*1 Dear Counsel:

After multiple ZOOM teleconferences and exchanges of correspondence between the parties throughout the summer of 2020, on August 19, 2020, Plaintiff Durr Systems, Inc. (“Durr”) filed with this Court its Loc. R. 104.7 (D. Md. 2018) Certificate of Conference regarding its July 10th Motion to Compel Defendant EFC Systems, Inc.’s Responses to Requests for Production. ECF No. 86. Pursuant to Loc. R. 104.8 (D. Md. 2018), Durr appended its Motion to Compel and the related memoranda as exhibits to its Certificate of Conference.[1] On August 27, 2020, the Court held a conference call with the parties concerning the Motion to Compel and resolved the parties’ disputes regarding Durr Document Request Nos. 44–46, 50, and 56. Disputes remain regarding the breadth of Durr Document Request Nos. 51 and 59.

With respect to Durr Document Request No. 51, Plaintiff Durr requests: “All documents relating to EFC possession of any Durr product or Durr documents, including any documents reflective of EFC's efforts to obtain such products or documents as well as any document relating to customers providing such products or documents to EFC.” Durr contends that under Halo Electronics, Inc. v. Pulse Electronics, Inc., 136 S. Ct. 1923 (2016), “the jury is entitled to evaluate the totality of the circumstances of EFC's conduct to evaluate whether EFC willfully infringed the patents in suit,” ECF No. 87-1 at 13. In Durr's view, this entitles them to show that EFC System Inc.’s (“EFC's”) claims of innovation “are false and misleading” and that “EFC obtains Durr products with the express intent of replicating those products[.]” Id. In contrast, EFC claims that “Durr is seeking extremely broad discovery [of] all documents in EFC's possession regarding all parts that can be used with any Durr painting system,” many of which are completely irrelevant. ECF No. 86-2 at 10 (emphasis in original). Further, EFC contends that even if the request referenced “only products useful with Durr paint systems[,]” the request would still be too broad. Id. at 11.

Durr seeks treble or exemplary damages pursuant to 35 U.S.C.A. § 284. ECF No. 60 at 58. The text of 35 U.S.C.A. § 284 provides that in a case of infringement, courts “may increase the damages up to three times the amount found or assessed.” But the text does not specify when these enhanced damages should apply. In 2007, the Federal Circuit, in In re Seagate Technology, LLC, 497 F.3d 1360 (2007) (en banc), adopted a rigid two-part test for determining when a district court may increase damages pursuant to 35 U.S.C.A. § 284. Nine years later, however, the United States Supreme Court held that the Seagate test was inconsistent with § 284 because it confined the district courts’ discretion. Halo, 136 S. Ct. at at 1935. “Section 284 gives district courts the discretion to award enhanced damages against those guilty of patent infringement.” Id. The Supreme Court also held that “[i]n applying this discretion, district courts are ‘to be guided by [the] sound legal principles’ developed over nearly two centuries of application and interpretation of the Patent Act.” Id. (internal citation omitted). These principles instruct district courts to “take into account the particular circumstances of each case and reserve punishment for egregious cases typified by willful misconduct.” Id. at 1926.

*2 “[P]atent law reflects ‘a careful balance between the need to promote innovation’ through patent protection, and the importance of facilitating the ‘imitation and refinement through imitation’ that are ‘necessary to invention itself and the very lifeblood of a competitive economy.” Halo, 136 S. Ct. at 1935. Thus, determining if EFC is a “a copycat who offers cut rate pricing” by “obtain[ing] Durr products [and] substantially replicat[ing] them,” ECF No. 87-1 at 12, rather than an innovator providing “customers with improved design or quality options over those offered by the manufacturers of [industrial paint systems,]” ECF No. 66 ¶ 30, is relevant to whether the alleged infringement is an “egregious case typified by willful misconduct.” Halo, 136 S. Ct. at 1926. Durr is entitled to obtain, to the extent it exists, evidence to that effect.

Nevertheless, as written, the Court agrees that Durr Document Request No. 51 is overly broad. “When faced with such broad discovery requests, a court may limit the time, place, and manner of discovery, or even bar discovery altogether on certain subjects, as required to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense.” Kuei-I Wue v. MAMSI Life & Health Ins. Co., No. CV RDB-07-1170, 2010 WL 11692074, at *1 (D. Md. Apr. 21, 2010) (quoting Crawford-El v. Britton, 523 U.S. 574, 599 (1998)) (internal quotation marks omitted). Accordingly, the Court will limit Durr Document Request No. 51 to documents encompassed by the original request that relate to products that can be used only with Durr Paint Systems. For the sake of clarity, this limitation does not include all products that are suitable for use in Durr Paint Systems. Rather such products must be specialty products made solely to be compatible with Durr Paint Systems and that are not for use with other paint systems. By a deadline agreed to by the parties, EFC will produce relevant documents responsive to Durr Document Request No. 51 as limited by the Court in this letter order.

Regarding the second dispute at issue here, Durr Document Request No. 59 requests: “All documents relating to efforts by EFC to sell EFC products, for example color changers, valves and turbines, to customers who have purchased the Accused Products.” ECF No. 87-1 at 12. Durr contends that “the documents relate directly to Durr's damages case.” Id. at 13. Specifically, Durr has two arguments relating to damages: (1) “Durr is entitled to explore all products that are sold with the accused products as this is a factor in determining patent royalties” under Georgia-Pacific Corp. v. United States Plywood Corp., 318 F. Supp. 1116 (S.D.N.Y), modified sub nom. Geogia-Pac. Corp. v. U.S. Plywood-Champion Papers, Inc., 446 F.2d 295 (2d Cir. 1971); and (2) Durr is entitled to “explore facts that support a claim of a convoyed sales patent damage model” under Warsaw Orthopedic, Inc. v. NuVasive, Inc., 778 F.3d 1365 (Fed. Cir. 2015), cert granted, judgment vacated sub nom. Medtronic Sofamor Danek USA, Inc. v. NuVasive, Inc., 136 S. Ct. 893, and opinion reinstated in part, 824 F.3d 1344 (Fed. Cir. 2016). EFC, in response, argues that “Durr has done nothing to try to appropriately tailor this discovery request” as it is required to do and thus the request is overly broad. ECF No. 86-2 at 11 (citing Andrew Corp. v. Gabriel Elecs., Inc., 785 F. Supp. 1041, 1051 (D. Me. 1996).

Beginning with Durr's second argument, for plaintiff's damages to include “lost profits for convoyed sales” under Warsaw, “the related products... must be functionally related to the patented product and losses must be foreseeable. Being sold together merely for ‘convenience or business advantage’ is not enough.” Warsaw, 778 F.3d at 1375 (internal citation omitted) (emphasis added). In order to be functionally related, the collateral product cannot have a use independent of the patented products. Id.

*3 The products relevant to Durr's first argument are slightly less limited. A “jury [is] entitled to rely on evidence of bundling and convoyed sales in determining the proper scope of the royalty base.” Fujifilm Corp. v. Benun, 605 F.3d 1366, 1373 (Fed. Cir. 2010) (emphasis added); see also Georgia-Pac. Corp., 318 F. Supp. at 1130 (describing the collateral sales that are a factor in determining reasonable patent royalties as the sale of other products that are sold along with the allegedly infringed specialty item). In order for the sale of a related product to be a factor in determining a reasonable royalty for the patented product, the related product must be sold with the accused product.

Thus, both of Durr's arguments refer to product sales that are considerably more limited than the product sales encompassed by Durr Document Request No. 59. Durr Document Request No. 59, as written, contemplates the sale of any EFC product to a customer that also purchased the Accused Products, regardless of whether the sales were related in any way. The Court agrees with EFC that this request is overbroad. Accordingly, the Court will limit Durr Document Request No. 59 to documents encompassed by the original request that relate to products that are sold along with the Accused Products and that are for use with the Durr Painting System. By a deadline agreed to by the parties, EFC will produce relevant documents responsive to Durr Document Request No. 59 as limited by the Court in this letter order.

Although informal, this is an Order of the Court and shall be docketed as such.