*1 Plaintiff K-fee System GmbH (“K-fee”) filed a motion to compel Defendant Nespresso USA, Inc., (“Nespresso”) to produce certain documents. (Dkt. No. 90.) Nespresso filed an opposition. (Dkt. No. 94.) K-fee filed a reply. (Dkt. No. 97.) The matter came on for hearing on March 7, 2022. The court ordered that, on or before March 14, 2022 or a date mutually agreed by counsel, Nespresso shall advise K-fee's counsel whether the appropriate foreign affiliate agreed to voluntarily produce some or all of the design and inventorship related documents requested by K-fee and, if so, an estimated date for production. The court further ordered that, on or before March 18, 2022, counsel shall advise the court whether the parties were able to resolve K-fee's pending motion to compel. (Dkt. No. 107.)

On March 17, 2022, Nespresso produced documents voluntarily supplied by its foreign affiliates. (See Dkt. No. 123.) On March 18, 2022, K-fee filed a report. (Dkt. No. 120.) Nespresso filed a response. (Dkt. No. 123.) On March 28, 2022, K-fee filed a report after reviewing further Nespresso's document production. (Dkt. No. 124.) Nespresso filed a response. (Dkt. No. 138.) The parties requested a discovery conference, and filed a joint report in advance of the April 22, 2022 discovery conference. (Dkt. Nos. 148, 151.)

By order dated April 22, 2022, the court ordered that the parties confer further and set a hearing on April 29, 2022. (Dkt. No. 153.) On April 28, 2022, K-fee filed a report and advised that, for purposes of its motion to compel, the document requests remaining at issue are Document Request Nos. 1-7 and 38-40. (Dkt. No. 163.) The matter came on for hearing on April 29, 2022.

The issue is whether Nespresso must produce documents responsive to Document Request Nos. 1-7 and 38-40 from four foreign non-party affiliates: (1) Nestlé S.A.; (2) Nestlé Nespresso S.A. (“NNSA”); (3) Société des Produits Nestlé S.A. (“SPN”); and (4) Nestec S.A. (“Nestec”). Nespresso advises that Nestec became inactive in 2019 and was integrated into SPN. (DeGeorge Decl. ¶ 7.) Therefore, the court need not separately address Nestec apart from SPN. Nespresso already agreed to produce responsive documents in its own possession, custody or control, including any responsive documents it received from one or more of these foreign affiliates or is accessible in its ordinary course of business. (Opp. at 2; see Exh. 5 § II);[1] LG Display Co. v. Chi Mei Optoelectronics Corp., 2009 U.S. Dist. LEXIS 6362, *9-*10 (S.D. Cal. Jan. 28, 2009).

The court denies K-fee's motion to compel production of documents responsive to Document Request Nos. 38-40. Document Request Nos. 38-40 are premature to the extent they call for production of expert-related documents in advance of the expert discovery schedule set by the District Court. To the extent these requests call for production of documents reviewed by lay witnesses who will testify at a deposition, hearing or trial, the requests are premature and do not describe with reasonable particularity the documents requested. Fed. R. Civ. P. 34(b)(1)(A).

*2 Nespresso has filed a motion for summary judgment on noninfringement. (Dkt. No. 126.) At the hearing, the court advised the parties that it would first consider K-fee's motion in the context of Nespresso's motion for summary judgment. District courts have broad discretion to control the timing and sequence of discovery. Crawford-El v. Britton, 523 U.S. 574, 599 (1998).

“Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties' relative access to relevant information, the parties' resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit.” Fed. R. Civ. P. 26(b)(1). “District courts have broad discretion in determining relevancy for discovery purposes.” Surfvivor Media, Inc. v. Survivor Prods., 406 F.3d 625, 635 (9th Cir. 2005).

A party may request documents “in the responding party's possession, custody, or control.” Fed. R. Civ. P. 34. “ ‘Control is defined as the legal right to obtain documents upon demand.’ ” In re Citric Acid Litig., 191 F.3d 1090, 1107 (9th Cir. 1999) (citation omitted). “ ‘[P]roof of theoretical control is insufficient; a showing of actual control is required.’ ” Id. The Ninth Circuit rejected a practical-ability-to-obtain-documents test. The moving party had argued that the responding party had the practical ability to obtain documents from a foreign affiliate because the affiliate had “voluntarily furnished” other “documents and information in the past.” The court observed that the foreign affiliate “could legally and without breaching any contract continue to refuse to turn over such documents.” Because the responding party “does not have legal control over [the foreign affiliate's] documents,” the moving party “could not compel [the responding party] to produce those documents.” Id.; United States v. Int'l Union of Petroleum & Industrial Workers, 870 F.2d 1450, 1454 (9th Cir. 1989) (rejecting “inherent relationship” test).

The party seeking production of the documents “bears the burden of proving that the opposing party has such control.” Id. at 1452. Courts consider the following factors: commonality of ownership; exchange or intermingling of directors, officers or employees; exchange of documents between the corporations in the ordinary course of business; benefit or involvement by the non-party corporation in the transaction; and involvement of the non-party corporation in the litigation. Lodestar Anstalt v. Bacardi & Co., 2018 U.S. Dist. LEXIS 228172, *4 (C.D. Cal. Nov. 21, 2018).[2]

With respect to ownership, courts commonly require a parent to produce documents from a wholly owned subsidiary. Int'l Union, 870 F.2d at 1452. There is no showing that Nespresso is the parent of any foreign affiliate at issue. On the contrary, it appears Nespresso is an indirect subsidiary of SPN. (Opp. at 3.) See Quinn-White v. Novartis Pharms. Corp., 2018 U.S. Dist. LEXIS 227081, *6-*7 (C.D. Cal. Sept. 4, 2018); see also Valdez v. Genesis Healthcare LLC, 2021 U.S. Dist. LEXIS 243297, *27-*28 (C.D. Cal. Sept. 7, 2021). Nespresso is an American corporation with headquarters in New York and “licenses and distributes Nespresso®-brand products in the United States.” (DeGeorge Decl. ¶ 4.) Nestlé is a Swiss corporation and a holding company. (Stipulation of Dismissal, Dkt. Nos. 38, 43.) NNSA is a Swiss corporation that is an indirect subsidiary of Nestlé. NNSA is responsible for manufacture, sales, marketing, distribution, and administrative, management, and support services. (Id. ¶ 6; Exh. 5 ¶ D to Mikulka Decl.) NNSA has a distributorship agreement with Nespresso in the United States. (Exh. 5 §§ 2-3 to Mikulka Decl.) SPN is a Swiss corporation, holds rights to intellectual property associated with the Nespresso brand, and is responsible for certain research, design and development work. (DeGeorge Decl. ¶ 5; see also Dkt. No. 29.)

*3 With respect to the second factor, there is no evidence of an exchange or intermingling of directors, officers or employees among Nespresso and the foreign affiliates. K-fee argues that an employee of one subsidiary may have previously worked for the parent or another subsidiary. This common employment situation does not give rise to an inference of control within the meaning of Fed. R. Civ. P. 34; compare Uniden Am. Corp. v. Ericcson Inc., 181 F.R.D. 302, 307 (M.D.N.C. 1998) (employee of one company reported to person at a different company).

The third factor exchange of documents in the ordinary course of business is not really a factor in this case because Nespresso agreed to produce responsive documents to which it has access in the ordinary course of business.

K-fee's strongest arguments are based on the fourth and fifth factors. K-fee argues that Nespresso has designated two SPN employees, Mr. Jarisch and Mr. Perentes, as Fed. R. Civ. P. 30(b)(6) witnesses on topics related to patent infringement issues. (Dkt. No. 52-5, Exh. D to Mikulka Decl.) K-fee further argues that Nespresso will likely rely on documents that it voluntarily obtains from one or more foreign affiliates in its defense while “steadfastly refusing to produce any other information from its affiliates that would permit K-fee to fairly test Nespresso's affirmative evidence, claiming lack of ‘control’ over the same affiliates from which it is obtaining its own key evidence.” (Reply at 1.)

Nespresso has since filed a motion for summary judgment on noninfringement. (Dkt. No. 126.) In support of that motion, Nespresso attached a declaration from Mr. Jarisch of SPN and various documents. (Dkt. No. 128.) Mr. Jarisch testified at deposition as both a Rule 30(b)(6) witness and an individual witness. (Depo. Tr. at 15:9-13.) Mr. Jarisch testified that he personally worked on the bitcode technology for the Vertuo capsule. (Id. at 19:8-16, 20:2-4, 15-17, 49:13-18, 235:19-20.) Mr. Jarisch testified at length at his deposition about the technology. He also testified that he spoke to a person in procurement about the specifications used by procurement at NNSA to order the printing cylinders for printing the bitcode on the Vertuo capsules. (Id. at 18:10-13.) The specifications dated November 2021 are attached as Exhibits 3-4 to his declaration in support of Nespresso's motion for summary judgment on noninfringement. Mr. Jarisch explained the specifications. (Id. at 170:9-172:4, 290:19-24, 292:8-19, 293:9-12, 297:10-298:22.)

The Vertuo line launched in 2014. (Id. at 40:21-41:3.) K-fee's counsel inquired whether the coding technology could have changed after Mr. Jarisch worked on the concept and presumably before the specification documents attached to his declaration. Mr. Jarisch did not know that information, but had not heard of such an occurrence. (Id. at 120:18-22.)

With Nespresso having filed a motion for summary judgment based, in part, on these specifications provided by its foreign affiliate, the fourth and fifth factors weigh in favor of Nespresso having the requisite control for purposes of Fed. R. Civ. P. 34.

IT IS ORDERED that K-fee's motion to compel is GRANTED IN PART as follows: Within seven days after entry of this order, or on another date mutually agreed by the parties, Nespresso shall produce the specifications for the printing cylinders for printing the code on Vertuo capsules in the final commercialized product for the time frame beginning with the launch of the Vertuo line in 2014 through the present. Nespresso need not re-produce Exhibits 3 and 4 to Mr. Jarisch's declaration in support of Nespresso's motion for summary judgment on noninfringement. Nespresso may designate the documents pursuant to the protective order.