*1 On May 4, 2020, Plaintiff Colibri Heart Valve LLC (“Plaintiff” or “Colibri”) filed this patent infringement action against Medtronic CoreValve LLC and Medtronic PLC. See Dkt. 1. After Medtronic PLC was dismissed as a defendant (see Dkt. 28, 29), Plaintiff filed a First Amended Complaint on June 12, 2020, naming Medtronic CoreValve LLC (“Defendant” or “Medtronic”) as the only defendant. See Dkt. 30.

On March 4, 2021, Defendant filed a Motion to Compel Plaintiff to Produce Documents (Dkt. 102, “Motion”), with a supporting Local Rule 37-2 Joint Stipulation (Dkt. 102-1, “Joint Stipulation” or “Jt. Stip.”) and attachments (Dkt. 102-2 to 102-3). The parties each filed supplemental memoranda under Local Rule 37-2.3. Dkt. 108, 109. The Court previously found the Motion appropriate for decision without oral argument.

The Motion seeks an order compelling Plaintiff to produce all documents responsive to Defendants' Requests for Production (“RFP”) Nos. 2 and 3, which seek “[a]ll Documents and Communications relating to the funding or financing of this Case by any third-party” and “[a]ll contracts or agreements between Colibri and a third-party relating to the funding or financing of this Case.” Motion at 1; Jt. Stip. at 2-4. Plaintiff refused to produce any documents in response to RFP Nos. 2 and 3 because “[l]itigation funding is not relevant to any issues in this case ....” Jt. Stip. at 2-3.

Having fully considered the parties' arguments, the Court now rules as follows.

“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. (“Rule”) 26(b)(1). Relevance under Rule 26(b)(1) is defined broadly. See Snipes v. United States, 334 F.R.D. 548, 550 (N.D. Cal. 2020); V5 Techs. v. Switch, Ltd., 334 F.R.D. 306, 309 (D. Nev. 2019), aff'd sub nom. V5 Techs., LLC v. Switch, LTD., 2020 WL 1042515 (D. Nev. Mar. 3, 2020) (noting that relevance for discovery purposes remains broad even after the 2015 amendments of the Federal Rules of Civil Procedure). Moreover, “[i]nformation within this scope of discovery need not be admissible in evidence to be discoverable.” Rule 26(b)(1). “Generally, the purpose of discovery is to remove surprise from trial preparation so the parties can obtain evidence necessary to evaluate and resolve their dispute.” Duran v. Cisco Sys., Inc., 258 F.R.D. 375, 378 (C.D. Cal. 2009) (citations omitted).

Although relevance for discovery purposes is defined very broadly, it is not without boundaries. See, e.g., Rivera v. NIBCO, 364 F.3d 1057, 1072 (9th Cir. 2004) (“District courts need not condone the use of discovery to engage in fishing expeditions.” (internal quotation marks and citations omitted)); Gonzales v. Google, Inc., 234 F.R.D. 674, 679-80 (N.D. Cal. 2006) (citing Hickman v. Taylor, 329 U.S. 495, 507 (1947)); Rule 26(b)(2). District courts have broad discretion in determining relevancy for discovery purposes. Mfg. Automation & Software Sys., Inc. v. Hughes, 2017 WL 5641120, at *3 (C.D. Cal. Sept. 21, 2017) (citing Surfvivor Media, Inc. v. Survivor Prods., 406 F.3d 625, 635 (9th Cir. 2005)).

*2 A party may serve on any other party requests, within the scope of Rule 26(b), to produce or permit inspection of, among other things, “any designated documents or electronically stored information” in “the responding party's possession, custody, or control.” Rule 34(a)(1)(A). Such requests “must describe with reasonable particularity each item or category of items to be inspected ... [and] must specify a reasonable time, place, and manner for the inspection ....” Rule 34(b)(1)(A), (B). The party responding to a request for production must, “[f]or each item or category, ... either state that inspection ... will be permitted as requested or state with specificity the grounds for objecting to the request, including the reasons.” Rule 34(b)(2)(B). “An objection must state whether any responsive materials are being withheld on the basis of that objection. An objection to part of a request must specify the part and permit inspection of the rest.” Rule 34(b)(2)(C). A propounding party may move for an order compelling an answer or production to a request for production if the responding party fails to produce documents or fails to respond as requested under Rule 34. Rule 37(a)(3)(B)(iv). An evasive or incomplete answer or response is treated as a failure to answer or respond. Rule 37(a)(4).

“Upon a motion to compel discovery, the movant has the initial burden of demonstrating relevance. In turn, the party opposing discovery has the burden of showing that discovery should not be allowed, and also has the burden of clarifying, explaining and supporting its objections with competent evidence.” United States v. McGraw-Hill Cos., 2014 WL 1647385, at *8 (C.D. Cal. Apr. 15, 2014) (citations and internal quotation marks omitted)). Once a showing of relevance is made, “[t]he party who resists discovery has the burden to show that discovery should not be allowed, and has the burden of clarifying, explaining, and supporting its objections.” DIRECTV, Inc. v. Trone, 209 F.R.D. 455, 458 (C.D. Cal. 2002); Oakes v. Halvorsen Marine Ltd., 179 F.R.D. 281, 283 (C.D. Cal. 1998).

As the moving party, Defendant has the initial burden to show the relevance of RFP Nos. 2 and 3. Defendant primarily argues Plaintiff's “litigation financing documents are relevant because ... they go to the heart of Colibri's ability to bring and maintain this lawsuit at all.” Jt. Stip. at 4.

To show “exactly why such documents are relevant and proportional to the needs of this patent infringement case,” Defendant cites Uniloc USA, Inc. v. Motorola Mobility, LLC, in which the court granted the defendant's motion to dismiss because the plaintiffs no longer “held exclusionary rights to the asserted patent on the date they filed [their patent infringement] suit” and thus lacked standing. 2020 WL 7771219, at *8 (D. Del. Dec. 30, 2020), appeal filed, No. 21-1555 (Fed. Cir. Jan. 19, 2021); Jt. Stip. at 5. In Uniloc, the plaintiffs had obtained a loan from a non-party to fund their litigation efforts. Id. at *1. As security for this loan, the plaintiffs granted the non-party a license to a patent portfolio, which later included the patent at issue in the case. Id. at *1-2. Under the relevant agreements, the non-party obtained a license to the patent portfolio on a specific date but agreed “not to ‘use’ the license unless and until a so-called ‘Event of Default’ occurred.” Id. at *1. The Uniloc Court determined that an “Event of Default” had taken place when the plaintiffs “failed to satisfy their monetization obligations,” and once the default occurred, the non-party had “the right to use its license of the patent” at issue. Id. at *7. The plaintiffs therefore lacked standing because they “no longer possessed the right to exclude [the defendant] from practicing the patent.” Id.

Acknowledging that the decision in Uniloc did not involve a “discovery dispute over the production” of the plaintiffs' litigation funding agreements, Defendant here nevertheless contends that Uniloc

*3 Jt. Stip. at 5.

But other than pointing to Plaintiff's purported “evasiveness” in response to one of Defendant's requests for admission not at issue on this Motion, asking Plaintiff to “[a]dmit that no Person or Entity other than Colibri has rights to the Patents-in-Suit,” Defendant offers no evidence or support suggesting that Plaintiff here lacks standing like the plaintiffs in Uniloc. Id. Rather, as presented, Defendant's argument is that information on Plaintiff's litigation funding is relevant in this case because there is some unknown chance that Plaintiff lacks standing. See Jt. Stip. at 4-7. Information, however, “is not relevant to the subject matter involved in a pending action if the inquiry is only based on the requesting party's mere suspicion or speculation.” Rich v. Kirkland, 2015 WL 7185390, at *2 (C.D. Cal. Nov. 13, 2015) (citing Micro Motion, Inc. v. Kane Steel Co., Inc., 894 F.2d 1318, 1324 (Fed. Cir. 1990)).

In addition, Plaintiff states it already provided Defendant documents on “all of the assignments of the asserted patents” and supplemented its response to the request for admission cited by Defendant “to clarify that Colibri has all rights, titles, and interests in the asserted patents but for a security interest held by the litigation funder.” Jt. Stip. at 12-13; see also id. at 2. Plaintiff further contends that Defendant “knows that the only interest in the asserted patents held by the litigation funder is a security interest,” which, on its own, “does not deprive Colibri of standing” because security interest “is not a conveyance of a present ownership right in the patent.” Jt. Stip. at 13 (quoting In re Transp. Design & Tech., Inc., 48 B.R. 635, 639 (Bankr. S.D. Cal. 1985)); cf. In re Cybernetic Servs., Inc., 252 F.3d 1039, 1052 (9th Cir. 2001) (“[A] security interest in a patent that does not involve a transfer of the rights of ownership ... is not an ‘assignment, grant or conveyance’ ....”).

While Defendant does not refute Plaintiff's assertions, Defendant insists it “should not be left to rely on generalized assurances that the security interest granted here works differently from the security interest in Uniloc.” Dkt. 109 at 2. However, as a general matter, Plaintiff's admission that it has “all rights, titles, and interests in the asserted patents but for a security interest held by the litigation funder” is not merely a “generalized assurance[ ].” Under Rule 36, an admitted matter “is conclusively established unless the court, on motion, permits the admission to be withdrawn or amended,” and any “false denials may result in sanctions.” Rule 36(b); Rutter Group Practice Guide, Federal Civil Procedure Before Trial, Cal. & 9th Cir. Ed., ¶ 11:1971.

Notably, although Plaintiff produced documents on “all of the assignments of the asserted patents,” Defendant does not refer to any specific evidence or support showing that Plaintiff here does not have “all rights, titles, and interests in the asserted patents” as Plaintiff claims. Defendant's arguments are instead based on skepticism, which is an improper ground for compelling discovery. See Hammler v. Clark, 2020 WL 8483914, at *4 (E.D. Cal. Dec. 11, 2020) (“While [the] [p]laintiff may be disinclined to trust [the] [d]efendants' discovery responses, ... in the absence of legal or fact-based substantive deficiencies, [the plaintiff] is required to accept the responses provided. Mere distrust and suspicion regarding discovery responses do not form a legitimate basis to further challenge responses ....”); Glodney v. Travelers Com. Ins. Co., 2020 WL 8414988, at *14 (C.D. Cal. Sept. 30, 2020) (“The fact that a party may disbelieve or disagree with a response to a discovery request ... is not a recognized ground for compelling discovery, absent some indication beyond mere suspicion that the response is incomplete or incorrect.” (quoting Jimena v. UBS AG Bank, 2010 WL 4363193, at *3 (E.D. Cal. Oct. 25, 2010))).

*4 Defendant also argues that “case law demonstrates that litigation financing agreements and communications are relevant to other issues too.” Jt. Stip. at 6. Defendant cites two cases in which the courts “found that ‘litigation funding agreements ... likely contain financial information related to the value of the litigation, and therefore to the value of the allegedly infringed patents’ ”; “could be used to refute any David vs. Goliath narrative at trial”; or “may be relevant to central issues like validity and infringement, valuation, damages, royalty rates, pre-suit investigative diligence, and whether [the plaintiff] is an operating company.” Id. (quoting Cont'l Cirs. LLC v. Intel Corp., 435 F. Supp. 3d 1014, 1019 (D. Ariz. 2020); Acceleration Bay LLC v. Activision Blizzard, Inc., 2018 WL 798731, at *3 (D. Del. Feb. 9, 2018)).

To the extent Defendant contends Continental Circuits LLC and Acceleration Bay LLC stand for a general proposition that litigation funding agreements are per se relevant in patent infringement cases, the Court disagrees that those cases from other district courts stand for such a bright line rule. Courts decide on motions to compel further discovery responses on a case by case basis, considering the relevant circumstances in a particular case. See Gutierrez v. Mora, 2019 WL 8953125, at *5 (C.D. Cal. Dec. 18, 2019) (relevance under Rule 26(b)(1) is “based on the actual clams and defenses at issue in the action”); United Access Techs., LLC v. AT&T Corp., 2020 WL 3128269, at *1 (D. Del. June 12, 2020) (“Acceleration Bay does not hold (as no case could) that such materials are always relevant, without any consideration of additional factors.”). Importantly, courts have declined to order production of litigation funding documents where, as in this instance, the moving party's justifications are based on speculation. See, e.g., United Access Techs., LLC, 2020 WL 3128269, at *2 (“AT&T merely speculates that the reasons underlying the order requiring production in Acceleration Bay are also present here. But AT&T fails to articulate how documents [sought] ... are relevant to the specific claims or defenses of this case.”); MLC Intell. Prop., LLC v. Micron Tech., Inc., 2019 WL 118595, at *2 (N.D. Cal. Jan. 7, 2019) (“MLC has confirmed that the non-party witnesses are not funding this litigation. As such, Micron's assertions of potential bias and conflicts of interest are speculative.”); VHT, Inc. v. Zillow Grp., Inc, 2016 WL 7077235, at *1 (W.D. Wash. Sept. 8, 2016) (“Although Zillow poses several imaginable hypotheticals in which VHT's litigation funding scenario becomes relevant, the dearth of evidence on the record supporting Zillow's position renders that information negligibly relevant, minimally important in resolving the issues, and unduly burdensome.”); Dkt. 108-1 at 4-5 (CM/ECF pagination) (concluding the defendants are “seeking discovery based on pure speculation (and not on a baseline showing of relevance), which is prohibited,” because the defendants “have no facts or evidence” suggesting the plaintiff's litigation funding agreement has, or may have, a clause granting “third party funder(s) some type of actual or conditional ownership/license to the patents-in-suit in some scenario” and the plaintiff's counsel statement on the record that the relevant agreement does not have such a clause).

As Defendant has not met its initial burden to show the relevance of the information sought here, the Court denies the Motion on that basis and does not reach the parties' other arguments regarding privilege.

For the foregoing reasons, the Motion (Dkt. 102) is DENIED.

*5 Initials of Clerk: mba