Rearden LLC v. Walt Disney Co.
Rearden LLC v. Walt Disney Co.
2023 WL 7185737 (N.D. Cal. 2023)
September 8, 2023
Tigar, Jon S., United States District Judge
Summary
The court found that Rearden LLC and Rearden MOVA LLC (“Rearden”) failed to timely disclose evidence of their Maya Scripts infringement theory, and thus precluded them from presenting evidence or argument based on the alleged copying. The court found that Rearden's failure to disclose was not substantially justified, and that allowing this evidence would significantly prejudice Defendants. As a result, the court excluded the Maya Script files evidence.
Additional Decisions
REARDEN LLC, et al., Plaintiffs,
v.
The WALT DISNEY COMPANY, et al., Defendants
v.
The WALT DISNEY COMPANY, et al., Defendants
Case No. 17-cv-04006-JST
United States District Court, N.D. California
Signed September 08, 2023
Counsel
Mark S. Carlson, Garth D. Wojtanowicz, Steve W. Berman, Jerrod C. Patterson, Hagens Berman Sobol Shapiro LLP, Seattle, WA, Frank H. Busch, Wagstaffe, Von Loewenfeldt, Busch & Radwick LLP, San Francisco, CA, Gayne Kalustian-Carrier, Rio S. Pierce, Hagens Berman Sobol Shapiro LLP, Berkeley, CA, for Plaintiffs.Kelly Max Klaus, Blanca Fromm Young, Peter A. Detre, Rohit K. Singla, Stephanie Goldfarb Herrera, Munger Tolles & Olson LLP, San Francisco, CA, Erin Joan Cox, Glenn Douglas Pomerantz, John L. Schwab, Rowley John Rice, Shannon Aminirad, Munger, Tolles and Olson LLP, Los Angeles, CA, Ginger D. Anders, Pro Hac Vice, Munger Tolles & Olson LLP, Washington, DC, for Defendants The Walt Disney Company, Buena Vista Home Entertainment, Inc., Walt Disney Motion Pictures Group, Inc., Mandeville Films Inc.
Kelly Max Klaus, Blanca Fromm Young, Peter A. Detre, Rohit K. Singla, Stephanie Goldfarb Herrera, Munger Tolles & Olson LLP, San Francisco, CA, Anne K. Conley, Erin Joan Cox, Glenn Douglas Pomerantz, John L. Schwab, John W. Spiegel, Rowley John Rice, Shannon Aminirad, Munger, Tolles and Olson LLP, Los Angeles, CA, Ginger D. Anders, Pro Hac Vice, Munger Tolles & Olson LLP, Washington, DC, for Defendant Marvel Studios, LLC.
Kelly Max Klaus, Blanca Fromm Young, Peter A. Detre, Rohit K. Singla, Munger Tolles & Olson LLP, San Francisco, CA, Anne K. Conley, Erin Joan Cox, Glenn Douglas Pomerantz, John L. Schwab, John W. Spiegel, Rowley John Rice, Shannon Aminirad, Munger, Tolles and Olson LLP, Los Angeles, CA, Ginger D. Anders, Pro Hac Vice, Munger Tolles & Olson LLP, Washington, DC, for Defendants Walt Disney Pictures, MVL Productions LLC, Infinity Productions LLC, Assembled Productions II LLC.
Tigar, Jon S., United States District Judge
ORDER GRANTING MOTION IN LIMINE RE: MAYA SCRIPTS INFRINGEMENT THEORY
Re: ECF No. 395
*1 Now before the Court is Defendants Walt Disney Pictures, Marvel Studios LLC, MVL Productions LLC, Infinity Productions LLC, and Assembled Productions II LLC's (“Defendants” or “Disney”) motion to preclude Plaintiffs Rearden LLC and Rearden MOVA LLC (“Rearden”) from presenting evidence or argument based on the alleged copying of various script lines in Maya files (“Maya Scripts”). ECF No. 395. The Court will grant the motion.
I. BACKGROUND
The factual and procedural background of this case is summarized in the Court's prior orders addressing Defendants’ motions to dismiss. ECF Nos. 60, 85.[1] The operative second amended complaint brings copyright and trademark claims based on Defendants’ alleged use of Rearden's MOVA Contour Reality Capture Program (“MOVA Contour” or “MOVA”) in the production of major motion picture films including Beauty and the Beast, Deadpool, and Guardians of the Galaxy. ECF No. 315.
Defendants now move in limine for an order precluding Rearden from introducing evidence or argument at summary judgment or trial related to the theory that Digital Domain 3.0, Inc. (“DD3”) infringed Rearden's copyright by allegedly copying Maya Script files. “Maya is a widely used computer graphics program developed and sold by Autodesk.” ECF No. 394-12 (Declaration of Stephen H. Lane) ¶ 13. “A .ma file, or Maya animation file, is a plain text project file that contains art asset data, along with commands and/or scripts. A .ma file is typically created, edited, and executed in connection with the production of 3D graphics content.” Id. ¶ 14.
As the following history makes plain, no complaint in this case has alleged infringement based on the copying of Maya Scripts, and no set of the Maya Scripts which DD3 allegedly copied has ever been produced. The initial complaint in this case was filed on July 17, 2017. ECF No. 1. It alleged copyright, trademark, and patent infringement against Defendants. Id. The initial complaint did not allege the copying or use of Maya Scripts. It did not mention the word “Maya.” Defendants filed a motion to dismiss that complaint on September 15, 2017, ECF No. 36, which the Court granted in part and denied in part on February 21, 2018. ECF No. 60.
Rearden amended its complaint in 2018 and again in 2022. ECF Nos. 63 (First Amended Complaint), 315 (Second Amended Complaint). The amended complaints alleged that Defendants were secondarily liable for the infringement acts of DD3. In both amended complaints, Rearden alleged that DD3 directly infringed the copyright in the “MOVA Contour” software program by (1) making a copy of the Contour program in their CPUs’ random access memory (“RAM”) without authorization from Rearden and (2) incorporating the output works of the Contour systems and methods and Contour program to animate computer graphics (“CG”) characters that were reproduced, distributed, displayed, and performed in Defendants’ films. ECF No. 63 ¶¶ 115, 129; ECF No. 315 ¶¶ 102, 111, 120, 160. Neither complaint alleged that the “MOVA Contour” program included scripts embedded in Maya Scripts, or that these Maya Scripts were loaded into RAM and copied throughout the facial animation pipeline whenever Maya Scripts were opened. In fact, as with the initial complaint, neither complaint contained the word “Maya.”[2]
*2 Plaintiffs did not identify the Maya Scripts in their initial disclosures. Instead, they identified only “the Contour program source code.” ECF No. 395-14. Rearden served amended disclosures in January 2023 and March 2023, but neither disclosure mentioned Maya, again referring only to “Contour program source code.” ECF Nos. 395-15, 395-16.
In 2018, Defendants asked Rearden to produce “[a]ny and all versions of the MOVA Contour Software from the date of conception to the present,” which Rearden agreed to do. ECF No. 395-6 at 7. Between January 15 and 17, 2019, Rearden made the source code for the MOVA Contour program available for review by Defendants’ consulting source code expert, Dr. David Cummings. ECF No. 395-7. At the time of Cummings's review, Rearden produced a complete listing of all MOVA Contour files that comprised the program. ECF No. 395-8. The list of files did not include any “script” files. Neither at the time of the disclosures, nor at any time prior to Rearden's technical expert witness's rebuttal report, did it tell Defendants that the Maya Scripts were missing from this disclosure.
On October 14, 2020, Defendants filed a “causal nexus” summary judgment motion, contending that Rearden could not claim as damages any portion of Defendants’ profits from the films at issue because Rearden could not establish a causal nexus between the alleged copyright infringement and those profits. ECF No. 249. In support of that motion, Defendants introduced evidence that that the MOVA Contour program was not used after the tracked mesh output was delivered from DD3's “Mova” team to its visual effects team. Specifically, Defendants’ expert witness Darren Hendler declared:
The Mova team also used Mova software in the course of processing output data from the captured performance including, most notably, for the creation of a “tracked mesh.” The tracked mesh output data can be “rendered” on a computer monitor as a white mask, with empty sockets where the eyes and mouth should be. Maya, from Autodesk, was used to create the mask rendering of the tracked mesh output data .... The tracked mesh output data does not include any data points for hair, for much of the neck, or for any part of the actor's body below that. Mova software was not used at any other point in the process of creating the Beast.
ECF No. 249-4 ¶ 16. Hendler's declaration further described in detail the numerous additional steps that were necessary to animate the Beast after the handoff of the tracked mesh output file. Id. ¶¶ 21–47. Rearden did not contest, or submit any evidence rebutting, these factual statements in the Hendler declaration.
Fact discovery closed on March 2, 2023.
The 30(b)(6) deposition of Steve Perlman, Rearden's founder and CEO, was taken on March 6, 2023. In that deposition, Perlman confirmed that Rearden was alleging that DD3 copied the MOVA Contour software program, including the source code for that program. ECF No. 394-9 at 6. Perlman also confirmed that the source code Rearden had made available for Defendants to review in 2019—which did not contain Maya Scripts—was the MOVA Contour software program at issue in this case. Id. at 7. As stated above, that source code did not contain Maya Scripts.
On April 20, 2023, Rearden served the opening expert report of its technical expert, Alberto Menache. In that report, Menache advances the theory that the Maya Scripts are also part of the MOVA Contour software program, and that the Maya Scripts are copied into RAM when an animation file is opened in Maya. ECF No. 394-10 at 17, 18. Menache's opening report does not opine that any Maya Scripts were actually copied into RAM or used in connection with Beauty and the Beast.
*3 During the expert discovery period, and after service of Menache's opening report, Defendants asked Rearden to make available the source code for the Mova Contour software program for Defendants’ new technical expert, Dr. Stephen Lane, to review. ECF No. 395-4 ¶ 6. Rearden permitted Lane to conduct a time-limited review, in counsel's office on a restricted computer. Id. ¶ 7; ECF No. 394-12 ¶¶ 9–11.
The production that Lane reviewed consisted of two sets of files. First, Rearden re-produced the same original source code repository that it had produced in 2019. ECF No. 395-9. Second, Rearden added more than 2,500 Maya (.ma) animation files that Rearden said had been returned by DD3 through the asset return process in a prior litigation captioned Shenzhenshi Haitiecheng Science and Technology Co., Ltd. v. Rearden LLC, Case No. 15-cv-00797-JST (“SHST”), to which Defendants are not parties. ECF No. 394-12 ¶ 10; ECF Nos. 394-6, 394-7; ECF No. 395-21. Following his review, Lane concluded that none of the Maya Scripts he reviewed had been included in the MOVA Contour software program that Rearden originally produced in 2019. See ECF No. 394-12 (Lane Decl.) ¶ 17.[3]
Rearden served Menache's rebuttal report on June 1, 2023. In that report, for the first time, Rearden alleged that DD3 caused Rearden's Maya Scripts to be copied into RAM throughout the animation pipeline during DD3's work on Beauty and the Beast. Specifically, Menache asserts:
All of the [DD3 visual effects] teams that accessed the Maya animation files for any work after the tracked mesh was ingested, potentially including simulation, lighting, and others, loaded MOVA software into the random access memory (‘RAM’) of their workstations when they opened Beast animation files containing ingested MOVA Contour tracked mesh.
ECF No. 394-11 at 34. Menache further asserts that there is “[n]o clear demarcation between Mova Contour capture/processing”—Rearden's theory of infringement throughout fact discovery—“and other steps in the animation pipeline.” Id. at 36-37.
To date, Rearden has not identified the body of Maya Scripts that it alleges form the basis for its new Maya Script infringement allegations.
II. JURISDICTION
The Court has jurisdiction under 28 U.S.C. § 1331.
III. LEGAL STANDARD
Rule 26(a)(1) of the Federal Rules of Civil Procedure requires parties to disclose a copy “of all documents, electronically stored information, and tangible things that the disclosing party has in its possession, custody, or control and may use to support its claims or defenses, unless the use would be solely for impeachment.” Fed. R. Civ. P. 26(a)(1). Rule 26(e) requires parties to supplement their disclosures “in a timely manner if the party learns that in some material respect the disclosure or response is incomplete or incorrect, and if the additional or corrective information has not otherwise been made known to the other parties during the discovery process or in writing.” Fed. R. Civ. P. 26(e)(1)(A).
*4 “If a party fails to provide information or identify a witness as required by Rule 26(a) or (e), the party is not allowed to use that information or witness to supply evidence on a motion, at a hearing, or at a trial, unless the failure was substantially justified or is harmless.” Fed. R. Civ. P. 37(c)(1). In addition to, or instead of, that sanction, the court may also impose any of the other appropriate sanctions provided for in Rule 37. Fed. R. Civ. P. 37(c)(1)(C). “The party facing sanctions bears the burden of proving that its failure to disclose the required information was substantially justified or is harmless.” R & R Sails, Inc. v. Ins. Co. of Pa., 673 F.3d 1240, 1246 (9th Cir. 2012).
IV. ANALYSIS
Defendants move to exclude any evidence or argument regarding Rearden's Maya Scripts infringement theory pursuant to Rules 8, 26, and 37 of the Federal Rules of Civil Procedure, because the evidence underlying Menache's expert opinion was not timely produced. Rearden does not dispute that this evidence was not timely produced. Instead, it argues that its failure to produce it was substantially justified[4] for the following reasons: (1) “Disney was on notice at least as early as October 29, 2020 that Rearden had learned from the file paths and names of files on Excel spreadsheets produced in the SHST MOVA asset recovery that DD3's Maya animation files contained copies of MOVA software,” ECF No. 408 at 6; (2) “Disney intentionally followed up on this knowledge by questioning Rearden and third-party witnesses about the infringing code in DD3's Maya animation files,” id.; (3) “Disney knew that Rearden could not effectively amend its complaint to allege that the Maya Scripts contained MOVA code because Rearden had only spreadsheets with file paths and names but not the actual Maya animation files themselves, and Disney had successfully used this exact same set of facts to dismiss Rearden's claims in Rearden II,” id.; (4) “Disney interfered with the SHST asset return process (in which DD3 was ordered to return all files containing MOVA software) precisely because it understood that the files would reveal the length and extent of DD3's infringement based on copies of MOVA code in its Beauty and the Beast Maya animation files,” id. (emphasis omitted), and (5) “Rearden tried to obtain the Maya animation files from DD3 through discovery in the present case, but ultimately was unable to obtain them.” ECF No. 408 at 12.
Below, the Court addresses each of these justifications, then turns to the question of whether the lack of disclosure was harmless.
A. Whether Rearden's Failure to Produce Evidence Supporting Its Maya Infringement Theory was Substantially Justified
1. Disney Was Not On Notice of Rearden's Maya Infringement Theory
Rearden argues against Disney's contention that it first learned of Rearden's Maya Scripts infringement theory when Menache's rebuttal report was served, stating that “Rearden first learned that DD3's Maya animation files contained substantial copies of MOVA Contour code on September 11, 2020,” and then “disclosed this potential infringement to Disney at its first opportunity on October 29, 2020.” ECF No. 408 at 9. In support, Rearden points to a brief it filed in support of a motion to strike the declaration of third-party witness Darren Hendler, which Disney had filed in support of a summary judgment motion. Id. at 10; see also ECF No. 258 (Rearden brief). Rearden's brief stated:
*5 The gist of Mr. Hendler's declaration is that MOVA is a de minimus and trivial part of a massive CG character animation pipeline that employs “many different software tools besides Mova in the process of developing shots including the Beast.” Those tools include “Autodesk's Maya software ... to animate the Beast face to add eyes, tongue and body motion, and to create a more nuanced performance and add back missing motions,” and “for facial shot modeling.” And Maya “was used to create the mask rendering of the tracked mesh output data[.]” But DisputeSoft's Schulman, the forensic investigator engaged by the Special Master in the SHST case, determined that DD3's Maya (.ma) files contain “significant amounts of [MOVA] source code in them” .... So MOVA extends much farther into the animation pipeline than Mr. Hendler admits in his declaration, but Rearden could not cross-examine him on that issue because the Beast production files have still not been produced.
ECF No. 408 at 10 (quoting ECF No. 258 at 4) (citations and emphasis omitted). Rearden argues that Disney understood upon reading the references to Maya in this passage that Rearden contended that DD3's Maya animation files copied MOVA source code. It points to the following language in Disney's opposition brief:
Specifically, Plaintiffs say they want to show that computer files generated by the “Maya” program—one of dozens of non-MOVA programs DD3 used to animate the Beast's face—may have contained MOVA source code, which would show “MOVA extends much farther into the animation pipeline than Mr. Hendler admits.” This is a red herring, because the point in the pipeline where Maya interacted with Mova data was in creating a rendering of the tracked mesh.
Id. (quoting ECF No. 260 at 2) (citations and emphasis omitted).
In essence, Rearden wanted to strike Hendler's declaration because it did not have access to the Beast production files—including Maya Scripts—that it needed to effectively cross-examine Hendler. Disney opposed the request because, it argued, Maya was not involved in the production process in a way that could have constituted infringement.
Regardless of the merits of that argument—which was resolved by an earlier order—Rearden's brief did not tell Disney that the “source code” was in the form of Maya Scripts, or that this “source code” was copied into RAM—all elements of its Maya Scripts infringement theory. Rearden did not say exactly how MOVA Contour “extend[ed] ... into the animation pipeline” as a result of this source code being in Maya Scripts—and probably could not have done so, since it lacked the production files. At best, this brief paragraph identified the possibility that Rearden might allege a Maya Scripts infringement theory someday, if it could obtain sufficient evidence in support. But the paragraph neither made that allegation nor disclosed any evidence in support of it.
2. Disney's Questioning of Rearden and Third-Party Witnesses Did Not Demonstrate Knowledge of Rearden's Maya Infringement Theory
Rearden next contends that Disney was aware of Rearden's Maya Scripts infringement theory because it “purposefully examined Rearden and third-party witnesses about DD3's copying of MOVA Contour MEL scripts into Maya animation files.” ECF No. 408 at 13. It points specifically to Disney's questioning of Ken Pearce, “who authored most if not all of the MOVA Contour MEL scripts in the Maya animation files at issue,” and who “was asked specifically about the components of MOVA Contour including custom MEL scripts in the Maya animation files.” Id. It also identifies Disney's deposition of Steve Perlman, in which it questioned him about Contour MEL scripts “and how they were used in Maya,” “Rearden's contentions that Contour MEL scripts were copied into Maya Scripts, that they were used by DD3, that MEL scripts running in Maya animation files could be traced by a function in Maya, that Rearden's knowledge was based on spreadsheets received in the SHST asset recovery process that are labeled ‘BEAST,’ ‘BATB,’ or ‘STEVENS,’ and that DD3 had not produced the Beauty and the Beast Maya animation files at that time.” Id. at 14. Finally, Rearden points to the deposition of Darren Hendler, in which “Rearden questioned him about all of the steps in the animation pipeline that used the Maya software,” “the SHST Special Master's discovery of MOVA Contour code in DD3's Maya animation files, and his understanding of how that could happen.” Id.
*6 None of these depositions disclosed Rearden's theory that Maya Scripts were copied by DD3 and used far into the animation pipeline during the making of Beauty and the Beast. And none of them provided evidence in support of that assertion.
3. Disney Did Not Interfere in Rearden's Ability to Obtain the Maya Script Files
Rearden next argues that “Disney interfered in the SHST asset return process in May 2022 to prevent DD3 from returning the Maya animation files to Rearden.” ECF No. 408 at 11. There are two problems with this argument.
First, Disney did not prevent Rearden from obtaining any files from the SHST asset return process. Instead, Disney's letter asked that the files, which it contended (apparently without dispute) contained its copyrighted property, be returned to it. ECF No. 408-16 at 2. The same letter, however, stated that “[i]f Rearden believes any files transferred to [Disney] are relevant to its claims against the defendants in Case No. 4:17-cv-04006-JST, Rearden may request those files through the ordinary discovery process.” Id. at 3. In fact, as it happened—and as Rearden's opposition to this motion acknowledges—the DD3 Maya animation files for Beauty and the Beast “were produced concurrently to Rearden and Disney pursuant to this Court's order” in March and April 2023. ECF No. 408 at 7 (emphasis added).
Second, the SHST asset return process was not the only way Rearden could have obtained the disputed Maya Scripts. It also could have served a subpoena on DD3. It actually did so on January 5, 2023, but that was almost two-and-a-half years after it says it first learned that DD3's Maya animation files contained substantial copies of MOVA Contour code. After service of the subpoena, it waited another five months before filing a motion to compel production, which Magistrate Kim denied as untimely. Rearden, not Disney, was responsible for these choices.
4. Rearden Has Not Demonstrated That It Was Unable to Obtain the Maya Animation Files Through Discovery
Rearden also argues that it tried to obtain the Maya animation files from DD3 through discovery, but “ultimately” was unable to obtain them. ECF No. 408 at 12. As the preceding paragraphs make clear, Rearden might have been able to obtain the Maya Scripts if it had promptly served a subpoena and moved to compel production within the fact discovery period. But those are not the facts.
For all the foregoing reasons, the Court concludes that Rearden's failure to produce evidence supporting its Maya Scripts infringement theory was not substantially justified.[5] It therefore turns to the question of remedy.
B. Remedy for Rearden's Untimely Disclosure
The Court now addresses whether Rearden's untimely disclosure was harmless, and finds that it was not. To the contrary, allowing this evidence would significantly prejudice Defendants. Fact discovery is now closed, so Defendants cannot learn what specific Maya Scripts are at issue (and they apparently still have not been disclosed), whether those scripts are protectable under copyright, who owns the copyright in the scripts (some of which were created by DD3 and not by Rearden), whether the scripts are part of the work that Rearden registered with the Copyright Office, whether the scripts were copied in connection with Beauty and the Beast, and whether the scripts were used after the tracked mesh was delivered to DD3's visual effects team. See ECF No. 413 at 13. Defendants cannot defend this case without that information.
*7 At the hearing on this motion, Rearden acknowledged that if the Court allowed Rearden to use the Maya Scripts evidence, a continuance would be required so Defendants could conduct additional discovery. But the disruption of the case schedule required to accommodate that discovery would prejudice Defendants and the Court. Nor would that discovery be the only disruption: in its opposition to the motion, Rearden concedes that it would need to amend its complaint. ECF No. 408 at 17. Moreover, were the Court to allow both another amended pleading and additional discovery, it seems likely that additional motion practice would be required. “Disruption to the schedule of the court and other parties ... is not harmless.” Rodman v. Safeway Inc., 125 F. Supp. 3d 922, 938 (N.D. Cal. 2015), aff'd, 694 F. App'x 612 (9th Cir. 2017) (quoting Wong v. Regents of Univ. of Cal., 410 F.3d 1052, 1062 (9th Cir. 2005)). The Court therefore concludes that Rearden's lack of disclosure was not harmless, and excludes the Maya Script files evidence.[6]
CONCLUSION
For the foregoing reason, evidence or argument related to Rearden's Maya Scripts infringement theory is excluded.
IT IS SO ORDERED.
Footnotes
In addition, the Statement of Decision in a related action, Shenzhenshi Haitiecheng Science and Technology Company v. Rearden LLC, includes a summary of the facts underlying the dispute as to the ownership of the MOVA assets. See No. 15-cv-00797 JST, ECF No. 427 (N.D. Cal. Aug. 11, 2017). The Court found that Rearden owns the MOVA assets. Id. at 18.
The word Maya does appear in the text of one of the patents attached to the First Amended Complaint, ECF No. 63-3 at 44, 45, but that language is not incorporated into, or even relevant to, the body of the complaint.
Lane also opined that “[t]he Maya scripts [he] reviewed have different software code from the code that is responsible for capturing the facial performance and for processing the data from the facial performance capture into Mova output files such as the tracked mesh,” ECF 394-12 ¶ 22, making it unlikely or impossible that such scripts were the same as those on which Rearden's technical expert was relying for his opinion. The Court need not resolve that issue.
The parties do not clearly demarcate their arguments regarding Rule 26 from the ones regarding Rule 8. The Court accordingly addresses all justifications offered by Rearden for its non-disclosure.
Rearden also argues that “Disney knew that Rearden could not effectively amend its complaint to allege that the Maya files contained MOVA code because Rearden had only spreadsheets with file paths and names but not the actual Maya animation files themselves, and Disney had successfully used this exact same set of facts to dismiss Rearden's claims in Rearden II.” This argument is irrelevant to the question of whether Rearden timely disclosed this evidence.
In light of the Court's conclusion that the Maya Scripts evidence must be excluded pursuant to Rules 26 and 37, it does not reach the parties’ arguments concerning Rule 8.