*1 This matter is before the court on Plaintiff's motion to compel. (ECF No. 67). The motion has been fully briefed, and the court has determined a hearing is unnecessary to render a decision.

Plaintiff Service Transport, Inc. (“Service Transport”) uses the registered trademark “STI” in connection with the freight transportation trucking services it provides. Defendants CRST Specialized Transportation, Inc. (“CRST Specialized”) and CRST Expedited, Inc. d/b/a CRST The Transportation Solution, Inc. (“CRST Expedited”) (collectively the “CRST Defendants” or “Defendants”) also provide freight transportation services as part of a large family of CRST companies. The CRST Defendants used a trademark incorporating “STI” on its tractor trailers. Service Transport previously brought two trademark infringement actions against CRST Specialized—the first in 2017, see Service Transport Inc. v. CRST International Inc. et al., No. 17-cv-00371-AMQ (D.S.C. Feb. 7, 2017), and the second in 2020, see Service Transport Inc. v. CRST International Inc. et al., No. 20-cv-01236-TMC (D.S.C. Mar. 21, 2020).[1] The second action resulted in a settlement agreement between the parties providing, in pertinent part, as follows:

(ECF No. 67-1 at 5). The settlement agreement defines “CRST Agent Vehicle” as “any vehicle owned by ... a CRST Agent” which, in turn, is “any [e]ntity having an active agency agreement with ... CRST International, CRST Specialized, or any of their respective Affiliates ....” Id. at 3. Service Transport released the CRST Defendants and its affiliates from liability for infringement occurring prior to January 1, 2021. Id. at 12. The settlement agreement also contained a liquidated damages provision:

*2 Id. at 9.

Service Transport alleges that one of its executives saw a CRST tractor trailer still displaying the STI mark in May 2021. Service Transport claims it notified the CRST Defendants of the breach and that Defendants subsequently responded that 536 CRST owned vehicles were rebranded pursuant to the settlement agreement but that only 49 of these vehicles potentially still displayed the “STI” mark after the deadline set forth in the settlement agreement. (ECF No. 67 at 4).

In September 2021, Service Transport filed this action, alleging breach of the settlement agreement and new trademark infringement claims. (ECF No. 1). During discovery, Plaintiff served its First Requests for Production (“RFP”) on the CRST Defendants, which included the following:.

(ECF No 67-2 at 18). For each of these requests, the RFP defined the term “Defendants’ Services” to mean “Defendants’ or Defendant's trucking or freight transportation related services that are offered using a mark incorporating the term ‘STI.’” (ECF No. 67-2 at 3 (emphasis added)).

Defendants objected to each of the foregoing requests as “as overly broad, unduly burdensome, and not proportional to the needs of the case to the extent it requests information ‘since use of a mark incorporating the term ‘STI’ began.” (ECF No. 67-4 at 42–45). Defendants, however, agreed to produce CRST Expedited's revenues, profits, and costs associated with the subset of 49 trailers that were identified as potentially displaying “STI” after the rebranding deadline. (ECF No. 67 at 5). Service Transport contends that Defendants’ production is insufficient and that it is entitled to the requested financial information reflecting revenues and profits for all 536 rebranded vehicles. (ECF No. 67 at 9).

Service Transport's Second Requests for Production included the following RFPs:

(ECF No. 67-3 at 8–9). Defendants objected to these requests as “overly broad, unduly burdensome, and not relevant or proportional to the needs of the case because [they] seek[ ] competitively sensitive financial information of the CRST Businesses that is not related to services ever offered under a mark incorporating the term ‘STI’ or to any alleged breach of the 2020 Settlement and Release Agreement.” (ECF No. 67-5 at 7–8). Nonetheless, CRST Specialized produced profit and loss statements for its entire business for the 2018–2022 period. CRST Expedited, however, did not agree to produce a broader set of profit and loss statements on the grounds that it has never used “STI” to offer any services to consumers. (ECF No. 69 at 6–7).

Service Transport contends that it is entitled to “[t]he withheld documents—particularly Defendants’ valuations, sales forecasts, and profitability projections, and CRST Expedited's profit and loss statements” in order to respond to Defendants’ position that the liquidated damages provision is an unenforceable penalty because it bears no reasonable relationship to any potential damages Service Transport might accrue as a result of Defendants’ infringement. (ECF No. 67 at 10).

In regard to the scope of discovery, Federal Rule of Civil Procedure 26(b)(1) provides:

Fed. R. Civ. P. 26(b). Additionally, “[i]nformation within this scope of discovery need not be admissible in evidence to be discoverable.” Id. Courts have construed relevance broadly “to encompass ‘any possibility that the information sought may be relevant to the claim or defense of any party.’ ” EEOC v. Sheffield Fin. LLC, No. 1:06-cv-00889, 2007 WL 1726560, at *3 (M.D.N.C. June 13, 2007) (unpublished) (quoting Merrill v. Waffle House. Inc., 227 F.R.D. 467, 473 (N.D. Tex. 2005)).

Nonetheless, discovery is not without limits, and the court has discretion to deny discovery that imposes an “undue burden or expense.” Shackleford v. Vivint Solar Dev. LLC, No. ELH-19-954, 2020 WL 3488913, at *5 (D. Md. June 25, 2020); see also Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351 (1978) (noting that “ ‘discovery, like all matters of procedure, has ultimate and necessary boundaries’ ”). Discovery, though within the broad contours of relevancy under Rule 26, must still be proportional “to the needs of the case.” Fed. R. Civ. P. 26(b)(1). “Proportionality is determined by ‘considering the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to the 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.’ ” Fluor-Lane S.C., LLC v. Johnson, Mirmiran & Thompson, Inc., No. 3:21-cv-01680-JMC, 2022 WL 2358486, at *1 (D.S.C. June 30, 2022) (quoting Fed. R. Civ. P. 26(b)(1)).

A. Financial Information Relating to All 536 Rebranded Vehicles

*4 Under the Lanham Act, 15 U.S.C. §§ 1051–1141n, damages for trademark infringement may include (1) the defendant's profits, (2) any damages sustained by the plaintiff, and (3) the costs of the action. 15 U.S.C. § 1117(a). “The court shall assess such profits and damages or cause the same to be assessed under its direction” and ensure that any relief awarded “shall constitute compensation and not a penalty.” Id. Moreover, the Lanham Act provides that in “assessing profits the plaintiff shall be required to prove defendant's sales only; defendant must prove all elements of cost or deduction claimed.” Id.

CRST Expedited produced spreadsheets showing revenues attributable to “the 49 trailers that were in use by CRST Expedited's third-party agent, KCH.” (ECF No. 69 at 5). Service Transport argues that CRST Expedited cannot limit its production to financial information relating to these 49 vehicles—the ones Defendants identified as potentially having continued to display the “STI” mark after the rebranding deadline—but must produce information reflecting revenues and profits for all 536 rebranded vehicles. (ECF No. 67 at 9). Service Transport argues that “Defendants likely committed additional violations of the 2020 Settlement Agreement” beyond any of the potential violations caused by the display of the STI mark by the 49 trailers in question. Id. In response, Defendants note that “[t]he only factual allegation of breach or infringement in the [Amended Complaint] relates to a single ... trailer used in 2021” and that, “in response to an interrogatory requesting a description of each alleged breach of the Settlement Agreement, [Service Transport] identified only 33 of the 49 trailers as breaching and no additional breaching vehicles or any other violation for any year other than 2021.” (ECF No. 69 at 11).

The court concludes that Defendants, at this juncture in the litigation, need not produce the requested financial information as to any of the other 487 vehicles in question that have not been demonstrated to have displayed the STI mark in breach of the settlement agreement or engaged in other infringing conduct. Accordingly, Service Transport's request for production is overbroad in this regard. However, should Service Transport discover additional CRST Owned or CRST Agent vehicles that displayed the STI mark in breach of the settlement agreement, Defendants must turn over the requested financial information relating to such vehicles.

B. CRST Expedited's Company-Wide Actual Profit and Loss Statements

Defendants argue that Service Transport's request for this category of documents is beyond the scope of discovery as it seeks financial information unrelated to the alleged infringement at issue. (ECF No. 69 at 9). In particular, Defendants point out that Service Transport seeks CRST's “revenues during the five-year period before it ever was accused of any infringement” by Service Transport. Id.

In response, Service Transport contends the alleged infringing use of the STI mark on the previously mentioned 49 trailers likely generated additional sales across its entire fleet that would not be reflected in the financial information directly related to such trailers. (ECF No. 72 at 2–4). According to Service Transport, the information produced by Defendants “omits any revenues that Defendants earned through the extensive use of the infringing ‘STI’ advertisements. The issue in this case is that hundreds of thousands of members of the public, including existing and potential customers, likely were exposed to clearly visible infringement displayed across the ‘Accused Trailers.’ ” Id. at 4.

*5 The court is not convinced that this extensive production seeks information that might lead to relevant evidence as to the causes of action currently before the court. The court denies this request (without prejudice to the ability of Service Transport to raise the issue again later in the proceedings) to the extent it seeks seven years of financial information. However, the court concludes that CRST Expedited's profit and loss statements for 2021 could potentially provide relevant evidence. Accordingly, CRST Expedited must provide its 2021 profit and loss statements.

C. Defendants’ Budgets, Profit Projections, Sales Forecasts, and Business Valuations

Service Transport argues it is entitled to financial information such as budgets, profit projections, sales forecasts, and business valuations “to rebut Defendants’ contention that the liquidated damages provision in the 2020 Settlement Agreement is an unenforceable penalty” and to “establish that the liquidated damage amounts were reasonably intended by the parties as the predetermined measure of compensation for actual damages that might be sustained by reason of nonperformance.” (ECF No. 67 at 7 (internal quotation marks omitted)). Defendants disagree, arguing primarily that this information is not relevant to the enforceability of the settlement agreement because “[Service Transport] did not have information about Defendants’ forecasts and projections at the time the Settlement Agreement was negotiated.” Id. at 14.

The court agrees with Defendants. Until there is some factual support to suggest that this information could have served as a basis for calculating the liquidated damages provision, the court will deny this request without prejudice.

Accordingly, as stated above, the court GRANTS IN PART AND DENIES IN PART Service Transport's Motion to Compel. (ECF No. 67).

IT IS SO ORDERED.