DDR Holdings, LLC v. Hotels.com, et al., 2:06cv42 (7/18/12)
Judge: Rodney Gilstrap
Holding: Motions to Compel GRANTED;
Yesterday, in addition to granting and denying various letter briefs seeking leave to file summary judgment motions in this case approaching trial in October, Judge Gilstrap also issued two opinions on motions to compel applying discovery principles in patent cases that may be of interest to readers. (Ed. note: I am one of the counsel representing DDR in this case).
Motion to Compel re: Depositions
In the first, the Court granted the plaintiff DDR's motion to compel defendant Digital River, Inc. to produce a corporate representative for deposition regarding the methods, processes and technology that power five (5) of Digital River’s e-commerce platforms. "During a series of 30(b)(6) depositions, none of the witnesses designated by Digital River were prepared to answer questions relates to the “SEAMLESS AFFILIATE TECHNOLOGY,” as defined in the Notice," the Court wrote. "Digital River does not dispute that the witness were not prepared, but justifies its refusal to tender a knowledgeable witness on the grounds that products falling within the definition of SEAMLESS AFFILIATE TECHNOLOGY are not specifically identified in the infringement contentions. According to Digital River, because “infringement contentions frame the scope of the case” and because SEAMLESS AFFILIATE TECHNOLOGY is not specifically defined in the infringement contentions, DDR has no right to the requested discovery at this stage of the case."
The Court disagreed:
The rules of discovery are accorded a broad and liberal treatment to affect their purpose of adequately informing litigants in civil trials. It is well settled in the Eastern District that “there is no brightline rule that discovery is permanently limited to the products specifically accused in a party’s [infringement contentions].” Such a limitation would be “inconsistent with the broad discovery regime created by the Federal Rules and the notion that a party may be able to amend its [infringement contentions.]” Therefore, discovery may be properly extended to “products ‘reasonably similar’ to those accused in [infringement contentions].
(Internal citations omitted). The Court went on to apply these principles to the dispute presented:
Digital River may not ignore a 30(b)(6) deposition notice simply because it believes the topics noted therein are outside the proper scope of discovery. Procedural devices, including a motion for protective order, are available and known to Digital River to protect itself from potential discovery that may be outside the scope of this case. Digital River’s unilateral decision to block discovery into a topic clearly and unambiguously identified in a 30(b)(6) deposition notice is not permitted under the Federal Rules of Civil Procedure or this Court’s Local Rules; in fact, such unilateral action blatantly usurps the Court’s function as the gatekeeper in matters of discovery. Having been put on notice of DDR’s theories of infringement and its line of inquiry regarding Digital River products related to SEAMLESS AFFILIATE TECHNOLOGY, Digital River was required to either (1) tender a witness; (2) confer with DDR’s counsel to discuss the scope of the deposition and resolve any disputes themselves; or (3) seek a Protective Order from the Court once a meet-and-confer between the parties did not resolve the dispute. Instead, Digital River acted purposefully and with knowing disregard for these established steps by refusing to present a knowledgeable witness at all.
(Emphasis added). It then got worse:
Moreover, this Court cannot help but wonder if Digital River elected not to timely file a motion for a Protective Order because it knew that DDR is entitled to the requested discovery related to the five DR Platforms, particularly in light of this Court’s strong adherence to a policy of broad discovery disclosure obligations. The infringement contentions filed in this case identify various Digital River products relating to an e-commerce website that Digital River hosts for its clients. After comparing the infringement contentions to the parties’ descriptions of the Five DR Platforms relevant to the present motion, the Court is convinced that they are “reasonably similar” to the products specifically identified by DDR in the infringement contentions. However, Digital River consciously chose not to present this matter to the Court via a request for protective order, but instead took it upon itself to not product a knowledgeable witness or witnesses on those noticed topics.
Digital River makes much of the fact that the requested discovery “expands the scope of the case” and that the information sought by DDR is “publicly available.” (Dkt. No. 356.) Digital River contends that these additional grounds also justify its refusal to tender a knowledgeable witness. The Court disagrees. These arguments might have formed the basis for a motion for protective order, but Digital River chose to ignore that avenue for relief. Notwithstanding Digital River’s improper unilateral action, the discovery issue before the Court is narrowly tailored to five products that function “reasonably similar” to those named in the infringement contentions, and therefore discovery related to those products is justified according to well-settled case law in this District. Further, although some information about these five platforms is surely publicly available, it is highly likely that non-public information will be provided during the 30(b)(6) depositions as well.
Infringement contentions serve the important role of providing Defendants notice with the theories of infringement in a case. However, infringement contentions are not intended to impose rigid boundaries that confine the scope of discovery to only those products that are specifically identified therein. This is particularly true when, as DDR did here, a party specifically identifies a series of products that may operate in a matter “reasonably similar” to other products specifically identified in the contentions. This Court’s commitment to broad discovery obligations requires that Digital River provide the requested discovery.
(Emphasis added). Accordingly, Judge Gilstrap granted the Motion to Compel, ordered Digital River to produce a knowledgeable corporate representative, within 14 days, to testify about specified DR Platforms, and "in light of Digital River’s inexcusable failure to act within the well-known and established rules of this Court," assessed costs and fees for the ordered deposition and prosecution of the motion to compel. Specifically, the Court ordered Digital River to pay and reimburse all reasonable travel costs of DDR’s counsel to take the deposition as well as all the associated court report and videographer costs related to such deposition. Moreover, pursuant to Rule 37(a)(5), Digital River and its counsel were jointly ordered to reimburse DDR for its reasonable costs and attorney fees, not to exceed $5000, associated with the prosecution of this Motion, such to be paid within three days of presentment by DDR to Digital River of its statement enumerating these costs and expenses.
Motion to Compel re: Interrogatory
The second motion to compel sought to compel a different defendant, ICE & OVS to supplement a response to an interrogatory seeking sales information.
Judge Gilstrap noted that the interrogatory in question did not specifically seek discovery of “Total Revenue”, but instead broadly sought the revenue figures that “relate” to ICE & OVS’s websites. "When providing DDR’s infringement theories the appropriate amount of latitude at this stage of the case, the Court believes that Hybrid sales “relate” to ICE & OVS’s websites within the context of Interrogatory No. 2, because customers first log-on to the accused website before telephoning a call center to complete their transactions. Therefore, Interrogatory No. 2 cannot be fully answered unless and until ICE & OVS provides both Web-only and Hybrid sales revenue numbers." Accordingly, in light of ICE & OVS’s representation that it (1) does not have specific revenue figures for Hybrid sales only and (2) cannot calculate Hybrid sales only revenue information, "the course of action most likely to lead to the discovery of admissible evidence is for ICE & OVS to provide Total Revenue information in response to Interrogatory No. 2."
The Court went on to note that ICE & OVS compile Total Revenue statistics in their ordinary course of business, and it therefore would not be burdensome to hand over this information at this stage of the case. But there was a caution. "The Court recognizes that the discoverability of potential evidence and the admissibility of evidence (or the proper reliance on such evidence) are different things subject to two different standards. Therefore, while the Court requires the production of “Total Revenue” figures in the context of this motion, the Court takes no position on whether it would be appropriate for DDR’s damages expert to rely upon “Total Revenue” in its damages calculations."