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On July 26, Stan Gibson will participate in a Strafford webinar discussing considerations that need to be taken into account when in-house counsel is noticed or subpoenaed for a deposition. Program details and a registration link are below. We hope to see you there!

Taking or Defending Depositions of In-House Counsel: Strategic, Substantive, and Ethical Considerations

Date: Tuesday, July 26, 2022

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In this patent infringement action, Plaintiff Eagle Eyes Traffic Industry USA Holding LLC (“Eagle Eyes”) filed a motion for an order compelling Defendant E-Go Bike LLC (“E-Go”) to provide responses to Eagle Eyes’ requests for production of documents (“RFPs”), interrogatories (“rogs”), and requests for admission (“RFAs”).   After noting that E-Go’s counsel conceded that the requests were properly served by e-mail, the court addressed E-Go’s explanation for failing to respond to the discovery:

E-Go’s explanation for its failure to respond is that the company ceased operations toward the end of last year, and it was difficult for U.S.-based counsel to obtain information from the pertinent former E-Go employee due to Covid lockdown in Shanghai and surrounding cities. That is a reasonable explanation for why it was difficult to produce documents or provide substantive information that counsel did not possess. But it does not constitute an explanation for why U.S. counsel based in Pleasanton, California did not serve written responses and objections. Drafting objections is an exercise of legal judgment under U.S. law, and a Chinese ex-employee would have been no help with that anyway.

The court then turned to appropriate remedies.  The court noted that there was no good cause for failing to submit objections to requests (even if substantive responses could not have been provided) and therefore found that any objections to requests were now waived. Continue reading

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In this patent infringement action, the plaintiff Flect LLC (“Flect”) moved to voluntarily dismiss its action against the defendant, Lumia Products Co. LLC (“Lumia”), pursuant to Fed.R.Civ.P. 41(a)(1). Flect’s request for voluntary dismissal included language stating that each party will bear its own costs. Rule 41(a)(1) provides: “Voluntary Dismissal.

(1) By the Plaintiff.

(A) Without a Court Order. Subject to Rules 23(e), 23.1(c), 23.2, and 66 and any applicable federal statute, the plaintiff may dismiss an action without a court order by filing:

(i) a notice of dismissal before the opposing party serves either an answer or a motion for summary judgment …” Continue reading

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Via Vadis, LLC and AC Technologies, S.A. (“Plaintiffs”) are the owner and exclusive licensee, respectively, of U.S. Patent No. RE40,521 (the “’521 Patent”) for a data access and management system. Plaintiffs accused Defendant, Inc. (“Amazon”) of direct and indirect infringement of the ’521 Patent through Amazon’s software-as-a-service and related services “by supporting the BitTorrent protocol, or other infringing peer to peer file distribution protocol, to transfer files and other data between electronic devices, such as computers.”

Amazon filed a motion to exclude the opinion of Plaintiffs’ damages expert, Paul Benoit, asserting that Benoit improperly based his damages theory on revenue for Amazon’s entire cloud storage service (Simple Storage Service or “S3”). Amazon contended that the non-accused features of that service account for more than 99.999 percent of its revenue and that Benoit violated the entire market value rule by basing his damages analysis on Amazon’s S3 revenue, “rather than looking to the revenue Amazon received or projected to receive from the usage of the BitTorrent interface.”

In opposing the motion, Plaintiffs asserted that Benoit had “articulated evidence reflecting the importance of price as a driver of sales of S3 services, and thus the economic footprint of the invention would not only reflect revenue generated from data transmitted via BitTorrent, but also the ability to attract customers to Amazon’s S3 by reducing the effective price of the service.”

As the district court explained, “[t]he heart of the parties’ disagreement thus is whether the entire market rule is implicated by starting the royalty calculation with total S3 revenues – notwithstanding subsequent apportionment – rather than the market value for the BitTorrent service.” Continue reading

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The Defendant, International Paper Company (“IPC”) filed an application for leave to file under seal a settlement agreement between Plaintiff and IPC’s co­defendants and portions of IPC’s motion to dismiss that quoted the settlement agreement.

To analyze whether the settlement agreement and the quoted portions should be filed under seal, the district court noted that: “The public has a general right to inspect and copy judicial documents so that it can monitor how public agencies work.” See Kamakana v. City & County of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006) (citing Nixon v. Warner Commc’ns, Inc., 435 U.S. 589, 597 & n.7, 598 (1978)).

The district court explained that “[t]here is a strong presumption of public access to documents falling outside a narrow class of documents—such as grand jury transcripts and warrant materials in pending pre-indictment investigations—that have ‘traditionally been kept secret for important policy reasons.’ See id. To overcome the strong presumption of public access to judicial documents, a party seeking to seal such documents in dispositive motions must ‘articulate[] compelling reasons supported by specific factual findings that outweigh the general history of access and the public policies favoring disclosure, such as the public interest in understanding the judicial process.’ Id. at 1178-79 (internal citations and quotation marks omitted). For non-dispositive motions, the party must provide good cause to seal. See Ctr. For Auto Safety v. Chrysler Grp., LLC, 809 F.3d 1092, 1096 (9th Cir. 2016). “Good cause is established on a showing that disclosure will work a clearly defined and serious injury to the party seeking closure. The injury must be shown with specificity.” Pansy v. Borough of Stroudsburg, 23 F.3d 772, 786 (3d Cir. 1994) (quoting Publicker Indus., Inc. v. Cohen, 733 F.2d 1059, 1071 (3d Cir. 1984)). Continue reading

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In this patent infringement action, plaintiff Performance Chemical Company (“PCC”) filed a motion for sanctions based on defendant, True Chemical Solutions (“True Chem”) concealing of evidence until a few weeks before trial.

In analyzing the motion, the district court noted that the allegations of misconduct were largely undisputed:

What distinguishes this case from the more “routine” situation where the Court has to determine whether the allegations of misconduct are true, is that PCC’s contentions of True Chem’s misdeeds are largely undisputed. It is really not in serious dispute that (a) True Chem hid material evidence, (b) True Chem disregarded and disobeyed not just normal discovery practices but a specific mandate from the Court to provide a complete frac trailer for inspection, (c) True Chem failed to preserve evidence and may have destroyed evidence by dismantling a trailer for the specific purpose of hiding evidence of automation, (d) True Chem filed a declaratory judgment action alleging non-infringement without sufficiently reviewing its own documents and emails, and (e) True Chem’s employees — no other phrase encapsulates it — lied under oath when asked direct questions about automation. The Court is therefore forced to conclude that True Chem acted deliberately and in bad faith.

Based on these allegations, the district court was left with the question of what sanction to impose. PCC sought the death penalty sanction. Continue reading

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In this patent infringement action, the Regents of the University of California (“the Regents”) alleged that defendant LTI Flexible Products, Inc., d/b/a Boyd Corporation (“Boyd”) improperly claimed ownership of a patent that the Regents owned and manufactured and sold technology that infringed the patent. Boyd moved to dismiss the complaint on a number of grounds, including that the Regents did not have standing to pursue the action.

The Regents contended that they owned the patent-in-suit because the inventors rights in it “were automatically assigned” to the Regents by operation of the Patent Acknowledgments. The district court explained that “[w]hether a patent assignment agreement automatically assigns or is only a promise to assign is a question of federal law. DDB Techs., L.L.C. v. MLB Advanced Media, L.P., 517 F.3d 1284, 1290 (Fed. Cir. 2008). When the agreement’s plain language is clear, that ends the inquiry. See id. Automatic assignments can occur only when the language so indicates, such as language declaring that the patent ‘shall belong to’ a party or that the assignor ‘hereby assigns’ the rights. See, e.g., Speedplay, 211 F.3d at 1253. In contrast, language that obligates an owner ‘to assign’ or says the patent ‘will be assigned’ is only an agreement to assign. See, e.g., Arachnid, Inc. v. Merit Indus., Inc., 939 F.2d 1574, 1581 (Fed. Cir. 1991). Continue reading

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In this patent dispute, Apple sought an order requiring that 11 depositions of Apple employees, noticed by Plaintiffs Masimo Corporation and Cercacor Laboratories, Inc. (“Plaintiffs”) for May and June 2021 to proceed in-person, in San Francisco, California, instead take place remotely by videoconference under Rule 30(b)(4) of the Federal Rules of Civil Procedure due to the continuing COVID-19 pandemic.

Although Apple did not provide declarations from the deponents or evidence upon which to conclude that the deponents themselves had concerns about appearing in-person for depositions or were only required to work remotely for the foreseeable future, due to the seriousness of the issues raised, the district court did not deny the request outright but instead provided Apple with an opportunity to make an appropriate showing.  As part of this showing, the district court required Apple’s counsel to submit a declaration that “identifies by name each of the 11 Apple employee-deponents who are the subject of the Application, and, for each deponent, attests that counsel has either spoken with or received an electronic communication directly from each such deponent, and answers, for each such deponent based on such communication: (a) whether the deponent states the deponent uncomfortable proceeding with an in-person deposition due to COVID-19; (b) whether the deponent has, for the preceding 30 days, worked for Apple remotely-only; (c) whether the deponent has attended any in-person work-related meeting during the preceding 30 days; and (d) whether the deponent has been advised that Apple requires the deponent to work remotely for the next 60 days. Confirmation of items (b), (c), and (d) are included based on the arguments and assertions made by Apple in the Application.” Continue reading

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Plaintiff ChromaDex, Inc. (“ChromaDex”) filed a motion for terminating sanctions against defendant Elysium Health, Inc. (“Elysium”) based on admissions that Elysium’s executives lied in their depositions regarding one of the executive’s cocaine use. The production of text messages ignited the issue.

Elysium had produced text messages from Elysium’s CEO’s phone showing that he—from September 29, 2015 through October 15, 2016—frequently purchased cocaine (referred to in the messages as “fire white,” “fire shit,” “white,” and “the special,” among other terms), including having it delivered to the Elysium office. The messages also showed that the CEO confided in January 2016 to a friend he met on a dating application that he had been “do[ing] too many drugs,” specifically “[c]oke,” and drinking a lot, for “maybe 6 months,” and how he wanted to stop but had not been able to stop. The text messages also suggest that others knew about the CEO’s drug use.

Elysium filed an ex parte application attempting to claw back the text messages, which the Magistrate Judge denied. Continue reading

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In this patent infringement action, the district court analyzed whether a litigation funding agreement should be produced. After it reviewed the litigation funding agreement that the plaintiff had entered into with a litigation funder, the district court concluded that the funding agreement itself was not relevant to issues of standing.

The district court explained that the funding agreement appeared to provide a security interest in four of the patents-in-suit to a third party, but noted that they had not been exercised and likely would not be exercised, if ever, for a long time. On that basis, the district court concluded that the litigation funding agreement and the related communications would not be relevant to standing.

In reviewing the funding agreement, however, the district court found that a portion of the agreement did not concern funding the litigation but instead detailed how the third-party fund would provide the plaintiff with money that the plaintiff could then use to purchase the four patents-in-suit. The district court concluded “[t]hat portion of the agreement, and any communications relating to it, would appear to be relevant to damages in this case (such that were that content not privileged or work product protected, it should be produced). See, e.g., Integra Lifesciences I, Ltd. v. Merck KGaA, 331 F.3d 860, 871 (Fed. Cir. 2003); Finjan, LLC v. ESET, LLC, Case No.: 17-cv-183-CAB-BGS, 2021 WL 1541651, at *6 (S.D. Cal. Apr. 20, 2021); TC Tech. LLC v. Sprint Corp., No. 16-cv-153-RGA, 2019 WL 2515779, at *10 (D. Del. June 18, 2019); Uniloc USA, Inc. v. Apple Inc., Case No. 19-cv-01692-EJD (VKD), 2020 WL 4368207, at *2 (N.D. Cal. July 30, 2020) (citing cases).”

Speyside Medical, LLC v. Medtronic CoreValve LLC et al, Case No. 1-20-cv-00361 (D. Del. April 28, 2021)

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