In a significant development for declaratory judgment actions involving jurisdictional challenges, a Northern District of California Magistrate Judge has ruled in favor of Samsung Electronics in its ongoing dispute with CM HK Ltd. The order from the court resolves key discovery issues, compelling document production from shared corporate resources and additional depositions to probe alter ego allegations. This ruling highlights the scrutiny courts apply to intertwined corporate structures in patent litigation, particularly when personal jurisdiction is at stake.
The case centers on Samsung’s bid for declaratory relief against CyWee Group Ltd.’s patent claims related to motion-sensing technology. After dismissing CyWee voluntarily and granting CM HK’s motion to dismiss for lack of personal jurisdiction, Judge Tigar allowed amendment and limited jurisdictional discovery focused on Samsung’s alter ego theory—that CM HK operates as CyWee’s extension in California, justifying jurisdiction via CyWee’s California contacts.
Under California law, alter ego requires unity of interest and ownership, plus a risk of injustice from treating entities separately. Relevant factors include commingling of assets, shared employees and offices, and disregard of corporate formalities. Judge Tigar noted colorable claims of asset manipulation between CM HK and CyWee, warranting discovery into their relationship.
Document Production: Shared Access Equals Obligation to Produce
Samsung sought formation documents, financial records, fund transfers, bank statements, and meeting minutes from all “CyWee Entities.” CM HK objected, limiting production to its own files and arguing no control over non-party documents. The court, applying Fed. R. Civ. P. 34(a), found responsive documents in CM HK’s possession via CEO Dr. Shun-Nan Liou’s deposition testimony. Dr. Liou admitted using a shared iCloud account and accessing servers for CM HK and affiliates like Xian Yue Intelligent and Shenzhen CyWeeMotion Technology. Citing Soto v. City of Concord (162 F.R.D. 603, 619 (N.D. Cal. 1995)) and PlayUp, Inc. v. Mintas (2024 WL 3621449, at *3 (D. Nev. Aug. 1, 2024)), the court emphasized that actual possession—disjunctive from custody or control—triggers production obligations, even for documents “belonging” to affiliates.
30(b)(6) Deposition: New Witness Required for Financial Topics
Samsung challenged Dr. Liou’s preparation on Topics 21 (financial metrics since 2014), 30 (company records), 39 (document locations for prior topics), and 40 (responsive document locations). While Dr. Liou addressed CM HK basics, he deferred repeatedly to “financial people” on details like accounts receivable, a $1 million transfer’s nature, and debts—revealing inadequate preparation.
Invoking Rule 30(b)(6)’s duty to educate designees on “reasonably available” information (Kelly v. Provident Life & Acc. Ins. Co., 2011 WL 2448276, at *2 (S.D. Cal. June 20, 2011)), the court granted a continued deposition in part. A new witness must cover Topic 21 (limited to CM HK), plus related document locations (Topics 39 and 40, narrowed). Topic 30 was deemed overbroad.CM HK’s “unused deposition time” defense was rejected; inefficiency from an unprepared witness does not bar relief (Great Am. Ins. Co. v. Vegas Const. Co., 251 F.R.D. 534, 540 (D. Nev. 2008)).
Individual Depositions: Lin and Wu Deemed Managing Agents
Samsung noticed 30(b)(1) depositions for Tiffany Lin (HR and investments) and Suzanna Wu (finance). CM HK resisted, claiming they were non-managing employees requiring subpoenas. Dr. Liou’s testimony shifted the analysis: Lin is “HR director and sometimes director of investments,” handling recruitment, investor coordination, and fund documentation; Wu manages financial information for CM HK’s Taiwan branch. Applying Ninth Circuit factors (Calderon v. Experian Info. Sols., Inc., 287 F.R.D. 629, 632 (D. Idaho 2012)), the court found both as “managing agents” for deposition purposes—exercising discretion in corporate matters relevant to alter ego (e.g., assets, employees, records), with aligned interests as current employees. The court compelled production of these witnesses and found that any binding effect on CM HK is for trial (Symantec Corp. v. Acronis, Inc., 2013 WL 503612, at *4 (N.D. Cal. Feb. 8, 2013)). Doubts resolved in favor of discovery (Calderon, 287 F.R.D. at 633).
Path Forward and Implications
This order reinforces that colorable alter ego claims justify probing corporate interconnections and shared servers, but courts will tailor relief to avoid overbreadth. For defendants, it underscores the risks of shared leadership and resources; for plaintiffs, it validates leveraging deposition gaps and shared resources to establish potential jurisdiction.
Samsung Electronics Co., Ltd. et al. v. CM HK, Ltd., No. 24-cv-06567-JST (LJC) (N.D. Cal. Nov. 25, 2025).
The authors of www.PatentLawyerBlog.com are patent trial lawyers at Jeffer Mangels Butler & Mitchell LLP. For more information about this case, contact Stan Gibson at 310.201.3548 or at SGibson@jmbm.com.