Opinion
No. M19-82.
May 24, 2005
OPINION
Iwasaki has moved in Part I of the court for an order to obtain discovery from U.S. Philips Corporation pursuant to 28 U.S.C. § 1782. U.S. Philips opposes the motion. In the alternative, U.S. Philips requests certain specific protections in the event Iwasaki's motion is granted, and requests reciprocal discovery.
A hearing was held on May 10. At the conclusion of the hearing the court stated that it would grant Iwasaki's motion. However, there seemed to be a possibility of settlement by the parties. Thus the court deferred issuing an opinion.
The court has now been advised that there is no settlement.
Facts
Iwasaki and U.S. Philips are engaged in patent litigation in the United States, Germany and Japan. The United States litigation is in the Southern District of New York.
Iwasaki has taken certain depositions in the Southern District case and documents have been produced by U.S. Philips to Iwasaki in that case. In connection with this discovery, the parties entered into a Stipulated Protective Order dated July 22, 2003, which was approved by the then assigned judge. Paragraph 10 of that order provides in pertinent part:
10. All discovery material, whether or not designated "CONFIDENTIAL" or "CONFIDENTIAL ATTORNEYS' EYES ONLY" shall be used solely for the prosecution or defense of the claims in this action and shall not be used for any business, commercial, competitive, personal or other purpose, including patent prosecution.
Paragraph 11 of the order provides:
11. In the event a party wishes to disclose CONFIDENTIAL or CONFIDENTIAL ATTORNEYS' EYES ONLY material for use in a related legal action, such party shall provide written notice to the party or nonparty who has produced such material, identifying (i) the related action, (ii) the material sought to be disclosed and (iii) the reason for the proposed disclosure. The written notice shall be delivered so as to be received by the producing party at least twenty (20) days in advance of the proposed disclosure. If the producing party objects in writing to the proposed disclosure, the disclosure shall not be made. If such an objection is made, the party seeking disclosure may move before this Court for an order allowing such disclosures.
The issues in the German and Japanese litigations are closely related to those in the Southern District action. Iwasaki seeks an order allowing it to use certain portions of the deposition transcripts and certain of the produced documents in connection with the German and Japanese proceedings.
There is no doubt about the fact that these materials are relevant to the German and Japanese litigations. At the same time, it appears that most of the materials are within the description of "CONFIDENTIAL" or "CONFIDENTIAL ATTORNEYS' EYES ONLY" in the Stipulated Protective Order. Iwasaki's attorneys in the Southern District action actually have the materials in question, so that there is not a question of production in a literal sense. However, it is fair to consider that there is an issue under § 1782 as to whether the materials can be used in the foreign case and whether they can be turned over to foreign counsel. And there is an issue about whether this would violate the Stipulated Protective Order.
Iwasaki applied to Judge Castel, who is now assigned to the Southern District case, for permission to use the materials in question in the German and Japanese proceedings. Judge Castel stated that the application should be made in Part I.
Discussion
An order under 28 U.S.C. § 1782 can only be directed to a person in the district in which the person "resides or is found." Section 1782 covers both the taking of testimony and the production of documents. Iwasaki considers that its entire application relates to documents. It is seeking to use portions of transcripts of deposition testimony taken in the Southern District case, rather than taking new testimony. And the materials are documents produced in the Southern District case. Iwasaki argues that it is seeking all these materials from a "person" found in this district — that person being U.S. Philips, which has possession of all the materials in question.
The main thrust of the opposition of U.S. Philips is based upon the Stipulated Protective Order. It is argued that documents were brought from abroad for production in the Southern District case and that depositions were given in the Southern District case, and that all this was done in reliance on the idea that the Stipulated Protective Order prevents the use of the materials in the way Iwasaki now proposes. U.S. Philips relies on two cases,Martindell v. Int'l Tel. Tel. Co., 594 F.2d 291 (2d Cir. 1979), and S.E.C. v. TheStreet.Com, 273 F.3d 222 (2d Cir. 2001), as standing for the proposition that a confidentiality stipulation of the kind entered in this case is almost sacrosanct against modification.
There was a lengthy discussion of the Martindell and S.E.C. cases at the hearing, at the conclusion of which it was quite apparent that these decisions simply have no bearing on the present case. Moreover, the Stipulated Protective Order, by its express language, does not contain the kind of bar which U.S. Philips argues for, and indeed invites modification where the purpose is for use in other litigation. This is clear from the language quoted earlier in this opinion. Paragraph 10 provides that the discovery material is to be used solely in connection with the Southern District action, and is not to be used for "business, commercial, competitive, personal or other reasons, including patent prosecution." But, as to use in a related legal action, paragraph 11 specifically contemplates such usage and provides a procedure to be followed, which has been followed and is still being followed by Iwasaki. Moreover, the related legal action referred to in paragraph 11 is surely the German and Japanese litigation. Thus Iwasaki is in no way violating the Stipulated Protective Order, but is carrying out the express terms of that order.
U.S. Philips argues that the protection sought is not authorized by § 1782, because the documents and the testimony do not belong to or come from a person found in this district. U.S. Philips argues that the court should look to the original sources of the testimony and the documents. None of the deposition witnesses resides or is found in this district. The documents belong to a foreign Philips entity and not to U.S. Philips.
On this point, the court rules in favor of Iwasaki. U.S. Philips is a party found in the Southern District. Under § 1782 an order can be directed against U.S. Philips. U.S. Philips has the materials which are sought. Under § 1782 U.S. Philips can be ordered to make materials in its possession available for discovery in aid of foreign proceedings.
The court must add that the argument of U.S. Philips is anomalous in view of the fact that the Stipulated Protective Order specifically invites an application to have U.S. Philips make available the discovery material for use in related litigation. There is no indication in the Stipulated Protective Order that the discovery material is out of bounds because the documents come from a foreign affiliate of U.S. Philips and the deposition transcripts relate to the testimony of non-residents.
Conclusion
For the foregoing reasons, Iwasaki's application is granted. However, there are certain specific protections requested by U.S. Philips in the event that Iwasaki's application is granted and also a request for reciprocal discovery. These matters will be dealt with in the settlement of the order.
Settle Order.