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finding that third Intel factor weighed in favor of permitting discovery for use in French proceedings, noting "the French court may still determine for itself whether to admit the evidence obtained through discovery in the United States."
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Case No.16-mc-80037-HRL
01-04-2017
In re: Ex Parte Application of: MENTOR GRAPHICS CORPORATION, Applicant, For an Order Pursuant to 28 U.S.C. § 1782 Granting Leave to Obtain Discovery For Use in Foreign Proceedings.
ORDER GRANTING-IN-PART AND DENYING-IN-PART APPLICATION FOR AN ORDER PURSUANT TO 28 U.S.C. § 1782 FOR LEAVE TO OBTAIN DISCOVERY FOR USE IN FOREIGN PROCEEDINGS
Re: Dkt. No. 1
Mentor Graphics Corporation ("Mentor Graphics") requests discovery in aid of a proceeding before a French court pursuant to 28 U.S.C. Section 1782. Mentor Graphics and its French subsidiary, Meta Systems SARL, have been sued in France by Alain Raynaud ("Raynaud"), a resident of the Northern District of California. Dkt. No. 2, Cleveland Decl., at ¶ 8; Dkt. No. 3, Dessrousseaux Decl., Ex. 1.
Raynaud, a former employee of Mentor Graphics, is named as a co-inventor of U.S. Patent No. 6,240,376 ("the '376 Patent"). Id. at 3; Dkt. No. 2, Cleveland Decl., Ex. A. After Raynaud left Mentor Graphics, the latter asserts, he went to work for a company called EVE-USA, Inc. ("EVE"). Dkt. No. 2, Cleveland Decl., Ex. B. In 2006, Mentor Graphics sued EVE for infringing the '376 patent and ultimately resolved the dispute through a license agreement. Dkt. No. 2, Cleveland Decl., Ex. D; Dkt. No. 1, at 4. EVE, however, was later purchased by Synopsys, Inc. ("Synopsys"), which did not have a license to use the patent. See Dkt. No. 2, Cleveland Decl., Ex. E. In a suit against Synopsys, Mentor Graphics received a judgment of over $36 million. Dkt. No. 2, Cleveland Decl., Ex. F. Raynaud has since sued Mentor Graphics and its French subsidiary for "additional remuneration" related to his invention of the '376 patent. Dkt. No. 3, Desrousseaux Decl., at ¶ 3.
Mentor Graphics filed the present application for an order pursuant to 28 U.S.C. Section 1782 in early 2016, seeking production of documents and a deposition from Raynaud. Dkt. No. 1. The testimony and documents are sought to potentially develop an argument that a five-year French Statute of Limitations bars or limits Raynaud's recovery. Dkt. No. 3, Desrousseaux Decl., at ¶ 11. More specifically, Mentor Graphics seeks to explore whether Raynaud "knew . . . that Mentor licensed the patent in 2006, more than five years before" he filed suit in France. Dkt. No. 1, at 2. To this end, the proposed subpoena filed with the court requests a deposition and two categories of documents: (1) "[n]on-privileged documents sufficient to show the extent and timing of Mr. Raynaud's knowledge of Mentor's exploitation of the invention and its assertion of infringement of U.S. Patent No. 6,240,376 against: a) products made by or on behalf of EVE; b) products made by or on behalf of Synopsys; and/or c) any other product;" and (2) "[a]ll agreements and non-privileged documents regarding U.S. Patent No. 6,240,376, or its invention." Dkt. No. 1, Ex. 1.
Several weeks after filing its application, Mentor Graphics informed this court that Raynaud had objected to the proposed U.S. discovery in the French proceeding. Dkt. No. 7. This court issued an interim order instructing Mentor Graphics to keep it informed of new developments in the adjudication of Raynaud's objections before the French court, as those developments could have an effect on this court's decision on the application. Dkt. No. 8. Mentor Graphics filed periodic updates over the summer and autumn. The most recent update stated that the French judge issued a decision that "effectively rejected all of Mr. Raynaud's objections." Dkt. No. 14, at 1. Mentor Graphics attached a copy of the decision in French and an uncertified translation. Dkt. No. 14, Exs. A, B. The court requested a certified translation, Dkt. No. 15, which Mentor Graphics supplied, Dkt. No. 16.
As the French court has ruled on Raynaud's objections, the court now turns to Mentor Graphics' application.
LEGAL STANDARD
Ex parte applications are appropriate for seeking discovery pursuant to Section 1782. Ex parte applications are common in this context and "are typically justified by the fact that the parties will be given adequate notice of any discovery taken pursuant to the request and will then have the opportunity to move to quash the discovery or to participate in it." In re Republic of Ecuador, No. C-10-80225 MISC CRB (EMC), 2010 WL 370247, at *3 (N.D. Cal. Sept. 15, 2010) (quoting In re Letter of Request from Supreme Court, 138 F.R.D. 27, 32 n.6 (S.D.N.Y. 1991).
Pursuant to Section 1782, a district court may order a person residing within its district to produce documents or testimony for use in a foreign legal proceeding, unless the disclosure would violate a legal privilege. 28 U.S.C. § 1782(a). This statute may be invoked where (1) the discovery is sought from a person residing in the judicial district in which the application is made; (2) the discovery is for use in a proceeding before a foreign tribunal; and (3) the application is a foreign or international tribunal or an 'interested person.'" Id.; Intel Corp. v. Advanced Micro Devices, Inc., 52 U.S. 241, 246-47 (2004).
A district court is not required to grant the application, but instead retains discretion to determine what discovery, if any, should be permitted. Id. at 264. In addition to the statutory requirements, the Supreme Court has counseled that the district court should consider the following discretionary factors: (1) whether 'the person from whom discovery is sought is a participant in the foreign proceeding"; (2) "the nature of the foreign tribunal, the character of the proceedings underway abroad, and the receptivity of the foreign government or the court or agency abroad to U.S. federal-court judicial assistance"; (3) whether the discovery request is "an attempt to circumvent foreign proof-gathering restrictions or other policies of a foreign country or the United States"; and (4) whether the discovery requested is "unduly intrusive or burdensome." Id. at 264-65.
DISCUSSION
A. Statutory Requirements.
Mentor Graphics satisfies the statutory requirements. It has made a prima facie showing that Raynaud resides in Mountain View, in Santa Clara County, part of California's Northern District. Dkt. No. 2, Cleveland Decl., ¶ 8. The requested discovery is for use in a foreign proceeding before the courts in France. Dkt. No. 3, Desrousseaux Decl., Ex. 1. And Mentor Graphics is a litigant in the foreign proceeding, which makes it an "interested person." In Re Republic of Ecuador, No. C-10-80225 MISC CRB (EMC), 2010 WL 3702427, at *3 (N.D. Cal. Sept. 15, 2010).
A. Discretionary Factors.
(1) Mentor Graphics is a participant in the foreign proceeding, which weighs against permitting the discovery. HT S.R.L. v. Velasco, 125 F. Supp. 3d 211, 223 (D. Md. 2015). (2) The court is not aware of any policy of the French courts making them unreceptive to assistance from United States federal courts. See In re Ex Parte Application of Societe D'Etude de Realisation Et D'Exploitation Pour Le Traitment du Mais, No. 13-mc-0266, 2013 WL 6164435, at *3 (E.D. Pa. Nov. 22, 2013); In re Consellior SAS, Kerfraval, Association De Documentation Pour L'Industrie Nationale, CFEB, No. 13 MC 34, 2013 WL 5517925, at *2 (D. Conn. Oct. 2, 2013). Additionally, the evidence sought is likely unattainable through the French courts in this proceeding, and it may be relevant to a Statute of Limitations defense. Desrousseaux Decl., at ¶ 11; see also London v. Does 1-4, 279 F. App'x 513, 515 (9th Cir. 2008) (permitting discovery where the evidence sought would have been unavailable in French courts but was "critical" to a claim). This factor weighs in favor of permitting the discovery. (3) The court has no reason to believe that Mentor Graphics is seeking to circumvent foreign restrictions or limitations on discovery. Though depositions and requests for categories of documents are asserted to be unavailable in the French proceeding, Desrousseaux Decl., at ¶ 18, a party does not "circumvent" foreign discovery procedures merely by pursuing material in the United States that would not be discoverable in the foreign proceeding. HT S.R.L., 125 F. Supp. 3d at 225 ("It is irrelevant if the matter sought is not discoverable in the foreign tribunal because 28 U.S.C. § 1782(a) does not impose a discoverability requirement."); Ex rel Application of Winning (HK) Shipping Co., No. 09-22659-MC, 2010 WL 1796579, at *10, n.7 (S.D. Fla. Apr. 30, 2010). Further, the French court may still determine for itself whether to admit the evidence obtained through discovery in the United States. The third factor also weighs in favor of permitting the discovery.
The ruling of the French court on Raynaud's objections further supports this court's exercise of its discretion to permit the requested discovery. The French court concluded that the neither the Hague Convention nor the French rules of civil procedure prevented discovery in this court, provided that it was conducted in a lawful manner, and provided that the French court had an opportunity to assess any evidence obtained through such discovery at the appropriate time. Dkt. No. 16, Ex. A. The court does not find anything in the order of the French court suggesting that that tribunal would not be receptive to United States court assistance or that the discovery requested here is sought to circumvent French restrictions and limitations on proof-gathering.
(4) In assessing the fourth discretionary factor, whether the discovery sought is unduly burdensome, the court analyzes the request under Federal Rule of Civil Procedure 26(b). The court considers this factor "in the context of the relevance of the material, the need for the discovery, the breadth of the request, the time period covered by the request, and the particularity of the request and burden imposed." In re Consellior SAS, Kerfraval, Association De Documentation Pour L'Industrie Nationale, CFEB, No. 13 MC 34, 2013 WL 5517925, at *3 (D. Conn. Oct. 2, 2013). Here, the material sought in the deposition and the first category of documents is relevant to the statute of limitations issue, and it is likely not available through the French proceedings. Dkt. No. 3, Desrousseaux Decl., at ¶¶ 11, 18. The requested documents cover a substantial period of time (2001-2016), but this temporal scope is required by the nature of the events at issue and the evidence sought. The deposition—lasting four hours—and the first category of documents sought are narrowly tailored to solicit relevant information.
The first category seeks "[n]on-privileged documents sufficient to show the extent and timing of Mr. Raynaud's knowledge of Mentor's exploitation of the invention and its assertion of infringement of U.S. Patent No. 6,240,376 against: a) products made by or on behalf of EVE; b) products made by or on behalf of Synopsys; and/or c) any other product[.]" Dkt. No. 1, Ex. 1. --------
The second category of documents requested, however—"[a]ll agreements and non-privileged documents regarding U.S. Patent No. 6,240,376, or its invention," Dkt. No. 1, Ex. 1—is overbroad when weighed against the relevance of the information sought. This request covers a greater temporal span than the request for the first category of documents, spanning at least eighteen years (as documents regarding the "invention" of the '376 patent could date from well before 1998, when Mentor Graphics asserts that the patent application was filed). Additionally, the request would undoubtedly include in its scope documents that have nothing to do with the purposes for which discovery is sought (exploring the five-year statute of limitations argument and seeking evidence inconsistent with positions Raynaud has taken in France regarding the value of the patent). The court is not persuaded that the likely benefit of this second category of documents outweighs the considerable burden of finding and producing responsive documents, especially considering that much of the information Mentor Graphics seeks may be available through the first category of documents or the deposition. See In re Ex Parte Application of Qualcomm, Inc., 162 F. Supp. 2d 1029, 1044-45 (N.D. Cal. 2016) (finding a request for documents spanning five to eleven years and including confidential information overbroad, even when weighed against the information's relevance).
CONCLUSION
Thus, with the exception of the second category of documents requested, which is overbroad and unduly burdensome, the court finds that the discretionary factors weigh in favor of permitting the discovery requested. As such, the court grants Mentor Graphics' application for discovery pursuant to Section 1782 with respect to the first category of documents sought and the deposition and denies it with respect to the second category of documents sought. The court further approves the subpoena and proposed protective order as modified (the modified subpoena and protective order are appended to this order).
The instant order is without prejudice to Raynaud or another interested party to seek to quash the subpoena. In the event any discovery disputes arise, the parties shall comply with the undersigned's Standing Order re: Civil Discovery Disputes, which, among other things, requires the submission of a joint discovery letter brief, rather than a noticed motion.
IT IS SO ORDERED. Dated: 1/4/2017
/s/_________
HOWARD R. LLOYD
United States Magistrate Judge
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