Opinion
22CV492-JO (BLM)
02-29-2024
WOODWAY USA, INC., Plaintiff, v. LIFECORE FITNESS, INC. dba Assault Fitness, Defendant.
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION TO COMPEL AND PLAINTIFF'S AND DEFENDANT'S RELATED LETTER BRIEFS CASE PARTICIPANTS ONLY [ECF NOS. 81, 91, AND 93]
Hon. Barbara L. Major United States Magistrate Judge
Currently before the Court is Defendant's February 1, 2024 Motion to Compel [ECF No. 81-1 (“MTC”)], Plaintiff's February 8, 2024 opposition to the motion [ECF No. 83 (“Oppo.”)], and Defendant's February 13, 2024 reply [ECF No. 87 (“Reply”)]. Also before the Court are the parties' February 20, 2024 letter briefs [ECF Nos. 91 ("D Brief") and 93 ("P Brief")]. For the reasons set forth below, Defendant's motion and the related letter briefs are GRANTED IN PART AND DENIED IN PART.
LEGAL STANDARD
The scope of discovery under Federal Rules of Civil Procedure (“Fed. R. Civ. P.”) is defined as follows:
Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case,
considering the importance of the issues at stake in the action, the amount in controversy, the parties' relative access to relevant information, the parties' resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit. Information within this scope of discovery need not be admissible in evidence to be discoverable.Fed. R. Civ. P. 26(b)(1). Typically, the relevance standard is broad in scope and “encompass[es] any matter that bears on, or that reasonably could lead to other matters that could bear on, any issue that is or may be in a case.” Doherty v. Comenity Capital Bank, 2017 WL 1885677, at *2 (S.D. Cal. May 9, 2017). Relevance, however, is not without limits. Id. The 2015 amendment to Rule 26(b) removed the phrase “reasonably calculated to lead to the discovery of admissible evidence” because it was often misconstrued to define the scope of discovery. Fed.R.Civ.P. 26(b)(1) advisory committee's notes (2015 amendment). Instead, to fall within the scope of discovery, the information must also be “proportional to the needs of the case,” requiring lawyers to “size and shape their discovery requests to the requisites of a case” while “eliminat[ing] unnecessary or wasteful discovery.” Fed. Civ. R. P. 26(b)(1); Cancino Castellar v. McAleenan, 2020 WL 1332485, at *4 (S.D. Cal Mar. 23, 2020) (quoting Roberts v. Clark Cty. Sch. Dist., 312 F.R.D. 594, 603 (D. Nev. 2016)).
District courts have broad discretion to determine relevancy for discovery purposes. D.M. v. County of Merced, 2022 WL 229865, at * 2 (E.D. Cal. Jan. 26, 2022) (citing Hallett v. Morgan, 296 F.3d 732, 751 (9th Cir. 2002) and Surfvivor Media v. Survivor Prods., 406 F.3d 625, 635 (9th Cir. 2005)). District courts also have broad discretion to limit discovery to prevent its abuse. See Fed.R.Civ.P. 26(b)(2) (instructing that courts must limit discovery where the party seeking the discovery “has had ample opportunity to obtain the information by discovery in the action” or where the proposed discovery is “unreasonably cumulative or duplicative,” “obtain[able] from some other source that is more convenient, less burdensome or less expensive,” or where it “is outside the scope permitted by Rule 26(b)(1)”). Further, “[w]hen analyzing the proportionality of a party's discovery requests, a court should consider the importance of the issues at stake in the action, the amount in controversy, the parties' relative access to the information, the parties' resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit. Cancino, 2020 WL 1332485, at *4 (citing Fed.R.Civ.P. 26(b)(1)).
Fed. Civ. R. P. 34 provides that a party may serve on another a request for production of documents, electronically stored information, or tangible things within the scope of Fed. Civ. R. P. 26(b). Fed.R.Civ.P. 34(a). Where a party fails to produce documents requested under Rule 34, the party propounding the request for production of documents may move to compel discovery. See Fed.R.Civ.P. 37(a). “The party seeking to compel discovery has the burden of establishing that its requests satisfy the relevancy requirements of Rule 26(b)(1). Thereafter, the party opposing discovery has the burden of showing that the discovery should be prohibited, and the burden of clarifying, explaining, or supporting its objections.” Williams v. County of San Diego, 2019 WL 2330227, at *3 (citing Bryant v. Ochoa, No. 7cv200 JM (PCL), 2009 WL 1390794, at *1 (S.D. Cal. May 14, 2009) (internal quotations omitted).
DISCUSSION
Defendant seeks an order from the Court compelling Plaintiff “to produce: (1) profit and loss statements related to Woodway's treadmill business segment, or its total business to the extent not segmented, from 2012 to present; (2) all license agreements and related documents from 2010 to present; and (3) production capacity and planning reports.” Mot. at 5.
Plaintiff contends that Defendant's motion should be denied on both substantive and procedural grounds. Oppo. at 6. Specifically, Defendant's attempt to obtain Plaintiff's “annual company-wide profit and loss statements from the year 2012 to the present is overreaching” and Plaintiff has already produced detailed financial information dating back to 2017. Id. Additionally, the licenses Defendant seeks to compel do not relate to the patents and patented technology at issue and the request for production capacity reports is premature. Id. at 6-7. Finally, Plaintiff argues that Defendant's motion is untimely as Defendant served overlapping discovery requests in an attempt to circumvent the thirty-day deadline for motions to compel. Id. at 7.
A. Financial Statements Such as Profit and Loss Statement and the Like
On January 3, 2023, Defendant propounded its First Set of Requests for Production (“RFPs”). Oppo. at 7; see also ECF No. 83-1, Declaration of Ashley M. Koley ('“Koley Decl.”) at ¶ 2, Ex. A. RFP Nos. 35 and 37 sought financial information from Plaintiff. Id. Plaintiff objected but by March 3, 2023, Plaintiff produced responsive documents that included “detailed financial reports relating to Woodway's line of curved manual treadmills, including revenue, sales, costing, and profits down to a by-unit basis.” Id. at 8; see also Koley Decl. at ¶ 3. On February 24, 2023, Defendant requested a meet and confer with Plaintiff regarding its objections and responses to Defendant's first set of RFPs. Id. at 8; see also Koley Decl. at ¶ 4. The parties met and conferred several times and Defendant never moved to compel additional responses or raise additional concerns regarding Plaintiff's responses. Id.
RFP No. 35 sought “[a]ll documents that refer or relate to, on an annual basis, the sales, revenues, prices, costs and profits of all Curved Manual Treadmills made and/or sold by Woodway and all replacement parts.” Oppo. at 8; see also Koley Decl. at ¶2, Exh. A.
RFP No. 37 sought “[a]ll documents that refer or relate to financial reporting used and disseminated by Woodway internally among management related to sales, revenues, expenses and profitability of Curved Manual Treadmills.” Oppo. at 8; see also Koley Decl. at ¶2, Exh. A.
On December 8, 2023, Defendant propounded its Sixth Set of RFPs which included RFP Nos. 97 and 100. Id. at 8; see also Koley Decl. at ¶ 5. Plaintiff objected, mostly challenging the relevancy of Defendant's request. Id. Plaintiff supplemented its responses on January 30, 2024 “with up-to date information through December 31, 2023, including a detailed breakdown of the one way bearing safety device assembly which is incorporated into each curved manual treadmill sold by Woodway” and on February 2, 2024, Plaintiff “produced bill of material costing information for each part of Woodway's curved manual treadmills.” Id. at 9; see also Koley Decl. at ¶ 6.
Request for Production (“RFP”) No. 97 seeks:
REQUEST FOR PRODUCTION NO. 97: Business plans, annual reviews, budgets, strategic plans or the like since 2004 that outline financial, marketing, production and other business strategies and results for the short term and/or the long-term business planning cycle related to the business segment, division or group that encompasses and/or is involved in the sale of Treadmills.ECF No. 81-3 (“Exhibit 1”). Plaintiff responded to RFP No. 97 as follows:
RESPONSE TO REQUEST FOR PRODUCTION NO. 97: In addition to its Preliminary Statement and General Objections, which are incorporated herein by reference, Woodway objects to this Request as overly broad and unduly burdensome to the extent that it seeks documents and things that are not relevant to either party's claims or defenses and to the extent that it seeks information that is disproportionate to the needs of the case. Specifically, it is unclear how Woodway's business plans, annual reviews, budgets, and strategic plans from the last twenty years concerning “Treadmills” as defined by Assault are relevant to either party's claims or defenses. Woodway further objects to this Request to the extent that it seeks information that is protected by and subject to the rules governing any applicable privilege or protection, including but not limited to the attorney-client privilege and the work-product immunity doctrine. Woodway will not produce documents responsive to this Request and invites Assault to meet and confer regarding the same.Id. RFP No. 100 seeks:
REQUEST FOR PRODUCTION NO. 100: Historical financial statements: income statements, balance sheets, contribution margin reports, gross margin reports or any other periodic financial reports since 2008 that show the financial results related to: a. The business segment, division or group that encompasses and/or is involved in the sale of Covered Woodway Treadmills; b. The company's overall operations (audited, reviewed, compiled by outside accountants, or internally generated); c. The costs and profits (i.e. gross margin, contribution margin, or operating profit) on each of the Covered Woodway Treadmill products sold by Woodway; and d. The costs and profits (i.e. gross margin, contribution margin, or operating profit) on each Treadmill product sold by Woodway that Woodway contends are not covered by any of the Asserted Patents.Id. Plaintiff responded to RFP No. 100 as follows:
RESPONSE TO REQUEST FOR PRODUCTION NO. 100: In addition to its Preliminary Statement and General Objections which are incorporated herein, Woodway objects to this Request to the extent it is duplicative of Request for Production Nos. 21, 35, and 37, and 73 and thus incorporates by reference all of Woodway's objections and responses to those Requests herein. Woodway further objects to this Request to the extent that it seeks to evade discovery deadlines set in Magistrate Judge Barbara Major's Chamber's Orders requiring that “[a]ll discovery motions must be filed within 30 days of the event giving rise to the dispute.” Certified Nutraceuticals, Inc. v. Clorox Co., No. 3:18-CV-00744-W-KSC, 2020 WL 4339489, at *3- 4 (S.D. Cal. July 28, 2020) (finding substantially similar discovery requests that seek to evade the court's discovery deadlines make for an untimely motion to compel discovery). Woodway objects to Assault's attempt to restart the clock on this particular discovery dispute by propounding duplicative discovery requests. Woodway further objects to this Request to the extent that it seeks documents not relevant to either party's
claims or defenses in this case and thus are disproportionate to the needs of the case. Specifically, except for some sales and costs information concerning the Covered Woodway Treadmills, all of the requested financial documents sought in this Request, especially dating back to 2008, have no bearing on either party's claims or defenses. Subject to and without waiving its General or Specific Objections, Woodway will not produce any income statements, balance sheets, contribution margin reports, or gross margin reports. With respect to subpart (a), Woodway has already produced documents reflecting sales of all Covered Woodway Treadmills and will update such production in due course. With respect to subpart (b), Woodway invites Assault to meet and confer regarding this portion of the Request. With respect to subpart (c), Woodway has already produced responsive documents reflecting relevant costs for each Covered Woodway Treadmill. With respect to subpart (d), Woodway invites Assault to meet and confer regarding this portion of the Request.Id. After meeting and conferring, Defendant agreed to narrow RFP Nos. 97 and 100 to a period of 2012 to the present and to only seek Plaintiff's profit and loss statements “from 2012 to present related to Woodway's treadmill business segment, and/or its total business to the extent the treadmill business is not segmented.” MTC at 7. Plaintiff continued to object to the request. Id.
Defendant argues that the requested information is relevant to the issue of damages especially given that in order to recover lost profits, Plaintiff must prove a causal relationship between the alleged infringement and its profit loss. Id. Defendant argues that the profit/cost/profit spreadsheet Plaintiff has submitted is insufficient as Defendant
is entitled to Woodway's P&Ls (or the like), regarding the company as a whole, and segmented to Woodway's treadmill products, to confirm whether Woodway is including all costs-such as overhead, administrative, building, etc.-in its price/cost/profit analysis of its patented products.Id. at 8. Defendant further argues that the information is relevant to reasonable royalty damages and notes that the 2012-time frame is appropriate because the alleged infringement began in 2017 and starting at 2012 “demonstrates the historical profitability and profitability trends of Woodway prior to the parties' hypothetical negotiation.” Id. at 9.
Plaintiff contends that Defendant is not entitled to its company-wide profit and loss statements. Oppo. at 9. Plaintiff also contends that it has already produced “detailed revenue, cost, and profit information relating to all curved manual treadmills, including specific information about the one-way bearing safety device assembly as well as detailed model costed bills of material” and that it's companywide financial data is less specific and encompasses products that are not at issue in this case. Id. at 9-10; see also Koley Decl. at ¶ ¶ 3, 6. Plaintiff states that it does not maintain annual loss/profit statements on a product-by-product basis. Id. Plaintiff further contends that Defendant's position is legally meritless and that its cited authority is inapposite. Id. at 10-14.
Defendant replies that RFP Nos. 97 and 100 seek documents (profit and loss statements) showing sales volumes (units and dollars), pricing, gross and net revenues, direct, indirect, fixed, and variable costs and/or deduction, and margins and/or profits for any treadmill sold by Plaintiff since 2012. Reply at 5-6. Defendant also replies that Plaintiff should not be permitted to withhold documents that may include non-responsive information as Defendant is entitled to confirm the veracity of the financial documents Plaintiff has produced, especially given that the documents are not kept in the ordinary course of business and were created for the litigation, and Plaintiff's case citations are unpublished, out of circuit, and inapposite. Id. Defendant further replies that the documents are relevant to a plurality of damages issues including:
(1) illuminating the circumstances around a hypothetical negotiation, (2) benchmarking the profitability of Woodway's allegedly patented “curved manual treadmills” against its other unpatented treadmills-e.g., if all treadmills, whether patented or non-patented, are equally profitable, then the asserted patent features arguably add little to no value, (3) determining if all costs have been included in the already-produced financials prepared unilaterally by Woodway for this litigation, and (4) evaluating the commercial success of the allegedly patented products-e.g., the success of nonpatented treadmills compared to patented treadmills can show a lack of commercial success as to the latter.Id. at 8.
Defendant's request to compel companywide profit and loss statements from Plaintiff is DENIED. As an initial matter, RFP Nos. 97 and 100 overlap with RFP Nos. 37 and 38 to the extent that RFP Nos. 97 and 100 are seeking information regarding the curved treadmills. Plaintiff produced detailed financial information regarding its curved treadmills in response to RFP Nos. 37 and 38 and Defendant did not file a timely motion to compel further responses to RFP Nos. 37 and 38, so to the extent Defendant is seeking further financial information regarding the curved treadmills, Defendant's motion is denied. The Court also notes that Plaintiff stated that it does not have annual profit and loss statements on a product-by-product basis so the Court cannot compel Plaintiff to produce such documents. See EVO Brands, LLC v. Al Khalifa Group LLC, 2023 WL 5506883, at *10 (C.D. Cal., Aug. 17, 2023) ('“the Court cannot compel Plaintiffs to produce documents that they state do not exist.”); see also Hardy v. Moreno, 2023 WL 2725928, at *3 (E.D. Cal., Mar. 30, 2023) (“The Court cannot compel Defendants to produce documents that do not exist”).
With respect to company-wide financial information, the Court finds that Defendant has not shown that the information is relevant and proportional to the needs of the case. While Defendant sets forth several arguments for the relevancy and proportionality of the requested companywide financial information, the Court finds that the arguments are not compelling, especially in light of the breadth and invasiveness of the requests. Defendant is seeking significant and sensitive financial information for a lengthy period of time from a direct competitor regarding products that are unrelated to the patents at issue in this dispute. Defendant argues that the information could help illuminate the circumstances of a hypothetical negotiation and evaluate the profitability and commercial success of the patented products as compared to the unpatented products. This argument is speculative, especially since Plaintiff's profit and loss statements do not contain a break down by product or type of product, and Defendant has not established that the requested, detailed financial information regarding Plaintiff's other products, including the motorized flat treadmills, are relevant and proportional to the claims at issue in this case. Generac Power Systems, Inc. v. Kohler Co., 2012 WL 2049945, at *3 (E.D. Wis., June 6, 2012) (“financial documents provide distinct insight into the business of their owner. The Court is uncomfortable demanding the disclosure of such sensitive products to Kohler's direct competitor, when it simultaneously cannot identify a strong reason for their disclosure”); see also C&C. See C & C Jewelry Mfg., Inc. v. West, 2011 WL 2559638, at *1 (N.D. Cal., June 28, 2011) (denying Defendant's motion to compel Plaintiff's financial information and revenues derived from non-accused products for an unlimited period of time to aid in the determination of a reasonable royalty and noting that “Defendant cites no binding precedent holding that the overall financial condition of an accused infringer is per se relevant to the determination of a reasonable royalty. As a logical matter, this court is unconvinced that sales of C & C's non-accused products, which reportedly are not made of tungsten carbide, have any relevance to the accused rings. There is nothing in the record presented to suggest, for example, that sales of C & C's other products are driven by or otherwise connected to the accused rings.”). Finally, the cases cited by Defendant are distinguishable, unpersuasive, and mostly from courts outside of the Ninth Circuit. See Fin. Bus. Equip. Sols., Inc. v. Quality Data Sys., Inc., 2008 WL 4663277, at *1 (S.D. Fla. Oct. 21, 2008) (does not involve patent litigation and addresses claims for “fraud in the inducement, common law fraud, tortious interference, and conversion arising from a sales and service agreement (for banking equipment)”); see also Phase Four Indus., Inc. v. Marathon Coach, Inc., 2006 WL 1465313, at *8 (N.D. Cal. May 24, 2006) (ordering plaintiff, who was the accused infringer, to produce financial information to defendant where for at least one of the requests for “[a]ll financial statements[,]” Plaintiff agreed to produce responsive documents and just failed to do so); Kove IO, Inc. v. Amazon Web Servs., Inc., 2021 WL 4516413, at *1 (N.D. Ill. July 14, 2021); Uni-Splendor Corp. v. Remington Designs, LLC, 2017 WL 10581102, at *5 (C.D. Cal. Sept. 5, 2017); and Superior Indus., LLC v. Masaba, Inc., 2011 WL 13136008, at *3 (D. Minn. May 17, 2011).
Accordingly, Defendant's motion to compel further response to RFP Nos. 97 and 100 is DENIED.
B. Fed. R. Civ. P. 30(b)(6) Deposition Topic No. 7.
On February 20, 2024, the parties filed letter briefs on an additional discovery issue that was not included in the initial briefing. P Brief and D Brief. The letter briefs discuss a dispute regarding 30(B)(6) Deposition Topic No. 7. Id. Topic No. 7 is related to RFP No. 97 and seeks:
The following regarding any Treadmill made, used, offered for sale, sold, or imported by Woodway since 2007: sale volumes (by units and dollars), pricing,
gross and net revenues, costs, deductions (including direct, indirect, fixed, and variable costs and deductions), margins and/or profits, and all calculations of margins and/or profits.Id. After meeting and conferring, Defendant agreed to limit the time frame to 2012 instead of 2007. D Brief at 1. As with RFP No. 97, Defendant argues that discovery regarding treadmills that are not covered by the asserted patents is appropriate and relevant to
(1) determining if Woodway is including all costs in the cost/profit analysis of its patented products that it unilaterally prepared, (2) benchmarking the profitability of Woodway's patented versus unpatented treadmills to evaluate the value-if any-added by the patented features,[] (3) comparing the commercial success of Woodway's patented versus unpatented treadmills-a factor used to analyze patent invalidity,[] and (4) assessing whether Woodway would have dealt more favorably with LifeCORE during a GeorgiaPacific hypothetical negotiation if it was not profitable or faced shrinking profitability marginsId. at 2. Additionally, Defendant argues that the deposition topic is necessary in light of information that Plaintiff produced on January 23, 2024, eleven months after the information was requested, stating that Plaintiff took a 51% interest in Samsara Fitness, LLC in connection with an Intellectual Property License Agreement in which Plaintiff licensed U.S. Patent No. 9,039,580, which is asserted in this case, to Samsara for a royalty of 6%. Id. at 2-3. Defendant argues that this information, in conjunction with the fact that Plaintiff's president admitted that Plaintiff has “prices, unit and dollar volumes, costs, and profits, [and] other documents, associated with [] sales [of Samsara treadmills,]” is another reason why its motion should be granted as to RFP Nos. 97 and 100, Topic No. 7, and as to extending the scheduling order. Id. at 3. Defendant notes that its discovery requests sought responses from Plaintiff and its subsidiaries, joint ventures, and brother or sister corporations, meaning information about Samsara's treadmills should have been included in all of Plaintiff's discovery responses which has not occurred and which will be discussed in a future meet and confer and addressed in future discovery requests. Id. at 4.
Plaintiff objects to Topic No. 7 and contends that the information is not relevant, “‘[P]ricing, gross and net revenues, costs, deductions (including direct, indirect, fixed, and variable costs and deductions), margins and/or profits, and all calculations of margins and/or profits' for Woodway treadmills on a product-by-product basis are not prepared or maintained in the ordinary course of Woodway's business[,]” and that Topic No. 7, which seeks “more than 15 years of granular financial information for products having nothing to do with Woodway's damages theories is disproportionate to the needs of the case.” P Brief at 1. Specifically, Plaintiff contends that financial information regarding flat, motorized treadmills is not relevant to any issue including Plaintiff's damages theories and that its arguments against Defendant's attempts to compel company-wide profit and loss statements and non-patent related licenses apply equally to Topic No. 7. Id. at 4. Plaintiff further contends that Topic No. 7 is not a reason for granting Defendant's request to extend the scheduling order which should be denied because Plaintiff agreed to extend the deposition schedule and produced Mr. Scott Hoerig twice, on February 2, 2024 when he was deposed in his individual capacity and again on February 16, 2024 as the 30(b)(6) witness. Id. at 3,5. Plaintiff notes that the 30(b)(6) deposition focused on Plaintiff's “finances concerning curved, manual treadmills, which lasted less than an hour and a half.” Id.
Defendant's request regarding Topic No. 7 is DENIED for the same reasons the Court denied Defendant's request to compel further response to RFP No. 97.
While the parties mention a potential dispute regarding the production of information relating to Samsara's products, [see D Brief at 4], the dispute is not ripe and the Court's ruling in this order does not prevent Defendant from obtaining relevant and proportional discovery from Plaintiff regarding Samsara's Curved Treadmills and its use or violation of the patent in suit. The Court will resolve Defendant's motion to continue dates in a separate order.
C. License Agreements Regarding Patents Directed To Treadmills
On January 3, 2023, Defendant propounded its First Set of RFPs that included RFP Nos. 33, 34, 47, and 48. Oppo. at 14; see also Koley Decl. at Exh. A. Plaintiff objected to the requests, in part due to confidentiality obligations under protective orders in other litigation, and on February 24, 2023, Defendant requested a meet and confer with Plaintiff regarding its objections and responses. Id. The parties met and conferred several times, and Plaintiff supplemented its responses and informed Defendant that there would be no additional supplementation. Id. at 15. Defendant did not move to compel further responses. Id.
RFP No. 33 sought “All Documents that refer or relate to any assignment, donation, transfer, advertisement, sale, offer for sale, auction, license, attempt to license, litigation, threat to litigate, covenant not to sue, settlement agreement or any other enforcement attempt or agreement involving any of the Patents-in-Suit or Related Patents.” Koley Decl. at Exh. A.
RFP No. 34 sought “All documents that refer or relate to any decisions to license or not to license the technology related to any of the Patents-in-Suit or Related Patents.” Koley Decl. at Exh. A.
RFP No. 47 sought “All licenses that Woodway contends are relevant to this action or that Woodway intends to rely on as part of its damages contentions or analysis.” Koley Decl. at Exh. A.
RFP No. 48 sought “All licenses for any Treadmill or Treadmill component patents.” Koley Decl. at Exh. A.
On December 8, 2023, Defendant propounded its Sixth Set of RFPs which included RFP Nos. 105 and 106. Id. Plaintiff objected for a variety of reasons including duplication of a prior request. Id.
Request for Production (“RFP”) No. 105 seeks:
REQUEST FOR PRODUCTION NO. 105: All documents and things evidencing the following regarding any agreements, or proposed agreement, regarding any patent directed to a Treadmill, or any feature of a Treadmill, including any licenses, settlement agreements, agreements not to sue, or any other agreements authorizing the sale or use of patented technology: a. payments made or received under such agreement; b. the average selling price of the products involved in such agreement; c. any financial forecasts prepared that evaluated the financial benefits and costs of such agreement and the decision to accept or reject the terms, including any financial terms, of such agreement; and d. all communications between the licensor and licensee regarding any such license, including the negotiation of such license and payments or royalties paid pursuant to such license.Exhibit 1. Plaintiff responded to RFP No. 105 as follows:
RESPONSE TO REQUEST FOR PRODUCTION NO. 105: In addition to its Preliminary Statement and General Objections which are incorporated herein,
Woodway objects to this Request to the extent it is duplicative of Request for Production Nos. 17, 33, 34, 47, 48, and 104 and thus incorporates by reference all of Woodway's objections and responses to those Requests herein. Woodway further objects to this Request to the extent that it seeks to evade discovery deadlines set in Magistrate Judge Barbara Major's Chamber's Orders requiring that “[a]ll discovery motions must be filed within 30 days of the event giving rise to the dispute.” Certified Nutraceuticals, Inc. v. Clorox Co., No. 3:18-CV-00744-W-KSC, 2020 WL 4339489, at *3- 4 (S.D. Cal. July 28, 2020) (finding substantially similar discovery requests that seek to evade the court's discovery deadlines make for an untimely motion to compel discovery). Woodway objects to Assault's attempt to restart the clock on this particular discovery dispute by propounding duplicative discovery requests. Woodway further objects to this Request to the extent that it seeks information that is protected by and subject to the rules governing any applicable privilege or protection, including but not limited to the attorney client privilege and the work-product immunity doctrine. Woodway further objects to this Request to the extent that it seeks settlement communications protected by Federal Rule Evidence 408. Woodway further objects to this Request to the extent it calls for confidential information that Woodway is under a legal duty not to disclose. Woodway further objects to this Request as overly broad and unduly burdensome to the extent that it seeks documents that are not relevant to either party's claims or defenses and thus disproportionate to the needs of the case. For example, it is unclear why Assault requires financial forecasts. Furthermore, any treadmill that does not practice any of the Asserted Patents is not relevant to either party's claims or defenses. Woodway further objects to this Request to the extent that it seeks email communications, which the parties agreed are not included in general production requests. (Dkt. 19 at 6.) Subject to and without waiving its General or Specific Objections, Woodway will not produce any responsive documents to this Request. Woodway invites Assault to meet and confer about this Request.Id. Request for Production ('“RFP”) No. 106 seeks:
REQUEST FOR PRODUCTION NO. 106: All documents and things that refer or relate to any internal analysis or review related to any patent license, including without limitation the Intellectual Property License, with Samsara, including without limitation any such analysis or review setting or evaluating the financial terms in any such license.Id. Plaintiff responded to RFP No. 106 as follows:
RESPONSE TO REQUEST FOR PRODUCTION NO. 106: In addition to its Preliminary Statement and General Objections which are incorporated herein, Woodway objects to this Request to the extent that it seeks information that is protected by and subject to the rules governing any applicable privilege or protection, including but not limited to the attorney-client privilege and the
work-product immunity doctrine. Woodway further objects to this Request to the extent it is duplicative of Request for Production Nos. 33 and 34 and thus incorporates by reference all of Woodway's objections and responses to those Requests herein. Woodway further objects to this Request to the extent that it seeks to evade discovery deadlines set in Magistrate Judge Barbara Major's Chamber's Orders requiring that “[a]ll discovery motions must be filed within 30 days of the event giving rise to the dispute.” Certified Nutraceuticals, Inc. v. Clorox Co., No. 3:18-CV-00744-W-KSC, 2020 WL 4339489, at *3- 4 (S.D. Cal. July 28, 2020) (finding substantially similar discovery requests that seek to evade the court's discovery deadlines make for an untimely motion to compel discovery). Woodway objects to Assault's attempt to restart the clock on this particular discovery dispute by propounding duplicative discovery requests. Woodway further objects to this Request to the extent that it calls for the production of third party confidential information that Woodway is under a legal duty not to disclose. Woodway further objects to this Request to the extent that it seeks communications that are protected under Federal Rule of Evidence 408. Woodway further objects to this Request as overly broad and unduly burdensome to the extent that it seeks documents related to patents that are not relevant to either party's claims or defenses in this case and thus disproportionate to the needs of the case. Woodway further objects to this Request to the extent that it calls for premature disclosure of expert opinions. Woodway further objects to this Request to the extent that it seeks email communications, which the parties agreed are not included in general production requests. (Dkt. 19 at 6.) Subject to and without waiving its General or Specific Objections, Woodway will produce any expert opinions consistent with the Order Setting Deadlines. (Dkt. 63.) Otherwise Woodway will not produce documents responsive to this Request, particularly because Woodway will not search its emails for documents responsive to this Request absent a specific ESI production request pursuant to the agreed upon protocol identified in the Joint Case Management Statement. (Dkt. 19 at 6.) In addition, Woodway is withholding documents on the basis of privilege and confidentiality. Specifically, with respect to confidentiality, Woodway is withholding documents designated as confidential subject to certain protective orders, including documents produced and/or received from third parties during the course of the following litigations:
• Chapco, Inc. v. Woodway USA, Inc., Case No. 3:15-cv-01665-JCH (D. Conn.); and
• Woodway USA, Inc. v. Samsara Fitness, LLC, Case No. 2:15-cv-00956-PP (E.D. Wis.).Id. After meeting and conferring, Defendant agreed to narrow RFP Nos 105 and 106 “to a time period of 2010 to the present.” MTC at 11. Plaintiff agreed to produce responsive documents, but only as to its license with Samsara. Id.
Defendant argues that license agreements or documents relating to treadmills and treadmill features are “highly relevant” to damages. Id. Plaintiff contends that Defendant is not entitled to licenses that are unrelated to the asserted patents and that Plaintiff did not agree to only produce responsive documents as to its license with Samsara. Oppo. at 15. Plaintiff further contends that it “has produced all licenses involving the asserted patents, related patents (within the same family), all drafts and communications relating to the Samsara license, the Samsara license, and any other agreement involving curved manual treadmills that could be construed as a license.” Id. at 15-16; see also Koley Decl. at ¶ 10. Plaintiff notes that the meaning of the word “feature” in Defendant's RFPs is unclear and that Plaintiff has nothing else to produce as Defendant “does not know what licenses would encompass ‘features' or ‘components' of treadmills.” Id. at 16. Finally, Plaintiff contends that Defendant's cited authority is inapposite. Id. at 17.
Defendant replies that features and components include “any license that pertains to a treadmill or a feature or component of a treadmill, whether it be for runners or hockey players” and argues that the comparability issued can be evaluated later. Reply at 9. Defendant notes that without seeing the other licenses, it is unable to determine if there are licenses that are comparable to the patent in suit. Id. at 10. Defendant argues that Plaintiff should not be permitted to only produce the licenses it believes to be relevant and notes that Plaintiff's case law support is inapposite. Id. at 10-11.
Plaintiff contends that it has produced all licenses involving the asserted patents and related patents but does not contend that it has produced all licenses as to any other treadmill related features or components as it does not know what Defendant means by feature or component and because the request is inappropriate. Oppo. at 16. Initially, the Court finds it appropriate to expand the scope of the relevant licensing agreements beyond those involving the patent in suit because Plaintiff appears to have entered into only one licensing agreement with a royalty involving the patent in suit. Oppo at 15-16. Plaintiff notified Defendant that Plaintiff had entered into a licensing agreement involving a royalty payment with Samsara regarding the patent in suit. D Brief at 2-3. Plaintiff asserts that it has provided Defendant with the requested information regarding the Samsara license. Oppo. at 15 (“Woodway has produced all licenses involving the asserted patents, related patents (within the same family), all drafts and communications relating to the Samsara license, the Samsara license, and any other agreement involving curved manual treadmills that could be construed as a license.”); see also Koley Decl. at ¶ 10. Defendant, however, recently learned that as part of the transaction that resulted in the licensing agreement, Plaintiff obtained 51 % ownership of Samsara. Defendant argues that this fact may impact the validity and applicability of the Samsara royalty rate. D Brief at 2-3. Because Plaintiff only has one licensing agreement involving the patent in suit and because there is a question regarding the validity and applicability of the Samsara licensing and royalty agreement, the Court finds that patents relating to non-curved treadmills, and all treadmill components and features are relevant and discoverable. See Bally Technologies, Inc. v. Business Intelligence Systems Solutions, Inc., (D. Nev., Aug. 30, 2011) 2011 WL 3892221, at *3 (denying without prejudice defendant's motion to compel plaintiff to produce license agreements involving comparable patents that were not at issue in the lawsuit where defendant did not show that the agreements were “sufficiently relevant to be discoverable” but recognizing that “[e]vidence regarding [Plaintiff's] licensing agreements involving similar patented technologies may be relevant and lead to the discovery of admissible evidence if the subject patents-in-suit have not been licensed or there is reason to believe that [Plaintiff's] licenses of the subject patents did not involve arms length business transactions that reflect the actual value of the patents in the market place.”). Second, the Court finds that the terms "features" and "components" are not confusing. If Plaintiff has a licensing agreement regarding any of its treadmills, or regarding any component of any of its treadmills, or regarding any feature of its treadmills, Plaintiff must produce the information contained in RFP Nos. 105 and 106. Finally, the Court finds that the appropriate time period is 2012 to the present. Accordingly, if there are documents other than the Samsara agreement that are responsive to Defendant's RFP Nos. 105 and 106 from 2012 to the present, Plaintiff is ORDERED to produce the documents by March 15, 2024 .
In its reply, Defendant states that licenses that encompass features or components of treadmills include “any license that pertains to a treadmill or a feature or component of a treadmill, whether it be for runners or hockey players.” Reply at 9.
D. Production Capacity or Planning Reports
On January 3, 2023, Defendant propounded its First Set of RFPs that included RFP No. 49. Oppo. at 18. During a February 2023 meet and confer, Plaintiff realized Defendant mistakenly believed that Plaintiff objected based on confidentiality. Id. Plaintiff explained that it was not making any privilege claims and the issue was resolved. Id.
Request No. 49 sought “[a]ll Documents and Things relating to Woodway's analysis, assessment, or calculation of any damages to which it is entitled to in this action, including licensing terms, reasonable royalty rates, and/or lost profits.” Koley Decl. at ¶ 2, Exh. A.
On December 8, 2023, Defendant propounded its Sixth Set of RFPs which included RFP No. 109. Id. at 18. Plaintiff objected and stated that it would produce an expert opinion and supporting documentation in response to this request when it is due under the scheduling order. Id. While meeting and conferring Plaintiff informed Defendant that it has not generated any production capacity reports and that it would provide Defendant with the appropriate documentation if Plaintiff's expert determined that Plaintiff would assert a lost profits theory. Id. at 19.
REQUEST FOR PRODUCTION NO. 109: Production capacity reports or planning reports for the plants used to manufacture the Covered Woodway Treadmills, whether company owned plants or the production capacity of suppliers.
RESPONSE TO REQUEST FOR PRODUCTION NO. 109: In addition to its Preliminary Statement and General Objections which are incorporated herein, Woodway objects to this Request to the extent that it is duplicative of Request for Production No. 49 and thus incorporates by reference all of Woodway's objections and responses to that Request herein. Woodway further objects to this Request to the extent that it seeks to evade discovery deadlines set in Magistrate Judge Barbara Major's Chamber's Orders requiring that “[a]ll discovery motions must be filed within 30 days of the event giving rise to the dispute.” Certified Nutraceuticals, Inc. v. Clorox Co., No. 3:18-CV-00744-W-KSC, 2020 WL 4339489, at *3-4 (S.D. Cal. July 28, 2020) (finding substantially similar discovery requests that seek to evade the court's discovery deadlines make for an untimely motion to compel discovery). Woodway objects to
Assault's attempt to restart the clock on this particular discovery dispute by propounding duplicative discovery requests. Woodway further objects to this Request to the extent that it seeks information that is protected by and subject to the rules governing any applicable privilege or protection, including but not limited to the attorney-client privilege and the work product immunity doctrine. Woodway further objects to this Request to the extent that it seeks protected information, communications, and/or documents under Federal Rule of Civil Procedure 26(b)(4). Woodway further objects to this Request as calling for the premature disclosure of expert testimony. Subject to and without waiving its General or Specific Objections, Woodway will produce any expert opinion and all supportive document(s) that are responsive to this Request consistent with the Order Setting Deadlines. (Dkt. 63.) Otherwise, Woodway has no nonprivileged documents in its possession, custody, or control that are responsive to this Request at this time.Exhibit 1. Defendant argues that Plaintiff's production capacity is highly relevant to Plaintiff's claim for lost profits and noted that the third Panduit factor, the method for evaluating lost profits, asks “for a patentee's “manufacturing and marketing capability to exploit the demand.” MTC at 12 (citing Panduit Corp., 575 F.2d at 1156). Defendant further argues that it is entitled to the information being sought now and is not required to wait for Plaintiff's expert report. Id. at 13.
Plaintiff notes that Defendant is entitled to production capacity reports if it asserts a lost sales theory but contends that Defendant is not entitled to any production capacity reports prior to Plaintiff's expert disclosures. Oppo. at 19. Plaintiff further notes that it does not have any production capacity reports and that a party is not required to create new documents to respond to discovery which only requires the production of documents that are already in existence. Id.
Defendant replies that it disagrees with Plaintiff's tactic of waiting to create documents until after the close of fact discovery knowing those documents are relevant and discoverable and that “in view of Woodway's representation that no responsive documents exist, LifeCORE provides the instant response as a prelude to seek to exclude or compel further discovery, should Woodway seek to rely on responsive documents that it chose to create after the close of fact discovery.” Reply at 12.
Plaintiff recognizes that the requested documents are relevant and discoverable under a loss sales theory but contends that no such documents exist. As Defendant recognizes, the Court cannot compel the production of documents that do not exist. See EVO Brands, LLC, 2023 WL 5506883, at *10 (“the Court cannot compel Plaintiffs to produce documents that they state do not exist.”); see also Hardy, 2023 WL 2725928, at *3 ("The Court cannot compel Defendants to produce documents that do not exist”). Accordingly, Defendant's motion to compel further response to RFP No. 109 is DENIED. See Kajeet, Inc. v. Qustodio, LLC, 2019 WL 8060078, at *15-16 (C.D. Cal., Oct. 22, 2019) (permitting defendant to delay producing documents that were prepared by its damages expert for the instant litigation until defendant served its expert disclosures and requiring defendant to indicate such in its response). The Court notes, however, that if there are responsive documents that currently exist, Plaintiff is ordered to produce those documents by March 15, 2024 as the Court finds that Plaintiff is not allowed to withhold such documents until it is ready to produce its expert report. See Sundance Image Technology, Inc. v. Cone Editions Press, Ltd., 2005 WL 8173278, at *6 (S.D. Cal., Aug. 19, 2005) (finding meritless plaintiff's argument that "to the extent that the request encompasses documents that support IJM's damage claim, as will be supported by IJM's economic expert, the request is premature as such documents will be produced at the time of the expert report” and noting that "[w]hile any request for the expert's opinions would be premature at this juncture, a request for the underlying factual data upon which the expert will rely is not only appropriate” but should have already been produced); see also Kaneka Corporation v. Zhejiang Medicine Co., Ltd., 2016 WL 11266869, at *12 (C.D. Cal., Oct. 18, 2016) (granting defendant's motion to compel where plaintiff objected to RFP No. 17 "to the extent it prematurely require[d] disclosure of expert testimony or opinion, or documents relating thereto,” but stated that it "w[ould] produce responsive documents relied on by [Plaintiff's] expert on damages when it serve[d] its expert report on damages.”).
E. Timeliness
Plaintiff contends that Defendant's motion is untimely, and that Defendant has waived its right to seek the requested documents. Oppo. at 20. In support, Plaintiff notes that "[M]otions to compel seeking documents responsive to substantially similar document requests are untimely if the movant waits longer than thirty days to bring any dispute to the court arising out of the original document requests.” Id. (citing Certified Nutraceuticals, Inc. v. Clorox Co., No. 3:18-CV-00744-W-KSC, 2020 WL 4339489).
Defendant argues that its motion is timely, and that Plaintiff's argument is meritless. Reply at 12. Specifically, Defendant notes that Plaintiff failed to identify the alleged substantial similarities between the present RFPs and the ones served in January 2023. Id. Defendant argues that the failure stems from the fact that there are no similarities. Id. The initial round of discovery sought financial documents related only to Plaintiff's curved treadmill whereas the instant requests seek documents regarding Plaintiff's companywide financials which includes Plaintiff's non-patented treadmills. Id. Additionally, Defendant argues that Plaintiff agreed to amend its response to RFP No. 48 and provide all licenses for any treadmill or treadmill components, but failed to do so which did not come to light until the parties met and conferred on the present requests. Id. at 13. Finally, Defendant argues that Plaintiff should not be permitted to avoid its discovery obligations by waiting to create documents it intends to rely on until after the close of fact discovery. Id.
Defendant's motion is not untimely due to substantively similar requests. RFP Nos. 35 and 37 from Defendant's First Set of RFPs in January 2023 are clearly directed to financial information regarding Plaintiff's curved treadmills while RFP Nos. 97 and 100 request financial information on all of Plaintiff's treadmills, not just curved treadmills. RFP Nos. 105 and 106 are not duplicative of RFP Nos. 47 and 48 from Defendant's First Set of RFPs. RFP No. 47 sought licenses that Plaintiff contends are relevant or that it intends to rely on whereas RFP No. 105 is much broader and seeks all documents regarding agreements, proposed agreements, licenses, settlement agreements, agreements, not to sue, and other agreements regarding the sale or use of patented technology. MTC at 10; see also Koley Decl. at Exh. A. Unlike RFP No. 47, RFP No. 105 is not limited to Plaintiff's interpretation of what is relevant. Id. RFP No. 48 sought all licenses for any treadmills or treadmill component patents. Koley Decl. at Exh. A. RFP No. 106 seeks not only licenses, but also documents and things that refer to the licenses, the internal analysis/review that went into the analysis behind any license, and analysis, review, and evaluation of the financial terms of any license. MTC at 11; see also Exh. 1. RFP No. 49 sought all documents and things related to Plaintiff's damages calculations for this action with licensing terms, reasonable royalty rates, and/or lost profits. Koley Decl. at Exh. A. RFP No. 109 seeks production capacity reports for plants used to manufacture the covered treadmills regardless of whether Plaintiff owns the plants or the production capacity of suppliers. The Court does not find these requests to be duplicative other than as discussed above.
While there is some overlap in the information being sought in Defendant's First Set of RFPs and the RFPs at issue in the current motion, the requests are not “unreasonably cumulative or duplicative” and the Court does not find they are so substantially similar as to warrant the denial of Defendant's motion. Fed.R.Civ.P. 26(b)(2)(C)(i-iii); Exhibit 1; and Koley Decl. at Exh. A. Additionally, Plaintiff's citation to Certified Nutraceuticals, Inc. is not persuasive as that case involved discovery requests where, unlike here, the Court was unable to “discern a meaningful difference.” 2020 WL 4339489 at *3.
CONCLUSION
Defendant's motion to compel and the parties' letter briefs are GRANTED IN PART AND DENIED IN PART. Plaintiff is ORDERED to produce the additional responses to Defendant discussed above by March 15, 2024 .
IT IS SO ORDERED.