MEMORANDUM AND ORDER
LYLE E. STROM, Senior District Judge.
Plaintiff Prism Technologies, LLC ("Prism") alleges infringement of its patent, U.S. Patent No. 7,290,288 ("'288 patent"), by defendants Adobe Systems, Inc., Autodesk, Inc., McAfee, Inc., National Instruments Corp., Sage Software, Inc., Symantec Corp., The Mathworks, Inc., and Trend Micro, Inc. (collectively, "defendants"). Before the Court is defendants' motion for a protective order pursuant to Federal Rule of Civil Procedure 26(c), with accompanying brief and index of evidence (Filing Nos.
I. Protective Orders — Procedural History.
Prism filed its complaint in this action on June 8, 2010 (Filing No.
II. Federal Rule of Civil Procedure 26(b); Patent Discovery.
"Mutual knowledge of all the relevant facts gathered by both parties is essential to proper litigation." Hickman v. Taylor, 329 U.S. 495, 507 (1947). Federal Rule of Civil Procedure 26(b) allows for broad discovery of "any nonprivileged matter that is relevant to any party's claim or defense — including the existence, description, nature, custody, condition, and location of any documents or other tangible things and the identity and location of persons who know of any discoverable matter." Fed. R. Civ. P. 26(b)(1).
Relevance during discovery is not measured by the Federal Rules of Evidence: "Relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence." Id. Relevance is to be broadly construed for discovery issues and encompasses "any matter that could bear on, or that reasonably could lead to other matter that could bear on, any issue that is or may be in the case." Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351 (1978).
However, the proponent of discovery must make "[s]ome threshold showing of relevance . . . before parties are required to open wide the doors of discovery and to produce a variety of information which does not reasonably bear upon the issues in the case." Hofer v. Mack Trucks, Inc., 981 F.2d 377, 380 (8th Cir. 1992). "Determinations of relevance in discovery rulings are left to the sound discretion of the trial court. . . ." Hayden v. Bracy, 744 F.2d 1338, 1342 (8th Cir. 1984).
In the context of patent infringement cases, some district courts have created more specific, local rules as to discovery regarding infringement, non-infringement, and invalidity contentions. See Rules of Practice for Patent Cases before the Eastern District of Texas (the "Patent Rules," abbreviated "P.R. __"). For example, in the Eastern District of Texas, "[n]ot later than 10 days before the Initial Case Management Conference with the Court, a party claiming patent infringement must serve on all parties a `Disclosure of Asserted Claims and Infringement Contentions.'" P.R. 3.1.
These local rules delineate just what should be included in the required disclosure, such as "each accused apparatus, product, device, process, method, act, or other instrumentality ("Accused Instrumentality") of each opposing party of which the party is aware." Id. Thus, "`[t]he Patent Rules demonstrate high expectations as to plaintiffs' preparedness before bringing suit, requiring plaintiffs to disclose their preliminary infringement contentions before discovery has even begun.'" Connectel, LLC, v. Cisco Sys., Inc., 391 F.Supp.2d 526, 527 (E.D. Tex. 2005) (emphasis added) (quoting Am. Video Graphics, L.P. v. Elec. Arts, Inc., 359 F.Supp.2d 558, 560 (E.D. Tex. 2005)).
As much as defendants might wish it were so, the District of Nebraska has no local rules regarding patent case discovery, and the Nebraska district court is not compelled to require parties in an infringement case to follow patent discovery rules from other jurisdictions. Nevertheless, the reasoning of these other district courts provides persuasive guidance for the management of patent case discovery and will be cited as such in this memorandum and order.
II. Federal Rule of Civil Procedure 26(c).
Although Federal Rule of Civil Procedure 26(b) does allow for broad discovery, the federal rules also permit supervision of discovery by the courts. Rule 26(c) states,
Fed. R. Civ. P. 26(c)(1). The rules "leave it to the enlightened discretion of the district court to decide what restrictions may be necessary in a particular case." 8A Charles Alan Wright, Arthur R. Miller & Richard L. Marcus, Federal Practice and Procedure § 2036 (3d ed. 2010).
"Because of liberal discovery and the potential for abuse, the federal rules `confer[ ] broad discretion on the [district] court to decide when a protective order is appropriate and what degree of protection is required.'" Miscellaneous Docket Matter No. 1 v. Miscellaneous Docket Matter No. 2, 197 F.3d 922, 925 (8th Cir. 1999) (quoting Seattle Times Co. v. Rhinehart, 467 U.S. 20, 36 (1984)). Not all relevant material is discoverable; "`[e]ven if relevant, discovery is not permitted where no need is shown, or compliance would be unduly burdensome, or where harm to the person from whom discovery is sought outweighs the need of the person seeking discovery of the information.'" Miscellaneous, 197 F.3d at 925 (quoting Micro Motion, Inc. v. Kane Steel Co., 894 F.2d 1318, 1323 (Fed. Cir. 1990) (emphasis omitted)). "Fed. R. Civ. P. 26(c) requires that `good cause' be shown for a protective order to be issued. The burden is therefore upon the movant to show the necessity of its issuance, which contemplates `a particular and specific demonstration of fact, as distinguished from stereotyped and conclusory statements . . . .'" Gen. Dynamics Corp. v. Selb Mfg. Co., 481 F.2d 1204, 1212 (8th Cir. 1973) (citation omitted).
Both Rule 26(c) and United States District Court for the District of Nebraska local rule 7.0.1(i) require that the party seeking a protective order must "meet and confer" with the other party "in an attempt to resolve the dispute without court action." Fed. R. Civ. P. 26(c)(1).
III. Defendants' Motion for Protective Order.
Here, defendants claim that Prism's discovery requests "seek information regarding non-accused technologies" (Filing No.
Defendants attach a "Nebraska Civil Rule 7(i) Certificate of Conference" to their motion that reads as follows:
A. Prism is not restricted to discovery of possible infringement via CD-ROMS only.
Defendants' first argument in favor of a protective order is that the offending discovery requests are unrelated to Prism's infringement theory as Prism has articulated it in the following: Prism's complaint; Prism's infringement contentions included in its responses to defendants' first set of interrogatories; and Prism's comments to the Court at the July 2011 hearing (Filing No.
B. Prism is not restricted to discovery of possible infringement via software products that defendants sell.
More specifically, defendants complain that Prism's discovery requests "are not tied to any software actually produced, marketed, or sold by each Defendant to a third party" (Filing No.
A look at the complaint, again, indicates that Prism did not so limit itself. In the complaint, Prism alleged that each defendant is infringing the '288 patent "by making, using, offering to sell, and/or selling authentication systems and methods for controlling access to protected computer resources with various [defendant] software products" (Filing No.
C. Prism is largely, but not completely, limited to discovery of possible infringement via already accused products or products that are "reasonably similar" to already accused products.
It is certainly true that Prism's first infringement contentions as articulated in its responses to defendants' first set of interrogatories are limited to software activation via CD-ROM. See Exhibits 1-8, Filing No.
Defendants rely on case law from the Eastern District of Texas and the Northern District of California to support this claimed restriction. For example, defendants cite the Northern District of California, where the court chided the defendants in that case for their overly broad discovery, saying, "It appears that Defendants seek the Court's permission to engage in a fishing expedition, so that they do not have to conduct an investigation into whether or not additional products infringe their patents. To deny such a request is not contrary to law." Samsung SDI Co., Ltd. v. Matsushita Elec. Indus. Co., Ltd., No. CV 05-8493-AG(SHx), 2007 WL 4302701, at *3 (C.D. Cal. June 27, 2007). However, this decision centered around the interpretation of a local patent rule, N.D. Cal. Pat. R. 3-1: "Courts have interpreted this local patent rule as imposing a limitation on a party seeking discovery." Id. at *3. Here, of course, there is no such local rule to interpret.
The Samsung court also noted that discovery requests cannot be based solely on "`mere suspicion or speculation,'" but, rather, that the party requesting discovery must establish a "reasonable basis to suspect that additional products allegedly infringe the patents-in-issue." Id. (quoting Micro Motion, Inc. v. Kane Steel Co., Inc., 894 F.2d 1318, 1326 (Fed. Cir. 1990)). This standard is similar to that used by courts generally in evaluating the relevance of discovery requests. See supra.
Other courts have been more reticent about making a hard and fast rule regarding patent case discovery, even in the context of local patent rules. In Epicrealm Licensing, LLC v. Autoflex Leasing, Inc., Nos. 2:05-CV-163-DF-CMC,:05-CV-356-DF-CMC, 2007 WL 2580969 (E.D. Tex. Aug. 27, 2007) the Eastern District of Texas addressed "whether the scope of discovery should be strictly limited to the products and services specifically identified in the patent holder's [patent infringement contentions, as required by local rule]." Epicrealm, at *2.
The Epicrealm court found "no bright line rule that discovery can only be obtained if related to an accused product identified in a party's [patent infringement contentions]." Id. at *3. Instead, as to the restricting local rules that require initial patent infringement contentions to delimit discovery, the court stated that, "`the scope of discovery is not limited to the preliminary infringement contentions or preliminary invalidity contentions but is governed by the Federal Rules of Civil Procedure.'" Id. (quoting § 2-5, Miscellaneous Order No. 62 (Dallas Div., N.D. Tex Apr. 2, 2007)). Further, the Epicrealm court interpreted this to mean "that this Dallas Division local rule intends that the scope of discovery is determined on a case-by-case basis and as contemplated by the `relevant to the claim or defense of any party' language in Federal Rule of Civil Procedure 26(b)(1)." Id. at *3.
The Epicrealm court quoted approvingly, "Judge Ward of the Eastern District of Texas has found that relevant discovery in a patent infringement suit includes discovery relating to the technical operation of the accused products, as well as the identity of and technical operation of any products reasonably similar to any accused product." Id. at *3 (quotation omitted).
This "reasonably similar" language appears in other Texas cases, as well. See, e.g., Honeywell Intern. Inc. v. Acer America Corp., 655 F.Supp.2d 650, 654 (E.D. Tex. 2009) (discussing the "`reasonably similar' standard"). In Honeywell, the court noted that the "reasonably similar" test is grounded in the notion that "the primary purpose of [patent infringement contentions] is to give a defendant notice of a plaintiff's specific theories of infringement." Honeywell, 655 F.Supp.2d at 655. However, this goal is tempered by the fact that when discoverable material is not publicly available, the specificity of the theory on infringement is limited. For example, unlike cases where desired information was available on the Internet, in Honeywell, the desired information "at issue in this case [is] not publicly available, and hence, absent this discovery, [plaintiff] cannot determine which [defendant] products to accuse." Id. at 657.
Putting this all together, if this Court is to follow the reasoning of the learned courts of the Eastern District of Texas and the Northern District of California, the following guidelines appear. First, the general contours of a desire for broad discovery apply as much in patent cases as in any other. Second, defendants should have some kind of notice as to the specific theory of infringement. Third, the objects about which the moving party seeks discovery must ordinarily be "reasonably similar" to the already accused products, whether those accusations are made in infringement contentions as required by local rule or, as here, in the course of discovery via answers to defendant's interrogatories. This "reasonably similar" standard must necessarily be determined on a case by case basis, since every patent is different.
Fourth, whether or not the desired information is publicly available will impact the ability of the plaintiff to articulate infringement contentions and discovery requests with specificity. This, in turn, may limit plaintiff's ability to demonstrate how the discovery request is related to products that are "reasonably similar" to already accused products. Finally, all of these factors must be analyzed using a "totality of the circumstances" weighting. See Honeywell, 655 F.Supp.2d at 658.
D. Prism properly gave notice to various defendants of new infringement contentions on October 27, 2011, and November 18, 2011.
On October 27, 2011, Prism served first supplemental objections and responses to the first set of interrogatories on defendants McAfee, Inc. ("McAfee") (Ex. 2, Filing No.
Prism claims that since discovery began in July 2011, Prism "has uncovered evidence of systems that Defendants make, use, or sell that are unrelated to software activation but also infringe the '288 patent, as set forth in Prism's . . . supplemental interrogatory responses to Defendants" (Filing No.
Prism claims that the supplemental infringement products "constitute `authentication systems and methods for controlling access to protected computer resources associated with' Defendants' software products," thus falling well within the confines of Prism's complaint (Filing No.
The question is whether or not Prism can augment its infringement contentions after filing its first set of interrogatory responses. By analogy with the Patent Rules of the Eastern District of Texas, defendants argue that Prism should not be allowed to augment its infringement contentions.
However, the parties' report of their Rule 26(f) planning meeting indicated that they did not come to an agreement as to any limitations on the timing of patent infringement, non-infringement, or invalidity contentions (Filing No.
This Court was presented with a similar, but not identical, issue in a previous case involving Prism: Prism Technologies, LLC v. Research in Motion, LTD, No. 8:08CV537, 2010 WL 1254940 (D. Neb. Mar. 24, 2010). Unlike in the present case, in Research in Motion, the parties agreed as follows: that Prism's initial infringement contentions would be served by a particular date; that the contentions could be amended without leave of court for a little over two months hence; and that Prism could amend for a period of fifteen days after the claim construction hearing. Research in Motion, 2010 WL 1254940 at *1. Otherwise, Prism would need to seek leave of court to amend. Id. In Research in Motion, the question before the Court was whether to grant Prism's motion to amend its infringement contentions when the motion was filed thirteen months after the commencement of the case and five months after the end of the period where amendment could occur without leave of court. Id.
As here, defendant Research in Motion objected to the amendment, claiming that Prism could have included its supplementary contentions with its original contentions because "the information providing the basis for the amendment was publicly available." Id. at *3. There, this Court quoted from Am. Video Graphics, L.P. v. Elec. Arts, Inc., 359 F.Supp.2d 558 (E.D. Tex. 2005) to establish that "`software cases present unique challenges' because plaintiffs typically do not have access to the underlying technical information alleged to infringe the patent." Research in Motion, 2010 WL 1254940 at *3, (quoting Am. Vide 359 F. Supp. 2d. at 560). This Court continued,
Research in Motion, 2010 WL 1254940 at *3.
"Moreover, even assuming the highly technical information Prism needed to craft its infringement contentions was publicly available, this would not necessarily mean that Prism lacked good cause to amend its infringement contentions." Research in Motion, 2010 WL 1254940 at *3 n.3. "Litigants are entitled to rely on the information disclosed to them during discovery to hone their theories of the case." Id. This Court also noted, "Prejudice to the non-moving party `is significantly lessened when amendment occurs prior to the [claim construction] hearing.'" Id. at *14 (quoting Performance Pricing, Inc. v. Google, Inc., No. 2:07-CV-432, 2009 U.S. Dist. LEXIS 84211, at *7 (E.D. Tex. Aug. 28, 2009)).
Regarding Prism's contentions about the supplemental infringement products, defendants state, "Allowing a party to accuse products in this manner would gut the limitations on discovery outlined in Samsung and Honeywell" (Filing No.
E. The motion for protective order will be partly granted and partly denied.
In support of its discovery requests, Prism claims that "the discovery requests at issue in the instant motion are directly relevant to Prism's various infringement theories" (Filing No.
Defendants make their case generally for all the offending discovery requests. They state that because "Prism concedes that its supplemental contentions do not accuse any Defendant's internal usage of security devices," and "all but one of the discovery requests for which Defendants seek protection go to such internal use," the requests for admissions should not be allowed (Filing No.
Considering the Court's findings on the nature of Prism's complaint, its initial and supplemental infringement contentions, and the difficulty of elucidating infringement contentions that are based on information solely in the hands of the defendants, as outlined above, the Court finds that Requests for Admissions 1-12 are relevant to the case at hand, are not unduly burdensome to defendants, relate to products that would be "reasonably similar" to accused products, and should be answered by defendants. However, because Requests for Admissions 13 and 14 do not refer to security applications that require a hardware key
V. Plaintiff's Request for Rule 26(c)(2) Order.
Prism "requests that the Court compel Defendants to provide complete responses to the discovery requests at issue in the present motion" pursuant to Federal Rule of Civil Procedure 26(c)(2). (Filing No.
IT IS ORDERED:
1) Defendants' motion for Rule 26(c) protective order (Filing No.
2) Defendants' motion for Rule 26(c) protective order (Filing No.
d) Rule 30(b)(6) Deposition Notice Topics 1 and 2.
3) Prism's motion to compel discovery is granted as to those discovery requests listed in (2)(a)-(c) above. Defendants will have until January 6, 2012, to comply with such discovery requests, to the extent that they have not already done so. Each defendant will file with the Court a certificate indicating such compliance by January 6, 2012.
4) At future depositions, defendants will answer questions regarding Rule 30(b)(6) Deposition Notice Topics 1 and 2, as applicable.