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Memory Integrity, LLC v. Intel Corporation

United States District Court, D. Oregon

July 29, 2015

MEMORY INTEGRITY, LLC, Plaintiff,
v.
INTEL CORPORATION, Defendant.

John Mansfield, MANSFIELDLAW, 121 S.W. Morrison Avenue, Suite 400, Portland, OR 97204; Bryan Atkinson, FARNEY DANIELS PC, 800 S. Austin Avenue, Suite 200, Georgetown, TX 78626; Jonathan Baker, Michael Saunders, and Gurtej Singh, FARNEY DANIELS PC, 411 Borel Avenue, Suite 350, San Mateo, CA 94402. Of Attorneys for Plaintiff.

Renee E. Rothauge, MARKOWITZ HERBOLD PC, 1211 S.W. Fifth Avenue, Suite 3000, Portland, OR 97204; Michael J. Summersgill, Jordan L. Hirsch, and Sean K. Thompson, WILMER HALE LLP, 60 State Street, Boston, MA 02109; Grant K. Rowan, WILMER HALE LLP, 1875 Pennsylvania Avenue NW, Washington, DC 20006; Arthur W. Coviello, WILMER HALE LLP, 950 Page Mill Road, Palo Alto, CA 94304. Of Attorneys for Defendant.

OPINION AND ORDER

MICHAEL H. SIMON, District Judge.

Plaintiff Memory Integrity, LLC ("Memory Integrity" or "MI") brings this action, alleging patent infringement of five patents owned by MI. The patents in suit cover algorithms that efficiently maintain cache coherence[1] in certain types of multiprocessor systems, as well as systems that implement those algorithms. MI alleges that Defendant Intel Corporation ("Intel") manufactures microprocessors that infringe each patent.[2] The parties have conducted substantial discovery in this case but have arrived at a deadlock. Intel seeks to depose a corporate representative of MI on 33 topics under Federal Rule of Civil Procedure 30(b)(6). On 18 of these topics, MI refuses to designate and produce a corporate witness to testify. Further, Intel asserts that MI refuses fully to respond to certain requests for documents and interrogatories. MI argues that to the extent that Intel is entitled to the requested discovery, MI's responses are sufficient. Finally, Intel argues that regarding half of its accused products, MI's infringement contentions are insufficient; MI disagrees. Intel moves to compel discovery from MI. For the reasons that follow, Intel's Motion to Compel, Dkt. 95, is GRANTED IN PART AND DENIED IN PART.

DISCUSSION

"[T]he Federal Rules of Civil Procedure promote a broad and liberal' policy of discovery for the parties to obtain the fullest possible knowledge of the issues and facts before trial.'" In re MSTG, Inc., 675 F.3d 1337, 1346 (Fed. Cir. 2012) (quoting Hickman v. Taylor, 329 U.S. 495, 501, 507 (1947)). The touchstone of permissible discovery is embodied in Rule 26(b)(1), which provides, in relevant part:

Parties may obtain discovery regarding any non-privileged matter that is relevant to any party's claim or defense.... Relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence. All discovery is subject to the limitations imposed by Rule 26(b)(2)(C).

As expressed by the final sentence of Rule 26(b)(1), the right to discovery is not unlimited, and the Court may "limit the frequency or extent of discovery" that is "unreasonably cumulative or duplicative, or can be obtained from some other source that is more convenient, less burdensome, or less expensive." Fed.R.Civ.P. 26(b)(2)(C)(i). When the subject of discovery relates to an issue of substantive patent law, Federal Circuit precedent governs discovery disputes. MSTG, 675 F.3d at 1341.

A. Settlement and Licensing Negotiations with Other Parties

MI objects to Intel's Deposition Topic No. 29, regarding "all communications, discussions, and negotiations related to" MI's "efforts to license the Asserted Patents." Dkt. 96-1 at 9 (hereinafter "Notice of Deposition"). Similarly, MI refuses to respond substantively to Intel's Interrogatory No. 8, which seeks details on "each offer, discussion, and/or negotiation to license, sublicense, covenant not to sue, and/or settle any claims... concerning each of the Asserted Patents." Dkt. 96-2 at 8 (hereinafter "Interrogatories"). MI asserts that its only licensing efforts have been ongoing settlement discussions with the other defendants in the original case.[3] MI argues that pursuant to Federal Rule of Evidence 408, such discussions are not admissible; that therefore, they are not "reasonably calculated to lead to the discovery of admissible evidence, " see Fed.R.Civ.P. 26(b)(1); and thus, that such discussions also are not discoverable. Intel argues that this discovery is directly relevant both to issues of damages ( e.g., the value of the patents and a reasonable royalty) and liability ( e.g., MI may have taken positions in such negotiations regarding the scope of its patents).

The Federal Circuit has considered this type of argument and rejected it. In MSTG, the Federal Circuit held that Federal Rule of Evidence 408 is no basis for a privilege protecting "settlement negotiations related to reasonable royalties and damage calculations." 675 F.3d at 1348. Accordingly, the court affirmed the district court's decision ordering production of such materials. Id. In so holding, the court necessarily recognized that under certain circumstances, settlement negotiations can lead to the discovery of admissible evidence. The contents of such negotiations might, for example, reveal comparable license agreements or limitations on the scope of the patents, either of which could be discoverable.[4] See, e.g., Phoenix Solutions Inc. v. Wells Fargo Bank, N.A., 254 F.R.D. 568, 582 (N.D. Cal. 2008) ("[T]hird-party negotiations could help [the defendant] ascertain the extent of its liability to [the plaintiff] and to formulate an appropriate litigation strategy.").

MI also objects that unlike the settlement negotiations in MSTG, the negotiations at issue here are as yet unconsummated. That fact has no appreciable bearing on whether the contents of those negotiations may lead to the discovery of admissible evidence. Disclosure of the contents of settlement negotiations could, however, affect the result of those negotiations. Thus, MI may restrict access to such materials and testimony under the terms of the protective order entered in this case.

B. Other Deposition Topics

MI objects to several of Intel's Rule 30(b)(6) deposition topics on the grounds that they are not appropriate subjects for lay-witness testimony. These topics-identified as numbers 8, 9, 11, 12, 14, 16, 18-26, and 28-generally cover the subject matter, conception, and reduction to practice of the patents; the validity of the patents and the prior art; the basis for MI's infringement allegations; and the basis for MI's damages claims. MI argues that the appropriate avenues for discovery regarding such topics are "contention interrogatories, patent rule-type disclosures, and expert ...


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