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ON COMMAND VIDEO CORP. v. LODGENET ENTERTAINMENT C

August 7, 1997

ON COMMAND VIDEO CORPORATION, a Delaware Corporation, Plaintiff,
v.
LODGENET ENTERTAINMENT CORPORATION, a Delaware corporation, Defendant.



The opinion of the court was delivered by: ARMSTRONG

 This action is a patent infringement suit brought by plaintiff On Command Video ("plaintiff" or "OCV") against defendant LodgeNet Entertainment Corporation ("defendant" or "LodgeNet"). The parties are presently before the Court on defendant's Objections to the Magistrate's Report and Recommendations ("the Report"). Having read and considered the papers filed, and having reviewed the record, the Court SUSTAINS in part and OVERRULES in part defendant's objections. *fn1"

 Plaintiff alleges that defendant has infringed and continues to infringe its patent which encompasses the technology for a video movie delivery system. On June 5, 1995, at the outset of this case, the parties submitted to the Court a stipulated Protective Order governing the exchange of confidential discovery materials. Paragraph 11 of the protective Order provided as follows:

 
Any information designated as Confidential Information shall not be used by the other party for any purpose other than in connection with preparation of the parties [sic] analysis of issues presented in this litigation.

 The Court approved the Protective Order on June 8, 1995 and the Order was filed on June 9, 1995.

 On February 27, 1996, plaintiff used materials produced by defendant during discovery and subject to the Protective Order as the basis for filing a separate lawsuit against defendant in San Francisco County Superior Court. Viewing plaintiff's actions to be in violation of the Protective Order, defendant filed a Motion to Enforce Protective Order before the Court. Plaintiff responded by serving a Motion for Sanctions against defendant pursuant to Federal Rule of Civil Procedure 11. The Court referred these matters to Magistrate Judge Maria-Elena James for findings and recommendations.

 On April 3, 1997, the Magistrate issued her Report in which she concluded, inter alia, that plaintiff did not violate the Protective Order and that there was no basis for imposing contempt sanctions or enjoining the state court lawsuit. Defendant now presents the following objections to the Magistrate's Report:

 
* The Magistrate erred as a matter of law by refusing to recommend enforcement of the plain language of the Protective Order. The Magistrate's interpretation of the Protective Order is clearly erroneous.
 
* The Magistrate's conclusion that the purpose of the Protective Order is not evident from the face of the Protective Order is clearly erroneous.
 
* The Magistrate erred as a matter of law by recommending that OCV be allowed to invoke the substantial compliance defense.
 
* The Magistrate's conclusion that OCV substantially complied with the Protective Order is clearly erroneous.
 
* The Magistrate's conclusion that the Court is barred by the Anti-Injunction Act from issuing an injunction to prevent OCV from pursuing its state court action is clearly erroneous.
 
* The Magistrate's recommendations not to fine OCV's attorneys, and not to award attorneys' fees to LodgeNet are clearly erroneous.
 
* The Magistrate erred as a matter of law in stating that LodgeNet's subsequent motion to enforce the Protective Order did not appear to have been filed within the safe harbor period.

 (Def.'s Obj. at 2-3.) Defendant also requests that the Court render an advisory opinion concerning whether it would exercise supplemental jurisdiction over the state court action. (Id. at 11.)

 STANDARD OF REVIEW

 A magistrate judge's findings and recommendations on matters which are dispositive of a claim or defense are reviewed de novo. See 28 U.S.C. § 636(b)(1)(C); Fed. R. Civ. P. 72(b). A magistrate's determination of non-dispositive matters is entitled to deference unless it is clearly erroneous or contrary to law. Grimes v. City & County of San Francisco, 951 F.2d 236, 241 (9th Cir. 1991) (citing 28 U.S.C. § 636(b)(1)(A) and Fed. R. Civ. P. 72(a)).

 Issues related to a protective order are collateral to the substantive issues in the litigation, and hence, are deemed nondispositive. C.f., Hutchinson v. Pfeil, 105 F.3d 562, 566 (10th Cir. 1997). Similarly, the decision of whether to impose Rule 37 sanctions for discovery violations is also considered a non-dispositive matter. See Ocelot Oil Corp. v. Sparrow Indus., 847 F.2d 1458, 1465 (9th Cir. 1988). *fn2" However, because only a district court may hold a party in contempt, Grimes, 951 F.2d at 240, the Magistrate's findings on the issue of civil contempt will be reviewed de novo. *fn3"

 DISCUSSION

 A. ENFORCEMENT OF THE ...


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