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DR. Systems, Inc. v. Siemens Fujifilm Medical Systems USA

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA


April 10, 2008

DR. SYSTEMS, INC., PLAINTIFF,
v.
SIEMENS FUJIFILM MEDICAL SYSTEMS USA, INC.; GE HEALTHCARE LTD; GE SIEMENS AG AND MEDICAL SYSTEMS, INC.; KONINKLJKE PHILIPS ELECTRONICS, N.V.; PHILIPS ELECTRONICS NORTH AMERICA CORPORATION; MCKESSON CORPORATION; AGFA-GEVAERT N.V.; AGFA CORPORATION; DYNAMIC IMAGING, LLC; SIEMENS MEDICAL SOLUTIONS USA, INC.; SIEMENS CORPORATION; SIEMENS AG; EASTMAN KODAK COMPANY; DEFENDANTS.

The opinion of the court was delivered by: Hon. Nita L. Stormes U.S. Magistrate Judge

ORDER GRANTING DR SYSTEMS' MOTION TO COMPEL DISCOVERY RESPONSES FROM MEDICAL SOLUTIONS AND DENYING WITHOUT PREJUDICE ALTERNATIVE REQUEST FOR LEAVE TO FILE AMENDED FINAL INFRINGEMENT CONTENTIONS [Doc. No. 263] AND RELATED COUNTERCLAIMS.

Plaintiff and Counterdefendant DR Systems, Inc. (DR Systems) moves for an order to compel Defendants and Counterclaimants Siemens Medical Solutions USA, Inc. and Siemens AG (collectively, Siemens) to supplement their responses to DR Systems' first sets of interrogatories and requests for production of documents and things (RFPs). While DR Systems has already received discovery on Siemens' Leonardo product, it now seeks to compel discovery on the syngo and SIENET products so that DR Systems can examine the interrelationship between these products and Leonardo. Alternatively, DR Systems requests leave of court to file amended final infringement contentions.

Siemens opposes the motion, arguing that Leonardo, syngo and SIENET are separate and distinct products. They say DR Systems is not entitled to discovery on the syngo and SIENET products because they did not identify those products as actual infringing products. Siemens says that DR Systems' discovery should be limited to only those products they identified in their infringement contentions.

The Court reviewed all documents filed in support of and in opposition to the motion. The Court found the issues suitable for decision without oral argument. Based on its review and analysis of the issues, the Court GRANTS DR Systems' motion to compel and DENIES without prejudice its alternative request for leave to amend its final infringement contentions.

RELEVANT FACTS

DR Systems filed this action February 24, 2006 and alleged infringement of its '416 patent against Fujifilm Medical Systems USA, Inc. The '416 patent involves technology that provides systems and processes for presenting and viewing medical images generated by imaging devices such as x-ray, MRI, CAT and PET. These systems are also known as Picture Archival and Communications products, or PACS. PACS products are generally large networked computer systems designed for use by doctors in a hospital or clinical environment.

On April 11, 2006, DR Systems filed a first amended complaint and added Siemens and several other entities as defendants. Siemens filed an answer and counterclaim on June 27, 2006 and asserted three patents against DR Systems. The Siemens patents also relate to PACS products.

The Court held a case management conference and issued an initial scheduling order on August 10, 2006. [Doc. No. 89.] On August 22, 2006, DR Systems served its preliminary infringement contentions. Those preliminary contentions identified Siemens' Leonardo Workstation as an infringing product. Bovich Decl. Ex. B

On August 28, 2006, all defendants joined in a motion to phase discovery. They sought to limit discovery in Phase 1 to only claim construction discovery. [Doc. No. 107.] DR Systems did not object to phasing discovery. [Doc. No. 109.] The Court stayed all fact discovery not related to claim construction until after a ruling on claim construction. [Doc. No. 115.] The Court entered a claim construction ruling on the '416 patent on October 2, 2007. [Doc. No. 236.] The Court lifted the discovery stay on October 30, 2007. [Doc. No. 247.]

On November 5, 2007, DR Systems served its final infringement contentions on Siemens. Those final contentions expressly named only the Leonardo Workstation as an infringing product, but identified some other Siemens' products as potentially infringing products:

Since fact discovery has been stayed, DR Systems reserves the right to amend its contentions as necessary to incorporate additional infringing products revealed in discovery. For example, it is not clear from publicly available information and/or the documents produced thus far whether SYNGO, SIENET MagicView and SIENET MagicWeb are each a component of the Leonardo system, software applications and/or separate products used in conjunction with Leonardo systems. Because DR Systems has had virtually no discovery, it cannot determine the exact configuration and/or names for Siemens' accused products.

Pl.'s Ex. A, p.2.

On December 14, 2007, DR Systems served interrogatories and RFPs on Siemens. Pl.'s Exs. D, E. The requests seek information regarding Siemens' PACS products that include physician preferences, one characteristic that DR Systems claims in the '416 patent. Siemens served responses to the discovery on February 4, 2008. Pl.'s Exs. F, G. Siemens limited its responses to address only the Leonardo Workstation and not other PACS products.

Meanwhile, sometime around April 2004, Siemens added "new and expanded applications" to syngo Multimodality Workstation, "renaming" the product to Leonardo. Pl.'s Ex. C, ¶ 1; Bowman Decl. ¶ 4. In February 2006, Siemens changed the name of the Leonardo Workstation to syngo Multimodality Workplace. Bowman Decl. ¶ 5. Siemens says that Leonardo and syngo Multimodality Workplace are the same product. In its disclosures and document productions in October and November 2006, Siemens produced approximately 15,000 pages work of manuals and materials for Leonardo and syngo Multimodality Workplace. Bovich Decl. ¶¶ 8, 10. On January 16, 2007, Siemens produced a 510(k) pre-market notification of Leonardo. Bovich Decl. ¶ 9. In February 2008, Siemens produced over 465,000 pages of additional material regarding Leonardo and syngo Multimodality Workplace. Bovich Decl. ¶¶ 16, 17.

In addition, Siemens makes several types of operational and technical information related to its products available in print, on the Siemens' website, or both. Bieber Decl. ¶ 3. The type of information publically available includes brochures, whitepapers, internet-specific content, DICOM conformance statements, magazines and press releases. Bieber Decl. ¶¶ 4-11.

DISCUSSION

Scope of Discovery

The scope of discovery in patent cases "should be liberally construed" under Federal Rule of Civil Procedure 26(b)(1).*fn1 See Bd. of Trs. of Leland Stanford Jr. Univ. v. Roche Molecular Sys.. Inc., 237 F.R.D. 618, 621 (N.D. Cal. 2006) (compelling production of documents under Rule 26 in patent infringement action). Rule 26 complements the Patent Local Rules of this district. See WebSideStory, Inc. v. Netratings, Inc., 2007 WL 1109597 (S.D. Cal. 2007) (Battaglia, J.) (compelling defendant to produce a witness to testify based on the broad relevancy standard of Rule 26).

DR Systems argues that under Rule 26, DR Systems should be allowed discovery of not only products expressly named in the final infringement contentions, but also of products that are "reasonably similar" to the accused products. Siemens argues that DR Systems' requested discovery is not relevant to the action because the discovery should be limited to only those products DR Systems specifically accused in their final infringement contentions.

No bright line rule governs whether discovery can be obtained only for products expressly accused in infringement contentions. According to one view, "the scope of discovery may include products and services 'reasonably similar' to those accused in the [preliminary infringement contentions]." Epicrealm Licensing, LLC v. Autoflex Leasing, Inc., 2007 WL 2580969, *3 (E.D. Tex. 2007); see L.G. Elec., Inc. v. Q-lity Computer, Inc., 211 F.R.D. 360, 368 (N.D. Cal. 2002) (noting that discovery is not necessarily limited to products specifically identified in initial patent infringement disclosures). The Federal Circuit has reasoned: "If a local patent rule required the final identification of infringement and validity contentions at the outset of the case, shortly before the pleadings were filed and well before the end of discovery, it might well conflict with the spirit, if not the letter, of notice pleading and broad discovery regime created by the Federal Rules." 02Micro Intern., Ltd. v. Monolithic Power Sys., Inc., 467 F.3d 1355, 1365 (Fed. Cir. 2006). According to another view, a party "only has the right to discover information regarding the alleged infringing service, not the right to discover information on whether it should assert a claim of infringement regarding other services." Caritas Tech., Inc. v. Comcast Corp., 2006 U.S. Dist. LEXIS 94879, *14-*15 (E.D. Tex. 2006).

A court in this district has already ruled that discovery may be obtained for products not specifically identified in preliminary infringement contentions. In WebSideStory, the defendant argued that it need not produce a witness at a Rule 30(b)(6) deposition to testify regarding products not identified in the plaintiff's preliminary infringement contentions. 2007 WL 1109597 at *2. The Court found the Rule 26 broad relevancy standard applied and ordered defendant to produce the witness. Id. This Court now applies the same the relevancy standard here.

Applying Rule 26, DR Systems' discovery should not be limited to only the products they expressly accused. First, the phasing of discovery did not deprive DR Systems of the opportunity to conduct discovery of products related to those that were expressly accused. As the parties requested in their joint motion, the Court now "allows the parties to conduct discovery, in the second phase, on all other issues" not related to claim construction. Joint Motion to Phase Discovery, p.2. Second, even though the parties have already drafted their final infringement contentions, they drafted those contentions without the benefit of open discovery. Had this case taken the normal course to allow unlimited discovery before the claim construction ruling, DR Systems would have issued these same discovery requests before the claim construction ruling and before drafting the final infringement contentions. Finally, based on Siemens' explanation of how the Leonardo and syngo products are interrelated PACS products, DR Systems' discovery requests are relevant to the claims and counterclaims at issue. For these reasons, the Court OVERRULES Siemens' relevance objections to the requested discovery.

Siemens' Remaining Objections to the Discovery

Finding that the proposed discovery is relevant and discoverable at this point in the litigation, the Court now turns to Siemens' objections that the discovery requests are overbroad, unduly burdensome and would cause Siemens to suffer prejudice. Siemens argues that if DR Systems is allowed access to information on the related products, the court would have to hold more claim construction hearings and the parties would essentially have to repeat the last two years of litigation. Siemens says that given the massive amount of documents it already provided for Leonardo and the syngo Multimodality Workplace, it would also need to undertake a similarly-massive document production for the related products, all while expert disclosures are due in less than three months. Siemens also argues that DR Systems has ignored much of this information, which has been publicly available.

The Court is not convinced by Siemens' remaining objections. First, allowing the additional discovery will not necessarily cause the parties to repeat two years of litigation. For example, allowing the additional discovery might not force another claim construction hearing because the discovery may not necessarily cause DR Systems' infringement theory to change. Second, even though some of this information may have been publicly available, the record is unclear on how easy it is to navigate through that vast amount of information and how DR Systems might have identified the public information as relevant to the Leonardo product. Finally, DR Systems has offered to narrow the scope of the requests to a preliminary production of product manuals and documents that may more fully explain Siemens' PACS products and their interrelationship. Accordingly, Siemens' objections that the discovery requests are overbroad, unduly burdensome and will cause prejudice are OVERRULED. Alternative Request to Amend Final Infringement Contentions.

The Court DENIES without prejudice DR Systems' alternative request to amend the final infringement contentions. The alternative request is premature because without the discovery, DR Systems has no basis to show the good cause needed to amend the final infringement contentions.

CONCLUSION

The Court GRANTS DR Systems' motion to compel further discovery responses from Siemens OVERRULES Siemens' objections. The Court DENIES without prejudice DR Systems' alternative motion for leave to file amended final infringement contentions. DR Systems must narrow the scope of their discovery requests, as they represented in their reply brief, and serve those amended requests by April 16, 2008. Siemens must serve responses to the amended requests by April 30, 2008, unless the parties agree to another date for production.


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