The opinion of the court was delivered by: Hon. Mitchell D. Dembin U.S. Magistrate Judge
ORDER DENYING MOTION TO COMPEL [DOC. NO. 170]
This particular discovery dispute has a long history. Plaintiffs have sued Defendants alleging, inter alia, that Defendants misappropriated Plaintiffs' trade secrets and that the stolen trade secrets form the basis of several of Defendants' patents. Over the course of this litigation two Magistrate Judges of this Court have ruled that Plaintiffs have failed to designate their trade secrets with sufficient particularity to justify compelling discovery from Defendants. (Doc. Nos. 146 and 160). The District Court has also commented on Plaintiffs seeming inability to describe its own technology adequately. (Doc. No. 121). This Court has provided Plaintiffs with multiple opportunities to designate any of their asserted trade secrets with sufficient particularity.
Currently before the Court is Plaintiffs' motion to compel discovery filed on September 6, 2011. (Doc. No. 170). On September 29, 2011, the Court held a hearing on the motion. At the conclusion of the hearing, the Court directed the parties to file supplemental briefs with particular emphasis upon the sufficiency of Trade Secret Designation #1. Briefs were submitted timely on October 17, 2011. For the reasons set forth below, Plaintiffs' motion is DENIED.
In August, 1999, SnapTrack,, and Locate Networks (Plaintiffs' predecessor-in-interest) entered into a license agreement, whereby Locate obtained a license to use SnapTrack's GPS software in exchange for licensing and royalty fees.
The agreement contemplated that the parties would jointly own work product developed in connection with the agreement. Plaintiffs allege that SnapTrack and Defendant Krasner used the relationship to steal and misappropriate Locate's intellectual property.
In March 2000, Qualcomm acquired SnapTrack for $1 billion. Plaintiffs allege that Defendant Krasner and SnapTrack passed along the improperly acquired intellectual property to Qualcomm during the buyout. Plaintiffs further allege that Defendants used this technology to obtain patents covering Locate's technology without properly attributing Locate as the inventors or co-inventors.
In 2004, Locate transferred its assets to Plaintiff Trace Technologies, LLC, a pre-existing entity created by Locate and Plaintiff Gabriel Technologies, Inc. Locate then sold its interest in Trace to Gabriel and went out of business. In 2006, Qualcomm entered into a new licensing agreement with Trace regarding Locate's technologies. Plaintiffs contend that the 2006 agreement was tainted by Defendants' continuing unlawful use of Locate's intellectual property and by Qualcomm's failure to disclose the terms of the original 1999 licensing agreement to Trace. Plaintiffs contend that they learned of Defendants' wrongdoing when Defendants' patents were published, and filed suit shortly after.
The initial Complaint was filed on October 24, 2008, alleging, among other claims, breach of the 1999 and 2006 license agreements, interference with contract, patent claims, misappropriation of trade secrets, and fraud. (Doc. No. 1). It was followed by a First Amended Complaint on April 29, 2009. (Doc. No. 14). Defendants moved to dismiss the First Amended Complaint and an Order granting in part and denying in part the motion was filed on September 3, 2009. (Doc. No. 35). A Second Amended Complaint was filed on September 14, 2009. (Doc. No. 36). A Third Amended Complaint was filed on October 9, 2009, and was followed by a motion to dismiss. (Doc. Nos. 40, 41). This prompted a Fourth Amended Complaint to be filed on January 11, 2010. (Doc. No. 53). The Fourth Amended Complaint was answered by the Defendants on January 21, 2010. (Doc. No. 54).
On March 30, 2010, in a Scheduling Order issued by U. S. Magistrate Judge Louisa S. Porter, Plaintiffs were ordered to identify the trade secrets at issue with reasonable particularity by May 1, 2010. (Doc. No. 61). On April 23, 2010, Plaintiffs' motion to file a Fifth Amended Complaint was denied. (Doc. No. 71). On July 2, 2010, Defendants moved for a bond under California Code of Civil Procedure § 1030 to secure costs and fees. (Doc. No. 81). On September 20, 2010, U. S. District Judge Michael M. Anello granted the motion and ordered Plaintiffs to post a bond of $800,000 to secure fees and costs that may be due Defendants upon resolution of this case. (Doc. No. 110). Notably, Judge Anello stated:
"Plaintiffs generalized descriptions of Locate technologies . . . is not sufficient." (Doc. No. 110 at 10). The cost bond was posted by Plaintiffs on December 16, 2010. (Doc. No. 121).
In early January, 2011, Plaintiffs served Defendant Qualcomm with requests for discovery related to Plaintiffs' trade secret claims. Defendants refused to respond to these requests asserting that discovery was barred because Plaintiffs had not sufficiently designated their trade secrets as required under Judge Porter's March 30, 2010, Scheduling Order and California Code of Civil Procedure § 2019.210. In response, Plaintiffs provided Defendants with brief descriptions of their purported trade secrets, and submitted four expert declarations concluding that Plaintiffs' trade secret designations were adequate. Defendants maintained that the designations remained deficient.
On January 10, 2011, the Plaintiffs filed their first Motion to Compel Discovery. (Doc. No. 128). A hearing on the motion was held before Magistrate Judge Porter on February 14, 2011. Of particular interest, during the hearing, the Court inquired of Plaintiffs whether the trade ...