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Audatex North America Inc. v. Mitchell International, Inc.

United States District Court, S.D. California

October 3, 2014

AUDATEX NORTH AMERICA INC., Plaintiff,
v.
MITCHELL INTERNATIONAL, INC., Defendant.

ORDER: (1) GRANTING PLAINTIFF'S MOTION TO COMPEL DISCOVERY; AND (2) DENYING PLAINTIFF'S MOTION FOR COSTS AND ATTORNEY'S FEES INCURRED IN MAKING THIS MOTION. [ECF No. 66]

BARBARA L. MAJOR, Magistrate Judge.

On August 6, 2014, counsel for both parties jointly contacted the Court regarding a discovery dispute, for which the Court set a briefing schedule. ECF No. 63. In accordance with the Court's Order, Plaintiff Audatex North America Inc. ("Audatex") filed a Motion to Compel Discovery Regarding Source Code and Damages on August 15, 2014. ECF No. 66. In its motion, Audatex also requested the Court to award its costs and attorney's fees incurred in connection with this motion. Id. at 14-15. Defendant Mitchell International, Inc. ("Mitchell") timely filed an opposition on August 29, 2014. ECF Nos. 70, 74. On September 5, 2014, Plaintiff replied in support of the motion to compel. ECF No. 82.

Having considered all of the briefing and supporting documents presented, and for the reasons set forth below, Plaintiff's motion to compel discovery is GRANTED. Plaintiff's motion for its costs and attorney's fees incurred in connection with this motion is DENIED.

BACKGROUND

Plaintiff and Defendant are competitors in the insurance estimation and loss valuation industry. ECF Nos. 57 at 2, 60 at 3. On February 6, 2012, Plaintiff filed this case asserting patent infringement involving computerized systems for automobile insurance claim analysis.[1] Plaintiff alleges patent infringement by Defendant through the manufacture, use, and sales of products, including "Mitchell's Work Center' software and related services." ECF No. 57 at 4, 7, 9.

In February 2014, Plaintiff served interrogatories and requests for production (RFPs) on Defendant. ECF No. 66-1 at 6. Plaintiff claims that Defendant provided unsatisfactory responses to many of its discovery requests and asks the Court in the instant motion to enter an order compelling Defendant to "provide source code citations" requested in Interrogatories Nos. 1 and 8. Id. at 5-6, 14. Plaintiff further asks the Court to compel Defendant to "produce and identify sales and financial documents related to the accused products" requested in RFP Nos. 34-38 and Interrogatory No. 15, and to award its costs and attorney's fees incurred in connection with this motion. Id. at 5-6, 14-15. Defendant claims that it has already provided or agreed to provide responses to all of Plaintiff's discovery requests and that Plaintiff's requests asserted in the instant motion to compel are "unduly burdensome" and "seek[] irrelevant information." ECF No. 70 at 5. Defendant thus argues that Plaintiff's motion should be denied. Id. at 5, 16.

LEGAL STANDARD

The Federal Rules of Civil Procedure generally allow for broad discovery, authorizing parties to obtain discovery regarding "any nonprivileged matter that is relevant to any party's claim or defense." Fed.R.Civ.P. 26(b)(1). Also, "[f]or good cause, the court may order discovery of any matter relevant to the subject matter involved in the action." Id . Relevant information for discovery purposes includes any information "reasonably calculated to lead to the discovery of admissible evidence, " and need not be admissible at trial to be discoverable. Id . There is no requirement that the information sought directly relate to a particular issue in the case. Rather, relevance encompasses "any matter that bears on, or that reasonably could lead to other matter that could bear on, any issue that is or may be [presented] in the case." Oppenheimer Fund, Inc. v. Sanders , 437 U.S. 340, 351 (1978). District courts have broad discretion to determine relevancy for discovery purposes. See Hallett v. Morgan , 296 F.3d 732, 751 (9th Cir. 2002). Similarly, district courts have broad discretion to limit discovery where the discovery sought 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). Limits should be imposed where the burden or expense outweighs the likely benefits. Id.

A party may request the production of any designated documents, electronically stored information or "tangible things" within the scope of Rule 26(b). Fed.R.Civ.P. 34(a). "For each item or category, the response must either state that inspection and related activities will be permitted as requested or state an objection to the request, including the reasons." Id. at 34(b)(2)(B). The responding party is responsible for all items in "the responding party's possession, custody, or control." Id. at 34(a)(1).

An interrogatory may relate to any matter that may be inquired under Rule 26(b). Fed.R.Civ.P. 33(a)(2). The responding party has the option in certain circumstances to answer the interrogatory by specifying responsive records and making those records available to the interrogating party. Id. at 33(d).

DISCUSSION

A. Interrogatory No. 1

Interrogatory No. 1 requests the following: "State the complete basis for your denial that Mitchell infringes any of the claims of the patents-in-suit, including directly, indirectly, literally and by the doctrine of equivalents, including by identifying all relevant facts, documents, source code (by file and line number), and persons with relevant knowledge." ECF No. 66-5, Exh. C at 3. Defendant initially objected to the interrogatory, but subsequently provided five supplemental responses. Id. at 2. In its fifth supplemental response, Defendant objected that Interrogatory No. 1 was premature, because discovery was still ongoing, that the interrogatory sought Defendant's complete contentions regarding non-infringement, and called for expert opinion and testimony. Id . Defendant also stated that the interrogatory was overboard and unduly burdensome, to the extent it sought "all relevant facts, documents, source code (by file name and line number), and persons with relevant knowledge, " and "failed to identify any specific infringing products."[2] Id . Defendant further stated that "UltraMate [was] not properly accused of infringement" and that it had "no relevance to the claims of the patents-in-suit given that any data input by an UltraMate user [was] input off-line and not through a website." Id . With respect to its WorkCenter product, Defendant denied any infringement of the patents-in-suit "directly, indirectly, literally, and/or by the doctrine of equivalents, " because "it d[id] not perform certain recited steps in the method claims or include certain limitations recited in the system/device/computer program claims." Id . Defendant listed specific "steps and limitations absent from the accused WorkCenter product, "[3] and incorporated by reference its "forthcoming" expert report on non-infringement. See id. at 4-7.

Plaintiff alleges that Defendant's response to the interrogatory is insufficient because Defendant did not provide the "factual basis for any denials of infringement, including source code citations to the extent that [Defendant's] non-infringement contentions are based on source code." ECF No. 66-1 at 8-9. Plaintiff further asserts that Interrogatory No. 1 is not premature and warrants Defendant's response because Plaintiff's initial complaint was filed two and half years ago, the deadline for substantial completion of document discovery has passed, and the parties have exchanged infringement and invalidity contentions, preliminary and responsive claim construction ...


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