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Largan Precision Co., Ltd. v. Genius Electronic Optical Co., Ltd.

United States District Court, N.D. California

January 8, 2015

LARGAN PRECISION CO., LTD., Plaintiff,
v.
GENIUS ELECTRONIC OPTICAL CO., LTD., Defendant.

ORDER DENYING MOTION FOR STAY OF ORDER GRANTING MOTION TO COMPEL Re: Dkt. No. 316

JAMES DONATO, District Judge.

This order resolves a discovery dispute between the parties that has dragged on since October. Defendant Genius seeks to withhold as attorney work product a number of emails and documents written and exchanged by non-attorneys at a time when no litigation was pending or reasonably threatened. Genius contends that it is entitled to withhold the documents because they were created after it received one or both of the two letters plaintiff Largan sent it - one in June 2011, which did not involve the patents-in-suit, and one in April 2013, which did - accusing Genius of patent infringement and proposing that Genius take a license from Largan. All of the documents Genius wants to withhold involved no attorneys or legal advice, were not labeled "work product" in any way, and bear no indication on their face that they were prepared for purposes of litigation, as opposed to negotiation. Many were prepared months after receiving the purportedly relevant notice letter. The Court has rejected this breathtakingly overbroad assertion of the work product doctrine on several occasions, most recently during a telephonic discovery conference held on December 30, 2014, and ordered Genius to produce all remaining documents withheld on that improper assertion. This order provides additional explanation of the Court's holding with the goal of ending this dispute now and forever more in this case.

BACKGROUND

This patent infringement case began on June 4, 2013, when Largan filed a complaint accusing Genius of infringing various patents relating to optical lens design. See Dkt. No. 1. The dispute that gave rise to this order erupted shortly before the close of fact discovery in October 2014, when Largan objected that Genius was improperly withholding or redacting documents and emails prepared by two Genius employees who are not attorneys, Arthur Berman and C. J. Lin. See Dkt. No. 154-3 at 1-2. Genius agreed to produce the documents created by Berman, see Dkt. No. 206, but claimed that the redacted portions of Lin's emails were work product, see Dkt. No. 166 at 2. Documents are only protected by the work product doctrine, of course, if they are prepared in anticipation of litigation, see Fed. R. Civ. Pro. 26(b)(3); In re Grand Jury Subpoena, 357 F.3d 900, 906 (9th Cir. 2003), and the sole basis Genius gave for anticipating litigation was its receipt of a notice letter from Largan on April 2, 2013. It did not provide any facts indicating that litigation was reasonably anticipated and did not allege that an attorney played any role whatsoever in the creation of the documents; in fact, according to Largan, the emails were sent before Genius hired litigation counsel. See Dkt. No. 154-3 at 2.

At a telephonic discovery conference on December 5, 2014, the Court ruled that the redacted Lin documents were not protected work product and ordered Genius to produce unredacted copies of the documents. See Dkt. No. 207. This ruling should have been the end of the matter but Genius then launched a series of rearguard actions that have unnecessarily dragged out this straightforward discovery issue. Genius's first action was to seek leave for "reconsideration" on December 15, 2014, on the purported ground that the Court had gotten it wrong in the December 5 order. See Dkt. No. 267. But Genius also said that it had, in fact, produced the documents that were the subject of the previous discovery dispute, and was filing a motion only because Largan had requested additional documents. See Dkt. No. 266 at 1.

In light of pending depositions set for December 18, 2014, involving at least one witness traveling from Taiwan, the Court turned to the request immediately and denied it as moot the same day based on Genius's representation that it had produced the disputed documents. See Dkt. No. 269. It advised Largan to file a motion to compel if it sought additional documents. See id. Largan did so the next day, accusing Genius of failing to comply with the Court's order. See Dkt. No. 274.

To resolve what was fast becoming an unproductive exchange of arguments, the Court ordered Genius to provide the disputed documents for in camera review. See Dkt. No. 276. On December 17, 2014, Genius delivered a box of over 300 disputed documents and a short letter stating that it was withholding the bulk of the documents based on work product because of the 2011 and 2013 notice letters. A number of the emails were in Chinese, and Genius claimed it no longer possessed translations it could provide to the Court. Over the next several days, the Court reviewed in camera over a hundred of the documents, and issued an order on December 21, 2014, granting Largan's motion to compel in part, finding that the vast majority of documents Genius sought to withhold were not prepared in anticipation of litigation. See Dkt. No. 295. The Court expressly stated in the order that it made no judgment with respect to the emails in Chinese. Id.

Only after this order, which directed Genius for a second time to produce the withheld documents, did Genius provide translations of some of the Chinese language emails. On Christmas Eve, Genius asked again to delay production and submitted translations of two email threads in Chinese claiming that they - at last - proved that the withheld documents truly were protected work product. See Dkt. No. 316. One of the new documents was a set of emails between Elmer Chang, Genius's Chief Technology Officer, and Largan, exchanged after Largan's June 2011 notice letter, while the second was a copy of Largan's April 2013 notice letter and a subsequent email from C. J. Lin, the Manager of Genius's IP Department to the President and Chairman of Genius. See id. at 4, 3.

These email strings are the subject of this order and the Court's telephonic ruling on December 30, 2014. The 2011 email chain begins with a June 24, 2011, email from Chia-Wen Lee of Largan to Denis Mack-Mumford, the Vice President of Sales and Marketing at Genius, stating: "Please find attached a copy of the notice letter for U.S. patent 7, 957, 079, sent to you by express mail on June 24, 2011." See Dkt. No. 316-3, Ex. B (submitted for in camera review). The document shows Mack-Mumford forwarded the email to Chang, and Chang and Lee exchanged emails to schedule in-person licensing discussions. See id. On July 21, 2011, Lee sent an email to Chang attaching a copy of a notice letter for another patent - the 340 patent. See id. Finally, after the in-person meetings, Chang sent a letter to Lee on August 31, 2011, stating that Genius had assessed the 079 and 340 patents, and concluded that: (1) its 4P lens complied with a patent Genius obtained in 2004; (2) the patentability of Largan's patents was dubious; and (3) the licensing price quoted by Largan was "way higher than the general standard of the industry." See id. It went on to state that "[i]n order to continue with the negotiation in the name of avoiding litigation, ' your company needs to provide a more persuasive argument." Id. It also suggested that Genius was still examining whether it would take a license to an additional Largan patent - the 078 patent: "As for the 078 case, our company is still holding internal discussions about whether to license or not. It is expected that the result will not come out until the middle of September." Id. The email is followed by a response by Lee from Largan, saying, "I'm sorry that your company's reply simply repeated the discussions on August 15 without any actual or specific explanation about the progress of the solution of the patent licensing issue between both parties." Id. It attempted to rebut Genius's arguments and suggested continuing negotiations with an attorney.

The April 2, 2013, notice letter, sent from Lee at Largan to C. J. Lin at Genius, states:

Dear Mr. Lin:
As you have known, Largan Precision Co., Ltd. ("Largan") has numerous issued and pending patent applications related to lens assemblies and the manufacture thereof. We write to determine if GSEO has interest in licensing Largan's patented technologies.
Among numerous patents in the lens technology owned by Largan, the following chart lists several GSEO lens products incorporated in Apple products ...

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