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In re Application of Pioneer Corporation for An Order Permitting Issuance of Subpoenas To Take Discovery In A Foreign Proceeding

United States District Court, C.D. California

May 9, 2018






         On March 23, 2018, Plaintiff Pioneer Corporation (“Pioneer”) filed an Ex Parte Application Pursuant to 28 U.S.C. § 1782 for an Order to Conduct Discovery for Use in Foreign Proceedings. (“Appl., ” Dkt. No. 1). The Application is supported by a Memorandum of Points and Authorities (“P Memo., ” Dkt. No. 1-2) and the declarations of Daniel R. Foster (“Foster Decl., ” Dkt. No. 1-3) and Dr. Andreas Von Falck. (“Von Falck Decl., ” Dkt. No. 1-7).

         On April 2, 2018, Respondent Technicolor, Inc. (“Technicolor” or “Technicolor Inc.”)[1] filed an Opposition (“Opp., ” Dkt. No. 10-1), supported by the declarations of Joseph Opalach (“Opalach Decl., ” Dkt. No. 10-2), and Ralph Nack (“Nack Decl., ” Dkt. No. 10-3), all of which contained redactions, and the declaration of Sophie Le Menaheze (“Le Menaheze Decl., ” Dkt. No. 10-4), which was unredacted. On April 4, 2018, Technicolor filed a Corporate Disclosure Statement pursuant to Federal Rule of Civil Procedure 7.1. (“R Discl., ” Dkt. No. 15). On April 6, 2018, with the Court's permission, (Dkt. No. 17), Technicolor filed unredacted versions of its Opposition (Dkt. No. 18) and the Opalach (Dkt. No. 18-1) and Nack (Dkt. No. 18-2) declarations under seal.[2]

         On April 12, 2018, Pioneer filed a Reply (“Reply”) in support of its Application and a second declaration of Dr. Andreas Von Falck (“Von Falck Decl. II”). (Dkt. No. 20). On April 19, 2018, Technicolor filed a Request for Leave to File a Sur-Reply, (Dkt. No. 23), which the Court granted. (Dkt. No. 23). On April 24, 2018, Technicolor filed a Sur-Reply (“Sur-Reply) and a second declaration of Ralph Nack (“Nack Decl. II”). (Dkt. No. 25).

         On May 8, 2018, the Court held a hearing. For the reasons stated below, Pioneer's Ex Parte Application is DENIED.



         Plaintiff Pioneer Corporation “is a global company, with headquarters in Tokyo, Japan.” (P Memo. at 3). Pioneer produces car entertainment and audio products. (Id.).

         Respondent Technicolor Inc. is a Delaware company headquartered in Hollywood, California. (Le Mehaneze Decl. ¶ 3). Technicolor sells “a variety of entertainment-related products and services.” (P Memo. at 3). Technicolor Inc. “is a wholly-owned subsidiary of Technicolor USA, ” (R Discl. at 2), which is also a Delaware corporation headquartered in Hollywood. (Le Mehaneze Decl. ¶ 3). Technicolor USA, in turn, “is a wholly-owned subsidiary of Technicolor SA, a publicly-held French corporation.” (R Discl. at 2; see also Le Mehaneze Decl. ¶ 4).

         Thomson Licensing SAS (“Thomson”) is another subsidiary of Technicolor SA and is similarly a French corporation. (Id. ¶¶ 5-6). Thomson does not produce products, “but instead licenses patents that have been acquired from third party inventors.” (P Memo. at 3). Thomson is a sister corporation of Technicolor USA, and is not a subsidiary of either Technicolor USA or Technicolor Inc. (Le Mehaneze Decl. ¶¶ 5, 7). Thomson Licensing SAS has no direct presence in the United States. (Id. ¶ 5). However, Thomson Licensing LLC is located in Princeton, New Jersey. (Opalach Decl. ¶ 2). Thomson also has a German-Austrian subsidiary called Thomson Multimedia Sales Germany & Austria GmbH. (P Memo. at 3).

         In 2001, Pioneer entered into an agreement with Thomson Multimedia Sales Germany & Austria GmbH to license certain MP3 technology patents (the “License Agreement”). (Id.). Pioneer paid royalties pursuant to the License Agreement for thirteen years. (Id.). However, Pioneer eventually concluded that it had overpaid its license fees by over $15 million due to “the expiration of the majority of the Licensed patents in October 2012.” (Id.).

         Pioneer states that it attempted to negotiate with Technicolor SA, Thomson's parent company, for reimbursement of the alleged overpayments. (Id. at 4). When those negotiations failed, “on December 30, 2016, Pioneer filed an action against Thomson Licensing SAS in the German court, seeking recovery of some portions of the $15, 161, 393.00” overpayment (the “German Claim” or “German proceedings”). (Id.). As described by Pioneer, the German Claim alleges that Pioneer's “products sold between October 2012 and December 2014 did not practice any valid unexpired Licensed patents.” (P Memo. at 3). The German court held a hearing on Pioneer's claims on February 8, 2018. (Von Falck Decl. ¶ 3; see also Nack Decl., Exh. 3 (minutes of hearing)). On March 15, 2018, the German court dismissed Pioneer's claims as “unfounded.” (Id., Exh. 1 at 14 (German court's written decision); see also Von Falck Decl. ¶ 3). Pioneer represented at the hearing that it has filed an appeal, and that argument will be heard in the German court of appeals on June 22, 2018 (the “Appeal”).



Section 1782(a) provides in relevant part:
The district court of the district in which a person resides or is found may order him to give his testimony or statement or to produce a document or other thing for use in a proceeding in a foreign or international tribunal . . . . The order may be made . . . upon the application of any interested person . . . . The order may prescribe the practice and procedure, which may be in whole or part the practice and procedure of the foreign country or the international tribunal, for taking the testimony or statement or producing the document or other thing. To the extent that the order does not prescribe otherwise, the testimony or statement shall be taken, and the document or other thing produced, in accordance with the Federal Rules of Civil Procedure.
A person may not be compelled to give his testimony or statement or to produce a document or other thing in violation of any legally applicable privilege.

28 U.S.C. § 1782(a); see also IPCom GmbH & Co. KG v. Apple Inc., 61 F.Supp.3d 919, 921-22 (N.D. Cal. 2014) (“Under 28 U.S.C. § 1782, a district court may order a person residing or found within its district to produce documents or testimony for use in a foreign legal proceeding, unless the disclosure would violate a legal privilege.”) (internal quotation marks and citation omitted).

         Accordingly, the court must, at a minimum, make three findings before granting a request for discovery pursuant to section 1782(a): “(1) the application is made by a foreign or international tribunal or ‘any interested person'; (2) the discovery is ‘for use in a proceeding in a foreign or international tribunal'; and (3) the person or entity from whom the discovery is sought is a resident of or found in the district in which the application is filed.” In re Dubey, 949 F.Supp.2d 990, 992 (C.D. Cal. 2013) (quoting 28 U.S.C. § 1782(a) and citing In re Bayer, 146 F.3d 188, 193 (3d Cir. 1998)). The Supreme Court instructs that the phrase “any interested person” “plainly reaches beyond the universe of persons designated ‘litigant.'” Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241, 256 (2004). While the discovery must be “for use” in a foreign proceeding or tribunal, “[s]ection 1782(a) does not limit the provision of judicial assistance to ‘pending' adjudicative proceedings.” Id. at 258. “[T]he ‘proceeding' for which discovery is sought under § 1782(a) must be in reasonable contemplation, but [it] need not be ‘pending' or ‘imminent.'” Id. at 247 (emphasis added). Additionally, the use of the word “tribunal” in the statute is intended “to ensure that ‘assistance is not confined to proceedings before conventional courts, ' but extends also to ‘administrative and quasi-judicial proceedings.'” Id. at 249 (quoting S. Rep. No. 1580, 88th Cong., 2d Sess., 7 (1964)).

         Nonetheless, as the Ninth Circuit has explained, “[t]he absolute requirements under § 1782 are only part of the story . . . . The courts have stressed that, even if those requirements are met, a district court still retains the discretion to deny a request.” In re Premises Located at 840 140th Ave. NE, Bellevue, Wash., 634 F.3d 557, 563 (9th Cir. 2011); see also In re Ex Parte Application of Qualcomm Inc., 162 F.Supp.3d 1029, 1035 (N.D. Cal. 2016) (‘[S]imply because a court has the authority under Section 1782 to grant an application does not mean that it is required to do so.”). “‘Congress gave the federal district courts broad discretion to determine whether, and to what extent, to ...

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