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Glass Egg Digital Media v. Gameloft, Inc.

United States District Court, N.D. California, Eureka Division

September 3, 2019

GLASS EGG DIGITAL MEDIA, Plaintiff,
v.
GAMELOFT, INC., et al., Defendants.

          ORDER ON DISCOVERY LETTER BRIEFS RE: DKT. NOS. 168, 203

          ROBERT M. ILLMAN, UNITED STATES MAGISTRATE JUDGE

         Currently pending before the court are the Parties' jointly filed letters briefs (dkts. 168, 203) setting forth a discovery dispute pertaining to a number of third-party subpoenas served and noticed by Plaintiff. In essence, Defendants move to quash or limit the subpoenas, or in the alternative, to make the responsive information subject to a protective order. For the reasons stated below, Defendants' motions to quash Plaintiff's third-party subpoenas are granted.

         BACKGROUND

         This is an action for copyright infringement and conversion, as well as unfair competition (based on conversion) pertaining to digital car models used in the gaming industry. See Order (dkt. 141) at 16-17; see also Fourth Amend. Compl. (dkt. 144). In early March of 2019, Plaintiff served 11 subpoenas on various third parties and served Defendants with notice of an intent to serve an additional 6 on other third parties. See Letter Br. of August 16, 2019 (“Defs.' Mot.”) (dkt. 203) at 1, 3. The following month, Defendant Gameloft, Inc. (“GLI”) and Defendant Gameloft SE (“GLSE”) submitted a joint letter brief to the court setting forth two sets of discovery disputes. Letter Br. of April 5, 2019 (dkt. 161). The disputes, a motion to compel between Plaintiff and GLSE, and a motion to quash by GLI and GLSE regarding Plaintiff's third-party subpoenas, would be presented in two separate letter briefs, but a stay of compliance with the subpoenas was sought pending the resolution of that particular dispute. Id. at 1. Thereafter, on April 9, 2019, the Parties filed another joint letter brief setting forth their various arguments regarding Plaintiff's subpoenas. Letter Br. of April 9, 2019, (dkt. 168). Being positioned differently, GLSE and GLI made different arguments about Plaintiff's subpoenas. See id. at 2-4. At the same time, Plaintiff and Defendant GLSE were embroiled in a separate, though related, discovery dispute pertaining to the scope of jurisdictional discovery that was previously ordered and necessary to a determination of GLSE's motion to dismiss. See Letter Br. of April 5, 2019 (dkt. 165). Because the resolution of the discovery motion could affect the outcome of the motion to quash (as to GLSE), on April 15, 2019, the court decided that judicial economy counseled in favor of initially proceeding with the discovery motion (dkt. 165), while staying compliance with Plaintiff's subpoenas in the meantime. See Order of April 15, 2019 (dkt. 169). The discovery motion was eventually resolved on July 18, 2019 (dkt. 196), following which, the Parties solicited and were given clarification as to the effect of the July 18th Order on the still-pending subpoena dispute (dkt. 200). Thereafter, a second jointly-filed letter brief, presenting the Parties' arguments as to Plaintiff's subpoenas was filed. Defs.' Mot. (dkt. 203). As noted, because the scope of discovery as to GLSE is limited to the test for specific jurisdiction commonly applied to tort claims (dkt. 196), and because the Court has already clarified that this scope also applies to third-party discovery (dkt. 200), GLI and GLSE offer differing justifications for quashing or limiting the subpoenas in question. However, both GLI and GLSE argue in the alternative that the information returned in response to the subpoenas in question should be made subject to a protective order. Defs.' Mot. (dkt. 203) at 1-3, 8 n.10.

         GLI's Arguments:

         GLI contends that it has standing to move to quash or limit the subpoenas because they “seek information directly related to Defendants' confidential interests.” Id. at 2. The basis on which the subpoenas would be quashed, as GLI urges, would be because they seek information that is irrelevant to the litigation and unduly burdensome to the nonparties. Id. In the alternative, GLI moves to subject the information sought by the subpoenas to a protective order. Id. at 3. In support of its arguments as to irrelevance and undue burden, GLI has divided the 17 subpoenas into a list of 19 topics attended with 19 footnotes, “for convenience.” Defs.' Mot. (dkt. 203) at 16-17. GLI does not challenge Topic No. 2 (“[a]ll documents relating to any game in the Asphalt series, ” included in 14 of the 17 subpoenas); however, GLI contends that the entirety of the remainder of the 19 topics fall outside the bounds of permissible discovery as irrelevant and disproportionate. Id. at 3. The essence of GLI's position is that there are no causes of action that would permit Plaintiff to generally discover information about GLI's business or relationship with nonparties, and that the information sought is not relevant to Plaintiff's unfair competition claim as part of Plaintiff's “pattern and practice” theory, which GLI claims is Plaintiff's “attempt to revive its dismissed negligence claim.” Id. at 2, 4. Thus, GLI submits that because “pattern and practice” is not relevant to either copyright infringement or conversion, Plaintiff's third-party discovery “should be limited to the Asphalt Games.” Id. at 4. GLI contends that Plaintiff has failed to give “even an indication whether a nonparty has objected to the Subpoenas.” Id. at 2 n.4. However, GLI appears to have overlooked the fact that in a joint letter brief filed several months ago, Plaintiff stated it had already received objections from Tesla, Netflix, SmartRecruiters, and Lesna. See Letter Br. of April 9, 2019 (dkt. 168) at 6 n.16.

         Additionally, GLI has submitted that the dispute is properly in this court as compliance with the subpoenas is due at Plaintiff's counsel's office in California. Id. at 2. More importantly, GLI has also noted that Plaintiff “has not requested the majority of documents sought in the Subpoenas from GLI; and those that it has are subject to ongoing discovery disputes where the parties are in the process of setting a date to exchange documents . . . [and that] it is entirely premature to make requests through overbroad and burdensome third party subpoenas.” Id.[1] GLI has committed to producing all relevant non-privileged information responsive to Plaintiff's third-party subpoenas, and GLI has further proposed that following the substantial completion of that process, Plaintiff can then seek relevant documents from subpoenaed third parties if such a need continues to exist at that time. See Letter Br. of April 9, 2019 (dkt. 168) at 3 n.10.

         GLESE's Arguments:

         GLSE submits that Plaintiff's subpoenas have been a “wholly disingenuous” attempt to circumvent the limits of jurisdictional discovery as to GLSE, and that regarding the issue of standing, “Plaintiff deliberately misses the point.” Defs.' Mot. (dkt. 203) at 5. Characterizing Plaintiff's argument that the subpoenas have independent relevance to GLI as “pure subterfuge” and lamenting “the latest of Plaintiff's improper tactics, ” GLSE argues that the breadth and wording of the subpoenas, constantly using the word, “Gameloft, ” where “Gameloft” is defined as including GLSE, operates to exceed the scope of jurisdictional discovery currently permitted as to GLSE. Id. at 6-7. Given that the subpoenas are all worded to include GLI as well as GLSE in their sweep, GLSE submits that the subpoenas themselves are “with limited and incidental exception, disingenuous subterfuge, ” and that “Plaintiff's real purpose is to discover currently barred information concerning GLSE.” Id. at 8. Consequently, GLSE requests that the court either quash the subpoenas in their entirety, or to order them limited such as to “exclude all information concerning GLSE and/or limit them to third parties and [r]equests that have independent relevance to Plaintiff's claims or defenses against GLI.” Id. Lastly, GLSE adds that “any allowed discovery should be subject to designation as confidential information subject to the Stipulated Protective Order on file in this action.” Id.

         Plaintiff's Arguments:

         It should first be noted that Plaintiff's arguments appear to contemplate a dispute as to 15 rather than 17 subpoenas. See Id. at 8 n.11 (“For 11 of the 15 subpoenas . . .”), see also Id. at 11-13 (describing and defending 15 subpoenas). After complaining that Defendants “obstinately refused to engage in any meaningful discussion” about standing at any of the meet and confer sessions, Plaintiff submits that the broad scope of the subpoenas is necessary to prove “liability, damages, as well as to disprove many of GLI's defenses relating to the culprit's identity, such as license, innocent infringement, and indemnity.” Id. at 8-9. As to GLI and GLSE's motions to quash the subpoenas, Plaintiff argues that “Defendants' conclusory assertion of confidential commercial information without providing the requisite description of such confidential information . . . is entirely insufficient to show prejudice, harm or how the existing protective order is insufficient to protect their interests.” Id. at 10.

         Plaintiff contends that its third-party subpoenas constitute relevant and proper discovery against GLI; and that specifically, the information is relevant to “allegations of willful misconduct, ” “GLI's 21 defenses, ” “purposefully ignor[ing] established Due Diligence standards, ” as well as being generally relevant to willful copyright infringement, conversion, and unfair competition. Id. Plaintiff then notes that “[t]he persistent conflation of the corporate separateness of GLI and GLSE is integral to the scope of third-party discovery, ” and then proceeds to ask a series of rhetorical questions about GLI. Id. at 11 (e.g., “Why is GLI innocent? . . . Is GLI's misconduct intentional?”). In any event, as to GLI's contention that the scope of discovery should be limited to the Asphalt Games series (containing the allegedly infringing products), Plaintiff argues that “whether GLI conducted any due diligence with other similar outsourced projects for other games is of the utmost importance on the issues of conscious disregard and willfulness, as well as unlawful pattern and practice of purposeful infringement and/or conversion, exposing GLI to punitive damages.” Id. at 11. Plaintiff submits that “the extent of GLI's involvement with other third parties has a direct bearing on GLI's knowledge and control over the marketing, promotion and sale of ads and/or the infringing Asphalt games and its intent in committing the alleged misconduct.” Id. Further, Plaintiff argues that discovery within this scope is not an attempt to bring about a “revival of the negligence claim, ” because “[t]he failure to conduct the industry standard due diligence, under FRE 401, is relevant to GLI's intentional disregard of Plaintiff's copyrights and/or proprietary assets.” Id. Plaintiff opposes limiting the subpoenas to the Asphalt Games series because it has alleged that Defendants have a pattern and practice of such misappropriation as well as alleging intentional misconduct, which Plaintiff contends “mak[es] other games relevant in discovery.” Id. at 12. Regarding GLI's contention that Plaintiff's third-party subpoenas are premature, in that most of the information requested can be obtained through Rule 26 discovery from GLI, Plaintiff has responded only to the extent of addressing a single third-party subpoena (to SmartRecruiters) by stating that the pertinent documents requested from GLI were either never in GLI's possession or that GLI has no obligation to produce any such information. See Letter Br. of April 9, 2019 (dkt. 168) at 6. The balance of Plaintiff's arguments, across the various letter briefs submitted in this matter, concern the relevance of the information sought, rather than any effort by Plaintiff to justify such broad third-party subpoenas at this stage of the case.

         In the most recently filed joint letter brief, Plaintiff presents a chart providing the named party in each of 15 subpoenas, as well as a description and explanation as to the general relevance of each subpoena. Defs.' Mot. (dkt. 203) at 11-13. For the subpoena to Basecamp, LLC (a web-based project management tool used in the development of the Asphalt Games series), Plaintiff essentially seeks all documents referring or relating to “Gameloft” in any way (see Id. at 16, GLI's list of 19 topics) and submits that this request is relevant to due diligence, as well knowledge of infringing activity (id. at 11). For the subpoenas to the Coca-Cola Company, the McDonald's Corporation, and Netflix, Inc., Plaintiff essentially seeks all documents related to any advertising campaigns “by Gameloft to you” or any documents referring or relating to “Gameloft” in any way (see Id. at 16-17, GLI's list of 19 topics) and argues that the information is related to damages (id. at 11-12). Regarding the subpoenas to the Ford Motor Company, Tesla, Inc., and Mattel, Inc., Plaintiff again seeks any and all documents referring or relating in any way to “Gameloft, ” submitting that its request is relevant to damages and also “bears on the industry standard to conduct due diligence before outsourcing work.” Id. at 12, 16-17. Similarly, concerning the subpoenas to Entertainment Software Association; UBM, LLC; the Mobile Marketing Association, Inc.; the French-American Chamber of Commerce San Francisco; Lesna, Inc.; SmartRecruiters, Inc.; AppNexus, Inc.; and SpotX, Inc., Plaintiff's repeated ...


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