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directPacket Research, Inc. v. Polycom, Inc.

United States District Court, N.D. California, San Jose Division

November 6, 2019

DIRECTPACKET RESEARCH, INC., Plaintiff,
v.
POLYCOM INC., Defendant.

          ORDER RE OCTOBER 17, 2019 DISCOVERY DISPUTE LETTER RE: DKT. NO. 204

          Virginia K. Demarchi United States Magistrate Judge

         Plaintiff directPacket Research, Inc. (“directPacket”) and defendant Polycom Inc. (“Polycom”) ask the Court to resolve two discovery disputes:

1. Whether Polycom should be required to provide directPacket access to Polycom's financial database(s) so that directPacket may discover certain information it contends is relevant to damages.
2. Whether Polycom should be required to amend or supplement its response to directPacket's Interrogatory No. 3 to Polycom.

         The Court held a hearing on the matters in dispute on November 5, 2019. Based on the parties' submissions and their presentations at the hearing, the Court resolves these disputes as set forth below.

         I. DAMAGES DISCOVERY

         In aid of its reasonable royalty theory of damages, directPacket seeks information about Polycom's U.S. sales of the products accused of infringing U.S. Patent Nos. 7, 710, 978, 7, 773, 588, and 8, 560, 828, as well as Polycom's U.S. sales of non-accused products and services sold with the accused products. Dkt. No. 204 at 1-3. Specifically, directPacket seeks information concerning units, downloads, price, revenue, costs, and gross and net profit margin for sales or licenses of the accused products and non-accused (but associated) products and services. The discovery requests on which directPacket relies are its Interrogatories Nos. 4-6 and its Requests for Production Nos. 66-70 to Polycom. Id. at 3 n.1. The parties dispute whether Polycom has complied with an earlier order of the Honorable Lawrence R. Leonard of the Eastern District of Virginia, the court from which this case recently was transferred, directing Polycom “to permit Plaintiff, under Defendant's supervision, to access Defendant's financial database to retrieve information regarding sales data of the Accused Products, including derivative or convoyed sales.” Dkt. No. 204-1 at 2.

         At the hearing on this dispute, Polycom represented that it has produced the following information to directPacket for the time period 2012 through mid-2019:

• transaction level or invoice level detail in its possession for all accused products, whether sold individually, with other products, or in bundles;
• all transactions reflecting renewals for all accused products;
• transaction level or invoice detail in its possession for all non-accused products or services sold with an accused product;
• cost information for all accused products and all non-accused products or services sold with an accused product;
• gross and net profit margin information for all accused products and all non-accused products or services ...

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