Bedrock Computer Technologies, LLC v. Softlayer Technologies, Inc. et al

Filing 265

RESPONSE in Opposition re 259 MOTION to Compel a Complete Response To Their Sixth Interrogatories filed by Bedrock Computer Technologies, LLC. (Cawley, Douglas)

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS TYLER DIVISION BEDROCK COMPUTER TECHNOLOGIES LLC, Plaintiff, v. SOFTLAYER TECHNOLOGIES, INC., et al. Defendants. CASE NO. 6:09-cv-269-LED Jury Trial Demanded BEDROCK'S REPLY IN SUPPORT OF ITS MOTION TO COMPEL FROM GOOGLE AND MATCH.COM A COMPLETE RESPONSE TO BEDROCK'S FIFTH INTERROGATORY AND BEDROCK'S RESPONSE TO GOOGLE'S AND MATCH.COM'S CROSS-MOTION TO COMPEL Dallas 307217v1 I. ARGUMENT IN REPLY Bedrock propounded an interrogatory seeking detailed information related to Google's and Match.com's revenue to the extent that that revenue depends on the Accused Instrumentality in this case. In response, Google cited to Rule 33(d) and directed Bedrock to its investor website, and Match.com responded by citing to Rule 33(d) and by making a promise to produce the relevant documents at some unknown point in the future. This is a clear misuse of Rule 33(d). See Laserdynamics, Inc. v. Asus Computer Int'l, No. 2:06-CV-348, 2009 WL 15361, at *2 (E.D. Tex. Jan. 21, 2009). In fact, Google and Match.com do not dispute that their responses to Bedrock's fifth interrogatory are deficient--their opposition brief is completely silent on Rule 33(d) and Laserdynamics. Instead of attempting to justify the adequacy of their responses, Google and Match.com only offer a patchwork of excuses. First, Google and Match.com attempt to minimize the importance of their infringement: "This [accused] source code deals with a minor aspect of the Linux operating system, an aspect which is completely unnecessary to the operation of Defendants' computer systems and businesses." Opp. Br. at 2. Even if this were true, FED. R. CIV. P 33 ("Rule 33") does not permit a party to refuse to answer an interrogatory on these grounds. To the contrary, Rule 33 states that "interrogatories must be answered[.]" See Rule 33(b)(1) (emphasis added). Second, Google and Match.com complain that Bedrock's interrogatory was overly broad and unduly burdensome. See Opp. Br. at 4. Google and Match.com only lodge this objection in a conclusory manner and offer no explanation as to how this interrogatory is overly broad or unduly burdensome. See id. -1Dallas 307217v1 Third, Google and Match.com argue that Bedrock has not established the relevancy of the discovery it seeks. See Opp. Br. at 4-7. Google and Match.com cite Gauthier v. Union Pac. R.R. Co., No. 1:07-CV-12, 2008 WL 2467016 (E.D. Tex. Jun. 18, 2008) for the proposition that Bedrock "must establish the threshold burden of relevancy under the Rules." See Opp. Br. at 5. The Local Court Rules provide guidance as to what this "threshold burden" is. Specifically, the Local Rules state that relevant information includes "information that reasonable and competent counsel would consider reasonably necessary to prepare, evaluate or try a claim or defense[.]" See Local Rule CV-26(d)(5). Certainly, Bedrock needs to conduct discovery on an appropriate royalty base so that its counsel can prepare, evaluate, and try its case. Moreover, the interrogatory at issue was explicitly tailored to the defendants' infringement. See e.g., Dkt. No. 246-4 at 10 ("For each Google business unit using, running, or relying upon to any degree a server or network of servers executing any Accused Version of Linux . . ."). The interrogatory is explicitly tied and linked to Google's and Match.com's reliance of the thing accused of infringing the patent-in-suit. Because the interrogatory at issue is within the scope of permissible discovery--on its face, no less--the burden is actually on Google and Match.com to "show why discovery should not be permitted." See Gauthier, 2008 WL 2467016, at *3 (emphasis added). Google and Match.com have made no such showing. Google's and Match.com's reliance on Micro Motion, Inc. v. Kane Steel Co., 894 F.2d 1318 (Fed. Cir 1990) is misplaced. As Google and Match.com admit, the damages-related discovery sought in Micro Motion was "entirely speculative." See Opp. Br. at 5. Here, in contrast, Bedrock is seeking damages related to Google's and Match.com's revenue that is attributable, at least in part, to their infringement of the patent-in-suit. See e.g., Dkt. No. 246-4 at 10 ("For each Google business unit using, running, or relying upon to any degree a server or -2Dallas 307217v1 network of servers executing any Accused Version of Linux . . ."). The interrogatory at issue is therefore not a "speculative damages inquiry" by any measure, and so Micro Motion is inapposite. 1 Google and Match.com further urge the Court to adopt a new discovery rule based on a dubious synthesis of Micro Motion and Allen: A plaintiff is not entitled to damages-related discovery without first having "set forth any damages theory (that is, a theory articulating a logical, causal link between the alleged infringement and a specific, quantified economic benefit to the business)." See Opp. Br. at 7. This new rule is not only contrary to Rule 33, Rule 26, and Local Rule CV-26(d); it is also ill-advised. First, this new rule would encourage discovery disputes between future litigants. It would be entirely too easy for a defendant to refuse discovery based on fabricated, perpetual dissatisfaction with the plaintiff's damages theory. Second, this new rule proposes an absurd framework in that it would allow a defendant to refuse damages-related discovery until the plaintiff shows a "logical, causal link between the alleged infringement and a specific, quantified economic benefit to the business." A plaintiff could rarely satisfy this burden without first conducting damages related discovery. Plainly, this would put the cart before the horse. Fourth, Google and Match.com argue that recent Federal Circuit opinions, specifically in Lucent Technologies, Inc. v. Gateway, Inc., 580 F.3d 1301 (Fed. Cir. 2009) and ResQNet.com, 1 Similarly, Allen v. Howmedica Leibinger GmhH, 190 F.R.D. 518 (W.D. Tenn. 1999) is inapposite. Google and Match.com cite Allen for the proposition that Bedrock must "articulate a linkage between the discovery sought and admissible evidence." See Opp. Br. at 5. This is simply not the law in this district. See Ferko v. Nat'l Ass'n for Stock Car Auto Racing, Inc., 218 F.R.D. 125, 132 (E.D. Tex. 2003) ("The definition of relevant information in Rule 26(b)(1) is broad, and relevant information need not be admissible at the trial of the discovery appears to be reasonably calculated to lead to the discovery of admissible evidence.") (emphasis added). In any event, as discussed above the interrogatory itself provides a clear linkage between the discovery sought and admissible evidence. -3Dallas 307217v1 Inc. v. Lansa, Inc., 594 F.3d 860 (Fed. Cir. 2010), have limited the scope of damages-related discovery. Not so. Neither case narrowed the scope of damages-related discovery; rather, both cases involved a review of damages awards for supporting evidence. See ResQNet, 594 F.3d at 868-873; Lucent, 594 F.3d at 1309, 1324-1339. In the context of this procedural posture, the Federal Circuit's statement in ResQNet that "[a]ny evidence unrelated to the claimed invention does not support compensation for infringement but punishes beyond the reach of the statute," 594 F.3d at 869, stands for the unremarkable proposition that evidence unrelated to the claimed invention cannot support an otherwise unsupported damages award. This in no way changes what is discoverable. To the contrary, to the extent that the Federal Circuit signaled, in Lucent and ResQNet, that it will require more rigor in damages calculations, a plaintiff must conduct more extensive damages discovery to hurdle that heightened scrutiny. II. ARGUMENT IN RESPONSE TO GOOGLE'S AND MATCH.COM'S CROSSMOTION TO COMPEL Google and Match.com did not satisfy the requirement to meet and confer for their crossmotion to compel as required by Local Rule CV-7(h). In the meet and confer for Bedrock's motion, Google and Match.com refused to supplement their responses to Bedrock's fifth interrogatory unless and until Bedrock supplemented its response to Google's and Match.com's sixth interrogatory. While Bedrock refused to have its discovery efforts held hostage by Google's and Match.com's satisfaction with Bedrock's response to its damages-contention interrogatory, Bedrock did not refuse to supplement its responses to those interrogatories. In fact, Bedrock expects to supplement its response as discovery progresses. To this point, however, Google and Match.com have refused even basic damages-related discovery, as exemplified by Bedrock's need to file a motion to compel a complete response to its fifth interrogatory. -4Dallas 307217v1 III. CONCLUSION Because Google and Match.com do not attempt to justify their deficient responses to Bedrock's interrogatory and further because they have no legitimate excuse for their deficient responses, Bedrock respectfully requests that the Court grant either Bedrock's proposed order or Bedrock's alternative proposed order. Bedrock also respectfully requests that the Court deny Google's and Match.com's cross-motion to compel. -5Dallas 307217v1 DATED: August 12, 2010 Respectfully submitted, McKOOL SMITH, P.C. /s/ Douglas A. Cawley Sam F. Baxter Texas Bar No. 01938000 McKOOL SMITH, P.C. sbaxter@mckoolsmith.com 104 E. Houston Street, Suite 300 P.O. Box 0 Marshall, Texas 75670 Telephone: (903) 923-9000 Facsimile: (903) 923-9099 Douglas A. Cawley, Lead Attorney Texas Bar No. 04035500 dcawley@mckoolsmith.com Theodore Stevenson, III Texas Bar No. 19196650 tstevenson@mckoolsmith.com Jason D. Cassady Texas Bar No. 24045625 jcassady@mckoolsmith.com J. Austin Curry Texas Bar No. 24059636 acurry@mckoolsmith.com McKOOL SMITH, P.C. 300 Crescent Court, Suite 1500 Dallas, Texas 75201 Telephone: 214-978-4000 Facsimile: 214-978-4044 Robert M. Parker Texas Bar No. 15498000 Robert Christopher Bunt Texas Bar No. 00787165 PARKER, BUNT & AINSWORTH, P.C. 100 E. Ferguson, Suite 1114 Tyler, Texas 75702 Telephone: 903-531-3535 Facsimile: 903-533-9687 E-mail: rmparker@pbatyler.com E-mail: rcbunt@pbatyler.com ATTORNEYS FOR PLAINTIFF BEDROCK COMPUTER TECHNOLOGIES LLC Dallas 307217v1 CERTIFICATE OF SERVICE I hereby certify that all counsel of record who are deemed to have consented to electronic service are being served with a copy of the forgoing document via the Court's CM/ECF system pursuant to the Court's Local Rules this 12th day of August, 2010. /s/ J. Austin Curry J. Austin Curry Dallas 307217v1