Hunter Douglas Inc. et al v. Ching Feng Home Fashions Co., Ltd.

Filing 105

ORDER RE: DAMAGES CONTENTIONS DISCOVERY LETTER BRIEF. Signed by Magistrate Judge Jacqueline Scott Corley on 12/12/2017. (ahm, COURT STAFF) (Filed on 12/12/2017)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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HUNTER DOUGLAS INC., ET AL.,
Plaintiffs,

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v.

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CHING FENG HOME FASHIONS CO.,
LTD.,

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United States District Court
Northern District of California

Case No.17-cv-01069-RS (JSC)
ORDER RE: DAMAGES
CONTENTIONS DISCOVERY LETTER
BRIEF

Defendant.

Re: Dkt. No. 98

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Now pending before the Court is a joint discovery letter brief. (Dkt. No. 98.) Defendant

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challenges the adequacy of Plaintiff’s Second Amended Discovery Contentions under Patent

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Local Rule 3-8. The Rule, adopted less than one year ago, provides as follows:

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3-8. Damages Contentions

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Not later than 50 days after service of the Invalidity
Contentions, each party asserting infringement shall:

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(a) Identify each of the category(-ies) of damages it is
seeking for the asserted infringement, as well as its theories of
recovery, factual support for those theories, and computations of
damages within each category, including:
1. lost profits;
2. price erosion;
3. convoyed or collateral sales;
4. reasonable royalty; and
5. any other form of damages.
(b) To the extent a party contends it is unable to provide a
fulsome response to the disclosures required by this rule, it shall
identify the information it requires.

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N.D. Cal. Patent L.R. 3-8. Similarly, the opposing party has an obligation to make known, with

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specificity, its defenses to the damages claimed:

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3-9. Responsive Damages Contentions

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Not later than 30 days after service of the Damages
Contentions served pursuant to Patent L.R. 3-8, each party denying
infringement shall identify specifically how and why it disagrees
with those contentions. This should include the party’s affirmative
position on each issue. To the extent a party contends it is unable to
provide a fulsome response to the disclosures required by this rule, it
shall identify the information it requires.
N.D. Cal. Patent L.R. 7-9. These required disclosures are designed to inform the parties and the

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court on issues of relevance and proportionality . . . . [and] create[] a potential opportunity for
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meaningful settlement discussions.” Twilio, Inc. v. Telesign Corp., 2017 WL 5525929 *3 (N.D.

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Cal. Nov. 17, 2017).
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After twice amending its Damages Contentions in response to meeting and conferring with
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Defendant, Plaintiff served its Second Amended Rule 3-8 Damages Contentions on November 13,
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2017. Defendant’s Rule 3-9 disclosure is due December 12, 2017 (Dkt. No. 96.) The parties

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United States District Court
Northern District of California

filed this joint discovery letter on December 6, 2017.
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Apparently recognizing that Plaintiff lacks information regarding Defendant’s sales of the
accused products, Defendant does not challenge Plaintiff’s failure to include an actual
computation of damages as required by the Local Rule; instead, Defendant argues more “factual
support” is needed. In particular, and among other things, it asserts that Plaintiff needs to: identify

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the witnesses that support its damages claims, explain provided spreadsheets and identify the
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underlying documentary evidence to support them, identify the actual costs of Plaintiff’s products
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as relevant to its lost profits claim, identify Plaintiff’s pricing policies, and identify evidence that

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supports its assertion that it is the market leader in window coverings.
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Local Rule 3-8 does not require the “factual support” Defendant demands. The Rule does

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not require a patent plaintiff to identify supporting witnesses or produce actual evidence of the
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specificity Defendant seeks. Further, “unlike the more rigorous disclosure requirements for
infringement and invalidity contentions (see L.R. 3-1, L.R. 3-3), there is no ‘good cause’ threshold
for amendment of damages contentions, or is there even a requirement to amend the contentions.”

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Twilio, Inc., 2017 WL 5525929 at *2.
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That being said, to have meaningful settlement discussions and determine what is actually
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at stake in this litigation, more information is required from both parties. Plaintiff seems to think
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that by simply stating in its Damages Contentions that it lacks information as to Defendant’s sales

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and similar information that Defendant was under an affirmative obligation to produce such

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information. The Court is unaware of this obligation, and it is not in the Local Rules. Rather,

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Plaintiff should have served written discovery on Defendant or at least informally sought this

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information before it served its Damages Contentions so that it could provide as fulsome a

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response as possible. See Twilio, Inc., 2017 WL 5525929 at *3.

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The district court’s case management conference order gave a January 20, 2018 or

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thereabouts deadline for the parties’ private mediation efforts. (Dkt. No. 64.) To ensure that those

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efforts are meaningful, and that the goal of the Damages Contentions are met, the parties shall
meet and confer in person or by telephone on or before December 15, 2017 to develop a plan for

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United States District Court
Northern District of California

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damages discovery so that Plaintiff can provide Defendant with a fulsome computation of its

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damages and Defendant can provide a meaningful response. On or before December 20, 2017, the

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parties shall jointly submit their damages discovery plan or, if agreement is not possible, a joint

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letter regarding the dispute. If the mediation date has been continued, then they may extend these

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deadlines by stipulation. But a plan is required.

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Further, no more than 45 days following the district court’s claim construction order, the

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parties shall jointly submit a comprehensive discovery plan for the remainder of the case. The

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parties’ stipulated ESI Order was a good start. The plan shall include any changes to the default

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discovery limitations. For example, do the parties wish to use a total hour limit for depositions

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(e.g., each side has 70 hours) rather than just seven hours per deposition, and how will depositions,

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if any, that require a translator be handled? The plan should also include the timing of discovery:

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when certain categories of written discovery will be completed, when depositions will occur, and

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where they will occur. The parties’ goal is to comply with the command of Federal Rule of Civil

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Procedure 1 that the Rules be construed, administered and employed by the courts and the parties

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“to secure the just, speedy and inexpensive determination of every action and proceeding.” Fed.

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R. Civ. 1.

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Should the parties run into difficulty in devising a discovery plan, they shall contact the
Court’s Courtroom Deputy to schedule a discovery case management conference.
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This Order disposes of Docket No. 98.

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IT IS SO ORDERED.

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Dated: December 12, 2017

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JACQUELINE SCOTT CORLEY
United States Magistrate Judge

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United States District Court
Northern District of California

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