Finjan, Inc. v. Zscaler, Inc.

Filing 113

ORDER by Judge Kandis A. Westmore Regarding 101 Joint Discovery Letter. (kawlc2S, COURT STAFF) (Filed on 2/14/2019)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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FINJAN, INC.,
Plaintiff,

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ORDER REGARDING JOINT
DISCOVERY LETTER

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v.

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ZSCALER, INC.,

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United States District Court
Northern District of California

Case No. 17-cv-06946-JST (KAW)

Re: Dkt. No. 101

Defendant.

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Plaintiff Finjan, Inc. filed the instant suit against Defendant Zscaler, Inc., alleging patent

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infringement. (Compl., Dkt. No. 1.) On January 23, 2019, the parties filed a joint discovery letter

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regarding the production of the e-mails of Mr. Tim Warner, a United Kingdom citizen.

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(Discovery Letter, Dkt. No. 101.) Having reviewed the letter, the Court GRANTS the relief

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sought by Plaintiff.

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I.

BACKGROUND

Plaintiff owns patents involving computer security. (Compl. ¶¶ 7-8.) One of its patented

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products was a Secure Web Gateway ("SWG"). (Discovery Letter at 1.) In 2009, Plaintiff sold its

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business and a license to sell its products to M86, but kept the rights to the intellectual property.

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(Id.) In 2012, Trustwave acquired M86 and the rights to sell Plaintiff's former products.

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In October 2018, Plaintiff sought the production of e-mails from Mr. Warner. Mr. Warner

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previously directed Plaintiff's U.K. sales from 2002 to 2010. (Discovery Letter at 1.) During the

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transition to M86, Mr. Warner directed the sales of Plaintiff's products for M86 from 2010 to

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2012. (Id.) When M86 was acquired by Trustwave, Mr. Warner continued to sell Plaintiff's SWG

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for Trustwave in Europe, the Middle East, and Africa. (Id.) In 2014, Mr. Warner left Trustwave

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and began working for Defendant, and is now Defendant's director of all sales to any business or

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government entity in the U.K. (Id.) Plaintiff asserts that Mr. Warner has "intimate knowledge" of

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Plaintiff's patented technology, and was familiar with all of the SWG's technical aspects and

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"could explain them inside out." (Id.)

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II.

DISCUSSION

Defendant asserts that it cannot produce Mr. Warner's e-mails without violating European

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privacy requirements contained in the General Data Protection Regulation ("GDPR"), which

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became effective in May 2018. (Discovery Letter at 3.) Defendant states that the GDPR limits

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"discovery of personal data to that which is objectively relevant to the issues being litigated." (Id.

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at 4.) Defendant argues that Plaintiff's overbroad search terms would require the production of

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unnecessary personal data, and that such data would need to be anonymized or redacted. (Id.)

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United States District Court
Northern District of California

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Defendant further contends that the anonymization cost may be great, and therefore Plaintiff

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should split the cost. (Id.) Defendant thus proposes that the discovery be staged so that it not

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produce Mr. Warner's e-mails until after production from domestic custodians, amend the

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Protective order to address permanent redactions, and require splitting the costs of anonymization.

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(Id.) Plaintiff responds that anonymization would impede its review of the e-mails, and that

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Defendant could have produced the e-mails as "Attorney's Eyes Only" to satisfy the GDPR. (Id. at

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1-2.)

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In general, a foreign country's statute precluding disclosure of evidence "do not deprive an

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American court of the power to order a party subject to its jurisdiction to produce evidence even

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though the act of production may violate that statute." Societe Nationale Industrielle Aerospatiale

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v. U.S. Dist. Ct. for S. Dist. of Iowa, 482 U.S. 522, 544 n.29 (1987). In determining whether the

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foreign statute excuses noncompliance with the discovery order, courts consider: (1) the

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importance of the documents or other information requested to the litigation; (2) the degree of

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specificity of the request; (3) whether the information originated in the United States; (4) the

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availability of alternative means of securing the information; and (5) the extent to which

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noncompliance would undermine important interests of the United States. Richmark Corp. v.

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Timber Falling Consultants, 959 F.2d 1468, 1475 (9th Cir. 1992). These factors are not exclusive;

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the courts also consider "the extent and the nature of the hardship that inconsistent enforcement
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would impose upon the person," as well as "the extent to which enforcement by action of either

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state can reasonably be expected to achieve compliance with the rule prescribed by the state." Id.

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(internal quotation omitted).

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First, the Court considers the importance of the documents at issue. "Where the evidence

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is directly relevant, [the Ninth Circuit has] found this factor to weigh in favor of disclosure."

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Richmark, 959 F.2d at 1468. Courts, however, "have refused to require production where the

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documents sought are largely cumulative of records already produced." United States v. Vetco,

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Inc., 691 F.2d 1281, 1290 (9th Cir. 1981). Plaintiff contends that Mr. Warner's e-mails may prove

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the fact and timing of Defendant's infringement, which would also go to willfulness. (Discovery
Letter at 1.) Defendant responds that the e-mails could be duplicative of production from

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United States District Court
Northern District of California

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domestic custodians. (Id. at 4.) The Court finds that Mr. Warner's e-mails are directly relevant to

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the infringement issue, particularly given his overlapping roles at Plaintiff, Defendant, M86, and

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Trustwave, and his personal knowledge of the technical aspects of the patented technology.

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Furthermore, Defendant's argument of duplication is hypothetical, as Defendant admits that they

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have not done a search of Mr. Warner's e-mails. (See id. at 5 (stating that the search terms could

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"return[] potentially thousands of documents") (emphasis added).) Thus, the Court finds that

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Defendant "ha[s] made no showing that the documents are cumulative of records already

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produced." Vetco, 691 F.2d at 1290. This factor weighs in favor of disclosure.

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Second, the Court reviews the specificity of the request. Defendant challenges the

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specificity of the request, arguing that Plaintiff's five proposed search terms -- "Finjan," "zero*day

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or zeroday or 0*day," "malicious," "obfuscat*," and sandbox* -- are "overbroad." (Def.'s St. at 4.)

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Specifically, Defendant contends that the search terms should be limited to "Finjan" and the

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asserted patent numbers, rather than the technical terms requested by Plaintiff. (Id. at 5.) The

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Court disagrees. Rather than requesting all of Mr. Warner's e-mails, Plaintiff has limited its

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request to itself and terms related to the patents at issue. (See Compl. ¶¶ 12, 15 (describing '633

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and '494 Patents as concerning "Malicious Mobile Code Runtime Monitoring System and

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Methods"), 31 (explaining that Defendant's allegedly infringing Cloud Sandbox technology is

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designed to prevent zero-day exploits).) Limiting the e-mail search to those that identify the
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patents by number, as Defendant proposes, would eliminate e-mails discussing the patents that do

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not refer to the patents by number, even if those e-mails discuss the content of the patents or refer

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to the patent by name. The Court finds that this factor weighs in favor of disclosure.

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Third, the Court considers where the information is located, or the location of information
and parties. Here, although Mr. Warner is located in the U.K., Defendant itself is an American

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company, subject to American discovery law. (Discovery Letter at 2.) This factor weighs

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somewhat in favor of disclosure. See Vetco, 691 F.2d at 1290 (finding that this factor did not alter

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the conclusion that the discovery be allowed because the discovery would take place both in

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America and Switzerland, as the records would be shipped out of Switzerland and the production

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to the requesting party would take place in America); contrast with Richmark Corp., 959 F.2d at

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United States District Court
Northern District of California

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1475 (finding this factor did not weigh in favor of discovery where the responding party had no

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American office).

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Fourth, the Court considers the availability of alternative means of obtaining the

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information. "If the information sought can easily be obtained elsewhere, there is little or no

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reason to require a party to violate foreign law." Richmark Corp., 959 F.2d at 1475. "[T]he

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alternative means must be 'substantially equivalent' to the requested discovery." Id. Defendant

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contends that the information could be produced by domestic custodians. (Discovery Letter at 4.)

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As discussed above, however, Defendant does not substantiate this claim as it has not done a

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search of Mr. Warner's e-mails -- nor is it clear that Defendant has finished its production by

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domestic custodians -- so it is not clear the domestic custodians would have the same information.

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Alternatively, Defendant proposes redacting all personal information, but this would not be a

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substantially equivalent alternative when the third parties are relevant to determining who Mr.

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Warner communicated with about the issues in this case. (See id. at 3, 4; Vetco, 691 F.2d at 1290

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("Masking the names of third parties is not a substantially equivalent alternative since the

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identities of the third party is relevant . . . . .").) This factor favors disclosure.

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Fifth, the Court considers the balance of national interests. "This is the most important

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factor," and requires that the Court "assess the interests of each nation in requiring or prohibiting

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disclosure, and determine whether disclosure would affect important substantive policies or
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interests . . . ." Richmark Corp., 959 F.2d at 1476. Courts have found that there is a strong

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American interest in protecting American patents. See Work v. Bier, 106 F.R.D. 45, 55 (D.D.C.

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1985) ("the litigation here implicates United States interests of a constitutional magnitude in

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connection with its administration of its patent laws under U.S. Const. Art. 1, § 8, cl. 8"); Dyson,

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Inc. v. SharkNinja Operating LLC, No. 1:14-cv-779, 2016 WL 5720702, at *3 (N.D. Ill. Sept. 30,

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2016) ("non-compliance with the discovery request would undermine the United States' interests

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in ensuring that patent suits are fully and fairly litigated"). While the U.K. has an interest in

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protecting the privacy of its citizens, courts have also recognized that an interest in protecting

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privacy "is diminished where the court has entered a protective order preventing disclosure of the
secret information." Masimo Corp. v. Mindray DS USA, Inc., Case No.: SACV 12-02206-

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United States District Court
Northern District of California

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CJC(JPRx), 2014 WL 12589321, at *3 (C.D. Cal. May 28, 2014); see also Vetco, 691 F.2d at 1289

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(finding that Switzerland's interest in protecting privacy was "diminished where the party seeking

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the records is the IRS, which is required by law to keep the information confidential"). Here, there

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is a protective order, and Plaintiff has agreed to allow Defendant to mark the e-mails as highly

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confidential. (See Discovery Letter at 2-3.) Additionally, it is not clear to what extent the U.K.'s

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interest in privacy is implicated, as Defendant states that the GDPR permits "the discovery of

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personal data to that which is objectively relevant to the issues being litigated." (Discovery Letter

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at 4 (internal quotation omitted).) Given Mr. Warner's role and the limited search terms,

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disclosure of the e-mails that are directly relevant to the instant case would appear to not violate

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the GDPR. Thus, considering the significant American interest in protecting its patents and the

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reduced U.K. interest in protecting the privacy of its citizens, the Court concludes that this factor

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weighs heavily in favor of disclosure.

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In addition to the five factors, the Court also finds that the burden on Defendant does not

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weigh against disclosure. "The party relying on foreign law has the burden of showing that such

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law bars production." Vetco, 691 F.2d at 1289. As discussed above, it is not clear that Defendant

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would be barred from producing Mr. Warner's e-mails under the GDPR, given that e-mails that are

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relevant can be produced, and Defendant has apparently not yet done a search of Mr. Warner's e-

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mails. Further, other courts have found that the burden of showing that the law bars production is
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not satisfied where there is no evidence of the extent to which the government enforces its laws.

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See Masimo Corp., 2014 WL 12589321, at *3; In re Air Crash at Taipei, Taiwan on Oct. 31,

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2000, 211 F.R.D. 374, 380 (C.D. Cal. 2002) (finding that hardship was not a factor weighing

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against disclosure where the producing party presented no "evidence regarding the manner and

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extent to which Singapore enforces its secrecy laws"). Here, Defendant provides no information

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on the likelihood of enforcement.
Taken together, the Court concludes that the GDPR does not preclude the Court from

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ordering Defendant to produce the requested e-mails in an unredacted form, subject to the existing

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protective order.

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III.

For the reasons stated above, the Court ORDERS Defendant to produce Mr. Warner's e-

United States District Court
Northern District of California

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CONCLUSION

mails.
IT IS SO ORDERED.
Dated: February 14, 2019
__________________________________
KANDIS A. WESTMORE
United States Magistrate Judge

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