Adobe Systems Incorporated v. A & S Electronics, Inc. et al

Filing 90

ORDER Regarding Docket Nos. 85 , 86 , and 87 by Magistrate Judge Elizabeth D. Laporte. (shyS, COURT STAFF) (Filed on 6/30/2016)

1
2
3
4

UNITED STATES DISTRICT COURT

5

NORTHERN DISTRICT OF CALIFORNIA

6
7

ADOBE SYSTEMS INCORPORATED,
Plaintiff,

8
9
10

ORDER REGARDING DOCKET NOS.
85, 86, AND 87

v.
A & S ELECTRONICS, INC., et al.,
Defendants.

11
United States District Court
Northern District of California

Case No. 15-cv-02288-SBA (EDL)

12
13

This is a case brought by Adobe against A&S Electronics and its President and CEO Alan

14

Lin for trademark infringement, false designation of origin, dilution, copyright infringement,

15

unfair business practices and breach of contract. According to Adobe, one of its investigators

16

purchased an “Adobe Acrobat X Standard v. 10 for Windows – 1 User, 2 PCs (License Key Card

17

Only- No Media” online from A&S’ website TrustPrice.com. Adobe claims that the serial number

18

for the product was a number for a product only to be sold in Asia, and the card itself was a

19

counterfeit not manufactured by Adobe. SAC¶ 37. A&S defends on the basis that its sales are

20

protected by the “first sale” doctrine, which generally provides that once a copyrighted work is

21

lawfully sold or transferred, the new rightful owner has the right to sell or otherwise dispose of

22

that copy without permission. The discovery cutoff was June 23, and Judge Armstrong’s

23

scheduling order provided that “[t]he parties are responsible for scheduling discovery so that

24

motions to resolve discovery disputes can be heard before the [June 23] discovery cutoff.” Dkt.

25

No. 60 at 1.

26

This Court has previously resolved several discovery disputes, and recently issued an

27

Order requiring the individual deposition of Mr. Lin to proceed and providing the parties with

28

guidance and ordering them to further meet and confer regarding the scope of a 30(b)(6)

1

deposition of A&S. See Dkt. Nos. 78, 79, 80, 87. Additionally, the Court has set a phone

2

conference set for July 8 to resolve a dispute over a subpoena that Adobe issued to Bank of

3

America seeking financial records for accounts belonging to A&S, Mr. Lin and a related third

4

party entity Spot.Me. See Dkt. Nos. 82, 83, 84, 88. Currently before the Court are three

5

additional discovery letters addressing two separate disputes. See Dkt. Nos. 85, 86, 87.

6

I.

Timeliness
On June 23, 2016, the discovery cutoff deadline, Adobe filed two unilateral letters seeking

7

to: (1) compel the deposition of A&S employee Vita Choi; and (2) compel compliance with

9

documents and testimony subpoenas issued to third party/closely related entity Spot.Me. See Dkt.

10

Nos. 85-86. Defendants and Spot.Me, all of whom share counsel, responded by letter to the Court

11
United States District Court
Northern District of California

8

on June 28. See Dkt. No. 87. Defendants and Spot.Me argue that Adobe’s letters to the Court are

12

untimely because Adobe waited to serve discovery and bring these disputes to the Court, and is

13

not in compliance with Judge Armstrong’s requirement that the parties schedule discovery so that

14

motions could be resolved before June 23. It appears that Defendants may have delayed in

15

completing discovery due to an erroneous assumption that Judge Armstrong would grant their

16

motion for leave to amend the complaint and modify the case schedule, but Judge Armstrong

17

denied the motion for leave to amend on June 20.

18

While there is some merit to Defendants’ timeliness argument, Adobe’s letters were filed

19

on the date of the cutoff whereas Defendants did not respond for five additional days. The Court

20

will not deny Adobe’s requests as untimely, and proceeds to the merits.

21

II.

Adobe’s Request to Compel Deposition of A&S Employee Vita Choi (Dkt. # 85)

22

Adobe seeks to compel the appearance of A&S employee Vita Choi at a deposition. On

23

June 10, Adobe served a deposition notice on Defendants’ counsel to take Choi’s deposition on

24

June 20. On June 17, A&S asked Adobe explain why no subpoena was required. Adobe

25

responded that Mr. Lin previously testified that Choi is an employee and the “office manager” of

26

A&S, and additionally she is named as the secondary contact on an agreement between Adobe and

27

A&S that is at issue in this litigation. Adobe argues that it need not subpoena an officer, director

28

or managing agent of a of a defendant corporation such as A&S. See Cadent Ltd. v. 3M Unitek
2

1

Corp., 232 F.R.D. 625, 628, n.2 (C.D. Cal. 2005) (quoting Schwarzer, Tashima & Wagstaffe,

2

California Practice Guide: Fed. Civil Procedure Before Trial, §§ 11:1419, 11:2226 (2005 rev.)

3

(“Under Rule 30(b)(1), it is well recognized that ‘if the corporation is a party, the notice compels it

4

to produce any ‘officer, director or managing agent’ named in the deposition notice. It is not

5

necessary to subpoena such individual. The corporation risks sanctions—including default or

6

dismissal—if the designated individual fails to appear.”).

7

A&S responds that Choi is not an officer, director or managing agent and is actually a

8

“book keeper” who must be served with a subpoena. A&S argues that the burden is on Adobe to

9

prove otherwise. See Calderon v. Experian Info. Sols., Inc., 287 F.R.D. 629, 632-33 (D. Idaho
2012), aff'd, 290 F.R.D. 508 (D. Idaho 2013). However, this burden is “a modest one, and at least

11
United States District Court
Northern District of California

10

at the discovery stage, all doubts are to be resolved in favor of the party seeking the depositions.

12

This is particularly true where the party seeking discovery has had less than complete discovery on

13

the issue of the witness's status within the corporation. Thus, courts have concluded that if there is

14

at least a ‘close question’ as to the managing agent status of a potential witness, doubts should be

15

resolved in favor of allowing the deposition, with the final determination of whether the agent has

16

the ability to bind the corporation to be left for trial.” Id. (internal citations omitted).

17

Adobe contends that, regardless of title, Choi is a managing agent for purposes of this

18

deposition given her involvement with A&S and the agreement at issue in this litigation, and does

19

not need to be subpoenaed. See Botell v. United States, No. 2:-11-CV-1545 GEB, 2013 WL

20

360410, at *4-5 (E.D. Cal. Jan. 29, 2013) (internal citations omitted) (analysis of whether

21

employee is managing agent for purposes of deposition requires consideration of several factors

22

including: “(1)whether the individual is invested with general powers allowing him to exercise

23

judgment and discretion in corporate matters; (2) whether the individual can be relied upon to give

24

testimony, at his employer's request, in response to the demand of the examining party; (3)

25

whether any person or persons are employed by the corporate employer in positions of higher

26

authority than the individual designated in the area regarding which information is sought by the

27

examination; (4) the general responsibilities of the individual respecting the matters involved in

28

the litigation”). A&S counters that Choi is not a managing agent merely because she can receive
3

1

notice relating to a corporate agreement.
Given Adobe’s minimal burden, and the fact that there is no dispute that Choi is at least the

2
3

the office manager of A&S and has some relationship with the agreement between A&S and

4

Adobe at issue in this litigation, there is at least a “close question” whether Choi is a managing

5

agent such no subpoena is required to take her deposition. A&S is hereby Ordered to produce

6

Choi for deposition within two weeks from the date of this Order.

7

III.

8
9

Adobe’s Request to Compel Testimony and Documents From Spot.Me (Dkt. # 86)
Adobe seeks to compel third-party Spot.Me’s compliance with subpoenas for testimony

and documents. Upon service of the subpoenas, counsel for Spot.Me -- the same counsel
representing defendants A&S and Mr. Lin in this litigation -- objected to the subpoenas and stated

11
United States District Court
Northern District of California

10

that Spot.Me would not appear or produce documents but did not move the Court for a protective

12

order or take any other action to avoid compliance with the subpoenas.

13

It appears to be undisputed that Defendant A&S and Spot.Me use the same mailing address

14

in California and Nevada, Defendant Mr. Lin is the managing agent of both companies, both

15

companies operate under the dba “TRUSTprice,” and both companies use the same PayPal

16

account. Thus, according to Adobe, they are operated by Mr. Lin as a single entity and its

17

subpoenas for documents and testimony to Spot.Me are proper. The Court agrees that some

18

discovery from Spot.Me is appropriate, and the question is one of scope.

19

Spot.Me/Defendants did not respond to Adove’s discovery letter on this issue until June

20

28, after the parties had the benefit of the Court’s June 27 Order with respect to the A&S

21

deposition notice. See Dkt. Nos. 87, 89. With respect to the document subpoena, the subpoena

22

included 15 categories of documents relating to Spot.Me’s communications and dealings with

23

A&S. Spot.Me states that it has now produced all of its sales records for Adobe Acrobat products

24

from May 21, 2011 to present. It is unclear whether this production resolves this dispute. If there

25

is still some remaining dispute over Spot.Me’s document production, the parties are ordered to

26

meet and confer and Spot.Me shall produce any additional documents prior to the deposition of

27

Mr. Lin set for July 11.

28

With respect to the deposition subpoena to Spot.Me, the parties have agreed to complete
4

1

the deposition of Mr. Lin individually and as the 30(b)(6) witness for A&S and Spot.Me on July

2

11. Notably, the deposition subpoena to Spot.Me contains 85 topics that appear to be similar to

3

the topics listed in the Rule 30(b)(6) deposition notice to A&S which is the subject of the Court’s

4

prior Order. The parties shall apply the Court’s guidance, provided with respect to how to

5

properly narrow the scope of the A&S deposition notice, to the Spot.Me subpoena and proceed

6

with the Spot.Me deposition accordingly.

7
8
9

IT IS SO ORDERED.
Dated: June 30, 2016

10

United States District Court
Northern District of California

11
ELIZABETH D. LAPORTE
United States Magistrate Judge

12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
5