Interserve, Inc. et al v. Fusion Garage PTE. LTD

Filing 179

Memorandum in Opposition re 164 MOTION to Compel Withheld Information and Documents filed byFusion Garage PTE. LTD. (Attachments: # 1 Affidavit Joshua L. Sohn, # 2 Exhibit A, # 3 Exhibit B, # 4 Exhibit C, # 5 Exhibit D, # 6 Exhibit E, # 7 Exhibit F)(Pennypacker, Evette) (Filed on 9/23/2010)

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Interserve, Inc. et al v. Fusion Garage PTE. LTD Doc. 179 1 QUINN EMANUEL URQUHART & SULLIVAN, LLP Claude M. Stern (Bar No. 96737) 2 claudestern@quinnemanuel.com Evette D. Pennypacker (Bar No. 203515) 3 evettepennypacker@quinnemanuel.com Thomas R. Watson (Bar No. 227264) 4 tomwatson@quinnemanuel.com 555 Twin Dolphin Dr., 5th floor 5 Redwood Shores, CA 94065 Telephone: (650) 801-5000 6 Facsimile: (650) 801-5100 Joshua L. Sohn (Bar No. 250105) joshuasohn@quinnemanuel.com 8 Sam S. Stake (Bar No. 257916) samstake@quinnemanuel.com 9 50 California Street, 22nd Floor San Francisco, California 94111 10 Telephone: (415) 875-6600 Facsimile: (415) 875-6700 11 Attorneys for Defendant Fusion Garage PTE Ltd. 12 13 14 15 16 17 18 TECHCRUNCH, INC., a Delaware corporation, and CRUNCHPAD, INC., a 19 Delaware corporation, 20 21 vs. Plaintiffs, CASE NO. C 09-cv-5812 RS (PVT) FUSION GARAGE'S OPPOSITION TO PLAINTIFFS' MOTION TO COMPEL PRODUCTION OF WITHHELD INFORMATION AND DOCUMENTS Date: October 12, 2010 Time: 10:00 a.m. Judge: Hon. Patricia Trumbull UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION 7 22 FUSION GARAGE PTE LTD., a Singapore company, 23 Defendant. 24 25 26 27 28 Case No. C 09-cv-5812 RS (PVT) FUSION GARAGE'S OPPOSITION TO PLAINTIFFS' MOTION TO COMPEL Dockets.Justia.com 1 2 3 4 I. 5 II. 6 III. 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 IV. B. C. D. E. TABLE OF CONTENTS Page INTRODUCTION ................................................................................................................. 1 BACKGROUND ................................................................................................................... 1 ARGUMENT ........................................................................................................................ 8 A. The Recent Depositions Confirm that Fusion Garage's Technical Information is Irrelevant to Plaintiffs' Claims Because Plaintiffs Had No Involvement with the Technical Aspects of Fusion Garage's Product ..................... 9 Plaintiffs' Speculation About Fusion Garage's Future Products Does Not Justify Production of Proprietary Source Code Now .............................................. 11 Plaintiffs Make No Showing That They Need Fusion Garage's Proprietary Documentation and Source Code ............................................................................ 11 The Authorities Plaintiffs Cite are Distinguishable ................................................ 14 Mr. Arrington Has Admitted His Disdain for the Terms of the Stipulated Protective Order ...................................................................................................... 15 CONCLUSION ................................................................................................................... 16 Case No. C 09-cv-5812 RS (PVT) -iFUSION GARAGE'S OPPOSITION TO PLAINTIFFS' MOTION TO COMPEL 1 2 3 TABLE OF AUTHORITIES Page Cases 4 Autotech Tech. Ltd. P'ship v. Automationdirect.com, Inc., 249 F.R.D. 530 (N.D. Ill. 2008) ...............................................................................................2, 4 5 Barcenas v. Ford Motor Co., 6 No. 03-4644, 2004 WL 2827249 (N.D. Cal. Dec. 9, 2004) .........................................................3 7 Epstein v. MCA, Inc., 54 F.3d 1422 (9th Cir. 1995) ........................................................................................................2 8 JustMed, Inc. v. Byce, 9 600 F.3d 1118 (9th Cir. 2010) ......................................................................................................8 10 Lt. P'Ship v. Microsoft Corp., 670 F. Supp. 2d 568 (E.D. Tex. 20009) .......................................................................................8 11 Nugget Hydroelectric, L.P. v. Pacific Gas & Elec. Co., 12 981 F.2d 429 (9th Cir. 1992) ........................................................................................................2 13 Philip M. Adams & Assoc., LLC v. Winbond Elecs. Corp., No. 05-64, 2010 WL 2977228 (D. Utah July 21, 2010) ..............................................................8 14 Viacom Intern. Inc. v. Youtube Inc., 15 253 F.R.D. 256 (S.D.N.Y. 2008)..........................................................................................2, 4, 6 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. C 09-cv-5812 RS (PVT) -iiFUSION GARAGE'S OPPOSITION TO PLAINTIFFS' MOTION TO COMPEL Statutes Cal. Code Civ. P. 2019.210 .............................................................................................................3 Fed. R. Civ. P. 26(b)...........................................................................................................................1 Fed. R. Civ. P. 26(b)(2)(C)(i)-(iii) .....................................................................................................2 Rule 30(b)(6) ..................................................................................................................................4, 6 1 I. 2 INTRODUCTION Discovery taken since the time the parties were previously before this Court on Defendant 3 Fusion Garage's renewed motion for a protective order has made even clearer what Fusion Garage 4 has been arguing all along: Plaintiffs had nothing to do with the technical development of the web 5 tablet that is at the center of this dispute. This is not a technical or source code case. Plaintiffs 6 have filed an original and an amended complaint, answered interrogatories, served a purported list 7 of "business ideas" they claim they contributed, and sat for depositions. In none of these areas 8 have Plaintiffs articulated an alleged contribution that would justify the need for technical 9 documents or source code. Nonetheless, Plaintiffs' Motion to Compel Production of Withheld 10 Information and Documents ("Motion") seeks production of Fusion Garage's highly proprietary 11 technical information and source code the crown jewels of Fusion Garage's business. This 12 detailed technical information is irrelevant to Plaintiffs' breach of fiduciary duty, fraud and deceit, 13 and unfair competition claims, and Plaintiffs' motion should be denied. 14 II. 15 BACKGROUND The Parties. Plaintiff TechCrunch is an Internet "blog" founded by blogger Michael 16 Arrington. (See Amended Complaint, Dkt. 167 at 7.) Plaintiff CrunchPad, Inc. was allegedly 17 formed as a subsidiary of TechCrunch to be a vehicle for TechCrunch's commercialization of the 18 CrunchPad. (See id.) CrunchPad Inc. was also the entity that would either acquire or merge with 19 Defendant Fusion Garage Pte. Ltd. ("Fusion Garage") had their merger negotiations been 20 successful. However, the parties were never able to come to terms on a merger or acquisition and 21 never signed a deal--largely because of Plaintiffs' failure to secure any venture funding for the 22 project. Spurned and embarrassed that they have no product and could not consummate a merger 23 or acquisition, Plaintiffs filed this lawsuit to disrupt Fusion Garage's business. 24 Plaintiffs' Complaint and Request for a Preliminary Injunction. Plaintiffs initially 25 filed suit in December 2009, alleging claims for Violation of the Lanham Act, Breach of Fiduciary 26 Duty, Misappropriation of Business Ideas, Fraud and Deceit, and Unfair Competition. (See Dkt. 1 27 (hereinafter "Complaint").) Plaintiffs' Complaint contained broad and superficial allegations that 28 Defendant Fusion Garage had stolen their ideas and breached an alleged partnership agreement Case No. C 09-cv-5812 RS (PVT) -1FUSION GARAGE'S OPPOSITION TO PLAINTIFFS' MOTION TO COMPEL 1 after Fusion Garage released a web tablet that the parties allegedly spent over a year jointly 2 developing. 3 Specifically, Plaintiffs' alleged that it developed a web tablet, Prototype A, by August 20, 4 2008. (See id. at 12.) The Complaint also alleged that Plaintiffs and Mr. Rathakrishnan of 5 Fusion Garage meet around the time of Plaintiffs' TechCrunch 50 conference in San Francisco in 6 September 2008, and struck up a relationship to collaborate on Plaintiffs' so-called CrunchPad 7 project. (See id. at 14 and passim.) By January 19, 2009, Prototype B was alleged to have been 8 constructed. (See id. at 18.) What Plaintiffs call Prototype C was ready by April 2009, but even 9 Plaintiffs acknowledged in their Complaint that Fusion Garage should get all the credit for the new 10 web tablet. (See id. at 22.) Between the parties' first meeting in September 2008 and November 11 2009, the parties continuously negotiated the terms of a potential merger. (See e.g., id. at 15, 12 26, 27, 28, 29, 38, 41.) The funding Plaintiffs needed never came, and they filed suit shortly after 13 Fusion Garage launched its web tablet in December 2009. (See id. at 44 and passim.) 14 Even without the benefit of a full record or exchange of discovery between the parties, 15 Judge Seeborg saw through many of Plaintiffs' allegations and dismissed the bulk of their claims 16 in his Order Denying Plaintiffs' Motion for Preliminary Injunction and Granting in Part and 17 Denying in Part Defendant's Motion to Dismiss, dated August 24, 2010 (hereinafter "August 24, 18 2010 Order"). (See Dkt. 162.) 19 Plaintiffs' Discovery Requests and Fusion Garage's Motion for a Protective Order. 20 Between the time Plaintiffs filed their Complaint and Judge Seeborg's August 24, 2010 Order, 21 Plaintiffs propounded interrogatories and several sets of requests for production seeking discovery 22 of Fusion Garage's confidential technical information and source code, including the discovery at 23 issue in this motion. Concerned that Plaintiffs' Misappropriation of Business Ideas claim was a 24 stalking horse for a trade secrets claim, Fusion Garage filed a Motion for Protective Order on 25 February 5, 2010 to protect its source code and highly proprietary information from being 26 disclosed until Plaintiffs complied with Cal. Code Civ. P. 2019.210 and disclosed precisely what 27 Fusion Garage allegedly misappropriated. (See Dkt. 23.) The Court granted this motion on April 28 Case No. C 09-cv-5812 RS (PVT) -2FUSION GARAGE'S OPPOSITION TO PLAINTIFFS' MOTION TO COMPEL 1 9, 2010, ruling that Fusion Garage need not disclose its "source code and other highly proprietary 2 information" until Plaintiffs "identify the ideas that have been misappropriated." (Dkt. 62 at 7.) 3 On April 23, 2010, Plaintiffs provided a Statement of Misappropriated Business Ideas 4 (further discussed infra). However, this Statement was so broad and non-specific that, in Fusion 5 Garage's view, it did not adequately identify the allegedly misappropriated business ideas. 6 Accordingly, Fusion Garage filed a Renewed Motion for Protective Order on April 30, 2010 that 7 sought to shield its proprietary information until Plaintiffs submitted a legally sufficient Statement 8 of Misappropriated Business Ideas. (See Dkt. 93.) This motion was submitted for decision on 9 June 30, 2010 and remains pending. 10 Since filing the Renewed Motion for Protective Order, however, Fusion Garage has had an 11 opportunity to take depositions and insist on supplemental responses to its interrogatories to learn 12 what, exactly, Plaintiffs "contributed" to Fusion Garage's web tablet under oath. Plaintiffs' 13 responses reveal what Fusion Garage has been asserting all along: that Plaintiffs have had no 14 involvement in the actual technical and source code development of Fusion Garage's web tablet. 15 (See Sohn Decl., Exs. A, B, C, D and H, discussed infra.) 16 Plaintiffs' Statement of Misappropriated Business Ideas. On April 23, 2010, Plaintiffs 17 served a Statement of Misappropriated Business Ideas ("Statement"). (See Sohn Decl., Ex. A.) 18 The Statement, however, lacks any indication that Plaintiff had any involvement in the actual 19 development of Fusion Garage's web tablet. With respect to hardware development, the 20 Statement asserts only that Plaintiffs "created CrunchPad Prototype A," "CrunchPad Prototype B," 21 and their respective hardware configurations. (See id. at 2.) However, CrunchPad Prototype A 22 predated Fusion Garage, and Prototype B simply ran Fusion Garage's software and bears no 23 relation to Fusion Garage's web tablet on either a specific hardware or source code level. (See 24 Sohn Decl., Ex. K at 40 [Declaration of Chandra Rathakrishnan In Support of Opposition to 25 Plaintiffs' Motion for Preliminary Injunction (Dkt. 75)]) (disclosing that the prototype Fusion 26 Garage unveiled in April 2009, Prototype C, was fundamentally different from the prior Protoype 27 A and Prototype B).) Plaintiffs' remaining alleged "contributions" to hardware development 28 consisted of "indicat[ing]," "suggest[ing]," "direct[ing]," and "dictat[ing]" various aspects to the Case No. C 09-cv-5812 RS (PVT) -3FUSION GARAGE'S OPPOSITION TO PLAINTIFFS' MOTION TO COMPEL 1 web tablet related to the keyboard, an integrated camera, peripheral ports, viewing angle, and a 2 single button. (See Sohn Decl., Ex. A at 2-3.) Conspicuously absent is any statement that 3 Plaintiffs actually performed any of the actual hardware development. More importantly, each of 4 Plaintiffs' alleged "contributions" are plainly visible by simply looking at the device. 5 Similarly with respect to software, other than stating they provided source code for 6 Prototype A and a "product draft" for source code for Prototype B (whatever that means), 7 Plaintiffs' alleged contributions to the source code for Fusion Garage's product is nothing more 8 than superficial "suggest[ions]," "idea[s]," and "instructions," as well as the the "identifi[cation]" 9 of "specific hang-up problems with the Linux source code and instruct[ing] Fusion Garage to 10 troubleshoot and repair them." (See id. at 3-4.) Plaintiffs make no affirmative representations that 11 they actually performed the coding for Fusion Garage's web tablet. 12 Plaintiffs' Responses to Interrogatories. Plaintiffs' responses to interrogatories seeking 13 their contributions to the Fusion Garage web tablet largely incorporate by reference Plaintiffs' 14 Statement discussed immediately above, and also includes the following high-level "ideas": 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. C 09-cv-5812 RS (PVT) -4FUSION GARAGE'S OPPOSITION TO PLAINTIFFS' MOTION TO COMPEL the "overall conception, blueprint, guidance, and senior level support of the project"; a large-screen touch-screen; booting extremely rapidly and straight to a borrower; the lack of a desktop; no hard drive other than for the software footprint; use of a white instead of a black background; use of large icons on the web tablet home screen so that users can quickly navigate to their favorite web pages; the use of proxying video display to the device so that video can be played without the use of a flash player; the application programming interface with the browser for custom applications; and the idea and knowhow for empowering the device to play video output to a resolution of 1080p. 1 (See Sohn Decl., Ex. B at 5 and 9 [Plaintiffs' Second Supplemental Response to Fusion Garage's 2 Interrogatories, Nos. 1 and 4].) However, such "contributions" and "ideas," even if they were 3 provided by Plaintiffs for the purposes of this motion, would be readily apparent by simply 4 looking at Fusion Garage's web tablet without ever having to look at Fusion Garage's proprietary 5 technical documentation and source code. 6 Depositions of Plaintiffs' Witnesses Further Clarify Plaintiffs' Lack of Involvement in 7 the Development of Fusion Garage's Web Tablet. Depositions of Plaintiffs and their related 8 witnesses over the past several months have only confirmed that Plaintiffs did not make any 9 technical contributions to Fusion Garage's web tablet. For instance, Mr. Arrington, Plaintiffs' 10 30(b)(6) witness, testified at deposition that the software coding for the web tablet was performed 11 by Fusion Garage: "I believe with prototype B where Louis was involved as well, that's when we 12 moved to mostly Fusion Garage software. At that point they were taking over. The actual coding 13 was done by Fusion Garage employees." (See Sohn Decl., Ex. D at 338:23-339:2.) He also could 14 not name any specific contributions that representatives of TechCrunch or CrunchPad, Inc. made 15 to the CrunchPad. (See Sohn Decl., Ex. D at 337:5-338:5.) 16 Brian Kindle, the person Plaintiffs claim to have hired to run the hardware side of the 17 business, did not start until mid-July 2009 (relatively late in the web tablet's development), could 18 not testify about any differences in web tablet prototypes after he started, and could not identify 19 any of the tablet's specifications, including whether the final form factor of the device was plastic 20 or metal. (See Sohn Decl., Ex. C at 74:8-12, 118:20-25, 128:8-132:18, and 130:1-5.) Needless to 21 say, Kindle's complete ignorance of the device's evolution proves that he was not "leading" 22 hardware development as Plaintiffs claim. Further, Kindle admitted that he flew to Singapore-- 23 where Fusion Garage was developing its web tablet--to "understand the details of the hardware 24 development" shortly after he was hired in July 2009, but spent only two days there. (See Sohn 25 Decl., Ex. C at 208:21-209:6 and 213:8-15.) 26 Finally, Heather Harde, TechCrunch's CEO and CrunchPad, Inc.'s CFO, testified that she 27 knew nothing about the source code for any of the devices at issue. She also testified that she had 28 only "limited" involvement with any of the CrunchPad prototypes and had never even held Fusion Case No. C 09-cv-5812 RS (PVT) -5FUSION GARAGE'S OPPOSITION TO PLAINTIFFS' MOTION TO COMPEL 1 Garage's JooJoo product until August 2010 nearly a year after the parties' alleged collaboration 2 ceased. (See Sohn Decl., Ex. H at 89:20-24; 89:25-90:2; 106:18-20.) 3 Plaintiffs' Amended Complaint. On September 13, 2010, Plaintiffs filed their Amended 4 Complaint for Breach of Fiduciary Duty, Fraud and Deceit, and Unfair Competition. (See Dkt. 5 167.) The Amended Complaint, filed six days after Plaintiffs brought this motion, defines the 6 scope of their claims (and by extension, discovery) against Fusion Garage by stating that 7 Plaintiffs' purported contributions to the development of the CrunchPad project were, again, 8 simply "high-level direction" related to "the overall conception, blueprint, guidance, and senior 9 level support." (See id. at 56.) The Amended Complaint does not allege that Plaintiffs were 10 responsible for creating any web tablet prototypes other than the first two prototypes of the 11 CrunchPad an initial prototype (Prototype A) which predated Fusion Garage's interactions with 12 Plaintiffs, and a second prototype (Prototype B) that bears little relation to Fusion Garage's JooJoo 13 and whose only connection to Fusion Garage was that it ran Fusion Garage's software. (See 14 Amended Complaint 16, 24, 56(b); Sohn Decl., Ex. K at 40.) 15 Plaintiffs' Amended Complaint does not provide any facts to support the belief that 16 Plaintiffs had any involvement in the actual hardware and software development of Fusion 17 Garage's web tablet that would not be ascertainable by simply looking at the device. 18 Plaintiffs Intend to Use Discovery Produced by Fusion Garage to Litigate this Case in 19 the Court of Public Opinion. Simultaneously with this lawsuit, Plaintiffs have engaged in a 20 public relations campaign through the TechCrunch blog and on Twitter.com to attempt to tarnish 21 and embarrass Fusion Garage and run it out of business. Plaintiffs' desire to litigate this case in 22 the press was on full display last week by their deft coordination of the filing of the Amended 23 Complaint with a blog post and a tweet on Twitter.com setting forth Plaintiffs' heavily skewed 24 side of the story, including the posting of documents Plaintiffs have obtained from Fusion Garage 25 through discovery. (See http://techcrunch.com/2010/09/15/status-of-crunchpad-litigation/ (last 26 checked 9/20/10); Sohn Decl., Ex. F at Tweet 74.) 27 Moreover, Mr. Arrington, TechCrunch founder and CrunchPad CEO, recently stated his 28 willingness to flout the Stipulated Protective Order in this case by posting sealed or otherwise Case No. C 09-cv-5812 RS (PVT) -6FUSION GARAGE'S OPPOSITION TO PLAINTIFFS' MOTION TO COMPEL 1 protected information on his Internet blog, stating in a recent tweet that the "really solid gold" 2 documents in this case were under seal, but that he was "probably going to just post [these 3 documents] anyway." (Sohn Decl., Ex. E.) 4 Threatening use of Plaintiffs' blog to shame and embarrass Plaintiffs' opponents into 5 submission is an old tactic of Plaintiffs. Plaintiffs did the same thing to one of the potential 6 suppliers of Fusion Garage's web tablet, Pegatron. Plaintiffs went to Pegatron in late August 2009 7 with two mutually exclusive options: either work with TechCrunch on the web tablet, or work 8 with Fusion Garage. (See Sohn Decl., Ex. G, passim.) Choosing the TechCrunch option would 9 mean that Pegatron would be showered by Plaintiffs with "great positive coverage globally" and 10 "positive communication[s]." (See id. at TC00000560 and TC00000557, respectively.) If 11 Pegatron chose the Fusion Garage option, on the other hand, Plaintiffs would cause a "hail storm 12 of negative press" to befall upon Pegatron. (See id. at TC00000558; see also Sohn Decl., Ex. C at 13 320:7-321:24.) Pegatron ultimately choose the Fusion Garage option, but was quick to state its 14 willingness to break-off its relationship with Fusion Garage to keep Plaintiffs' "negative guns" 15 (i.e., negative blog posts) pointed away from Pegatron. (See Sohn Decl, Ex. G at TC00000557.) 16 This sort of threatening behavior makes Plaintiffs' bare allegation that that the Court's 17 Protective Order is sufficient to protect Fusion Garage's proprietary information and source code 18 insufficient particularly given how irrelevant this sensitive information is to Plaintiffs' case. 19 Fusion Garage Is Not Seeking to Delay Discovery. Despite the fact the initial Complaint 20 was filed in December 2009, this case is still in its initial stages. Plaintiffs filed their Amended 21 Complaint just last week, and Fusion Garage's response is not due until September 27, 2010. 22 There is no case schedule, discovery deadline, summary judgment deadline, or trial date. Further, 23 it should be stressed that Fusion Garage is not shielding its proprietary technical documents and 24 source code in order to stonewall discovery or deny Plaintiffs the documents that could be relevant 25 to Plaintiffs' claims. Indeed, Fusion Garage has thus far produced roughly 35,000 pages of 26 documents nearly double the volume of Plaintiffs' own production that are more than 27 sufficient to help Plaintiffs prove their case if they can, and Plaintiffs make no argument to the 28 contrary. (See Sohn Decl. 2.) As noted above, Mr. Arrington recently crowed in a public Case No. C 09-cv-5812 RS (PVT) -7FUSION GARAGE'S OPPOSITION TO PLAINTIFFS' MOTION TO COMPEL 1 Twitter message that some of these Fusion Garage documents are "really solid gold documents" 2 that he planned to post on the TechCrunch blog. (Sohn Decl., Ex. E) ("reason we haven't said 3 much about crunchpad litigation - the really solid gold documents are under seal. probably going 4 to just post anyway"). Mr. Arrington's apparent delight with the contents of Fusion Garage's 5 document production underscores how Fusion Garage has been satisfying its obligation to provide 6 relevant documents to Plaintiffs and highlights Fusion Garage's very real concern over having its 7 proprietary information posted on the Internet for the world to see. Fusion Garage is not 8 attempting to delay production, but is instead trying to protect its proprietary technical 9 documentation and source code from production where this information is not relevant, let alone 10 necessary, to Plaintiffs' case. 11 III. 12 ARGUMENT Federal Rule of Civil Procedure 26(b) provides that parties may obtain discovery that is 13 relevant to any party's claim or defense, but this ability to obtain information is subject to the 14 court's duty to limit the frequency or extent of discovery if: (i) the discovery sought is 15 unreasonably cumulative or duplicative, (ii) the party seeking discovery has had ample 16 opportunity to obtain the information by discovery in the action, or (iii) the burden or expense of 17 the proposed discovery outweighs its likely benefit. See Fed. R. Civ. P. 26(b)(2)(C)(i)-(iii); see 18 also Nugget Hydroelectric, L.P. v. Pacific Gas & Elec. Co., 981 F.2d 429, 439 (9th Cir. 1992) (a 19 discovery request is unnecessarily burdensome and overbroad where compelling party fails to 20 make "a specific showing that the burdens of production would be minimal and that the requested 21 documents would lead to relevant evidence"); Epstein v. MCA, Inc., 54 F.3d 1422, 1424 (9th Cir. 22 1995) (holding that district court abused its discretion by granting motion to compel irrelevant 23 discovery requests). It is appropriate for the Court to limit the discovery Plaintiff seeks here. 24 In Autotech Tech. Ltd. P'ship v. Automationdirect.com, Inc., 249 F.R.D. 530, 534-35 (N.D. 25 Ill. 2008), for example, the court denied a motion to compel "confidential and proprietary 26 technical information" on the ground that the information was not relevant to plaintiff's breach of 27 contract claims over a touchscreen device. Moreover, discovery of source code has been denied 28 where a plaintiff had failed to make a "plausible showing" of relevance. Viacom Intern. Inc. v. Case No. C 09-cv-5812 RS (PVT) -8FUSION GARAGE'S OPPOSITION TO PLAINTIFFS' MOTION TO COMPEL 1 Youtube Inc., 253 F.R.D. 256, 260 (S.D.N.Y. 2008). This Court should rule similarly here 2 because Fusion Garage's confidential and proprietary technical information and source code are 3 not relevant to, nor are they needed to prove, Plaintiffs' claims for breach of fiduciary duty, fraud, 4 and unfair competition. 5 6 7 A. The Recent Depositions Confirm that Fusion Garage's Technical Information is Irrelevant to Plaintiffs' Claims Because Plaintiffs Had No Involvement with the Technical Aspects of Fusion Garage's Product Plaintiffs' Motion argues that the Court already "weighed in" on the relevance of Fusion 8 Garage's proprietary information. (Mot. at 7.) While the Court's April 9 Order (granting Fusion 9 Garage's Motion for Protective Order over its proprietary information) did suggest that this 10 information could be relevant to Plaintiffs' fraud and breach of fiduciary duty claims (for example, 11 the April 9 Order noted that an examination of the source code metadata might show whether 12 Plaintiffs helped write the code), the Court made this preliminary relevance determination before a 13 number of critical depositions had taken place. (Dkt. 62 at 6.) 14 By contrast, the depositions that have taken place since April 9, coupled with Plaintiffs' 15 written discovery responses, clearly show that Plaintiffs had no involvement with the source code 16 or technical specifications of Fusion Garage's product. It follows that Fusion Garage's proprietary 17 information and source code is not relevant to show the terms of the alleged "partnership" or 18 Fusion Garage's alleged "fraud" or whether Plaintiff contributed to the source code they admit 19 they did not.For this reason, Plaintiffs' motion to compel such information should be denied. See 20 Barcenas v. Ford Motor Co., No. 03-4644, 2004 WL 2827249, *2 (N.D. Cal. Dec. 9, 2004) 21 ("[s]ome threshold showing of relevance must be made before parties are required to open wide 22 the doors of discovery and to produce a variety of information which does not reasonably bear 23 upon the issues in the case.") 24 For instance, Plaintiffs have alleged that TechCrunch consultant Brian Kindle had a major 25 role in developing the hardware for the "CrunchPad" web tablet that Fusion Garage allegedly 26 stole. (See, e.g., Mot. for Preliminary Injunction (Dkt. 26) at 3.) However, Mr. Kindle admitted to 27 having no involvement with the CrunchPad before he was hired in July 2009. (Sohn Decl., Ex. C 28 at 74:8-12.) Mr. Kindle also had no knowledge about how the CrunchPad's prototypes evolved Case No. C 09-cv-5812 RS (PVT) -9FUSION GARAGE'S OPPOSITION TO PLAINTIFFS' MOTION TO COMPEL 1 after he was hired in July 2009, and could not identify something as basic as whether the final 2 product's form factor would be plastic or metal. (Id. at 118:20-25) ("Q: Can you tell me the 3 differences between the various prototypes that you saw at CrunchPad between July 2009 and the 4 time you left in December 2009? A: No."); 130:1-5 ("Q: So you can't recall whether the final 5 form factor was plastic or metal, is that right? A: I don't recall."). Clearly, Mr. Kindle did not 6 contribute to the technical specifications of the CrunchPad if he was utterly ignorant of the 7 device's evolution during his tenure on the alleged CrunchPad project. 8 The other two Plaintiff witnesses who have been deposed thus far Michael Arrington and 9 Heather Harde further confirm that Plaintiffs had no involvement with the "CrunchPad's" 10 technical specifications or source code. For instance, Ms. Harde testified that she knew nothing 11 about the source code for any of the devices at issue (Sohn Decl., Ex. H at 106:18-20), had only 12 "limited" involvement with any of the CrunchPad prototypes (id. at 89:25-90:2), and had never 13 even held Fusion Garage's JooJoo product until last month. (Id. at 89:20-24.) For his part, Mr. 14 Arrington, who was testifying as Plaintiffs' Rule 30(b)(6) designee, could not name any specific 15 contributions that representatives of TechCrunch or CrunchPad, Inc. made to the CrunchPad. (See 16 Sohn Decl., Ex. D at 337:5-338:5.) He admitted that the "actual coding" for the CrunchPad 17 prototypes was done by Fusion Garage since at least early 2009. (See id. at 338:23-339:2.) And 18 he too admitted that he had never even held Fusion Garage's JooJoo product (id. at 107:6), and 19 thus logically cannot name any features of the JooJoo that were created by Plaintiffs. Indeed, Mr. 20 Arrington candidly admitted that "I don't know much about the JooJoo." (Id. at 370:5-6.) 21 Further, Plaintiffs' responses to written discovery reveal that their purported contributions 22 are strictly limited to such superficial things such as the "overall conception, blueprint, guidance, 23 and senior level support of the project"; a large-screen touch-screen; booting extremely rapidly 24 and straight to a borrower; the lack of a desktop; no hard drive other than for the software 25 footprint; use of a white instead of a black background; use of large icons on the web tablet home 26 screen so that users can quickly navigate to their favorite web pages; the use of proxying video 27 display to the device so that video can be played without the use of a flash player; the application 28 programming interface with the browser for custom applications; and the idea and knowhow for Case No. C 09-cv-5812 RS (PVT) -10FUSION GARAGE'S OPPOSITION TO PLAINTIFFS' MOTION TO COMPEL 1 empowering the device to play video output to a resolution of 1080p. (See Sohn Decl., Ex. B at 5 2 and 9.) 3 Given that Plaintiffs had no involvement with the technical specifications of Fusion 4 Garage's product, the technical information Plaintiffs seek in their motion to compel is simply not 5 relevant to Plaintiffs' claims and need not be produced. See Autotech, 249 F.R.D. at 534-35 6 (denying motion to compel "proprietary technical information" where this information was not 7 relevant to plaintiff's breach of contract claims over a touchscreen device); Viacom, 253 F.R.D. at 8 260 (denying motion to compel production of source code where plaintiff had failed to make a 9 "plausible showing" of relevance). 10 This is not a case about the ownership and/or piracy of source code, but whether Fusion 11 Garage breached alleged fiduciary obligations to Plaintiffs and/or committed fraud. As a result, 12 Plaintiffs' motion should be denied. 13 14 15 B. Plaintiffs' Speculation About Fusion Garage's Future Products Does Not Justify Production of Proprietary Source Code Now Plaintiffs' speculation about what Fusion Garage may or may not argue during the 16 damages phase regarding "a new version of the JooJoo" which "might well require a source code 17 comparison" (Mot. at 7) is irrelevant at this point because there is currently no new version of the 18 JooJoo being offered for sale. Plaintiffs have not made any showing that they have even examined 19 Fusion Garage's JooJoo or performed any sort of analysis to justify producing source code. 20 Further, Plaintiffs have failed to make any showing, either by argument or through an expert 21 declaration, that a source code comparison would be necessary to show differences in source code 22 between the JooJoo and a hypothetical future web tablet. But again, that is all speculation at this 23 point because Fusion Garage has not released any additional web tablet besides the JooJoo. 24 25 26 C. Plaintiffs Make No Showing That They Need Fusion Garage's Proprietary Documentation and Source Code Finally, Plaintiffs do not argue, nor could they, that they would be unable to prove their 27 case without discovery into Fusion Garage's proprietary information. Indeed, Fusion Garage has 28 Case No. C 09-cv-5812 RS (PVT) -11FUSION GARAGE'S OPPOSITION TO PLAINTIFFS' MOTION TO COMPEL 1 produced documents responsive to nearly half of the requests at issue here (excepting its highly 2 proprietary data), including without limitation: 3 4 5 6 7 8 9 10 11 12 13 14 Request 40: All documents that mention (a) the JooJoo and (b) the CrunchPad, TechCrunch, or Michael Arrington. Request 43: All documents concerning communications with any vendors, contractors, or suppliers, including but limited to Pegatron, relating to the JooJoo. Request 44: All documents concerning communications with any vendors, contractors, or suppliers, including but not limited to Pegatron, concerning the CrunchPad or the project to develop the CrunchPad. Request 49: All documents concerning government approvals or certifications concerning the JooJoo or the CrunchPad, including but not limited to Federal Communications Commission approval. Request 53: Every document created or received before November 17, 2009 that contains the term "JooJoo." Request 61: All documents concerning the planning or implementation of what Mr. Rathakrishnan termed Fusion Garage's "Plan B" on page 80 of his deposition transcript. Request 67: Documents sufficient to show the work performed on the CrunchPad project, JooJoo, or other web tablet on which either party worked by FUSION GARAGE TABLET PERSONNEL. 15 (See Plaintiffs' Motion to Compel, Appendix; see also id., Fusion Garage's responses to Requests 16 54, 55, 56, 57, 59, 60, 61, 79, 80, and 81.) Moreover, Fusion Garage has already produced and/or 17 agreed to produce documents responsive to numerous other requests that directly go to Plaintiffs' 18 breach of fiduciary duty and fraud claims, including: 19 20 21 22 23 24 25 26 27 28 Request 1: All documents constituting or concerning any communications with Michael Arrington, Heather Harde, Louis Monier, Nik Cubrilovic, Brian Kindle, or TechCrunch. Request 7: Documents sufficient to identify all persons who have participated in the development, design, manufacturing, documentation, marketing, advertising and promotion of the CrunchPad, or in the planning for any of those activities. Request 8: Documents sufficient to identify all persons who have participated in the development, design, manufacturing, documentation, marketing, advertising and promotion of the JooJoo, or in the planning for any of those activities. Request 16: Documents sufficient to identify all suppliers of any components of the JooJoo device. Request 22: All documents concerning marketing of the JooJoo. Request 26: All documents concerning plans for or discussions of a merger between you and CrunchPad, Inc. Case No. C 09-cv-5812 RS (PVT) -12FUSION GARAGE'S OPPOSITION TO PLAINTIFFS' MOTION TO COMPEL 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Request 34: All documents concerning contracts, agreements or understandings concerning the CrunchPad or the project to develop it. Request 35: All documents concerning contracts, agreements or understandings concerning the JooJoo. Request 36: All documents concerning sales, order, or pre-orders of the JooJoo. Request 39: All documents concerning plans for and selection of a brand name for the JooJoo or a related domain name. Request 41: All drafts and internal communications concerning or leading up to your November 17, 2009 email to Michael Arrington, contained within Exhibit D to the Complaint. Request 52: Every document containing the term "CrunchPad." Request 62: All documents reflecting any agreement or proposal concerning, mentioning, or discussing you and Plaintiffs each profiting or deriving revenues related to developing marketing, or sale of a tablet computer. Request 63: All documents reflecting any agreement or proposal concerning, mentioning, or discussing you and Plaintiffs each bearing their own losses or costs related to developing, marketing, or sale of a tablet computer. Request 69: All documents referring or relating to an actual or potential merger or acquisition between you and Plaintiffs, including but not limited to agreements, letters of intent, memoranda of understanding, term sheets or any drafts of or communications comprising or regarding same. Request 70: All communications between you and any third party reflecting an interest in collaborating, assisting, contributing or otherwise working with you to develop a web tablet. Request 71: All documents relating to any third party's actual or contemplated funding of or investment in the CrunchPad, JooJoo, or other web tablet on which either party worked, including communications with those third parties. Request 74: A specimen of each prototype or version of the JooJoo, including at least.... Request 75: All documents that refer or relate to Plaintiffs advancing Fusion Garage money or paying Fusion Garage's bills. Request 82: All documents concerning work on presentations concerning the CrunchPad. Request 83: All documents concerning presentations or other marketing communications you have made to promote the JooJoo outside of the United States. 25 (See Sohn Decl., Exs. I [Requests 1, 7, 8, 16, 22, 26, 34-36, 39, and 41] and J [Requests 52, 62-63, 26 69-71, 74-75, and 82-83].) 27 Each of these requests call for documents that Plaintiffs hope will show "what, if any, 28 work on a tablet Fusion Garage performed outside of its collaboration with Plaintiffs" and "when Case No. C 09-cv-5812 RS (PVT) -13FUSION GARAGE'S OPPOSITION TO PLAINTIFFS' MOTION TO COMPEL 1 and how Fusion Garage began to develop and market its JooJoo apart from Plaintiffs," which are 2 the ostensible reasons why Plaintiffs seek Fusion Garage's technical documents and source code. 3 (Motion at 6.) Fusion Garage has also agreed to provide witnesses to testify about the 4 development of its web tablet, which the parties are currently trying to schedule for November. 5 (See Sohn Decl. 3.) Plaintiffs have failed to explain why they need more. In particular, 6 Plaintiffs have not shown they are entitled to the detailed technical documents, source code, and 7 interrogatory responses that give away the crown jewels of Fusion Garage's product. 8 It is clear what Plaintiffs seek to do by this motion. They want to use the liberal discovery 9 rules to obtain Fusion Garage's technical documents and source code so that they can appropriate 10 for themselves the work and effort Fusion Garage poured into its web tablet. This result would 11 not only be unfair, but it would also put at risk Fusion Garage's most propriety information for no 12 reason at all. 13 14 D. The Authorities Plaintiffs Cite are Distinguishable The cases that Plaintiffs cite to show the supposed "relevance" of Fusion Garage's source 15 code are inapposite. (See Mot. at 6-7) (citing i4i Lt. P'Ship v. Microsoft Corp., 670 F.Supp. 2d 16 568 (E.D. Tex. 20009); JustMed, Inc. v. Byce, 600 F.3d 1118 (9th Cir. 2010); and Philip M. Adams 17 & Assoc., LLC v. Winbond Elecs. Corp., No. 05-64, 2010 WL 2977228 (D. Utah July 21, 2010)). 18 For one thing, none of these cases ordered the production of source code, and thus they certainly 19 do not compel a conclusion that Fusion Garage's source code must be produced in this case. 20 Moreover, while the JustMed and Winbond cases did discuss the potential importance of source 21 code and embedded source code comments,1 both cases involved a dispute over the ownership 22 and/or alleged piracy of the source code itself something that is not even at issue in this case. In 23 such circumstances, it is obviously important to review the full, annotated source code to see who 24 created the source code and when. By contrast, in this case, Mr. Arrington has admitted that 25 26 The third case cited by Plaintiffs, i4i Ltd. P'ship v. Microsoft Corp., did not discuss source 27 code comments at all, and it is unclear why Plaintiffs even attempt to rely on this case or analogize to it. 28 Case No. C 09-cv-5812 RS (PVT) -14FUSION GARAGE'S OPPOSITION TO PLAINTIFFS' MOTION TO COMPEL 1 1 Fusion Garage did all of the relevant source coding since at least January 2009. Thus, there is no 2 dispute over who can claim credit for the source code of the device at issue, and Plaintiffs' motion 3 to compel such code should be denied. 4 5 6 E. Mr. Arrington Has Admitted His Disdain for the Terms of the Stipulated Protective Order Plaintiffs also argue that the Stipulated Protective Order in this case offers adequate 7 protection for Fusion Garage's proprietary information. (Mot. at 8.) However, Plaintiffs ignore 8 the fact that their own clients' principal officer Mr. Arrington has admitted his clear disdain for 9 the terms of the Stipulated Protective Order. For instance, Mr. Arrington wrote in a Twitter 10 message just last month that the "reason we haven't said much about crunchpad litigation - the 11 really solid gold documents are under seal. probably going to just post anyway." (Sohn Decl., Ex. 12 E) (emphasis added). 13 The disdain likely stems from the fact that the Protective Order is preventing Plaintiffs 14 from their true desire: to litigate this case in the press in an attempt to embarrass and tarnish a 15 small start-up and run it out of business. Plaintiffs are chronicling this lawsuit, and their recent 16 coordinated the filing of their Amended Complaint with a blog post and tweet by Mr. Arrington is 17 just the latest example. (See http://techcrunch.com/2010/09/15/status-of-crunchpad-litigation/ 18 (last checked 9/20/10); Sohn Decl., Ex. F at Tweet 74.) 19 Moreover, given the popularity and reach of Plaintiffs' TechCrunch blog, there is great 20 potential to wreak extraordinary damage to Fusion Garage's business by posting Fusion Garage's 21 proprietary information online if Plaintiffs ever follow-through with their threat. Fusion Garage 22 cannot be forced to have its proprietary technical information the crown jewels of its business 23 held hostage to Mr. Arrington's whim and caprice. 24 It is clear that this motion is nothing more than a veiled attempt by Plaintiffs to peer into 25 Fusion Garage's most important information to pluck and appropriate for themselves "ideas" and 26 "contributions" to Fusion Garage's web tablet that Plaintiffs had no role in developing. Thus, if 27 the Court does compel production of documents, Fusion Garage respectfully requests an Order 28 precluding Plaintiffs from amending their written discovery responses relating to any purported Case No. C 09-cv-5812 RS (PVT) -15FUSION GARAGE'S OPPOSITION TO PLAINTIFFS' MOTION TO COMPEL 1 "contributions" to Fusion Garage's web tablet that Plaintiffs could not previously identify. Fusion 2 Garage also requests a stern warning to Plaintiffs that they must not disseminate Fusion Garage's 3 proprietary information or source code over the Internet. 4 IV. 5 CONCLUSION Because Plaintiffs have failed to make even a threadbare showing that Fusion Garage's 6 proprietary technical documents and source code are necessary to prove their case, and because of 7 the great risk associated with producing this information to Plaintiffs, Plaintiffs' Motion to 8 Compel should be denied. If, on the other hand, the motion is granted, Fusion Garage respectfully 9 requests a stern warning to Plaintiffs that they must not disseminate Fusion Garage's proprietary 10 information or source code over the Internet and must abide by the terms of the Stipulated 11 Protective Order in this matter. 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. C 09-cv-5812 RS (PVT) -16FUSION GARAGE'S OPPOSITION TO PLAINTIFFS' MOTION TO COMPEL DATED: September 23, 2010 QUINN EMANUEL URQUHART & SULLIVAN, LLP By /s/ Evette D. Pennypacker Evette D. Pennypacker Attorneys for Defendant Fusion Garage PTE Ltd.

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