Tessera, Inc. v. UTAC (Taiwan) Corporaiton

Filing 289

ORDER Re: Discovery Dispute Joint Report #7 274 . Signed by Magistrate Judge Howard R. Lloyd on 4/22/2015. (hrllc1, COURT STAFF) (Filed on 4/22/2015)

*E-Filed: April 22, 2015*

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IN THE UNITED STATES DISTRICT COURT

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For the Northern District of California

NOT FOR CITATION

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United States District Court

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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SAN JOSE DIVISION

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TESSERA, INC.,
Plaintiff,

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v.

No. C10-04435 EJD (HRL)
ORDER RE: DISCOVERY DISPUTE
JOINT REPORT #7

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UTAC (TAIWAN) CORPORATION,

[Dkt. No. 274]

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Defendant.
____________________________________/

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Plaintiff Tessera, Inc. (“Tessera”) sues Defendant UTAC (Taiwan) Corporation (“UTC”) for

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alleged failure to pay royalties under a license agreement. The first phase of this action concerned a

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contract interpretation dispute between Tessera and UTC about the criteria for determining which

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UTC products are royalty-bearing. Following discovery on that subject, the parties submitted

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summary judgment motions relating to contract interpretation, which were ruled on by the court.

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In the second phase of this action, Tessera served UTC with infringement disclosures

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identifying the products that Tessera contends are royalty-bearing under the agreement. Tessera’s

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July 8, 2014 disclosures identified 32 claims of 12 licensed patents and provided claim charts

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contending that two types of UTC packages—its w-BGA packages and DFN packages—are

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covered by the claims of licensed patents and are therefore royalty-bearing. Tessera’s disclosure

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asserted that Tessera did not have enough information to determine whether a third type of package,

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UTC’s LGA SiP package, is covered by the claims of the licensed patents and is therefore royalty-

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bearing. UTC disputes Tessera’s contentions, and also served Tessera with invalidity contentions.

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UTC has filed a motion for partial summary judgment, which is currently pending. Dkt.

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Nos. 208, 247. Tessera opposed the motion, and the court has not yet issued a ruling. The parties

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have also briefed and argued claim construction issues, and the court has not yet issued a claim

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construction order.

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Presently before the Court is the parties’ Discovery Dispute Joint Report (“DDJR”) #7. Dkt.

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No. 274. The parties’ dispute relates to the following Tessera discovery requests: RFP Nos. 62, 66-

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75, 77-79, and 82-83, as well as Fed. R. Civ. P. 30(b)(6) Topic Nos. 1-8, 11, 13, 16, 18-21. Tessera

For the Northern District of California

United States District Court

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seeks discovery responsive to these requests. Tessera argues that the discovery it seeks is directly

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relevant to a contract interpretation defense that UTC has raised—that the agreement had a

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geographical limitation on UTC’s obligation to pay royalties.

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requested discovery is relevant to interpreting the geographic scope of the agreement, it is relevant

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to UTC’s defense that paying for a world-wide license would not be convenient for its customers,

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and it is relevant to determining UTC’s royalty obligations under its own interpretation of the

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contract. In the alternative, Tessera argues that UTC should be precluded from arguing that its

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royalty obligations are limited based on geographical considerations. UTC argues that Tessera’s

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requests for discovery are irrelevant, overbroad, and unduly burdensome.

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Specifically, Tessera argues that the

Each of the disputed discovery requests will be addressed in turn. First, several of Tessera’s

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requests are cumulative of discovery requests addressed in the first phase of litigation, which

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addressed contract interpretation. RFP 66 and Deposition Topics 18 and 19 concern the

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interpretation of the agreement and discussions between UTC and Tessera about it. UTC has

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already made full production of all documents relating to the agreement’s negotiation and execution

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in the first phase. In addition, UTC produced the three witnesses who participated in the negotiation

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of the agreement on UTC’s behalf years ago and are no longer employees of UTC. Tessera had a

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full opportunity to depose them about all negotiations concerning the agreement.

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In addition, several of the requests are burdensome and seek information that is irrelevant.
RFP 79 seeks documents reflecting UTC’s “corporate structure.” UTC has already provided this

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information to Tessera: UTC is owned by UTAC Singapore and has no subsidiaries. RFP 67 and

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Deposition Topic 1 seek discovery concerning whether, when UTC paid royalties previously, it paid

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for all of its packages without regard to where the packages were made, shipped, or sold. UTC

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already stipulated to this fact in its answer to Tessera’s Interrogatory No. 15.

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Second, several of the requests are overbroad and unduly burdensome. See Fed. R. Civ. P.

discovery outweighs its likely benefit, considering the needs of the case, the amount in controversy,

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the parties’ resources, the importance of the issues at stake in the action, and the importance of the

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discovery in resolving the issues”). RFPs 68 and 72 seek any communications between UTC and its

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For the Northern District of California

26(b)(2)(C)(iii) (a court must limit discovery when “the burden or expense of the proposed

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United States District Court

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customers that might refer to UTC’s license with Tessera and documents reflecting any condition on

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which UTC does business. Any such communications would have no relevance or probative value.

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None of this involves a manifestation of intent or understanding that UTC made to Tessera, or vice

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versa. Rather, it involves one party’s subjective understandings or statements. See Century Sur. Co.

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v. Acer Hotel, No. C 13-00593 WHA, 2013 WL 3575546, at *4 (N.D. Cal. July 12, 2013)

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(“Evidence of the undisclosed subjective intent of the parties is irrelevant to determining the

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meaning of contractual language. It is the outward expression of the agreement, rather than a party’s

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unexpressed intention, which the court will enforce.” (internal quotation marks omitted)).

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RFPs 69 and 70 and Deposition Topics 8 and 16 are unduly burdensome and seek irrelevant

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information. RFP 69 seeks “Documents Relating to UTAC Taiwan’s knowledge of its customers’

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plans to import or sell w-BGA Packages and UTAC Taiwan Packages to other countries,” RFP 70

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seeks “Documents that reflect where UTAC Taiwan’s customers imported or sold w-BGA Packages

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and UTAC Taiwan Packages,” Deposition Topic 8 seeks “UTAC Taiwan’s knowledge of its

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customers’ plans to import or sell wBGA Packages and UTAC Taiwan Packages to other countries,”

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and Deposition Topic 16 seeks “The identity of products into which the Packages at Issue have been

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incorporated, the companies that sold those products, and the identity of any downstream customers

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of those products.” As explained above, UTC’s unilateral actions and state of mind are irrelevant to

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contract interpretation. The unilateral actions and state of mind of third parties (UTC’s customers)

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are also irrelevant to contract interpretation.

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Third, several of Tessera’s discovery requests are not relevant to the geographic scope

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dispute. RFPs 71, 73, 75, and 78, and Deposition Topics 4, 5, 11, and 21 seek discovery of what

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UTC is capable of doing rather than what it actually does or has done. RFP 71 seeks documents

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relating to UTC’s “ability or willingness” to ship packages outside of Taiwan. RFP 73 seeks

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documents relating to any “offers for sale by of w-BGA Packages or UTAC Taiwan Packages.”

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RFP 75 seeks documents that show where UTC “offered to sell” its w-BGA packages and other

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UTC packages. 1 RFP 78 seeks documents relating to any “plans or forecasts of UTAC Taiwan’s

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business.” Deposition Topic 4 seeks communications relating to UTC’s “manufacturing, sales,

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shipment, delivery, or testing capacities.” Deposition Topic 5 concerns market forces and

For the Northern District of California

United States District Court

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“demand.” Deposition Topic 11 seeks information relating to UTC’s “offers for sale” of w-BGA

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packages or UTC packages. Deposition Topic 21 seeks “[p]lans or forecasts” for UTC’s business.

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Tessera’s complaint does not claim that UTC owes royalties on unconsummated offers for sale, or

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for packages it might have been willing to make but never actually made. Rather, it claims royalties

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for products made by UTC. Tessera’s demand for discovery as to what UTC did not make is

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unjustified.
RFPs 74 and 82 and Deposition Topics 2, 3, and 13 seek discovery concerning statements

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about or relating to the license. As discussed above, all discovery relevant to interpreting the license

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agreement was completed in the first phase. For example, all communications between Tessera and

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UTC were produced. Tessera now seeks production of statements by others, such as UTC’s

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corporate parent UTAC Singapore, which is not a party to the agreement but instead has its own

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separate license with Tessera. Other requests seek statements not made to Tessera, but instead to

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UTC’s customers. Such statements cannot constitute competent extrinsic evidence for interpretation

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of the parties’ agreement.
RFPs 62, 77 and 83 and Deposition Topics 6, 7, and 20 are all either irrelevant or unduly

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burdensome. Tessera has not explained or established how these are purportedly connected to the

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“geographic scope” issue (or to any other claim or defense). RFP 62 seeks documents concerning

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RFP 75 also seeks documents that show where UTC actually assembled, sold, used, or imported
its w-BGA packages and UTC packages. UTC objects only to the extent that this request extends to
offers to sell.
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UTC’s contracts, regardless of whether they have any information relating to where UTC has made,

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sold, or shipped packages. To seek to collect all such documents would be burdensome, and

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Tessera has not identified a basis for doing so. RFP 77 and Deposition Topic 20 ask whether UTC

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has ever used Tessera’s trademarks. However, Tessera’s complaint does not mention trademarks.

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In any event, whether a trademark is used says nothing about where a product was made or sold.

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RFP 83 improperly seeks documents “of UTAC Singapore,” UTC’s corporate parent and a separate

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entity over whose documents UTC has no legal control. Such discovery is beyond what UTC is

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obliged to provide.

For the Northern District of California

Accordingly, Tessera’s request for discovery responsive to RFPs 62, 66-75, 2 77-79, and 82-

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United States District Court

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83, and Deposition Topics 1-8, 11, 13, 16, 18-21 is denied. In addition, Tessera’s request that UTC

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be precluded from arguing that its royalty obligations are limited based on geographical

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considerations is also denied.
IT IS SO ORDERED.

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Dated: April 22, 2015

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HOWARD R. LLOYD
UNITED STATES MAGISTRATE JUDGE

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In regards to RFP 75, Tessera’s request for discovery is denied only to the extent that this request
extends to offers to sell.
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C10-04435 EJD (HRL) Order will be electronically mailed to:

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Benjamin W. Hattenbach

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David H. Herrington

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Dominik B. Slusarczyk

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Jennifer Renee Bunn

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Joseph Mark Lipner

[e-mail], [e-mail], [e-mail], [e-mail]

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Kevin Patrick Kiley

[e-mail]

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Lawrence B. Friedman

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Michael F. Heafey

[e-mail]

[e-mail], [e-mail]
[e-mail], [e-mail]
[e-mail]

[e-mail]

[e-mail], [e-mail]

For the Northern District of California

United States District Court

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Morgan Chu

[e-mail]

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Morvarid Metanat

[e-mail]

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Nathaniel E. Jedrey

[e-mail]

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Richard William Krebs [e-mail], [e-mail], [e-mail],
[e-mail], [e-mail], [e-mail]

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Ryan Alexander Ward

[e-mail]

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Counsel are responsible for distributing copies of this document to co-counsel who have not
registered for e-filing under the court’s CM/ECF program.

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