Lantiq North America, Inc. et al v. Ralink Technology Corporation et al

Filing 163

ORDER GRANTING PLAINTIFF'S MOTION TO COMPEL by Judge Paul S. Grewal granting 109 Motion to Compel; granting 117 Motion to Compel (psglc1, COURT STAFF) (Filed on 4/25/2012)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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United States District Court
For the Northern District of California

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SAN JOSE DIVISION

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LANTIQ DEUTSCHLAND GMBH,

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Plaintiff,
v.
RALINK TECHNOLOGY CORPORATION,
ET AL.,
Defendants.

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Case No.: 11-CV-00234-EJD (PSG)
ORDER GRANTING PLAINTIFF’S
MOTIONS TO COMPEL
(Re: Docket Nos. 109, 117)

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In this patent infringement suit, Plaintiff Lantiq Deutschland GMBH (“Lantiq”) moves to
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compel Defendants Ralink Technology Corporation, a California Corporation, and Ralink
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Technology Corporation, a Taiwanese Corporation (collectively “Ralink”), to produce documents
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regarding their post-merger structure and relationship with MediaTek, Inc. (“MediaTek”). In
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addition, Lantiq moves to compel the production of documents responsive to its first set of
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document requests and the court’s September 15, 2011 order. Ralink opposes both motions. On
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April 3 and April 10, 2012, the parties appeared for hearings. Having reviewed the papers and
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considered the arguments of counsel,
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IT IS HEREBY ORDERED that Lantiq’s motion to compel MediaTek documents is
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GRANTED.
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Case No.: C 11-00234 EJD (PSG)
ORDER

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During the pendency of this suit, Ralink merged with MediaTek. Lantiq argues that

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discovery related to a potential technology and products transfer between the two companies, the

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deal itself, and any valuations involved in the deal are relevant to issues of indirect infringement

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and damages. Based on the discovery obtained thus far and other publicly-available information,

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Lantiq is concerned that Ralink exists now only as a “hollow shell” that would frustrate an adverse

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judgment. A joint press release issued by the two companies on March 16, 2011 stated that

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MediaTek would be the surviving company and that MediaTek would incorporate Ralink’s
advanced technology and industry-leading team of engineers. In another press release issued two

United States District Court
For the Northern District of California

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months later, however, the companies announced that instead of combining into a single entity

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Ralink would become a wholly-owned subsidiary of MediaTek. Even if Ralink and MediaTek

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remain separate entities and that Ralink has no plans to integrate its products with those of

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MediaTek, Lantiq contends that the discovery sought is relevant to confirm whether Ralink still has

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any assets or whether all of Ralink’s assets, including its technology, have indeed been transferred.
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Ralink responds principally by noting procedural deficiencies in Lantiq’s motion to compel;

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such as: (1) Lantiq did not comply with Civ. L.R. 37-2 because it did not set forth the request, the

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response and the objections afterwards; (2) Lantiq failed to meet and confer on a number of

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categories of documents that it now seeks.

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Lantiq’s compliance – or lack thereof - with its meet-and-confer and other procedural
obligations gives the court pause. These obligations are not merely optional – they are designed to

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facilitate the orderly exchange of discovery and resolution of disputes. But here the court cannot
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overlook the reality that, based on the representations made by Ralink and MediaTek in their

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March 16, 2011 joint press release that they have intermingled their assets and business operations,

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discovery related to Ralink’s new corporate structure appears more than reasonably calculated to

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lead to the discovery of admissible evidence. Events since then lead further support to this

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conclusion, including MediaTek’s release of a router product using Ralink’s “RL” product number
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Case No.: C 11-00234 EJD (PSG)
ORDER

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prefix and a statement from MediaTek’s president that MediaTek has been “proactively integrating

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technical advantages from both parties.” Even in its opposition papers, Ralink concedes that

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MediaTek engages in “marketing support” of the accused products – a vague term that could

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implicate any number of the acts proscribed under section 271 of Title 35.

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No later than May 4, 2012, Ralink shall produce the following:

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Documents and communications regarding the sale/exchange of Ralink’s stock with
MediaTek;

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Documents and communications related to the MediaTek-Ralink deal and resulting
corporate structure (including closing binders);

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Documents regarding post-merger inter-corporate sales, product developments,
technology/product sharing/transfers, technology branding, etc.;

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Documents showing Ralink sales of MediaTek products and vice versa;

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Documents and communications showing how MediaTek acquired, obtained or otherwise
joined itself with relink, including valuations of Ralink, its technologies and its products;

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Documents and communications showing employee transfers from Ralink to MediaTek and
vice versa;

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Documents and communications showing business unit structures, such as current
organizational charts, as well as documents describing the division of responsibilities
between business units; and

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Documents and communications regarding MediaTek-Ralink/Ralink-MediaTek inter-and
intra-company financial transactions/transfers, funding, and balance sheets.

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IT IS FURTHER ORDERED that Lantiq’s motion to compel documents responsive to its

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United States District Court
For the Northern District of California

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first set of requests is GRANTED.
Lantiq previously moved to compel Ralink to produce documents responsive to its first set

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of document requests. On September 15, 2011, the court largely granted Lantiq’s motion to

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compel and ordered Ralink to produce responsive documents. 1 Lantiq contends that despite the

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September 15 order, Ralink has failed to produce all of its responsive documents. Lantiq takes

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issue specifically with: (1) certain Register Transfer Language (“RTL”) code supplied by

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Synopsys, Inc. (“Synopsys”) that has been withheld; (2) the lack of intermediate technical

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See Docket No. 60.
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Case No.: C 11-00234 EJD (PSG)
ORDER

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documents pertaining to the functionality of accused Ralink products that are identified on Ralink’s

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website, such as programming guides, reference designs, turn-key designs, software development

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kits, software development user guides, circuit diagrams, driver code and software; and (3)

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Ralink’s refusal to produce financial data in native, rather than .TIFF, format.

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Ralink responds that it has complied with the September 15 order. Regarding the Synopsys-

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supplied RTL code, Synopsys previously objected to production. Regarding the so-called

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intermediate technical documents, Ralink insists that it does not make use of schematics, circuit

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diagrams or other such forms for the design of the accused products. As explained in the

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declaration of Kuo Chang Lu, Ralink instead uses RTL code to document the design of its products

United States District Court
For the Northern District of California

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and then provides to its customers detailed and descriptive data sheets so that they can determine

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how the products operate and the specifications for the products. Regarding Lantiq’s request for

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financial data in native format, Ralink offers no substantive response.

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The court is persuaded that Lantiq’s demands are warranted and orders:

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1.

Working with Synopsys, Ralink shall produce the disputed RTL code subject to the

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condition that Ralink shall give Synopsys five days notice before taking possession of any paper

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copies of the code so that Synopsys may have the opportunity to raise any objection.

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2.

Based on Lantiq’s showing that certain intermediate technical documents are

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reflected on Ralink’s website, in Ralink’s customer documents, and in Ralink’s own production of

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documents, Ralink shall produce all of the intermediate technical documents for the accused

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products specified in Lantiq’s motion in its possession, custody or control.

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3.

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Ralink shall comply with this order no later than May 11, 2012.

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Ralink shall produce all financial data in native (not .TIFF) format.

IT IS SO ORDERED.

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Dated:

4/25/2012

_________________________________
PAUL S. GREWAL
United States Magistrate Judge

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Case No.: C 11-00234 EJD (PSG)
ORDER