TIBCO Software Inc., v. Gain Capital Group, LLC

Filing 100

Order by Magistrate Judge Virginia K DeMarchi re 86 , 89 Discovery Letter Brief. (vkdlc1S, COURT STAFF) (Filed on 8/31/2018)

Download PDF
1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION 7 TIBCO SOFTWARE INC., 8 Plaintiff, 9 v. 10 GAIN CAPITAL GROUP, LLC, 11 United States District Court Northern District of California Case No.17-cv-03313-EJD (VKD) Defendant. 12 ORDER RE DISCOVERY DISPUTE RE PLAINTIFF'S MOTION TO COMPEL DOCUMENTS Re: Dkt. No. 86 13 14 On July 27, 2018, the parties submitted a joint discovery letter regarding plaintiff TIBCO 15 Software Inc.’s (“TIBCO”) motion to compel defendant GAIN Capital Group, LLC (“GAIN”) to 16 produce documents in response to TIBCO’s Request for Production No. 15.1 Dkt. No. 86. Both 17 parties request a hearing on this dispute. However, the Court finds that the dispute may be 18 decided on the papers without a hearing. Having reviewed the parties’ submissions, the Court denies TIBCO’s motion to compel, as 19 20 set forth below. 21 I. BACKGROUND 22 TIBCO provides enterprise software for data analytics and event-processing. GAIN 23 provides online trading services. Dkt. No. 43. In this action, TIBCO alleges that it licensed 24 certain software to GAIN during a limited term, but that GAIN deployed the TIBCO software 25 outside that term in violation of the license agreements. TIBCO sues GAIN for breach of contract, 26 breach of the covenant of good faith and fair dealing, and copyright infringement. Id. 27 1 28 The parties’ joint submission also addresses a dispute concerning TIBCO’s Interrogatories Nos. 8 and 9 to GAIN, but the parties advise that this dispute has been resolved. Dkt. No. 89. GAIN denies TIBCO’s allegations, and counterclaims against TIBCO for fraud in the 1 2 inducement, negligent misrepresentation, unfair competition, rescission based on unilateral 3 mistake, and rescission based on mutual mistake. Dkt. No. 72. 4 In discovery, TIBCO seeks documents responsive to a request which asks for “All 5 Communications between You and GAIN U.K., related to the subject matter of this lawsuit.” Dkt. 6 No. 86, Ex. B (Request for Production No. 15). The parties have not attached the portion of the 7 discovery request at issue that includes the definitions for “You” and “GAIN U.K.” However, 8 their submission reflects that “You” refers to Gain Capital Group, LLC, the defendant in this 9 action, and “GAIN U.K.” refers to GAIN Capital Limited U.K., which appears to be a separate 10 affiliated company based in the United Kingdom. Dkt. No. 86 at 3, 6. GAIN does not object to producing communications between GAIN and GAIN U.K. United States District Court Northern District of California 11 12 Rather, the crux of the parties’ dispute is a disagreement about what the “subject matter of this 13 lawsuit” is. TIBCO asserts that the subject matter of the lawsuit is broad enough to encompass 14 deployment of TIBCO software by GAIN U.K., and any communications related to such 15 deployment. Id. at 3. GAIN responds that the subject matter of the lawsuit is limited to the 16 software licenses and alleged software licenses executed in 2008, 2010, and 2016, the software 17 that is the subject of those licenses or alleged licenses, and the over-deployment or unauthorized 18 use of that software by GAIN Capital Group, LLC. Id. at 6. 19 II. LEGAL STANDARD 20 Under the Federal Rules of Civil Procedure, a party may discover any matter that is 21 relevant to a claim or defense and that is “proportional to the needs of case, considering the 22 importance of the issues at stake in the action, the amount in controversy, the parties’ relative 23 access to relevant information, the parties’ resources, the importance of the discovery in resolving 24 the issues, and whether the burden or expense of the proposed discovery outweighs its likely 25 benefit.” Fed. R. Civ. P. 26(b)(1). Information need not be admissible in evidence to be 26 discoverable. Id. 27 III. 28 DISCUSSION It is clear from the allegations in the first amended complaint that all of TIBCO’s claims in 2 1 this action are limited to conduct by GAIN Capital Group, LLC, the named defendant. Dkt. No. 2 43. In addition, TIBCO’s breach of contract claims (claims 1 and 3) are limited to specific 3 software that it contends GAIN over-deployed in violation of the license agreements, or for which 4 GAIN has not paid pursuant to the terms of an alleged license agreement. Similarly, TIBCO’s 5 copyright infringement claim (claim 4) is limited to the specific software TIBCO alleges GAIN 6 deployed without permission under the license agreements. Finally, TIBCO’s claim for breach of 7 the covenant of good faith and fair dealing (claim 2) is limited to GAIN’s conduct with respect to 8 the audit TIBCO sought to conduct and did conduct in 2016. 9 The first amended complaint is not specifically limited to conduct occurring in the United States, although the audit that is the source of many of TIBCO’s factual allegations appears to 11 United States District Court Northern District of California 10 have encompassed only GAIN’s deployment of TIBCO software in the United States. In addition, 12 with respect to copyright infringement, the first amended complaint contains no allegations of 13 unauthorized copying or use of TIBCO software that would support a claim for infringement of 14 TIBCO’s U.S. copyrights by conduct occurring outside the United States. See Subafilms, Ltd. v. 15 MGM-Pathe Commc’ns Co., 24 F.3d 1088, 1095–96 (9th Cir. 1994) (en banc) (the Copyright Act 16 does not apply extraterritorially); Allarcom Pay Television Ltd. v. Gen. Instrument Corp., 69 F.3d 17 381, 387 (9th Cir. 1995) ( “In order for U.S. copyright law to apply, at least one alleged 18 infringement must be completed entirely within the United States . . . .”). GAIN’s defenses and 19 counterclaims concern the same license agreements and alleged license agreements between 20 GAIN and TIBCO for specific software, the conduct of the audit, and communications with 21 TIBCO about those matters. 22 With respect to TIBCO’s Request for Production No. 15, the Court finds that relevant and 23 proportionate discovery of communications between GAIN and GAIN U.K. about “the subject 24 matter of this lawsuit” should be limited to communications between GAIN and GAIN U.K., in 25 GAIN’s possession, custody, or control, related to: (i) GAIN’s alleged breach of the agreements or 26 alleged agreements identified in the first amended complaint, (ii) GAIN’s alleged breach of the 27 covenant of good faith and fair dealing with respect to conduct of the audit, (iii) GAIN’s alleged 28 over-deployment and unauthorized use of the specific software identified in the first amended 3 1 complaint. TIBCO’s discovery with respect to this request may not extend to conduct by GAIN 2 U.K., which is not at issue in the case. 3 The Court finds no allegations of conduct occurring outside the United States in the 4 operative pleadings. However, if TIBCO can plausibly show that some of the alleged conduct by 5 GAIN that forms the basis of its claims as currently pled occurred outside the United States, and 6 therefore warrants a broader scope of discovery, it shall confer with GAIN regarding such 7 discovery and, if necessary, may submit the dispute to this Court for resolution in accordance with 8 the undersigned’s discovery dispute resolution procedures. 9 10 IT IS SO ORDERED. Dated: August 31, 2018 United States District Court Northern District of California 11 12 VIRGINIA K. DEMARCHI United States Magistrate Judge 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4

Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.


Why Is My Information Online?