Apple Inc. v. Qualcomm Incorporated

Filing 379

ORDER on 353 Joint Motion for Determination of Discovery Dispute Regarding Qualcomm's Responses to Apple's Third Set of Special Interrogatories Nos. 21 and 38. As provided herein, Apples motion to compel further responses to Interrogatori es 21 and 38, as presented in this Joint Motion, is GRANTED IN PART AND DENIED IN PART. Within 14 days of this Order, Qualcomm is ORDERED to: 1. Respond fully to Interrogatory 21 limited to its licensees Compal Electronics, Inc., Pegatron Corporati on, FIH Mobile Ltd (Foxconn), Hon Hai Precision Industry Co., Ltd., and Wistron Corporation; and, 2. In further response to Interrogatory 38, provide the identities of its personnel knowledgeable of each assertion that a standard is satisfied by a portion of a patent-in-dispute. Signed by Magistrate Judge Mitchell D. Dembin on 3/14/18. (Dembin, Mitchell)

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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IN RE: QUALCOMM LITIGATION

Case No.: 17-cv-0108-GPC-MDD
ORDER ON JOINT MOTION FOR
DETERMINATION OF
DISCOVERY REGARDING
QUALCOMM’S RESPONSES TO
APPLE’S THIRD SET OF SPECIAL
INTERROGATORIES NOS. 21 AND
38
[ECF NO. 353]

This Joint Motion was filed on March 2, 2017. The dispute involves
Qualcomm’s responses to two interrogatories.
Legal Standard
The Federal Rules of Civil Procedure authorize parties to obtain

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discovery of “any nonprivileged matter that is relevant to any party’s claim or

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defense and proportional to the needs of the case . . . .” Fed. R. Civ. P.

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26(b)(1). “Information within the scope of discovery need not be admissible in

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evidence to be discoverable.” Id. District courts have broad discretion to

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limit discovery where the discovery sought is “unreasonably cumulative or

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duplicative, or can be obtained from some other source that is more

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convenient, less burdensome, or less expensive.” Fed. R. Civ. P. 26(b)(2)(C).
An interrogatory may relate to any matter that may be inquired of

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under Rule 26(b). Fed. R. Civ. P. 33(a)(2). The responding party must

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answer each interrogatory by stating the appropriate objection(s) with

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specificity or, to the extent the interrogatory is not objected to, by

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“answer[ing] separately and fully in writing under oath.” Rule 33(b). The

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responding party has the option in certain circumstances to answer an

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interrogatory by specifying responsive records and making those records

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available to the interrogating party. Rule 33(d).
DISCUSSION

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1. Interrogatory 21

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Apple is asked to identify all agreements, potential agreements,

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licensees and potential licensees that proposed or requested (i) an alternative

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royalty base structure to the royalty base you initially proposed or supported

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or (ii) the smallest saleable patent-practicing unit or another component of

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the consumer product be used as the royalty base. (ECF No. 353 at 4).1
Qualcomm objects for vagueness, overbreadth, undue burden and lack

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of proportion. Qualcomm also challenges relevance. In particular,

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Qualcomm asserts that answering this interrogatory would require

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Qualcomm to search records relating to thousands of actual or potential

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agreements dating back more than 30 years for proposals or requests made

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by licensees. (Id.).

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The Court will refer to pagination supplied by CM/ECF rather than original pagination
throughout.
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Apple asserts that this information is relevant to one of the most

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important issues in this lawsuit and states that this discovery is designed to

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test assertions by Qualcomm which, Apple says, “has repeatedly claimed that

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charging royalties on the basis of the wholesale price of fully assembled

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devices is ‘standard’ and ‘typical’ in the industry and in its practice, noting

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that ‘That model has since been agreed to by over 300 licensees, for 2G, 3G

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and 4G licenses.’” (Id. at 5).

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Qualcomm has offered to investigate a reasonable subset of agreements

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to the extent Apple specifically identifies a relevant set. (Id. at 7). Apple has

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demurred because it has no way of identifying which prospective or actual

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licensees may have proposed different terms. (Id. at 6). Instead, Apple

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suggested that Qualcomm provide the requested response for all of the

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licenses listed in Exhibits 1-3 and the negotiations identified in response to

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Interrogatory No. 15. Qualcomm responded that those exhibits and

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negotiations cover thousands of agreements, addendums and other

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negotiations. (Id. at 6-7). Neither party saw fit to provide the Court with

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referenced responses and exhibits.

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This dispute indicates a wholesale failure of the parties to cooperate

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meaningfully “to secure the just, speedy, and inexpensive determination of

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every action and proceeding.” Rule 1, Fed. R. Civ. P. Not only that, each

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party has failed to provide the Court with an adequate basis to rule on their

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assertions.

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First, Qualcomm’s objection for undue burden and lack of proportion is

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supported only by its claim that responding to this interrogatory would

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require Qualcomm to search records relating to thousands of actual or

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potential agreements dating back more than 30 years for proposals or

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requests made by licensees. (ECF No. 353 at 4). This claim is not backed up
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with any evidence, such as a declaration from a knowledgeable person,

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regarding the extent of such records, their manner of storage, and the time

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and effort necessary to collect, review and produce responsive, non-privileged

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information. Consequently, Qualcomm’s objections for undue burden and

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lack of proportionality are OVERRULED.

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Apple fares no better in presenting purported quotes from Qualcomm

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that its licensing scheme, based upon the wholesale price of a fully assembled

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product, is “standard” and “typical.” (Id. at 5). The sources of these

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purported quotes are not identified. No record or other citations are

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provided. With a docket already at 378 entries, the Court is not going to

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search for them.

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The parties should have been able to resolve this dispute without Court

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intervention. The Court finds that the interrogatory is overbroad as it is not

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restricted in time. Despite the parties failing in their obligation to provide

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evidence in support of their assertions, the Court partially will accept both

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Qualcomm’s claim regarding burden and Apple’s claim regarding relevance,

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to the extent Apple relies on unattributed quotes purportedly from

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Qualcomm. The parties should have agreed on a subset of licensees for

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Qualcomm to use to respond to the interrogatory. At a minimum, Apple

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could have used the opportunity to select a number of licensees at random

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from the information it has been provided. At most, this dispute should have

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been over the number of licensees that Qualcomm had to research. Apple’s

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decision not to compromise or cooperate, leaving this mostly as an all-or-

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nothing proposition, makes it difficult for the Court to rule in its favor. Apple

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is entitled to something but abdicated its responsibilities to work with

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Qualcomm on an overbroad interrogatory. The Court will resolve the dispute

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as provided below.
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This case has been consolidated with a case carrying docket number 17-

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cv-1010-GPC-MDD, initiated by Qualcomm against 5 companies identified as

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“contract manufacturers.” (See ECF No. 118). These contract manufacturers

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or “CMs” are licensees of Qualcomm and build products for Apple using, in

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part, Qualcomm chipsets and technologies. The Court believes it appropriate

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for Qualcomm to answer the disputed interrogatory regarding the CMs.

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2. Interrogatory 38

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Qualcomm is asked to explain, for each portion of a Standard identified

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in its response to Interrogatory No. 3, how each element is satisfied by that

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particular portion. Qualcomm is instructed, in the interrogatory, to provide a

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response that is as specific as possible and identify the Qualcomm personnel

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most knowledgeable about each assertion. (ECF No. 353 at 7-8).

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Qualcomm’s response covers approximately 120 pages, broken down by

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patent, and is technical in nature. Apple complains, that despite the volume,

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Qualcomm fails to explain its position that each element is satisfied and is a

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rehash of its response to Interrogatory No. 3. Neither party saw fit to provide

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the Court with Interrogatory No. 3 or the response from Qualcomm.

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This dispute exemplifies the limitations of interrogatories. The

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question here, requiring an explanation how each portion of a particular

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patent satisfies a standard, may be better left to expert reports and

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depositions. It is not obvious to the Court that Qualcomm’s response is

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deficient. Apple has not convinced the Court that Qualcomm is obfuscating

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rather than clarifying. But, Apple is correct that Qualcomm did not identify

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its personnel with knowledge of each assertion. Qualcomm will be required

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to remedy that deficiency.

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CONCLUSION
Apple’s motion to compel further responses to Interrogatories 21 and 38,
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as presented in this Joint Motion, is GRANTED IN PART AND DENIED

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IN PART. Within 14 days of this Order, Qualcomm is ORDERED to:

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1. Respond fully to Interrogatory 21 limited to its licensees Compal

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Electronics, Inc., Pegatron Corporation, FIH Mobile Ltd (“Foxconn”),

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Hon Hai Precision Industry Co., Ltd., and Wistron Corporation; and,

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2. In further response to Interrogatory 38, provide the identities of its

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personnel knowledgeable of each assertion that a standard is

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satisfied by a portion of a patent-in-dispute.

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Dated: March 14, 2018

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