Intellectual Ventures I LLC et al v. Ricoh Company Ltd. et al

Filing 187

MEMORANDUM ORDER accepting 157 Memorandum Order to the extent explained in this memorandum order. IT IS FURTHER ORDERED that defendants shall show cause, on or before June 6, 2016, why defendants should not be precluded from using any inform ation provided by their parent RCL2 in their defense. Plaintiff may respond on or before June 20, 2016. The court will address the issue at the June 22, 2016 expert discovery status conference. See memorandum order for further details. Signed by Judge Sue L. Robinson on 5/23/2016. (nmfn)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE

INTELLECTUAL VENTURES I LLC,
Plaintiff,

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) Civ. No. 13-474-SLR

V.

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RICOH AMERICAS CORPORATION
and RICOH ELECTRONICS, INC.,
Defendants.

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MEMORANDUM ORDER
At Wilmington this 23rd day of May, 2016, having reviewed the Report and
Recommendation issued by Magistrate Judge Fallon on March 10, 2016 (D.I. 157), the
objections thereto and related papers filed in connection therewith;
IT IS ORDERED that, as the court finds no legal error in Judge Fallon's analysis,
the Report & Recommendation is accepted, but only to the extent explained below:
1. At the outset of the above captioned litigation, plaintiff articulated the concern
that it would be denied core liability discovery if Ricoh Company Ltd. ("RCL," a
Japanese company that is the parent company of the defendants at bar, Ricoh
Electronics, Inc. ("REI") and Ricoh Americas Corp. ("RAC")) were dismissed as a party.
In moving for dismissal, defendants represented as follows:
IV speculates that, if RCL is not a party, it may not get the technical
discovery it needs. . . . IV identifies no information exclusively within
the possession of RCL that is germane to its infringement case. On
the other hand, it would be unreasonable and a hardship on RCL to
force it to participate in litigation halfway around the world, particularly

when RAC and REI are able and willing to contest IV's claims.
(D.I. 17 at 8-9).
2. Given IV's efforts to obtain core liability discovery from the remaining
defendants, IV's concern turns out to be well-founded. After the dismissal of RCL, REI
and RAC stated that the technical documents sought by IV were not in their possession
or control, but might be obtained from RCL. RCL refused to provide the documents
voluntarily. Unable to obtain timely discovery from REI and RAC, IV sought discovery
from RCL through international Letters Rogatory. That request was denied by the
Japanese Ministry of Foreign Affairs.
3. It was not until October 2015 that REI produced a Technical Assistance
Agreement ("TAA") between RCL and REI. The TAA was executed in October 2005
and, therefore, was known or should have been known to REI before this litigation
commenced (March 2013). The TAA limits the flow of information from RCL to REI in
several ways, from the narrow scope of products 1 to the nature of the information
provided:
In the event of any actual or threatened litigation against one of the
parties hereto because of an alleged infringement of patents or other
intellectual property rights of third parties, the other party will make

available all information and particulars, if any, in its possession which
will assist in defending against such actual or threatened suit. All
expenses therefor shall be equally born by Ricoh and REI.
(D.I. 143, ex. Cat 4) (emphasis added) According to the court's understanding, RCL
has agreed to provide only information related to REl's non-infringement defenses, as
opposed to all relevant core technical information. As a last resort, IV moved to compel

1

"End Products," D.I. 143, ex. C, Art. 1(a).

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REI to produce documents and Rule 30b)(6) testimony regarding the design and
operation of the accused products. Magistrate Judge Fallon denied the motion, based
on the legal confines effectively imposed by RCL.
4. The court understands that litigation in this country is much more intrusive
than elsewhere in the world, including Japan. However, the fact remains that the parent
company of the defendants has relevant information critical to a fair and just resolution
of this patent infringement case, and has erected legal barriers to the production of
such information through its subsidiaries, barriers that were known but not disclosed to
the court when considering dismissal. It is a defendant's obligation under this court's
rules to provide all relevant, non-privileged information. The court declines to allow
RCL and defendants to use the TAA as both a sword and a shield.
THEREFORE, IT IS FURTHER ORDERED that defendants shall show cause,
on or before June 6, 2016, why defendants should not be precluded from using any
information provided by their parent RCL 2 in their defense. Plaintiff may respond on or
before June 20, 2016. The court will address the issue at the June 22, 2016 expert
discovery status conference.

2

Depending on the flow of information to defendants versus to plaintiff, the court
may also consider the imposition of a negative inference as to infringement.

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