Vulcan Golf, LLC v. Google Inc. et al

Filing 247

MEMORANDUM by Google Inc. in support of motion for discovery 246 (Attachments: # 1 Exhibit 1, # 2 Exhibit Ex 1A (part1), # 3 Exhibit Ex 1A (part2), # 4 Exhibit Ex 1B, # 5 Exhibit Ex 1C)(Cyrluk, Jonathan)

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IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION VULCAN GOLF, LLC, JOHN B. SANFILIPPO & SONS, INC., BLITZ REALTY GROUP, INC., and VINCENT E. "BO" JACKSON, Individually And On Behalf Of All Others Similarly Situated, Lead Plaintiff, v. GOOGLE INC., OVERSEE.NET, SEDO LLC, DOTSTER, INC., AKA REVENUEDIRECT.COM, INTERNET REIT, INC. d/b/a/ IREIT, INC.; and JOHN DOES 1-X, Defendants. ) ) ) Case No. 07 CV 3371 ) ) ) Hon. Blanche M. Manning ) ) ) Magistrate Judge Geraldine Soat Brown ) ) ) Date: November 29, 2007 ) ) ) ) ) )

GOOGLE'S CASE MANAGEMENT STATEMENT Defendant Google Inc. ("Google") respectfully submits the following Case Management Conference Statement. A. Status of Case Plaintiff Vulcan Golf LLC filed its Complaint on June 15, 2007. Google filed a motion to dismiss on August 10, 2007. On August 21, 2007, Judge Charles P. Kocoras granted Plaintiffs leave to amend the complaint, denied without prejudice Defendants pending motions to dismiss, stayed all discovery until resolution of motions to dismiss, and recommended reassigning the case. On September 18, 2007, Plaintiffs filed the First Amended Complaint. This Court held a status conference on September 20, 2007 and continued the stay of discovery until the next status conference, so that the Court could reach a preliminary assessment of the merits before allowing discovery. On October 18, 2007, Google and the other defendants filed their motions to dismiss, which are now fully briefed and pending before the court.

B.

Google's Case Management Position Google's position on discovery is simple. Google does not belong in this action, as

demonstrated in its motion to dismiss, and should not be subjected to Plaintiffs' proposed onslaught of discovery in a case from which it will soon be dismissed. 1. Discovery Should Await Determination of Motions to Dismiss

Plaintiffs' factual allegations on all counts concerning Google repeatedly fail to meet the relevant legal standards, providing pure questions of law for the court to resolve prior to the commencement of discovery. For example, Plaintiffs cannot state a claim for direct or contributory trademark infringement (Counts 4 and 10) because they have not alleged Google's actual or constructive knowledge of any infringement. Plaintiffs' vicarious trademark claim (Count 11) fails because they plead to an incorrect legal standard and lack factual allegations, as required, that Google is a "joint tortfeasor." Plaintiffs also plead to an incorrect standard for their dilution claim (Count 6) and do not allege, as required, that each of their marks is famous among the "general consuming public of the United States." Plaintiffs' cybersquatting claim (Count 3) fails because they do not allege that Google owned or operated any of the allegedly infringing domain names. Similarly, Plaintiffs do not allege that Google uses the domain names at issue "on or in connection with any goods or services," as required to state a claim for false designation (Count 5). Plaintiffs' state law claims (Counts 7 and 9) fail for the same reasons as their federal claims. After wading through Plaintiffs' pleadings, the frailty of their case is clear. Plaintiffs have not sufficiently alleged that Google knew of or should have known of alleged trademark infringement involving domain names owned, operated, or used in connection with goods or commerce by third parties. Nor can they: as set forth in Google's motion to dismiss, Plaintiffs have deliberately avoided giving Google any knowledge of their claims, because Google's policy in response to such notice is to immediately disable advertising directed to any allegedly infringing domain. Giving notice to Google would immediately cease the "harm" of which Plaintiffs purport to complain.

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Indeed, Plaintiffs themselves candidly state that "[i]t is not the advertisement itself, the content of the advertisements or the source of the advertisements that is illegal." MTD Opp'n at 52. The only activity by Google even alleged is that, only until asked not to, Google provides advertisements to websites whose names Plaintiffs dislike but which Google has no role in naming or operating--conduct that has been recognized as lawful in Lockheed Martin Corp. v. Network Solutions, Inc., 985 F. Supp. 949, 957 (C.D. Cal. 1997). The court should not allow Plaintiffs to inflict the tremendous expense of discovery to investigate its claims that Google has engaged in nothing more than lawful conduct. 2. Alternatively, Class Certification Discovery Should Precede Merits Discovery

Moreover, even if the court chooses not to dismiss the counts against Google or to keep in place its stay on all discovery, the court should at a minimum stay merits discovery until it has resolved any motion for class certification. The law is settled that courts may and often should limit the initial discovery in a putative class action to factual issues that are relevant to the class-certification decision. The notes to the 2003 Amendments to Rule 23(c)(1), addressing class certification, state that courts may allow "controlled discovery" "limited to those aspects relevant to making the certification decision on an informed basis." Notes to 2003 Amendments to Rule 23(c)(1). This court, along with federal courts generally, have therefore frequently limited initial discovery to issues related to class certification. See, e.g., Lawrence E. Jaffe Pension Plan v. Household Int'l, No. 02 C 5893, 2004 WL 2108410, *1 (N.D. Ill. Sept. 21, 2004) ("discovery in this matter is bifurcated, with class discovery preceding merits discovery"); American Nurses' Ass'n v. State of Illinois, No. 84 C 4451, 1986 WL 10382, *2-*3 (N.D. Ill. Sept. 12, 1986) (ordering bifurcated discovery); Washington v. Brown & Williamson Tobacco Corp., 959 F.2d 1566, 1570-71 (11th Cir. 1992) ("To make early class determination practicable and to best serve the ends of fairness and efficiency, courts may allow classwide discovery on the certification issue and postpone classwide discovery on the merits."); Manual for Complex Litigation, Fourth § 21.14, at 256 (2005) ("Courts often bifurcate discovery between certification issues and those related to the

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merits of the allegations."). The Court should limit any initial discovery in this matter, for two reasons: (1) it is extremely unlikely that a class will be certified, because no trademark infringement class has ever been certified, and thus unlikely that classwide merits discovery will ever be necessary; and (2) the merits discovery served by plaintiffs is breathtaking in scope and cost. This case thus falls directly within the comment of the Manual for Complex Litigation that "in cases that are unlikely to continue if not certified, discovery into aspects of the merits unrelated to certification delays the certification decision and can create extraordinary and unnecessary expense and burden." Id. It is extraordinarily unlikely that plaintiffs will be able to persuade this court to certify a class in this case. As far as we have been able to determine, there has never been a class of trademark owners certified in any court. This case is particularly unlikely to be the first, because the Court cannot even identify the putative class members "by reference to objective criteria," as Rule 23(a) requires. Fletcher v. ZLB Behring LLC, 245 F.R.D. 328, 335 (N.D. Ill. 2006). Plaintiffs have proposed a class of "[a]ny and all individuals and/or entities . . . domiciled within the United States that own or are a licensee of a `distinctive or valuable mark' that has been infringed, diluted, cybersquatted, typosquatted, and/or otherwise improperly used." Compl., ¶ 289. Instead of objective criteria, this purported definition incorporates "a threshold finding of liability"--requiring the court to determine which marks were used improperly--which makes it inadequate as a matter of law. Fletcher, 245 F.R.D. at 335. In addition, even the seemingly "objective" part of the definition cannot be applied in practice. Plaintiffs assert that "all Class Members can be identified in business records maintained by Defendants," id. ¶ 293, but provide no explanation as to why Defendants (or anyone else) will have records of all mark holders in the United States or, even if Defendants have such records, how they could determine whether a mark is "distinctive or valuable," much less famous. Individual questions -- meaning questions that a reasonable jury could answer differently for different plaintiffs before of differences in their factual circumstances -- would make up the

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bulk of any claims here, as with any trademark and dilution case. Each plaintiff would have to prove that it owns a mark, that the mark has the requisite national fame for a dilution claim (which will require individual survey evidence), that the mark is distinctive or that it has achieved secondary meaning, that it is confusingly similar to some alleged infringing mark, and so on. And all of this would have to be done for each of the millions of claimed marks in the United States, because the proof for any particular mark would have no application to any other mark. Evidence of confusion (or non-confusion) between "Vulcan Golf" and an ad for Callaway golf clubs, for example, will tell the trier of fact precisely nothing about confusion between (for example) United Airlines and an ad for hotels. Trademark claims are uniquely individualized, and uniquely unsuited for class treatment. Given the proposed class' slim chance of certification, to the extent the court lifts the stay on discovery, it should do so only to permit class discovery, not merits discovery. 3. Plaintiffs' Proposed Discovery is Breathtaking in Scope and Cost

It is nearly impossible to overstate Plaintiffs' discovery demands. Google is almost certainly the single largest nongovernmental storer of electronic information on earth, and Plaintiffs have demanded that Google produce literally all of it to them. We recognize that this will sound hyperbolic, and thus we attach hereto (as Exhibits A through D) Plaintiffs initial discovery demands so that the Court can assess the incredible burden Plaintiffs propose inflicting before there is even a settled pleading. We invite the Court to review those demands, and highlight only a few here. As the Court is no doubt aware, Google is the world's largest search engine, and has catalogued and indexed virtually the entire contents of the Internet. Google's advertising systems (which contribute virtually all of Google's revenue) serve billions of Sponsored Links, placed by millions of separate advertisers, to hundreds of millions of users. Plaintiffs have demanded that Google (in what they astonishingly describe as "an appropriate and cost-effective means of preservation") simply remove all of its computers from service, and replace them with new ones. Ex. A at 18. Alternatively, Plaintiffs suggest that

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Google could simply create forensically accurate duplicates of all of its hundreds of thousands of servers. Id. This is no narrower in scope than, in a suit against General Motors, asking it to build new factories and turn the old ones over in discovery. Plaintiffs' document requests are equally mind-boggling. For just a few examples, they seek: Every single bit of data related to Google's entire advertising business ("all documents, data, other information, invoices, bills, and/or other accounting documents related to the AdWords or AdSense Programs," id. at ¶58); All of Google's data concerning traffic to billions of pages on the Internet ("[a]ny and all documents, ommunications, and ESI related to Your actions in monitoring, directing, reporting on, or otherwise evaluating and observing Web Traffic," id. ¶ 81); Complete mirrored copies of every computer at Google (id., ¶¶102, 103); Every bit of Google's accounting information ("a]ll documents, data, and information related to Your, or any other Defendant's income from any advertising and marketing program, including but not limited to the AdWords or AdSense programs," id. ¶ 104,); Every single piece of Google's crown jewel software code ("[a]ny and all algorithms/formulas/software programs used in connection with Your, and/or any of the Defendants', Search and Ranking programs," Ex. B at ¶ 32); and The identities of every one of the millions of individuals and businesses that have ever used Google's AdWords or AdSense programs ("The name and address of each and every participant in the AdWords and AdSense program," id. at ¶28).

These are just a sample of the 121 separate demands in Plaintiffs' "first" set of demands (not to mention the interrogatories and Rule 30(b)(6) deposition demands, at Exs. C and D). We cannot imagine what could be left for a second set, as Plaintiffs could have saved most of the words in the first set by simply asking Google to produce the entire company. Discovery such as Plaintiffs demand would be outrageous in any case. It is particularly objectionable in this case, where Plaintiffs are unlikely to survive Google's motion to dismiss,

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and equally unlikely to certify a class.1 If discovery is allowed to proceed in advance of a ruling on the motion to dismiss, that dismissal will be of scant comfort when it comes, after millions of dollars of discovery expense has been incurred. We recognize, of course, that once discovery opens Google and the other Defendants will need to come to this Court to seek protection from Plaintiffs' excessive discovery. But there is no reason that either the Court or the parties should be put to the burden of that process unless Plaintiffs have first survived dismissal and certified a class. "Drain the pond" discovery techniques are rarely appropriate, particularly when the pond is the Pacific and the underlying claims are at best no more than a raindrop. This Court should leave in place the stay Judge Kocoras ordered until and unless this case proceeds past the pleadings stage, and then should limit discovery to class certification issues pending certification. Dated: December 4, 2007 Respectfully submitted, GOOGLE, INC By: /s/ Moriah E. Moran ______ One of Its Attorneys Michael H. Page Joseph Gratz KEKER & VAN NEST, LLP San Francisco, CA 94111 [phone] Lead Counsel Admitted Pro Hac Vice Joseph J. Duffy Jonathan M. Cyrluk Mariah E. Moran STETLER & DUFFY, LTD. 11 South LaSalle Street, Suite 1200 Chicago, IL 60603 [phone]

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As we previously noted, the total gross revenue from all the Vulcan-related domains in their initial complaint was less than $18.00. We expect the total gross income from all domains identified by all four class representatives cannot exceed a few hundred dollars.

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CERTIFICATE OF SERVICE I, Mariah E. Moran, an attorney, certify that I caused copies of the foregoing Google's Case Management Conference Statement to be served via the Court's CM/ECF system this 4th day of December, 2007. /s/ Mariah E. Moran

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SERVICE LIST Robert Foote Stephen W. Fung Foote Meyers Meilke & Flowers, LLC 28 N. First Street, Suite 2 Geneva, IL 60134 Steve Borgman Kenneth P. Held Vinson & Elkins LLP First City Tower 1001 Fannin Street, Suite 2300 Houston, TX 77002-6760 Steven D. Atlee Winston & Strawn, LLP 333 S. Grand Avenue, 38th Floor Los Angeles, CA 90071 Ronald Y. Rothstein Janelle M. Carter Winston & Strawn, LLP 35 W. Wacker Drive Chicago, IL 60601 Vincent V. Carissimi Pepper Hamilton LLP 3000 Two Logan Square Eighteenth & Arch Streets Philadelphia, PA 19103-2799 Brett August Bradley Cohn Alexis Payne Pattishall, McAuliffe, Newbury, Hilliard & Geraldson, LLP 311 S. Wacker Drive, Suite 5000 Chicago, IL 60613 Kathleen C. Chaves Chavez Law Firm, P.C. 28 North First Street Suite 2 Geneva, IL 60134 Scott Wiehle 2001 Ross Avenue Suite 3700 Dallas, TX 75201

Andrew P. Bridges Winston & Strawn, LLP 101 California Street Suite 3900 San Francisco, CA 94111 Michael Dockterman Alison C. Conlon Wildman, Harrold, Allen & Dixon, LLP 225 W. Wacker Drive, Suite 2800 Chicago, IL 60606 Jeffrey Singer Misty R. Martin Segal McCambridge Singer & Mahoney Sears Tower 233 S. Wacker Drive, Suite 5500 Chicago, IL 60606

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