Norco Industries Inc v. CPI Binani Inc
Filing
45
OPINION AND ORDER, grnating in part and denying in part 44 MOTION to Compel the Deposition of Defendant CPI filed by Norco Industries Inc. Signed by Magistrate Judge Andrew P Rodovich on 12/13/12. (kjp)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
HAMMOND DIVISION
NORCO INDUSTRIES, INC.,
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Plaintiff
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v.
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CPI BINANI, INC.,
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Defendant
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********************************)
CPI BINANI, INC.,
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)
Counter Claimant
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v.
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NORCO INDUSTRIES, INC.,
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Counter Defendant
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CIVIL NO. 2:12 cv 313
OPINION AND ORDER
This matter is before the court on the Motion to Compel
the Deposition of Defendant CPI Pursuant to Federal Rule of
Civil Procedure 30(b)(6) [DE 44] filed by the plaintiff,
Norco Industries, Inc., on December 10, 2012.
For the rea-
sons set forth below, the motion is GRANTED IN PART and
DENIED IN PART.
Background
On August 6, 2012, the plaintiff, Norco Industries,
Inc., filed a complaint alleging that the defendant, CPI
Binani, Inc., infringed on United States Design Patent No.
D650,723, based on CPI’s manufacture and sale of composite
rafters for recreation vehicles and trailers.
Several
months later, Norco filed a motion for a preliminary injunction against the continued use of the infringed product.
The court set an expedited discovery deadline of December
18, 2012, for discovery related to the preliminary injunction motion.
On December 6, 2012, Norco sent CPI its Notice
of Deposition of CPI, identifying eight topics on which
Norco desires to depose a CPI representative. The topics
include:
1. The design, development, and manufacture of CPI’s composite RV rafters that
are accused of infringement in this
litigation ("the Accused Products").
2. Communications, both oral and written, with Mito, Keystone, and/or other
customers regarding the design, development, manufacture, costs, and sales of
the Accused Products.
3. Advertising and marketing of the
Accused Products.
4. Sales history, costs, profits, and
revenues for the Accused Products.
5. All documents produced by CPI as part
of expedited discovery related to Norco’s motion for preliminary injunction.
6. The factual basis for any claim construction argument that CPI intends to
assert in responding to Norco’s motion
for preliminary injunction.
7. The factual basis for CPI’s assertion
that the Accused Products do not in2
fringe upon the patent-in-suit, if it
intends to argue non-infringement in
responding to Norco’s motion for preliminary injunction.
8. The factual basis for CPI’s assertion
that the patent-in-suit is invalid, if
it intends to argue invalidity in responding to Norco’s motion for preliminary injunction.
(Pltf. Mot. Ex. 2 p. 4)
CPI objected to the proposed topics on various grounds.
The
court set a briefing schedule, and Norco submitted the present motion to compel the deposition testimony of CPI.
Discussion
Norco moves to compel the deposition of a CPI representative under Federal Rule of Civil Procedure 30(b)(6) which
states "[i]n its notice or subpoena, a party may name as the
deponent a public or private corporation, a partnership, an
association, a governmental agency, or other entity and must
describe with reasonable particularity the matters for examination.
The named organization must then designate one or
more officers, directors, or managing agents, or designate
other persons who consent to testify on its behalf; and it
may set out the matters on which each person designated will
testify."
A party may "obtain discovery regarding any mat-
ter, not privileged, that is relevant to the claim or defense of any party, including the existence, description,
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nature, custody, condition and location of any books, documents, or other tangible things."
Federal Rule of Civil
Procedure 26(b)(1). For discovery purposes, relevancy is
construed broadly to encompass "any matter that bears on, or
that reasonably could lead to other matter[s] that could
bear on, any issue that is or may be in the case." Chavez v.
DaimlerChrysler Corp., 206 F.R.D. 615, 619 (S.D. Ind. 2002)
(quoting Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340,
351, 98 S.Ct. 2380, 2389, 57 L.Ed.2d 253 (1978)). Even when
information is not directly related to the claims or defenses identified in the pleadings, the information still
may be relevant to the broader subject matter at hand and
meet the rule's good cause standard. Borom v. Town of
Merrillville, 2009 WL 1617085, *1 (N.D. Ind. June 8, 2009)
(citing Sanyo Laser Prods., Inc. v. Arista Records, Inc.,
214 F.R.D. 496, 502 (S.D. Ind. 2003)). See also Adams v.
Target, 2001 WL 987853, *1 (S.D. Ind. July 30, 2001) ("For
good cause, the court may order discovery of any matter
relevant to the subject matter involved in the action.");
Shapo v. Engle, 2001 WL 629303, *2 (N.D. Ill. May 25, 2001)
("Discovery is a search for the truth.").
A party may seek an order to compel discovery when an
opposing party fails to respond to discovery requests or has
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provided evasive or incomplete responses. Federal Rule of
Civil Procedure 37(a)(2)-(3). The burden "rests upon the
objecting party to show why a particular discovery request
is improper." Gregg v. Local 305 IBEW, 2009 WL 1325103, *8
(N.D. Ind. May 13, 2009) (citing Kodish v. Oakbrook Terrace
Fire Protection Dist., 235 F.R.D. 447, 449–50 (N.D. Ill.
2006)); McGrath v. Everest Nat. Ins. Co., 2009 WL 1325405,
*3 (N.D. Ind. May 13, 2009) (internal citations omitted);
Carlson Restaurants Worldwide, Inc. v. Hammond Professional
Cleaning Services, 2009 WL 692224, *5 (N.D. Ind. March 12,
2009) (internal citations omitted). The objecting party must
show with specificity that the request is improper. Cunning-
ham v. Smithkline Beecham, 255 F.R.D. 474, 478 (N.D. Ind.
2009) (citing Graham v. Casey's General Stores, 206 F.R.D.
253, 254 (S.D. Ind. 2002)). That burden cannot be met by "a
reflexive invocation of the same baseless, often abused
litany that the requested discovery is vague, ambiguous,
overly broad, unduly burdensome or that it is neither relevant nor reasonably calculated to lead to the discovery of
admissible evidence." Cunningham, 255 F.R.D. at 478 (citing
Burkybile v. Mitsubishi Motors Corp., 2006 WL 2325506, *6
(N.D. Ill. Aug. 2, 2006)) (internal quotations and citations
omitted). Rather, the court, under its broad discretion,
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considers "the totality of the circumstances, weighing the
value of material sought against the burden of providing it,
and taking into account society's interest in furthering the
truth-seeking function in the particular case before the
court." Berning v. UAW Local 2209, 242 F.R.D. 510, 512 (N.D.
Ind. 2007) (examining Patterson v. Avery Dennison Corp., 281
F.3d 676, 681 (7th Cir. 2002)) (internal quotations and citations omitted). See also Hunt v. DaVita, Inc., 680 F.3d
775, 780 (7th Cir. 2012) (explaining that the district court
has broad discretion in supervising discovery).
CPI agrees that Norco may depose any CPI employee who
submits a declaration in support of CPI’s opposition to
Norco’s motion for preliminary injunction before the motion
is heard or any individual who CPI may call as a witness.
However, CPI contends that nothing more is warranted and
that Norco should not be permitted to take the deposition of
a CPI representative on the issues set forth in its subpoena, raising various objections.
To begin, CPI argues that Topics 1-4 are not relevant
to Norco’s motion for a preliminary injunction.
To succeed
on its preliminary injunction Norco would have to show that:
it "is likely to succeed on the merits, that [it] is likely
to suffer irreparable harm in the absence of preliminary
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relief, that the balance of equities tips in [its] favor,
and that an injunction is in public interest."
Winter v.
Natural Resources Defense Council, Inc., 555 U.S. 7, 21, 129
S.Ct. 365, 375, 172 L.Ed.2d 249 (2008).
To show that a
patent has been infringed, the plaintiff must establish
"ownership of the patent, . . . the specific patent infringed, . . . the means by which the defendant infringed
the patent, and . . . the specific statute violated."
Cleversafe, Inc. v. Amplidata, Inc., 2011 WL 6379300, *1
(N.D. Ill. Dec. 20, 2011).
CPI complains that many of the
topics introduced in Norco’s notice of deposition would not
help show that Norco is likely to succeed on the merits or
that it is likely to suffer irreparable injury.
Norco responds that its first topic, the design, development, and manufacture of CPI’s composite RV rafters, is
relevant to exploring CPI’s defenses. It would enable Norco
to determine how CPI copied the patented roof bow, which is
directly relevant to rebutting CPI’s anticipated defense of
patentability. To show that it can succeed on the merits,
the plaintiff must show both that its claim has merit and
that it can overcome any defenses.
Stacy L. Davis and Lisa
A. Zakolski, Federal Procedure, Lawyer’s Edition, §47:59.
Therefore, background that may be used to rebut anticipated
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defenses is relevant to the motion for preliminary injunction.
CPI counters that patent infringement is evaluated by
comparing only the appearance of the accused product to the
design claimed in the patent, and that the samples, drawings, and photos it produced are the only discovery necessary to achieve this.
It is CPI’s position that the manu-
facture and development of the product would be irrelevant
to the question of infringement.
The court disagrees.
The
way in which the product was made may show whether the product design was the same and will shed greater light on whether the appearance of the product is similar enough to support Norco’s position that it is likely to succeed on the
merits.
Moreover, the development process may reveal whet-
her CPI in fact copied Norco.
The first topic goes directly
to the heart of the dispute: whether CPI copied and manufactured Norco’s patented product.
The second proposed topic states Norco’s intent to
inquire about communications CPI had with Mito, Keystone, or
other customers regarding design, development, manufacture,
costs, and sales.
Because the court has determined that
CPI’s design, development, and manufacturing process are
relevant, communications regarding these topics also may
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bear on whether CPI copied Norco’s patented product.
These
communications may reveal how CPI developed its product,
whether the development stemmed from Norco’s design, and
whether the product was made in the same manner.
The de-
sign, development, and manufacturing process bear on the
appearance of the product, which CPI argues is the only
relevant inquiry.
However, as explained below, although
CPI’s sales are relevant and subject to discovery, CPI’s
costs are not.
Norco also intends to depose the CPI representative
about the advertising, marketing, sales history, costs,
profits, and revenues of the accused products.
Norco be-
lieves this information is necessary to establish irreparable harm, namely lost sales, damage to reputation, and loss
of market share.
There is a presumption that infringement
threatens irreparable injury for which there is no adequate
remedy at law.
AM General Corp. v. DaimlerChrysler Corp.,
311 F.3d 796, 805 (7th Cir. 2002).
"[T]he court balances
likelihood of success and the risk of irreparable harm on a
sliding scale: the better a party's chances of winning at
trial, the less the balance of harms needs to favor that
party."
AM General, 311 F.3d at 831.
When considering
irreparable injury, the court may consider loss of market
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share, decrease in production, reduction in workforce, and
the costs to the parties.
Economic losses alone will not
suffice to show irreparable injury. AM General, 311 F.3d at
831.
However, economic loss coupled with loss of customers
or goodwill may satisfy the plaintiff's burden.
Praefke
Auto Electric & Battery Co., Inc. v. Tecumseh Products Co.,
225 F.3d 460, 462 (7th Cir. 2001); BellSouth Telecommunica-
tions, Inc. v. MCIMetro Access Transmission Services, LLC,
425 F.3d 964, 970 (11th Cir. 2005); Stacy L. Davis and Lisa
A. Zakolski, Federal Procedure, Lawyer’s Edition, §47:60.
Norco does not explain how discovery of CPI’s advertising or marketing would show any loss of market share, customers, or goodwill, nor would CPI’s costs, profits, and
revenues show the injury Norco suffered.
The court agrees
that the sales history may be relevant to determining the
market share and customers lost as a result of the infringement.
Although marketing and advertising may have contrib-
uted to a loss of customers and market share, the way in
which Norco advertised will not show the actual loss, rendering this information irrelevant to the preliminary injunction.
Additionally, CPI’s profits and revenues would
not bear on what Norco lost as a result of the alleged patent infringement.
The inquiry should be limited to facts
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relevant to what Norco needs to obtain a preliminary injunction, namely Norco’s permanent injury.
For this reason,
Norco may depose a CPI representative about its sales history but may not question the representative about CPI’s
advertising, marketing, costs, profits, and revenues.
The fifth topic pertains to documents produced by CPI
as part of its expedited discovery related to Norco’s motion
for preliminary injunction.
CPI argues that it would be
unduly burdensome to prepare a witness to testify about the
4,000 documents it has produced and that this topic is not
stated with "reasonable particularity" as required by Rule
30(b)(6).
CPI produced the documents, and therefore ack-
nowledged that the documents are relevant to the dispute.
Because the documents are CPI’s own, CPI should be familiar
with the documents and able to find a representative competent to testify about their contents.
Norco has a right to
conduct discovery on information that is relevant and will
bear on its motion.
CPI has not provided enough explanation
to show how this request would be overly burdensome.
Topics 6-8 state Norco’s intent to depose the CPI representative regarding the factual basis for any claim construction argument, assertion that the accused products do
not infringe upon the patent-in-suit, or assertion that the
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patent-in-suit is invalid, which CPI intends to assert in
defense of Norco’s claim. These topics are relevant because
they go directly to CPI’s possible defenses. However, CPI
argues that the proposed topics are inappropriate deposition
topics.
Norco’s deposition topics exceed the scope of discovery
and attempt to discover the legal conclusions and mental
impressions of CPI’s attorneys.
The proposed topics state
Norco’s intent to inquire about the factual basis of CPI’s
possible defenses.
The factual basis of any defenses that
may be raised is a determination made by CPI’s attorneys.
This would amount to an attempt to depose opposing counsel.
See S.E.C. v. Buntrock, 2004 WL 1470278, *2 (N.D. Ill. June
29, 2004).
To respond, Norco either would need to depose
CPI’s attorney or CPI’s attorney would need to prepare a
witness to testify about the basis of its defenses.
In
either case, it would reveal the factual and legal theories
of the defenses CPI’s attorney intends to raise.
If Norco
were to make this inquiry to a CPI employee who has been
informed about the basis of the defenses for the purpose of
the deposition, this would infringe upon the attorney-client
privilege, which shields from discovery any communications
between the attorney and his client.
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See Upjohn Co. v.
United
States, 449 U.S. 383, 390, 101 S.Ct. 677, 683, 66
L.Ed.2d 584 (1981)(explaining "the privilege exists to protect not only the giving of professional advice to those who
can act on it but also the giving of information to the
lawyer to enable him to give sound and informed advice.").
If Norco were to depose CPI’s attorney, this directly would
reveal his or her mental impressions and the legal theories
on which he or she basis the defenses.
Although the text of
the attorney client privilege only prohibits discovery of
documents made in anticipation of litigation, "the principles of Hickman v. Taylor, 329 U.S. 495, 67 S.Ct. 385, 91
L.Ed. 451 (1947), the seminal work product case, restrict an
opposing party's inquiry into an attorney's mental processes, regardless of the discovery method employed."
Oak
Industries v. Zenith Electronics Corp., 687 F.Supp. 369, 374
(N.D. Ill. 1988).
Norco attempts to remove its proposed topic from the
shield of these privileges by limiting the inquiry to the
"factual basis" of the defenses rather than the attorney’s
legal basis.
However, the court cannot fathom a manner in
which the factual basis can be revealed without disclosing
CPI’s attorney’s mental conclusions, legal theories, and
conclusions.
Discovery of the factual basis of the defenses
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would reveal the attorney’s impression of the facts and
legal theory of the case.
Additionally, Norco will learn of
CPI’s proposed defenses when CPI files its response to
Norco’s motion for a preliminary injunction.
For these
reasons, the court agrees that proposed deposition topics 68 are improper.
See Smithkline Beecham Corp. v. Apotex
Corp., 2000 WL 116082 (N.D. Ill. Jan. 24, 2000) (holding
that discovery request seeking the factual basis of the
plaintiff’s claim improperly infringes on the attorney/client and work product privileges).
Norco’s motion to compel
the deposition of a CPI representative on these topics is
DENIED.
_______________
Based on the foregoing, the Motion to Compel the Deposition of Defendant CPI Pursuant to Federal Rule of Civil
Procedure 30(b)(6) [DE 44] filed by the plaintiff, Norco
Industries, Inc., on December 10, 2012, is GRANTED IN PART
and DENIED IN PART.
Norco may proceed with its deposition
of a CPI representative consistent with the limitations of
this order.
ENTERED this 13th day of December, 2012
s/ ANDREW P. RODOVICH
United States Magistrate Judge
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