High Point Sarl v. Sprint Nextel Corporation et al

Filing 789

MEMORANDUM AND ORDER granting in part and denying in part 700 High Point's Motion to Compel Sprint to Produce Documents Responsive to High Point's Fifth Set of Requests for Production No. 223. Within 30 days of the date of this Memorandu m and Order, Sprint shall produce all license and settlement agreements, damages expert reports, and transcripts of damages expert deposition testimony relating to Sprint's VOIP technology patent infringement litigation, Sprint Communications Co ., L.P. v. Vonage Holdings, Corp. (D. Kan. Civ. A. No. 05-2433) and four related cases. Sprint's relevancy objection to producing its settlement communications between Vonage and other VOIP patent litigation defendants is sustained and it need not produce these documents. Signed by Magistrate Judge David J. Waxse on 4/30/2012. (byk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
HIGH POINT SARL,
Plaintiff and Counterclaim
Defendant,
v.
SPRINT NEXTEL
CORPORATION, et al.,
Defendants and
Counterclaimants.

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CIVIL ACTION
Case No. 09-2269-CM-DJW

MEMORANDUM AND ORDER
Plaintiff High Point SARL (“High Point”) filed this patent infringement case against
Defendants Sprint Nextel Corporation; Sprint Spectrum L.P.; SprintCom, Inc.; Sprint
Communications Company L.P.; Sprint Solutions, Inc.; APC PCS, LLC; APC Realty and Equipment
Company, LLC; and STC Two LLC (collectively referred to as “Sprint”), alleging that Sprint’s
CDMA cellular telephone networks infringe four of High Point’s patents. One of the innovations
of the patents-in-suit devises a way to replace certain circuit-switched portions of traditional
telecommunications systems with more efficient and economical packet-switched network
equipment for cellular telephone communications. This matter is before the Court on High Point’s
Motion to Compel Sprint to Produce Documents Responsive to High Point’s Fifth Set of Requests
for Production No. 223 (ECF No. 700). High Point requests an order under Fed. R. Civ. P. 37(a)
compelling Sprint to produce documents responsive to its narrowed Fifth Request for Production
No. 223. As narrowed, High Point requests that Sprint produce all license and settlement
agreements, damages expert reports, deposition transcripts of damages expert testimony, and

communications between Sprint and its counterparties regarding the terms of settlement relating to
Sprint’s voice-over-internet-protocol (“VOIP”) technology patent infringement litigation, Sprint
Communications Co., L.P. v. Vonage Holdings, Corp. (D. Kan. Civ. A. No. 05-2433) and four
related cases. As explained below, the motion is granted in part and denied in part. Sprint is ordered
to produce VOIP patent license and settlement agreements, damages expert reports, and deposition
transcripts of damages expert testimony from the Vonage and related litigation, but not settlement
communications.
I.

Fifth Request for Production No. 223
High Point’s Fifth Request for Production No. 223 asks Sprint to produce the following:
All documents referring or relating to Sprint’s patent infringement litigation (as
plaintiff, defendant, or otherwise) involving voice-over-internet-protocol technology,
including Sprint Communications Co., LP, v. Vonage Holdings Corp., No.
2:05-cv-2433. This request includes, but is not limited to, all documents, expert
reports, pleadings, motions, and testimony related to damages, and all licenses and
settlement agreements.

Sprint objected to the request as overly broad, unduly burdensome, seeking irrelevant information,
and seeking documents protected by the attorney-client privilege and work product doctrine.
Specifically, it objected to the request as overly broad and unduly burdensome because it seeks all
documents, not limited in time, relating to all of Sprint’s patent infringement litigation involving
VOIP technology, which relates to a different technology that is at issue in this case. Sprint further
objected to the request as seeking documents referring or relating to VOIP technologies not relevant
to any of the claims or defenses of the parties to this lawsuit.
After attempting to confer with Sprint, High Point narrowed its Request No. 223 to the
following documents:

2

[F]or Sprint Communications Co., LP, v. Vonage Holdings Corp., No. 2:05-cv-2433
(and the other four Sprint cases involving the same patents) (1) the license and
settlement agreements; (2) damages expert reports; (3) transcripts of damages expert
deposition testimony; and (4) communications between Sprint and its counterparties
regarding terms of settlement.
After further efforts to confer, the parties reached an impasse on the narrowed request, and High
Point filed the instant motion to compel.
Sprint opposes the motion. It argues that the Court has already ruled that its VOIP patent
license agreement information requested from the Vonage case and four other related cases is not
relevant to this litigation. It also argues that High Point has waived its right to move to compel as
to Request No. 223 because it failed to mention that request in its motion for extension of time.
Sprint also continues to object that the VOIP patent license and settlement agreements, damage
expert reports and testimony, and communications leading up to settlement with Vonage and other
counterparties are not relevant to the claims and defenses in this case. More specifically, Sprint
argues that the VOIP patent related documents sought by Request No. 223 are not relevant to this
case because its VOIP patents and High Point’s patents-in-suit involve very different technologies.
II.

Impact of the Court’s September 12, 2011 Relevancy Ruling on the Present Dispute
Sprint first argues that the Court has already considered and decided the issue of the

relevance of Sprint’s VOIP patent litigation. In its September 12, 2011 Memorandum and Order,
the Court sustained Sprint’s relevance objection to High Point’s Fourth Interrogatory No. 26, which,
like the current Request for Production No. 223, sought information from the Vonage case and four
other Sprint-initiated VOIP patent cases involving Sprint’s patented technology. Sprint argues that
High Point’s instant motion essentially seeks to relitigate and reverse the Court’s September 12,
2011 finding that VOIP technology is not relevant to this case. Sprint argues that High Point had
3

a full and fair opportunity to brief the relevance of VOIP patent licensing agreements in connection
with its earlier motion to compel and made a conscious decision not to do so. High Point should not
be permitted to use its instant motion to belatedly seek reconsideration of the Court’s earlier
determination that Sprint’s VOIP patent licensing agreements are not relevant.
High Point disputes that the Court’s prior ruling on its Fourth Interrogatory No. 26 precludes
the discovery sought by Request No. 223. It explains that it did not substantively address Sprint’s
relevancy objection to the VOIP technology information requested by Fourth Interrogatory No. 26
in its prior motion because the motion was directed to Sprint’s supernumerary objections.
On September 12, 2011, the Court entered its Memorandum and Order (ECF No. 676)
granting in part and denying in part High Point’s Motion to Compel Sprint to Answer Forty
Interrogatories. One of the interrogatories in dispute was High Point’s Fourth Interrogatory No. 26,
which asked Sprint to identify:
[A]ny patent licensing agreements to which you are a party that cover or include
telecommunications networks or services, including without limitation CDMA or
voice-over-internet-protocol, including:
(a) the names of the parties to each agreement;
(b) the period covered by each agreement;
(c) the royalty amounts or royalty rates specified by each agreement;
(d) the royalty base; and
(e) the numbers of the patents included in each agreement.
This interrogatory includes, without limitation, licensing agreements where you were
a licensor or licensee.
After finding that High Point had not exceeded its interrogatory limit and that Sprint should answer
the interrogatories, the Court considered Sprint’s relevance objection to Interrogatory No. 26. Sprint
objected that the interrogatory’s request for information related to its VOIP patent licensing
agreements did not seek relevant information. It argued that the interrogatory was High Point’s

4

attempt to obtain material in the Vonage case, and the information sought was irrelevant to Sprint’s
CDMA network for handling voice calls, at issue in the present action. In its decision, the Court
found that High Point did not address the issue of relevancy in the briefing. It further found that the
relevancy of the requested VOIP patent licensing agreements was not readily apparent. The Court
therefore sustained Sprint’s relevance objection to Interrogatory No. 26 to the extent it asked for
information related to VOIP.
Here, the Court concludes that its sustaining Sprint’s relevance objection to High Point’s
Interrogatory No. 26 does not foreclose High Point from seeking to compel Sprint to produce
documents responsive to Request for Production No. 223. In addition to being different discovery
devices, High Point’s request for production seeks different information than its interrogatory.
Interrogatory No. 26 asked Sprint to identify VOIP patent related licensing agreements and certain
information contained in the agreements. Request No. 223 asks Sprint to produce documents
relating to its VOIP patent related litigation, including licensing agreements, expert reports,
deposition transcripts, and settlement communications for the Vonage case.

Due to these

differences, High Point is not foreclosed from propounding or seeking to compel production of
documents responsive to Request No. 223. The Court’s prior finding that High Point had not shown
the relevancy of information about Sprint’s VOIP patent licensing agreements, as sought by
Interrogatory No. 26, does not preclude High Point from making a showing of relevancy as to the
VOIP patent related documents sought by Request No. 223.
III.

Waiver of Right to Compel Production
Sprint next argues that High Point has waived its right to move to compel production of

documents responsive to Request No. 223 by its failure to mention that specific request in its
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September 19, 2011 motion for an extension of time to file a motion to compel. According to Sprint,
High Point’s extension motion only described two other issues that the parties had continued to
discuss; it did not mention Request No. 223. Sprint also argues that High Point did not raise Request
No. 223 as an issue between May and October 2011.
On August 12, 2011, High Point filed an unopposed motion for an extension of time to file
a motion to compel with respect to its Fifth Set of Requests for Production Nos. 178-232 (ECF No.
672). The Court granted the motion, but ordered that “[a]ny further requests for an extension of this
deadline will require a more specific showing of good cause and a more specific description of the
parties’ recent efforts toward resolving the particular dispute without Court involvement.” (ECF No.
673). On September 19, 2011, High Point filed another unopposed motion for extension of time
with respect to Fifth Requests Nos. 178-232 (ECF No. 677). In its motion, it described two issues
the parties continued to discuss: Alcatel-Lucent design documents, and documents sufficient to show
connections between Sprint infrastructure products and the public switched telephone network
(“PSTN”) and whether a request for admission may moot the need for any such documents. The
Court granted the motion for extension of time (ECF No. 678).
On October 19, 2011, High Point filed another unopposed motion for extension of time to
file a motion to compel, but narrowed to Fifth Request Nos. 194, 222, and 223 (ECF No. 691). This
motion requested an extension to November 18, 2011 and described the issues remaining with the
three remaining discovery requests, including Request No. 223. The Court granted the motion and
extended High Point’s deadline to file a motion to compel until November 18, 2011 (ECF No. 692).
High Point then filed the instant motion to compel on November 18, 2011.
Under these circumstances, the Court finds that High Point has not waived its right to file
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a motion to compel with respect to Request No. 223. High Point’s August 12, 2011 and September
19, 2011 motions requested an extension for Request Nos. 178 through 232; its subsequent October
19, 2011 motion requested an extension for Request Nos. 194, 222, and 223. The Court’s
requirement that High Point provide a more specific description of the parties’ efforts toward
resolving the particular dispute was to aid the Court in determining whether High Point had shown
good cause for each requested extension and to ensure that the parties were continuing to confer on
these long-running discovery disputes. It did not create a requirement that High Point was to
describe every outstanding issue for every remaining discovery request in each of its extension
motions. High Point properly extended its deadline for filing a motion to compel with respect to its
Fifth Request for Production No. 223.
IV.

Remaining Objections to Narrowed Request for Production No. 223
Sprint’s remaining objection is that High Point’s Request No. 223 calls for the production

of documents and information that are not relevant to the patents-in-suit or the claims and defenses
in this case. Specifically, it argues that its VOIP patents cover very different technologies from the
patents-in-suit, and thus are not comparable to the patents-in-suit for purposes of determination of
a reasonable royalty.
Federal Rule of Civil Procedure 26(b)(1) provides that a party “may obtain discovery
regarding any nonprivileged matter that is relevant to any party’s claim or defense.” Relevancy is
broadly construed during the discovery phase, and a request for discovery should be considered
relevant if there is “any possibility” that the information sought may be relevant to the claim or
defense of any party.1 “Relevant information need not be admissible at the trial if the discovery
1

Design Basics, L.L.C. v. Strawn, 271 F.R.D. 513, 523 (D. Kan. 2010).
7

appears reasonably calculated to lead to the discovery of admissible evidence.”2 When the discovery
sought appears relevant on its face, the party resisting the discovery has the burden to establish that
the requested discovery does not come within the scope of relevance as defined under Rule 26(b)(1),
or is of such marginal relevance that the potential harm occasioned by discovery would outweigh
the ordinary presumption in favor of broad disclosure.3 Conversely, when the relevancy of the
discovery request is not readily apparent on its face, the party seeking the discovery has the burden
to show the relevancy of the request.4
As the Court previously found in its September 12, 2011 ruling on Sprint’s relevance
objection to High Point’s Fourth Interrogatory No. 26, the relevance of patent licensing agreements
for Sprint’s VOIP technology, which involve different patents from the patents-in-suit, is not readily
apparent. High Point, as the party seeking the discovery, therefore has the burden to show that the
information and documents sought by its discovery request are relevant to the claims or defense in
this case.
A.

Relevance of Sprint’s VOIP Patent License and Settlement Agreements

High Point argues that the requested documents concerning Sprint’s license and settlement
agreements for its VOIP telecommunications network patents are relevant to the calculation of a
reasonable royalty for the alleged infringement of the patents-in-suit. According to High Point,
information concerning patent license agreements relating to VOIP technology is relevant to the
determination of a reasonable royalty because Sprint’s VOIP patents are comparable to the patents-

2

Fed. R. Civ. P. 26(b)(1).

3

Design Basics, 271 F.R.D. at 523.

4

Id.
8

in-suit. High Point claims that the discovery is needed for its economic damages expert to assess
whether the licenses Sprint gave for its VOIP technology are sufficiently comparable to be relevant
to consideration of the hypothetical negotiation of a reasonable royalty for a license to the patentsin-suit. Both patent families address packetization of voice traffic and interfacing packet networks
with traditional circuit-switched telephone networks. This combined with each party asserting that
its respective patents are essential to the operation of their respective telecommunications network
systems makes the valuation of Sprint’s VOIP patents, and the factors considered in assessing that
value, relevant to the assessment of a reasonable royalty for a license to the patents-in-suit.
Sprint argues that its VOIP patents are not comparable to the patents-in-suit. It claims that
the patents-in-suit are directed to the infrastructure equipment used in CDMA cellular telephone
systems, where the movement of the mobile cellular telephone unit among multiple cell sites creates
unique challenges for setting up and maintaining the call. Its VOIP patents are different because
they are directed to pioneering technology that employs the use of packetized networks, like the
internet, to connect phone calls between traditional telephones using the Public Switched Telephone
Network (“PSTN”). Sprint argues that its VOIP patents for connecting the internet to the PSTN are
very different from High Point’s patents for connecting CDMA cell sites to the PSTN.
Upon a showing of infringement, a patentee is entitled to “damages adequate to compensate
for the infringement, but in no event less than a reasonable royalty for the use made of the invention
by the infringer.”5 Litigants routinely adopt several approaches for calculating a reasonable royalty.6
The first, the analytical method, focuses on the infringer’s projections of profit for the infringing

5

35 U.S.C. § 284.

6

Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1324 (Fed. Cir. 2009).
9

product.7 The second, more common approach, called the hypothetical negotiation or the “willing
licensor-willing licensee” approach, attempts “to ascertain the royalty upon which the parties would
have agreed had they successfully negotiated an agreement just before infringement began.”8 In
determining the reasonable royalty that would have been agreed to at the hypothetical negotiation,
parties in patent cases frequently utilize the fifteen factors set out in Georgia–Pacific Corp. v. U.S.
Plywood Corp.9
High Point argues that Sprint’s VOIP patent related license agreements and settlement
agreements are relevant to the determination of a reasonable royalty under the second, twelfth, and
fifteenth Georgia-Pacific factors. The second Georgia–Pacific factor considers “the rates paid by
the licensee for the use of other patents comparable to the patents in suit.”10 It examines whether
the licenses relied on by the patentee in proving damages are sufficiently comparable to the
hypothetical license at issue in suit.11 The twelfth Georgia–Pacific factor is the portion of the profit
or of the selling price that may be customary in the particular business or in comparable businesses
to allow for the use of the invention or analogous inventions.12 The fifteenth factor is the amount that
a licensor and a licensee would have agreed upon if both had been reasonably and voluntarily trying

7

Id.

8

Id.

9

318 F. Supp. 1116, 1120 (S.D.N.Y. 1970).

10

Id.

11

Lucent, 580 F.3d at 1325.

12

Georgia–Pacific, 318 F. Supp. at 1120.
10

to reach an agreement.13
High Point also argues that Sprint’s VOIP licenses are relevant to the proper structure of the
reasonably royalty negotiation. It argues that the comparability of the Sprint’s VOIP licenses to the
hypothetical negotiation of a reasonable royalty for a license to the patents-in-suit is not limited to
just the technologies at issue, but can also relate to the structure of the license such as, whether the
license payments are in the form of an on-going royalty or a lump sum, and what is a proper royalty
base.
The Court finds that High Point has met its burden of showing the relevancy of Sprint’s
VOIP patent license and settlement agreements. It has shown they are relevant under the second and
twelfth Georgia-Pacific factors for determination of a reasonable royalty. High Point has also
shown that the technology in Sprint’s VOIP patents is sufficiently comparable to the technology at
issue in the patents-in-suit to warrant discovery of the VOIP patent license and settlement
agreements. Although the VOIP patents are directed at technology for connecting phone calls to the
internet to the PSTN, versus the patents-in-suit, which are directed at technology for connecting
cellular cell sites to the PSTN, the VOIP patent licenses are arguably comparable to a hypothetical
license for the patents-in-suit for purposes of establishing relevancy to a reasonably royalty
calculation. Both sets of patents involve the packetization of voice data and transmission over a
network. This is an adequate showing of a comparable patent for purposes of discovery.
Sprint argues that two recent Federal Circuit cases, Lucent Technologies, Inc. v. Gateway,

13

Id.
11

Inc.,14 and ResQNet.com, Inc. v. Lansa, Inc.,15 addressing the reasonable royalty damages calculation
pursuant to the Georgia-Pacific factors have repeatedly emphasized that there must be a basis in fact
connecting the evidence relied upon to the patents-in-suit. It points out that in ResQNet, the Federal
Circuit remanded the case with the instruction that “the trial court should not rely on unrelated
licenses to increase the reasonable royalty rate above rates more clearly linked to the economic
demand for the claimed technology.”16 The Federal Circuit in ResQNet underscored that it had “long
required district courts performing reasonable royalty calculations to exercise vigilance when
considering past licenses to technologies other than the patent in suit.”17
High Point contends that Sprint’s reliance on the Lucent and ResQNet cases is misplaced
because the circumstances in those cases bear no resemblance to the issues presented here, where
(1) Sprint’s own descriptions of the two technologies establishes parallels between them, and other
evidence confirms their comparability, and (2) the present dispute is at the discovery stage, not trial,
and High Point’s experts have not even had an opportunity to assess Sprint’s VOIP patent licenses.
High Point argues that the Lucent and ResQNet cases cited by Sprint do not support Sprint’s
argument that its VOIP patent licenses are not discoverable.
The Court agrees with High Point that Sprint’s reliance on Lucent and ResQNet is misplaced
in the context of a discovery dispute. Relevancy is broadly construed and does not require that the
Court determine that Sprint’s VOIP patent licenses would be sufficiently comparable to the patents-

14

580 F.3d 1301 (Fed. Cir. 2009).

15

594 F.3d 860 (Fed. Cir. 2010).

16

Id. at 872-73 (emphasis added).

17

Id. at 869 (emphasis in original).
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in-suit to be admissible or used to support a damage award. Indeed, Rule 26(b) provides that
“[r]elevant information need not be admissible at trial if the discovery appears reasonably calculated
to lead to the discovery of admissible evidence.” In Trading Technologies International, Inc. v.
eSpeed, Inc.,18 the plaintiff argued that it was entitled to discover documents and information related
to the defendants’ other patent licenses because such information was relevant to determining
damages under the second, twelfth, and fifteenth Georgia-Pacific factors. The court granted the
plaintiff’s motion to compel, explicitly recognizing that “[w]hile Georgia-Pacific does indicate that
the patents to which we may look to determine a reasonable royalty rate must be ‘comparable,’
courts have often interpreted this fact broadly.”19 The court further recognized the significant
difference between the discoverability of such licenses and the ultimate admissibility and weight to
be given to them at trial:
If, as defendants contend, the patents at issue are not comparable and will not give
any indication of what the patents-in-suit would be worth, they will not carry weight
in the final determination. But defendants are getting ahead of themselves. We are
currently dealing with discovery, not the admission or weight of any evidence, and
plaintiff has failed to point us to any court that has limited such discovery.20
Here, the Court agrees with Trading Technologies that a different standard exists for
discoverability of other comparable patent licenses and the ultimate admissibility and weight to be
given to the licenses at trial. High Point has shown that Sprint’s VOIP patent licenses and settlement
agreements are relevant to a determination of a reasonable royalty under the second and twelfth
Georgia-Pacific factors. High Point has further made a sufficient showing that the technology in

18

No. 04 C 5312, 2007 WL 704525, at *1-2 (N.D. Ill. Mar. 1, 2007).

19

Id. at *2.

20

Id.
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Sprint’s VOIP patents is sufficiently comparable to the technology at issue in the patents-in-suit to
justify discovery of the VOIP patent licenses and settlement agreements.
Sprint also argues that its VOIP patent license and settlement agreements are not relevant
because they were negotiated and entered into long after the date of the alleged first infringement
of the patents-in-suit. According to Sprint, there is little, if any, probative value to licenses resulting
from settlement agreements entered into a decade after the alleged infringement first
occurred—when the hypothetical royalty negotiation under Georgia-Pacific is supposed to
occur—even for the same patents.
Sprint has failed to convince the Court that the timing of the VOIP patent license and
settlement agreements makes them not relevant and therefore not discoverable. It is true that a
reasonable royalty typically is determined from the “hypothetical results of hypothetical negotiations
between the patentee and infringer (both hypothetically willing) at the time infringement began.”21
This does not preclude, however, consideration of evidence of facts and events occurring after the
alleged infringement began.22
Sprint also argues that licenses to the patents-in-suit obtained by High Point and other
predecessor owners are far more relevant to a reasonable royalty determination than licenses to
patents for other technology like Sprint’s VOIP patents. The licenses most factually linked to the
damages calculation in this case are the numerous consummated licenses to the patents-in-suit by
High Point’s predecessors. As such, there is no need for licenses for Sprint’s VOIP technology.

21

Mahurkar v. C.R. Bard, Inc., 79 F.3d 1572, 1579 (Fed. Cir. 1996).

22

Fromson v. W. Litho Plate & Supply Co., 853 F.2d 1568, 1575 (Fed. Cir. 1988), overruled
on other grounds by Knorr-Bremse Systeme Fuer Nutzfahrzeuge GmbH v. Dana Corp., 383 F.3d
1337 (Fed. Cir. 2004)).
14

The Court agrees with Sprint that licenses for the patents-in-suit would appear to be more
relevant than licenses for other patents not at issue in this case, such as Sprint’s VOIP patents. The
fact that licenses for the patents-in-suit may be “more relevant” to a reasonably royalty calculation,
however, does not make Sprint’s VOIP licenses irrelevant and not discoverable. High Point is
entitled to discovery regarding any nonprivileged matter that is relevant to it claims or defenses, not
just the most relevant information. High Point’s motion to compel Sprint to produce license and
settlement agreements for its VOIP technology patent in the Vonage case (05-2433) and four related
cases is granted.
B.

Relevance of VOIP Damages Expert Reports and Deposition Testimony

High Point also asserts that the expert reports and deposition testimony from damages
experts in the Vonage litigation are relevant and should be produced. It asks the Court to reject
Sprint’s argument that the damages expert deposition testimony and reports from the Vonage case
are irrelevant because High Point has obtained the publicly available trial transcript of Sprint’s
damages expert. High Point claims that in patent litigation, it is customary for parties to provide
highly detailed expert reports, which are then summarized during the expert’s direct testimony.
Thus, the Vonage trial transcript likely only represents a snapshot of Sprint’s damages analyses.
Deposition testimony is also often very different in content from testimony at trial. High Point
maintains that its request for these documents clearly meets the minimal threshold for relevancy and
the Court should order Sprint to produce them.
Sprint argues that High Point does not explain its need for the damages expert reports and
deposition testimony from the Vonage case. High Point already has the publicly available trial
testimony of Sprint’s damages expert in that case. In that testimony, which spans roughly 150 pages,
15

Sprint’s damages expert discusses the reasonable royalty determination and the methodology used
to reach it.
High Point has met its burden of showing the relevancy of the expert reports and deposition
testimony from damages experts in Sprint’s VOIP patent Vonage litigation. It has further convinced
the Court that the publicly available Vonage trial transcripts likely do not provide the same type or
amount of information as the deposition transcripts or the damages expert reports. High Point’s
motion to compel Sprint to produce VOIP damages expert reports and deposition transcripts in the
Vonage case and four related cases is granted.
C.

Relevance of VOIP Licensing Communications Between Sprint and Vonage
Regarding Terms of Settlement

High Point also seeks VOIP settlement communications between Sprint and Vonage and
other VOIP patent litigation defendants. As discussed above, High Point has shown that Sprint’s
VOIP patent license and settlement agreements to be relevant to the calculation of a reasonable
royalty in this case. In addition to licenses and settlement agreements, High Point also seeks
Sprint’s settlement communications with Vonage and other VOIP patent litigation defendants. High
Point points out that this Court has not specifically ruled on the issue of whether licensing and
settlement negotiations in patent litigation are discoverable where there is a consummated license
agreement. The Court has previously ordered High Point to produce its ongoing and unconsummated
patent licensing communications with third parties in the absence of a consummated agreement.23
High Point points out that the Court’s prior ruling recognized decisions from several other courts
finding a patent holder’s licensing communications with third parties to be relevant in patent

23

See July 29, 2011 Mem. & Order (ECF No. 669), at 8-10.
16

infringement suits, including being relevant to whether prior licenses are comparable and to the
calculation of a reasonable royalty.
Sprint argues that even if the Court were to find the VOIP license and settlement agreements
relevant, the communications between Sprint and its counterparties regarding the terms of settlement
are not relevant as the VOIP licensing communications merge into the final licensing agreement.
It argues that Judge Bostwick’s decision in Heartland Surgical Specialty Hospital v. Midwest
Division, Inc.,24 sets a bright-line rule that settlement negotiations are never discoverable where an
agreement has been consummated.
The Court finds that High Point has not met its burden to show that Sprint’s settlement
communications with Vonage and the other VOIP patent litigation defendants are relevant to the
claims and defenses in this case. While the Court agrees with High Point that Sprint’s VOIP patent
licenses and settlement agreements are relevant to the determination of reasonable royalty
calculation under the second and twelfth Georgia-Pacific factors, High Point has not adequately
shown how Sprint’s settlement communications with Vonage and other VOIP patent litigation
defendants that led up to the VOIP patent licenses or agreements would be relevant. Although the
Court previously found in its July 29, 2011 ruling that licensing communications between High
Point and other third parties were relevant, those licensing communications were pertaining to the
patents-in-suit rather than to comparable patents as sought here. Sprint’s relevancy objection to
producing its settlement communications between Vonage and other VOIP patent litigation
defendants is sustained and High Point’s motion to compel these documents is denied.

24

No. 05-2164-MLB-DWB, 2007 WL 1246216, at *5 (D. Kan. Apr. 27, 2007).
17

V.

Rule 37(a)(5) Expenses
Under Fed. R. Civ. P. 37(a)(5)(C), if a motion to compel is granted in part and denied in part,

then the court after providing an opportunity to be heard, may “apportion the reasonable expenses
for the motion.” Neither High Point nor Sprint requests any reasonable expenses incurred in filing
or opposing the motion to compel. Upon review of the briefing, the Court finds that although some
of Sprint’s relevancy objections to Request No. 223 were ultimately overruled, those objections were
substantially justified. The parties shall therefore bear their own expenses related to this motion.
IT IS THEREFORE ORDERED that High Point’s Motion to Compel Sprint to Produce
Documents Responsive to High Point’s Fifth Set of Requests for Production No. 223 (ECF No. 700)
is granted in part and denied in part. Within 30 days of the date of this Memorandum and Order,
Sprint shall produce all license and settlement agreements, damages expert reports, and transcripts
of damages expert deposition testimony relating to Sprint’s VOIP technology patent infringement
litigation, Sprint Communications Co., L.P. v. Vonage Holdings, Corp. (D. Kan. Civ. A. No. 052433) and four related cases responsive to High Point’s narrowed Fifth Request No. 223. Sprint’s
relevancy objection to producing its settlement communications between Vonage and other VOIP
patent litigation defendants is sustained and it need not produce these documents.
IT IS FURTHER ORDERED that the parties shall bear their own expenses related to the
motion.
IT IS SO ORDERED.
Dated in Kansas City, Kansas, on this 30th day of April, 2012.

s/ David J. Waxse
David J. Waxse
U.S. Magistrate Judge
18