Infinity Headwear & Apparel v. Jay Franco & Sons et al

Filing 110

OPINION & ORDER: It is HEREBY ORDERED that (1) Defendants shall supplement their interrogatory and document request responses in the manner described above no later than November 6, 2015. (2) Infinity's request to compel production of Defenda nts' sales records prior to the October 21, 2014 issuance of its patent is DENIED. (3) Infinity's request for entry of the Federal Circuit's Model Order for E-Discovery is DENIED. (4) Infinity's motion for sanctions against Defendants and their counsel is DENIED. (As further set forth in this Order) (Signed by Magistrate Judge Ronald L. Ellis on 10/23/2015) (kl)

UNITED STA TES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
INFINITY HEADWARE & APPAREL,
OPINION &
ORDER

Plaintiff,
- against -

15-CV-1259 (JPO) (RLE)
JAY FRANCO & SONS, et al.,
Defendants.

.

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RONALD L. ELLIS, United States Magistrate Judge:

Plaintiff Infinity Headwear & Apparel ("Infinity") brings this action for patent
infringement under Title 35, United States Code. (Doc. No. 1.) On August 15, 2015, the Parties
submitted to the Court a Joint Letter regarding "Deficiencies in Defendants' Discovery
Responses." (Doc. No. 93.) The Parties dispute the sufficiency of a number of Defendants'
responses to interrogatories and document requests. Infinity seeks various forms of relief.
1.

Defendants' Past Sales Information

The Parties dispute whether Defendants' sales information predating the October 21,
2014 issuance oflnfinity's patent is discoverable in this matter. Having reviewed the information
provided by the Parties, the Court finds that Infinity has not demonstrated that these sales are
relevant to any claims or defenses in this case. Infinity asserts that the information could be
relevant to a calculation oflost profits. This position is meritless. Infinity's own sales are more
probative evidence of its lost profits.
Infinity also argues that Defendants' sales would be relevant to a calculation of a
reasonable royalty, a possible remedy in the case. This position is also meritless. Infinity relies
on two of the fifteen factors enumerated in Georgia-Pac. Corp. v. U.S. Plywood Corp., 318 F.
Supp. 1116, 1120 (S.D.N.Y. 1970). Infinity first argues that the past sales information is relevant

to the factor, "[t]he extent to which the infringer has made use of the invention; and any evidence
probative of the value of that use." Georgia-Pac. Corp., 318 F. Supp. at 1120. This factor would
apply in a context in which the infringement period began when the defendant started to
manufacture a product that incorporated an infringing element. Sales records of the product
before inclusion of the infringing element and after the date it began to be used, demonstrating
either an increase or decrease in sales over time, would be probative of the "value of that use." In
this case, however, the infringement is measured from the date that Infinity's patent issued. The
very nature of the discovery request suggests that Defendants' use of the infringing product
began before the period of infringement. Any trend in Defendants' sales that may be observable
before and after the issuance of the patent could not be attributed to, and thus is not probative of,
the use oflnfinity's patented product. Therefore, the sales information predating the October 21,
2014 issuance oflnfinity's patent is not relevant to the value of Defendants' alleged use of the
patented product.
Infinity's second argument fails for similar reasons. Infinity argues that the prior sales
information is relevant to the "established profitability of the product made under the patent, its
commercial success, and its current popularity." Id. This factor encompasses the profitability of
the product manufactured during the period of patent infringement, which here begins only after
the issuance oflnfinity' s patent on October 21, 2014. Therefore, this factor does not support
Infinity's argument that the prior sales information is relevant to a calculation of reasonable
royalty.
For the foregoing reasons, Infinity's request to compel production of Defendants' sales
records prior to the issuance of its October 21, 2014 patent is DENIED.

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2.

Interrogatory No. 2
The parties dispute whether Defendants have provided sufficient information regarding

the individual products sold and the dates that each individual product was first offered for sale.
Infinity claims that Defendants did not include the "fox" product in a list of individual products,
although information about the "fox" product was included in response to other requests, and
that this highlights an overall lack of completeness in Defendants' responses. In the joint letter,
Defendants point to documents that list the "fox" product and explain that it was sold for only a
limited time to Bed, Bath, & Beyond. The Court finds that within their Supplemental Response
and the Joint Letter, Defendants have adequately responded to Interrogatory No. 2.

3.

Interrogatory No. 3
Infinity asked that Defendants provide it with a chart containing month-by-month sales

information. The Court has reviewed the information provided and could not discern how
Defendants' response supplied the requested information. The response therefore does not
adequately explain how Infinity could derive the information and does not establish that
responsive documents would be burdensome to produce. Defendants are HEREBY ORDERED
to supplement their response to Interrogatory No. 3 with the sales information Infinity requests
or to explain with particularity how this information can be derived from the documents
produced.

4.

Interrogatory No. 5
Infinity alleges that Defendants have provided insufficient information regarding

Defendants' customers and the dates of sales to each customer. Defendants respond that the list
of customers is complete for the period after issuance of Infinity's patent and that the answers are
being verified. Defendants' response does not adequately explain how the dates of sales and

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customer addresses can be derived from the documents provided, and does not establish that
responsive documents would be burdensome to produce. Defendants are HEREBY ORDERED
to supplement their response to Interrogatory No. 5 to include the dates of sales and customer
address, and to verify that the response is complete, or to explain with particularity how this
information can be derived from the documents produced.
5.

Document Request No. 5

Parties dispute whether Defendants have provided sufficient documents in response to
Infinity's request for documents relating to "plans for marketing and promoting their product."
Defendants assert that no such documents exist. If they have not done so already, Defendants are
HEREBY ORDERED to verify this response by someone with individual and actual knowledge

of the efforts to search for documents responsive to Request No. 5.
6.

Document Request No. 12

Infinity asks that Defendants produce communications between Defendants and third
parties regarding Infinity, the patent at suit, and this action. Defendants contend that "[t]here are
no non-privileged documents" that are responsive to the requests. Defendants, however, have not
produced a privilege log or explained the measures undertaken in searching for relevant and
responsive documents, or established that responsive documents would be burdensome to
produce. Infinity has asked the Court to enter the Federal Circuit's Model Order for E-Discovery.
Infinity has not demonstrated that such an order is appropriate at this time and therefore its
request is DENIED.
Defendants, however, are HEREBY ORDERED to explain to the Court the efforts they
have made to locate documents and things relating to communications, internal and external,
regarding Infinity, this action, and/or the '544 Patent. To the extent that Defendants have

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identified privileged communications that both are responsive to Plaintiff's request and relevant
to the claims and defenses in this case, they shall, in accordance with FRCP Rule 26, produce a
log listing each document, the privilege that they claim attaches, and a description of the nature
of the communications not produced or disclosed, in a manner that, without revealing
information itself privileged or protected, will enable Plaintiff to assess each claim of privilege.
If, in this search, Defendants identify non-privileged communications that are responsive to

Infinity's request, they shall supplement their response to Infinity's request with those
documents.
7.

Document Request No. 15

Infinity asked for documents "sufficient to identify all persons with an ownership interest
in Defendants." Defendants first referred Infinity to "public corporate records" and, in their
supplemental response, listed the names of the individual owners of the Defendant corporations.
Infinity has not shown that production of additional documents would be probative of any fact at
issue and thus have not established relevance. The Court therefore finds that Defendants have
adequately responded to Document Request No. 15.
8.

Document Request No. 17

Infinity asked for documents that show Defendants' "unit sales, gross and net revenue,
costs, and gross and net profits" since October 2014. Defendants have not adequately explained
how this information can be derived from the documents they produced in response and have not
shown that that responsive documents would be burdensome to produce. Defendants are
HEREBY ORDERED to supplement their response to Document Request No. 17 by explaining

with particularity how gross and net revenue can be derived from the documents produced, or
producing documents that are responsive to the request.

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9.

Document Request Nos. 18 & 23
Infinity requested all communications and agreements between Defendants and their

customers regarding the products at issue. With respect to communications, Infinity argues that
Defendants have produced only "one email between it and Target related to this litigation," and
again requests entry of the Federal Circuit's Model Order for E-Discovery. Infinity has not
demonstrated that such an order is appropriate at this time and therefore its request is DENIED.
Defendants, however, have not adequately explained how the documents they provided
satisfy Infinity's requests with respect to both communications and agreements, or that
responsive documents would be burdensome to produce. Defendants are HEREBY ORDERED
to supplement their response to Document Requests Nos. 18 and 23 by explaining with
particularity how the documents they provided satisfy the requests. In addition, Defendants are to
explain the efforts they have made to locate communications with customers regarding the
products at issue. With respect to Defendants' position that the request is indefinite for lack of a
specific time period, as explained above, the relevant time period for responsive documents is
after the alleged infringement began, October 21, 2014.
To the extent that Defendants have identified privileged communications that both are
responsive to Plaintiff's request and relevant to the claims and defenses in this case, they shall, in
accordance with FRCP Rule 26, produce a log listing each document, the privilege that they
claim attaches, and a description of the nature of the communications not produced or disclosed,
in a manner that, without revealing information itself privileged or protected, will enable
Plaintiff to assess each claim of privilege. If, in this search, Defendants identify non-privileged
communications that are responsive to Infinity's request, they shall supplement their response to
Infinity's request with those documents.

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10.

Document Request Nos. 25 & 30
Infinity asks for Defendants' own inventory reports, sales forecasts, and budget forecasts.

Defendants assert that they do not have such documents. Defendants are HEREBY ORDERED
to verify that they do not possess the documents requested in Infinity's Document Request Nos.
25 and 30.

11.

Document Request No. 27
Infinity seeks documents that identify customers to whom Defendants have "offered to

sell" their products. Defendant argues that the request is indefinite in temporal scope and that
they do not keep a list for these products. As explained above, the relevant time period for
calculation of a reasonable royalty would be after the date of infringement began in October 21,
2014. Defendants have not established that these documents would be burdensome to produce.
Defendants are HEREBY ORDERED to supplement their response to Document Request No.
27 with offers to sell during the period of alleged infringement. If no such communications are
found, Defendants are to explain to the Court the efforts they have made to locate the offers.

12.

Document Request No. 28
Infinity asks for documents related to commentary, praise, and criticism of Defendants'

products, and claims that Defendants have failed to produce any "customer-feedback
communications." Defendants' response references nearly sixty pages of documents but fails to
explain how the documents are responsive to Infinity's request. Defendants are HEREBY

ORDERED to supplement their response to Document Request No. 28 by explaining how the
documents provided are responsive to the request. Further, Defendants shall explain the efforts
they have made to locate customer-feedback communications.

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13.

Infinity's Motion for Sanctions Against Defendants and Counsel

Having reviewed the information provided by the parties, the Court finds that Infinity has
not demonstrated that sanctions against Defendants and their counsel are appropriate at this time.
CONCLUSION
It is HEREBY ORDERED that

(1) Defendants shall supplement their interrogatory and document request responses in the
manner described above no later than November 6, 2015.
(2) Infinity's request to compel production of Defendants' sales records prior to the October
21, 2014 issuance of its patent is DENIED.
(3) Infinity's request for entry of the Federal Circuit's Model Order for E-Discovery is
DENIED.
(4) Infinity's motion for sanctions against Defendants and their counsel is DENIED.

SO ORDERED this 23rd day of October 2015
New York, New York

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The Honorable Ronald L. Ellis
United States Magistrate Judge

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