Judge Robinson Orders Defendants to Show Cause Why They Should Not Be Precluded from Using Information Provided by Foreign Parent Company
June 8, 2016
Publication| Intellectual Property
In Intellectual Ventures I LLC v. Ricoh Americas Corporation, et al., C.A. No. 13-474-SLR (D. Del. May 23, 2016), Judge Robinson accepted Magistrate Judge Fallon’s report and recommendation that plaintiff Intellectual Ventures I LLC’s (“IV”) motion to compel defendants Ricoh Americas Corporation (“RAC”) and Ricoh Electronics, Inc. (“REI”) to produce documents and Rule 30(b)(6) testimony be denied, but further ordered that the defendants show cause as to why they should not be precluded from using any information provided by Japanese parent company Ricoh Company Ltd. (“RCL”) in their defense. Early in the patent infringement litigation, RCL was an additional party in the case. Although IV expressed concerns that it would be unable to get core liability discovery unless RCL remained a party to the action, the defendants argued that requiring RCL to litigate the case from “halfway around the world” was unreasonable and created undue hardship in light of REI and RAC’s willingness to defend against the plaintiff’s claims. Accordingly, RCL was dismissed as a party.
Upon RCL’s dismissal, the remaining defendants stated that the technical documents IV requested were not in their possession and RCL refused to provide them. The plaintiff’s subsequent attempt to obtain discovery from RCL through International Letters Rogatory similarly failed when the request was denied by the Japanese Ministry of Foreign Affairs. Additionally, when REI produced a technical assistance agreement (“TAA”) entered into by RCL and REI in October 2005, more than two and a half years had passed since the litigation’s commencement. Furthermore, the TAA only entitled REI to receive information on “End Products” from RCL that will assist REI in defending against an actual or threatened lawsuit. As such, the TAA did not authorize REI to receive all of the relevant core technical information in RCL’s possession, which included the discovery requested by IV.
“As a last resort,” IV filed its motion to compel REI to produce documents and Rule 30(b)(6) testimony “regarding the design and operation of the accused product.” Magistrate Judge Fallon denied the motion to compel due to the scope of the TAA, and Judge Robinson accepted Magistrate Judge Fallon’s report and recommendation as there was no legal error in the magistrate judge’s analysis. Nonetheless, recognizing that RCL had relevant information in the case and that the defendants had an obligation to provide all relevant, non-privileged information, Judge Robinson declined “to allow RCL and the defendants to use the TAA as both a sword and a shield.” Accordingly, Judge Robinson ordered that the defendants show cause as to why they should not be precluded from using any information provided by RCL in their defense.
Analysis: The Court’s decision makes it clear that subsidiaries must be careful about limiting the information available from a foreign parent company if it plans to use that information at trial.