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Tessera, Inc. v. Broadcom Corporation

United States District Court, D. Delaware

October 24, 2017

TESSERA, INC. and TESSERA ADVANCED TECHNOLOGIES, INC., Plaintiffs,
v.
BROADCOM CORPORATION, Defendant.

          MEMORANDUM ORDER

          CHRISTOPHER J. BURKE UNITED STATES MAGISTRATE JUDGE

         Pending before the Court are certain discovery disputes (hereinafter, the "Motion") raised by Plaintiffs Tessera, Inc. and Tessera Advanced Technologies, Inc. (collectively, "Tessera"). (D.I. 171) Having considered Defendant Broadcom Corporation's ("Broadcom") opposition, the parties' letter submissions, (D.I. 173, 176, 179, 180), and the arguments made during the parties' September 6, 2017 teleconference with the Court, the Court hereby ORDERS that the Motion be DENIED.

         I. BACKGROUND

         Tessera instituted this patent infringement action against Broadcom on May 23, 2016. (D.I. 1) In the now-operative Second Amended Complaint, Tessera alleges direct and indirect infringement of certain claims of seven patents: United States Patent Nos. 5, 666, 046; 6, 043, 699; 6, 046, 076; 6, 080, 605; 6, 218, 215; 6, 284, 563; and 6, 954, 001. (D.I. 30) On January 25, 2017, Chief Judge Leonard P. Stark referred the case to the Court, inter alia, to resolve all discovery disputes. (D.I. 62)

         The Motion was filed on August 23, 2017. (D.I. 171) With it, Tessera asserts that Broadcom has refused to provide core technical documents for certain specifically-identified accused products (semiconductor chips) that Broadcom itself did not ship into the United States in the past six years (i.e., accused products without a "Ship To" location located in the U.S.)[1] and worldwide sales data for all accused products. (See D.I. 173 at 1, 3; id., ex. 16 at 4; id, ex. 17 at 2; D.I. 179 at 3; see also D.I. 176 at 4; id, ex. A at 1) Specifically, Tessera is seeking the following core technical documents for specifically-accused products that fall into the category above (products relating to the "Interconnect and Packaging Patents" in-suit): (1) die specifications; (2) GDS files; (3) RDL passivation, substrate, bump and assembly drawings; (4) assembly qualification reports/assembly instructions; (5) material composition declarations; (6) data sheets; and (7) process flows and recipes. (D.I. 179 at 3) Regarding worldwide sales data, Tessera requests such data for all specifically-accused products, such production to include information about the end customer, including "Parent_End_Name, Sold_To_Parent, and End_Cust_Name, or the equivalent."[2] (Id. at 3 (citing id., ex. 28 at 20))[3]

         II. STANDARD OF REVIEW

         Federal Rule of Civil Procedure 37 applies to motions to compel discovery, providing that "[o]n notice to other parties and all affected persons, a party may move for an order compelling ... discovery." Fed.R.Civ.P. 37(a)(1). Under Federal Rule of Civil Procedure 26(b)(1), "[p]arties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case[.]" Fed.R.Civ.P. 26(b)(1). The Rule further states that relevant information "need not be admissible in evidence to be discoverable." Id.

         When a party objects to discovery requests, "the burden falls on the party seeking the discovery to show the relevance of the information requested." Kaiser v. Stewart, Civ. A. No. 96-6643, 1996 WL 730533, at *2 (E.D. Pa. Dec. 10, 1996) (citations omitted); see also In re Wilmington Trust Sees. Litig., Master Civ. No. 10-990-SLR-SRF, 2017 WL 2457456, at *4 (D. Del. June 6, 2017). Discovery is relevant, inter alia, if used '"to flesh out a pattern of facts already known to a party relating to an issue necessarily in the case.'" Invensas Corp. v. Renesas Elecs. Corp., 287 F.R.D. 273, 278 (D. Del. 2012) (quoting Micro Motion, Inc. v. Kane Steel Co., 894 F.2d 1318, 1326 (Fed. Cir. 1990)). However, '"requested information is not relevant... if the inquiry is based on the party's mere suspicion or speculation.'" Id. (quoting Micro Motion, Inc., 894F.2d at l326).

         "Once relevance is shown, the party opposing discovery may show why discovery, even if relevant, should not be permitted." Paoli v. Stetser, Civil Action No. 12-66-GMS-CJB, 2013 WL 2154393, at *3 (D. Del. May 16, 2013) (quoting Kaiser, 1996 WL 730533, at *2).

         III. DISCUSSION

         A. Request for Core Technical Documents of Accused Products With a Foreign "Ship To" Address

         Tessera requests that this Court enter an order requiring Broadcom to produce core technical documents relating to specifically-accused products that Broadcom asserts were not shipped to a U.S. recipient. (D.I. 173 at 1) Broadcom objects to this request on relevance grounds, arguing that Tessera has failed to show how this category of specifically-accused products ("the accused products at issue") are relevant to its case or theories. (D.I. 176 at 1) Put simply, Broadcom argues that products not made, used, sold or imported into the U.S. are not subject to the patent laws of the U.S. and thus not relevant in this action. (Id. at 2) Tessera, then, as the party moving to compel, bears the burden of establishing how core technical documents regarding products with "Ship To" addresses outside the U.S. are relevant to its claims for direct patent infringement.

         Of course, these core technical documents would be relevant to Tessera's claims of direct infringement if the accused products at issue were, inter alia, considered to have been the subject of a U.S.-based sale by Broadcom. See 35 U.S.C. § 271(a). Tessera argues that the accused products at issue-even though they were initially shipped to a foreign address-may still qualify as products that were the subject of United States-based infringing sales, pursuant to the rationale set out in Carnegie Mellon Univ. v. Marvell Tech. Grp., Ltd., 807 F.3d 1283 (Fed. Cir. 2015). (D.I. 173 at 2) In Marvell, the United States Court of Appeals for the Federal Circuit noted that there is no "single, universally applicable fact that determines the answer" as to where an infringing sale is said to occur and, further, that it is not settled whether a sale can have more than just one location. Marvell, 807 F.3d at 1308. In determining where a sale occurred, a court is to focus on, inter alia, the "place of inking the legal commitment to buy and sell and a place of delivery" and where '"substantial activities of the sales transactions' occurred[.]" Id. (quoting Halo Elecs., Inc. v. Pulse Elecs., Inc., 769 F.3d 1371, 1379 (Fed. Cir. 2014)). Potentially relevant information includes: (1) where specific orders of accused products were negotiated and made final; and/or (2) (at least in the context of a situation where a defendant/accused infringer is working to obtain a "design win" with regard to the design of a particular product that will be sold to a particular customer) where design and testing of accused products occurred, where the defendant shipped samples of those products to the customer, and where the defendant provided assistance to the customer with incorporating the accused product into the customer's product. Id. at 1309.

         Even in light of Marvell, Broadcom argues that "there can be no serious dispute that the vast majority of allegedly infringing activities relating to the international sale of accused products in this case take place abroad-outside the jurisdiction of U.S. patent law." (D.I. 176 at 2) For support, Broadcom cites to a declaration from its Senior Director of Worldwide Sales Operations (the "Broadcom declaration"), which lists various activities relating to the accused products at issue that are said to take place outside the U.S.: (1) that manufacturing and distribution of the products occur outside the U.S.; (2) that price quotations and purchase orders for such products are provided by non-U.S. employees; (3) that the purchase orders and final invoices for the products all ...


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