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Princeton Digital Image Corp. v. Harmonix Music Systems Inc.

United States District Court, D. Delaware

April 16, 2018

PRINCETON DIGITAL IMAGE CORP., Plaintiff,
v.
HARMONIX MUSIC SYSTEMS, INC., et al., Defendants. PRINCETON DIGITAL IMAGE CORPORATION, Plaintiff,
v.
UBISOFT ENTERTAINMENT SA and UBISOFT, INC., Defendants.

          MEMORANDUM ORDER

          CHRISTOPHER J. BURKE UNITED STATES MAGISTRATE JUDGE

         Plaintiff Princeton Digital Image Corporation ("Plaintiff) has moved for relief against Defendant Konami Digital Entertainment Inc. ("Konami US") regarding certain discovery disputes. (D.I. 227; D.I. 249)[1] The Court[2] has considered the parties' briefs, (D.I. 229; D.I. 232; D.I. 253; D.I. 255), and heard argument on March 14, 2018, (D.I. 278 ("Tr.")).

         I. DISCUSSION

         Plaintiff has two remaining ripe disputes that are directed to Konami US. (D.I. 243 at 1; D.I. 253 at 1 & n.l) The Court will address each in turn.

         A. Plaintiffs Request Regarding Communications Between Konami U.S. and Other Defendants

         First, Plaintiff requests that Konami U.S. produce communications between it and other Defendants concerning "the infringement by the Defendants' unrelated accused products, damages, or other issues where the Defendants' legal interests are not identical[.]" (D.I. 229 at 3 (citing RFP Nos. 19, 20 & 22)) Konami U.S. has resisted production by invoking the common interest privilege, (D.I. 232 at 3), which protects: (1) communications made by separate parties in the course of a matter of common legal interest; (2) that are designed to further that common legal interest; where (3) the privilege has not been waived, INVISTA N. Am. S.a.r.l. v. M&G Corp., Civil Action No. 11-1007-SLR-CJB, 2013 WL 12171721, at *5 (D. Del. June 25, 2013). It is Konami US's burden to show that the privilege has been established. See id.

         It does seem that if there are communications between Defendants about whether their respective products do or do not infringe the patent-in-suit and why (and what damages might result), those communications will very likely be protected by the common interest privilege. But the briefing on this issue was not fulsome, and the Court realizes that it really has little information about: (1) how many such records/communications are being withheld on this ground of privilege; (2) what those records/communications look like; and (3) why it is exactly that those particular records/communications are, in fact, covered by the privilege. It would not be responsible for the Court to finally resolve the dispute (and to find Konami U.S. has met its burden here) without at least reviewing some such records/communications and satisfying itself that the privilege in fact applies.

         Thus, by no later than April 30, 2018, Konami U.S. shall provide the Court with some indication (e.g., via privilege log or otherwise) of the scope of the records/communications that have been withheld on this ground. The Court will then follow up to request ex parte review of a representative sample of such records/communications, in order to determine if Konami U.S. has met its burden here. Cf. Circle Grp., L.L.C. v. Se. Carpenters Reg'I Council, l:09-cv-3039- WSD, 2011 WL 13214349, at *5 (N.D.Ga. Apr. 22, 2011).[3]

         B. Documents Relating to the Citation of the Patent-in-suit That Are In the Physical Possession of Non-party Konami Digital Entertainment Co., Ltd.

         The second live Konami US-related dispute regards Plaintiffs request for documents and communications relating to the citation of Plaintiff s patent-in-suit (United States Patent No. 5, 513, 129) by Konami US, its affiliates and their patent attorneys. (D.I. 229 at 3-4 (citing, inter alia, RFP No. 11); D.I. 253 at 1-3)

         1. The Parties' Positions

         Plaintiff has alleged that during the prosecution of certain United States patents held by non-party Konami Digital Entertainment Co., Ltd. ("Konami Japan") (dating from as early as 2001 and through at least April 2004), certain Konami Japan patent attorneys and Konami Japan employees cited to, reviewed or were aware of the patent-in-suit. (D.I. 94 at ¶¶ 69-71) Plaintiff expects that the sought-after documents and communications will provide support for its claim of Konami US's pre-suit knowledge of the patent-in-suit (which, in turn, is relevant to Plaintiffs pending allegations of indirect and willful infringement).[4]

         Konami US, however, has repeatedly stated that any documents relating to the prior citation of the patent-in-suit are not in its physical possession. Instead, it asserts that any such documents are in the possession of Konami Japan, [5] which is an affiliate of Konami U.S. (Konami Japan and Konami U.S. are both subsidiaries of the same parent). (D.I. 232, ex. 2 at ¶¶ 5, 11)

         And so, this discovery dispute turns on whether Konami U.S. should be required to obtain and turn over such documents (even if they are in the physical possession of Konami Japan). To obtain an order requiring such production, Plaintiff would need to show that these documents are nevertheless under the "control" of Konami US, pursuant to the meaning of Federal Rule of Civil Procedure 34(a)(1). Plaintiff asserts that it has made such a showing, in that it has demonstrated that "the litigating corporation [Konami US] acted with its sister [Konami Japan] in effecting the transaction giving rise to suit and is litigating [this suit] on [Konami Japan's] behalf[.]" Gerling Int'llns. Co. v. Comm'r of Internal Revenue, 839 F.2d 131, 141 (3d Cir. 1988); see also (D.I. 253 at 2).

         2.The Court's Prior Order and Additional Facts Now of Record

         The Court previously addressed this issue in an August 31, 2016 Memorandum Order (the "August 31 Order"). There it determined that Plaintiff had not yet met its burden to demonstrate Konami US's control over documents in the possession of Konami Japan. (D.I. 176)[6] Since then, Plaintiffs have added to the record on this control issue.

         The record now clearly contains the following additional relevant facts relating to the above-described test for "control" under Rule 34:

(1) With regard to the Dance Dance Revolution and Karaoke Revolution games that are relevant to Konami US's alleged infringement of the patent-in-suit (e.g., via Konami US's testing, use, publishing, distribution, offer for sale and sale of such games), Konami Japan owns the intellectual property as to those games and it licenses Konami U.S. to publish and distribute the games in the United States. Konami U.S. and Konami Japan are subsidiaries of Konami Corporation, a Japanese company, and are part of that company's global digital entertainment business system.
(2) Hideki Hayakawa is the Chairman of the Board and one of two Directors of Konami US. He is also the President, Chief Operating Officer and a Director of Konami Japan. According to Konami US, Mr. Hayakawa is not ...

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