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Godo Kaisha IP Bridge 1 v. TCL Communication Technology Holdings Limited

United States District Court, D. Delaware

June 27, 2018

TCL COMMUNICATION TECHNOLOGY HOLDINGS LIMITED, a Chinese Corporation, TCT MOBILE LIMITED, a Hong Kong Corporation, TCT MOBILE US, INC., a Delaware Corporation, and TCT MOBILE, INC., a Delaware Corporation, Defendants.



         At Wilmington this 27th day of June, 2018, the court having considered the letter briefs, arguments presented by the parties, status report, and prior court decisions regarding plaintiff Godo Kaisha IP Bridge 1 's ("IP Bridge") motion to compel defendants TCL Communication Technology Holdings Ltd. ("TCL Holdings"), TCT Mobile Limited ("TCT Hong Kong"), TCT Mobile (US), Inc., and TCT Mobile Inc. (collectively, "defendants") to: (1) produce the invoicing reports, (2) present a 30(b)(6) deponent to testify regarding the invoicing reports, (3) make its SAP system available for inspection by IP Bridge and its expert, and (4) reimburse EP Bridge for all costs associated with the fifth round of briefing on this issue[1] (D.I. 281; D.I. 282; D.I. 285; D.I. 286; D.I. 295; D.I. 307; D.I. 311; D.I. 327; D.I. 340; D.I. 347; D.I. 376; D.I. 379; D.I. 394; D.I. 396; D.I. 421; D.I. 422; 8/23/17 Tr.; 3/29/18 Tr.; 4/16/18 Tr.), IT IS HEREBY ORDERED that IP Bridge's motion to compel is granted-in-part.

         1. Background.

         IP Bridge commenced this patent infringement action on July 24, 2015 against defendants TCL Holdings, TCT Hong Kong, and TCT Mobile (US), Inc. (D.I. 1) On July 11, 2016, the parties entered into a joint stipulation to amend the pleadings to add TCT Mobile, Inc. as a defendant. (D.I. 62) The amended complaint asserts causes of action for infringement of U.S. Patent Nos. 7, 373, 295 ("the '295 patent"), 8, 351, 538 ("the '538 patent"), and 8, 385, 239 ("the '239 patent"), which are directed to technology declared essential to one or more of the W-CDMA and LTE telecommunication standards. (D.I. 63 at ¶¶ 27-48)

         2. The discovery dispute presently before the court concerns IP Bridge's request to compel defendants to produce the invoicing reports identified during the June 22, 2017 deposition of James Wodach, who was designated to testify regarding revenues from sales of the accused products. (D.I. 281, Ex. 10; D.I. 307, Ex. 2) On August 23, 2017, the court held a discovery dispute teleconference, during which IP Bridge challenged the adequacy of defendants' production of financial documents under the court's February 27, 2017 Memorandum Order. (8/23/17 Tr.)

         3. On December 14, 2017, the court issued a Memorandum Order compelling defendants to produce the invoicing reports identified during the deposition of Mr. Wodach by December 21, 2017. (D.I. 327 at ¶ 7) The court's Memorandum Order was upheld over defendants' objections in a March 8, 2018 Memorandum Order by Judge Bataillon. (D.I. 376) Defendants subsequently represented that they would produce the invoicing reports by March 15, 2018. (D.I. 379 at 3)

         4. On March 15, 2018, defendants produced a single spreadsheet drawn from the SAP database that included invoicing data through June 8, 2017. (D.I. 394, Exs. B & C) In communications with counsel and during a March 29, 2018 status conference with the court, defendants represented that they were investigating whether the monthly invoicing reports still existed. (Id., Ex. D at 1; 3/29/18 Tr. at 11:9-24)

         5. On April 11, 2018, defendants produced two monthly invoicing reports received by Mr. Wodach covering the period from January 2016 to October 2017. (4/16/18 Tr. at 6:13-18; D.I. 423, Exs. A & B) During the April 16, 2018 hearing on this issue, defendants informed the court that they had not been able to find monthly invoicing reports beyond the two Excel files from 2018, which were already produced. (4/16/18 Tr. at 13:6-14:18)

         6. On May 17, 2018, IP Bridge took the deposition of Keiki Rodriguez, the Vice President of Supply Chain and Operation for defendant TCT Mobile (US), Inc. (D.I. 421, Ex. D) During his deposition, Mr. Rodriguez testified that he received and maintains weekly invoicing reports containing the relevant data. (Id. at 37:21-39:11) Mr. Rodriguez confirmed that the invoicing report files he received are different from the ones identified by Mr. Wodach and contain fewer columns of data. (D.I. 422, Ex. L at 183:23-184:17) Defendants produced copies of the sample weekly reports received by Mr. Rodriguez on May 23, 2018. (D.I. 423, Exs. E, G, I, K)

         7. Analysis.

         IP Bridge's request for production of the monthly invoicing reports is denied. The production made by defendants to date is sufficient to satisfy IP Bridge's request, and defendants have achieved compliance with the court's Memorandum Orders. (D.I. 327; D.I. 376) The record reflects that twenty-two of Mr. Wodach's monthly invoicing reports for the period between January 2016 and October 2017 have been produced. (D.I. 423, Exs. A & B) The record further establishes that Mr. Wodach left his employment with the defendants in late 2017. (D.I. 421, Ex. A at 12:16-22; D.I. 422, Ex. L at 57:3-8) However, defendants pulled and produced full invoicing data from the SAP database pertaining to all U.S. sales between 2015 and March 2018 in accordance with the time frame set forth in the court's Memorandum Orders, which includes the eleven months of invoicing reports not located in Mr. Wodach's documents. (D.I. 423, Ex. C; D.I. 327 at ¶ 7; D.I. 376 at 4)

         8. IP Bridge seeks the production of invoicing reports from Mr. Rodriguez based on his deposition testimony indicating that he received the invoicing reports in the ordinary course of business on a weekly or bi-weekly basis. (D.I. 421 at 2; Ex. D at 37:1-38:22) However, defendants' production of a sampling of Mr. Rodriguez's invoicing reports illustrates that these reports differed in significant ways from the reports received by Mr. Wodach and the full SAP data produced by defendants. (D.I. 423, Exs. E, G, I, K) Specifically, the reports received by Mr. Rodriguez do not contain total gross price information or net sales, or other cost or profit information which formed the basis of IP Bridge's request for the invoicing reports in the first instance. (Id.; see also Exs. A-C; D.I. 422, Ex. L at 171:24-173:18 (explaining gross price and net sales)) Mr. Rodriguez's deposition testimony confirms this point. (D.I. 422, Ex. L at 32:19-33:3; 175:23-176:7; 182:22-184:17) ("I receive basically the first version of it, which is up to column AQ. Then, as I was saying, finance, Ashley, starts probably from AV until the end of the file with that information. That file I don't receive it because she already sends it directly to - to headquarters.")[2] IP Bridge's request for production of Mr. Rodriguez's invoicing reports is denied because IP Bridge has failed to establish that those reports contain the requested cost or profit information, and that the production of those reports would not be wholly duplicative of the information contained in the full SAP database spreadsheet produced by defendants.

         9. IP Bridge's request for supplemental 30(b)(6) deposition testimony from Mr. Rodriguez is denied as moot as a result of the court's denial of the motion to compel production of the remaining monthly invoicing reports. The purpose of IP Bridge's request is to obtain additional 30(b)(6) testimony after the requested invoicing reports are produced. (D.I. 421 at 4) (requesting that defendants "provide Mr. Rodriguez for additional 30(b)(6) testimony once those reports have been produced"). IP Bridge does not point to deficiencies in Mr. Rodriguez's May 17, 2018 deposition testimony based on the documents that had been produced at that time. Mr. Rodriguez's deposition transcript reflects that he was able to adequately testify regarding the creation and maintenance of records in the SAP database, and the significance of the content in each data column. (D.I. 422, Ex. L at 32:12-39:11; 168:8-200:23)

         10. IP Bridge's request to inspect defendants' SAP database is granted. IP Bridge has long questioned the veracity of the information produced in the attorney-generated spreadsheets, given apparent discrepancies in the data. (D.I. 327 at ΒΆ 9) Permitting the inspection will enable IP Bridge to verify the scope and accuracy of the data first-hand. IP Bridge has indicated that this relief would be an acceptable substitute for the production of the remaining monthly invoicing reports from Mr. Wodach, in light of defendants' position that the remaining reports do not exist elsewhere. (4/16/18 Tr. at 12:11-20) The court expects that, with this relief, the issue regarding the sufficiency of the invoicing report production will have closure. The parties are to meet and confer within one week from the date of this Memorandum Order on the logistics and procedure for ...

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