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TNA Australia PTY Ltd. v. PPM Technologies, LLC

United States District Court, N.D. Texas, Dallas Division

April 19, 2018

TNA AUSTRALIA PTY LIMITED and TNA NORTH AMERICA INC., Plaintiffs,
v.
PPM TECHNOLOGIES, LLC, Defendant.

          MEMORANDUM OPINION AND ORDER

          DAVID L. HORAN, UNITED STATES MAGISTRATE JUDGE.

         Plaintiffs TNA Australia Pty Limited and TNA North America Inc. (collectively, “Plaintiffs” or “TNA”) have filed a Motion to Compel to Discovery, see Dkt. No. 68 (the “MTC”), requesting that the Court enter an order (1) compelling Defendant PPM Technologies, LLC (“PPM”) to produce documents and information in response to TNA's discovery requests relating to the identification of PPM's customers with respect to the accused PPM products at issue in this patent infringement case; and (2) extending the fact discovery deadline from May 11, 2018 to and through June 1, 2018 for the limited purpose of conducting discovery, including third-party discovery, relating to PPM's customers.

         Chief Judge Barbara M. G. Lynn has referred the MTC to the undersigned United States magistrate judge for a hearing, if necessary, and for recommendation or determination under 28 U.S.C. § 636(b). See Dkt. No. 71. Judge Lynn's “Order of Referral also prospectively refers all procedural motions (e.g., to modify briefing limitations, to supplement a motion, or for an expedited hearing) hereafter filed by a party who supports or opposes the referred motion, and that relate to the United States Magistrate Judge's resolution of the motion.” Id. at 1.

         PPM filed a Response to Plaintiffs' Motion to Compel and Motion for In Camera Review of Sensitive Documents, see Dkt. No. 77, and TNA filed a reply, see Dkt. No. 80.

         For the reasons and to the extent explained below, the Court GRANTS Plaintiffs TNA Australia Pty Limited and TNA North America Inc.'s Motion to Compel Discovery [Dkt. No. 68] and DENIES Defendant PPM Technologies, LLC's Motion for In Camera Review of Sensitive Documents [Dkt. No. 77].

         Background

         The pertinent factual background and procedural background is familiar to the parties and will not be recounted here except as necessary in the Court's analysis and conclusions below.

         TNA explains that

Plaintiff TNA Australia Pty Limited is the owner, and Plaintiff TNA North America Inc. the exclusive licensee, of all substantial rights in and to United States Patent No. 7, 185, 754 (“the '754 Patent”). As alleged in the Complaint (ECF No. 1), Plaintiffs contend that PPM infringes one or more claims of the '754 Patent by making, using, importing, selling, and/or offering to sell in or into the United States, certain conveyor assemblies, including but not limited to the conveyor assemblies identified in the Complaint. Indeed, in addition to the conveyor assemblies specifically identified in the Complaint, PPM has provided documents and information in response to Plaintiffs' discovery requests demonstrating numerous other infringing conveyor assemblies provided by PPM to one or more of its customers.
Under the Patent Act, Plaintiffs are entitled to damages adequate to compensate for PPM's infringement (and in no event less than a reasonable royalty). In this case, given that Plaintiffs and PPM are direct competitors in the U.S. marketplace for the patented invention of the '754 Patent, Plaintiffs seek damages in the form of lost profits, lost sales, and lost opportunities, as well as injunctive relief. (See ECF No. 1, at ¶¶ 21-24 & Prayer for Relief.) As such, the identity of the customers to which PPM has sold its infringing conveyor systems - as compared to Plaintiffs' customers and prospective customers - is highly relevant, and in fact necessary, to Plaintiffs' claims for damages. PPM, however, has unilaterally withheld any and all identifying information of its customers through unfounded objections to Plaintiffs' discovery requests, and related application of redactions to PPM documents produced in this case.
Moreover, PPM has also delayed Plaintiffs in bringing this issue to the Court's attention, stating in numerous discussions that it was still considering Plaintiffs' requests. At this juncture, however, Plaintiffs have no choice but to file the present [MTC]. ....
On December 22, 2017, Plaintiffs served counsel for PPM with Plaintiffs' First Set of Interrogatories and Plaintiffs' First Set of Requests for Production. See A0001-A0009; A0010-A0026. In relevant part with respect to the present [MTC], Plaintiffs' First Set of Interrogatories included the following Interrogatory No. 4:
For each Accused Product the identification of which is sought in Interrogatory No. 1, Identify all Persons that you have sold or offered to sell or otherwise supplied or provided, or plan to sell or offer to sell or otherwise supply or provide, the product to, including, for each such Person, the quantity and price for each product sold or offered for sale or otherwise supplied or provided, and the date of such sale, offer for sale, or supply or providing.
A0005. A number of Requests in Plaintiffs' First Set of Requests for Production likewise sought documents related to PPM's customers, including their identification. For example Request No. 24 states as follows:
Documents sufficient to Identify any and all Persons to which you have sold or offered to sell or otherwise supplied or provided, or plan to sell or offer to sell or otherwise supply or provide, each Accused Product, and, for each such Person, Documents sufficient to Identify the quantity and price for each Accused Product sold or offered for sale or otherwise supplied or provided and the Date of such sale, offer for sale, or supply or providing.
A0021. Other Requests seeking documents related to PPM's customers include Request Nos. 11, 15, 16, 17, 18, 19, 20, 23, and 34. See A0010-A0026.
On January 30, 2018, PPM provided its objections and responses to Plaintiffs' First Set of Interrogatories and Plaintiffs' First Set of Requests for Production. With respect to Request No. 24, PPM “object[ed] to revealing the identities of its customers.” A0053. Despite this and other objections, however, PPM responded that it had “produced responsive documents.” PPM similarly “object[ed] to revealing the identities of its customers” in response to a large number of Plaintiff's other Requests, including Request Nos. 1, 5, 6, 8, 11, 12, 13, 14, 16, 17, 18, 19, 20, 23, 24, 25, and 26. See A0041-0062. Notably, PPM did not include any such objection (i.e., to “revealing the identities of its customers”) in response to Plaintiffs' Interrogatory No. 4, which plainly sought the identification of PPM's customers with respect to the accused products. See A0033-A0034. Nonetheless, PPM's response to that Interrogatory did not provide the requested identification of PPM's customers. See A0033-A0034.
Shortly after service of PPM's objections and responses to Plaintiffs' First Set of Interrogatories and Plaintiffs' First Set of Requests for Production, PPM provided “Supplemental Objections” to Plaintiffs' First Set of Interrogatories and Plaintiffs' First Set of Requests for Production. See A0063-A0064. In short, PPM supplemented its objections to certain requests, including Interrogatory No. 4, to include the following objection: “Defendant further objects to the extent the [request/interrogatory] calls for the disclosure of any of Defendant's trade secrets or other confidential information.” A0063.
On February 13, 2018, Plaintiffs' counsel wrote to PPM's counsel to advise and inquire regarding a large number of deficiencies in PPM's responses to Plaintiffs' First Set of Interrogatories and Plaintiffs' First Set of Requests for Production (as well as PPM's responses to Plaintiff's First Set of Requests for Admission). See A0065-A0071. Among the deficiencies raised, Plaintiffs' counsel advised PPM that its refusal to provide documents and information regarding the identification of PPM's customers with respect to the accused products was unfounded. See A0067. Plaintiffs' counsel noted that “the identity and location of PPM's customers are highly relevant to TNA's claims of direct and indirect infringement, as well as TNA's overall damages claims, ” and further noted that “any business or competitive concern regarding disclosure of the identification of PPM's customer is sufficiently alleviated by the Protective Order in this case, which allows PPM to designate such information ‘Confidential Attorney Eyes Only Information, ' thereby shielding the information from TNA itself.” A0067.
As such, Plaintiffs' counsel requested that PPM withdraw its objections, provide any and all responsive information previously withheld under the objections, and likewise produce unredacted copies of the documents previously produced by PPM - wherein customer-identifying information (e.g., name, address, etc.) had been redacted. A0067.
The next day, on February 14, 2018, the parties met and conferred regarding, inter alia, the deficiencies in PPM's responses to Plaintiffs' First Set of Interrogatories and Plaintiffs' First Set of Requests for Production (as well as PPM's responses to Plaintiff's First Set of Requests for Admission). See A0128-A0129. PPM's counsel advised that PPM would respond to the February 13, 2018 letter from Plaintiffs' counsel by February 26, 2018 - after PPM's counsel's vacation. See A0128-A0129. On February 27, 2018, after follow-up inquiry from Plaintiffs' counsel, PPM finally provided a letter response to the February 13, 2018 letter from Plaintiffs' counsel. See A0072-A0073. With respect to the production and disclosure of documents and information identifying PPM's customers, PPM responded, in pertinent part: “Given what TNA has pled in this case and concerns over proportionality, we do not believe the Court will order PPM to turn over its customer information to TNA.” A0072. PPM's counsel reported, however, that they were “still in the process of discussing the issue with [PPM].” A0072.
A short time thereafter, on March 1, 2018, PPM provided amended objections and responses to Plaintiffs' First Set of Interrogatories and Plaintiffs' First Set of Requests for Production. See A0074-A0091; A0092-A0121. While PPM's amended responses attempted to address a number of other deficiencies in PPM's original responses, the amended responses still did not provide the requested information and documents with respect to the identification of PPM's customers. For example, in amended response to Request No. 24, PPM “objects to the extent the request calls for the disclosure of any of Defendant's trade secrets or other confidential information, for clarification, if necessary, including Defendant's customers' and potential customers' identifying information” and also “objects to revealing the identities of its customers and potential customers.” A0108-A0109. Likewise, PPM amended its response to Interrogatory No. 4 to state as follows: “Defendant further objects to the extent the interrogatory calls for the disclosure of any of Defendant's trade secrets or other confidential information, for clarification, if necessary, including Defendant's customers' identifying information.” A0083.
Thereafter, Plaintiffs raised their intent to file the present [MTC] with PPM's counsel, and attempted several times to schedule the requisite meet and confer to attempt to resolve the matter without seeking assistance from the Court. See A0129-A0130. Ultimately, the parties conferred on the issue on April 4, 2018, at which conference PPM maintained its objection to Plaintiffs' discovery requests seeking the identification of PPM's customers. See A0129-A0130.

         Dkt. No. 69 at 1-6 (footnotes omitted).

         TNA contends that the discovery that it requested “regarding the identification of PPM's customers with respect to the accused products is highly relevant to Plaintiffs' claims”; that “PPM's objections to the requests - which are based primarily on the confidential nature of the information - are unfounded in view of the facts of the case”; and that, “[a]s such, Plaintiffs request that this Court enter an Order compelling PPM to produce documents and information in response to Plaintiff's discovery requests seeking the identification of PPM's customers.” Id. at 6.

         TNA contends that the requested information is relevant to Plaintiffs' claims and that PPM's objections are unfounded, where

[t]he primary objection stressed by PPM throughout PPM's amended objections to Plaintiffs' Requests and Interrogatories seeking identifying information regarding PPM's customers is based on the “confidential” nature of that information. See, e.g., A0083; A0108-A0109. This objection is simply unfounded in view of the controlling Protective Order in this case (ECF No. 38). As previously explained by Plaintiffs' counsel during the parties' exchanges on this issue, “any business or competitive concern regarding disclosure of the identification of PPM's customer is sufficiently alleviated by the Protective Order in this case, which allows PPM to designate such information ‘Confidential Attorney Eyes Only Information, ' thereby shielding the information from TNA itself.” A0067; see generally ECF No. 38.
Once again, the court's decision in Tama [Plastic Industry v. Pritchett Twine & Net Wrap, LLC, No. 8:12-CV-324, 2013 WL 275013 (D. Neb. Jan. 24, 2013), ] is highly instructive on this point. In Tama, the court evaluated - and dismissed - a similar “confidentiality” objection to that of PPM here. Tama, 2013 WL 275013, at *6-*7. The defendant in Tama had “object[ed] to producing its customer lists based on confidentiality and ask[ed] for a protective order allowing it to withhold specific customer names.” Id. at *6. In overruling the objection, and denying the motion for protective order, the court noted that, “[w]hile customer lists are undoubtedly confidential information, the parties already have a protective order in place to address the production of confidential information - including the ability of parties to designate documents as ‘Attorney's Eyes Only.'” Id. The court found that any concern by defendant regarding disclosure of its customer information was controlled and resolved under the protective order. Id. As such, the court ordered the defendant to “produce the responsive customer information, ” and designate it “Attorneys' Eyes Only” pursuant to the controlling protective order. Id. at *6-*7.
Further, PPM's confidentiality objection to Plaintiffs' Interrogatory No. 4 is especially unfounded, in that PPM waived any such objection by not specifically including it in its original response to Interrogatory No. 4. Pursuant to Rule 33(b)(4) of the Federal Rules of Civil Procedure, “[t]he grounds for objecting to an interrogatory must be stated with specificity” and “[a]ny ground not stated in a timely objection is waived unless the court, for good cause, excuses the failure.” (emphasis added) Here, as discussed above, PPM did not include any specific objection to revealing the identities of its customers in response to Plaintiffs' Interrogatory No. 4. See A0033-A0034. Rather, PPM objected only to the definition of “Accused Products” as used in the Interrogatory, and otherwise objected to the Interrogatory as compound. A0033-A0034. By not stating “with specificity” an objection to disclosing customer information in original response to Interrogatory No. 4, PPM has waived any such objection to that Interrogatory.
Moreover, PPM's “Supplemental Objections” to Plaintiffs' First Set of Interrogatories did not cure this waiver. See A0063-A0064. At best, those supplemental objections - served by letter, as opposed to formal supplemental responses - merely added a general objection to the disclosure of PPM's “trade secrets or other confidential information.” A0063. The supplemental objection did not state “with specificity” an objection to disclosing customer information in response to Interrogatory No. 4. See Fed.R.Civ.P. 33(b)(4). Indeed, no such specific objection was added until PPM's amended response to Interrogatory No. 4. See A0082-A0083.
PPM's additional objections to Plaintiff's Requests - that they are “overbroad, not sufficiently tailored to obtain relevant or admissible information, and not sufficiently limited by time” (see, e.g., A0109-110 (Request No. 24)) - are generic, boilerplate objections, which are also unfounded. Indeed, as noted in PPM's responses, PPM has provided responsive information and documents in response to Plaintiff's requests with the lone exception of the identification of PPM's customers. And PPM's objection to disclosing the identification of its customers is itself unfounded, as discussed above. Further, and for similar reasons, PPM cannot show that Plaintiffs' Requests fail the proportionality calculation mandated by [Federal Rule of Civil Procedure] 26(b). See Seastrunk, 2017 WL 6406627, at *7. Rather, as discussed above, the discovery is very important to resolving the issues in the case, and is particularly important to Plaintiffs' damages claims. Moreover, Plaintiffs do not have access to the requested information outside of PPM. And, finally, as discussed above, no burden or expense of the discovery outweighs its benefit, as the confidential nature of the discovery may remain protected from TNA itself through appropriate designation of the information under the controlling Protective Order.
For each of the foregoing reasons, PPM's objections to Plaintiffs' Requests and Interrogatories seeking identifying information regarding PPM's customers are unfounded, and should be overruled. Plaintiffs request that this Court overrule PPM's objections and order PPM to produce documents and information in response to Plaintiff's discovery requests relating to the identification of PPM's customers with respect to the accused PPM products. Plaintiffs further request an extension of the fact discovery deadline from May 11, 2018 to and through June 1, 2018 for ...

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