ALJ Rogers Rules on Motions to Compel, Motions to Strike and Motions for Summary Determination In Certain Digital Imaging Devices And Related Software (337-TA-717)
On March 1 and 2, 2011, ALJ Robert K. Rogers, Jr. issued public versions of Order Nos. 16, 20, 21, 22, 24, 25, and 26 in Certain Digital Imaging Devices and Related Software (Inv. No. 337-TA-717).
In Order No. 16 (dated December 6, 2010), ALJ Rogers denied Respondent Eastman Kodak Company’s (“Kodak”) motion to strike a portion of a supplemental expert report filed on behalf of Complainant Apple, Inc. (“Apple”). According to the Order, Kodak argued that while the parties agreed that Apple’s expert could serve a supplemental expert declaration to address source code first produced by third parties after the deadline for initial expert reports, a portion of Apple’s supplemental expert report addressed the technical prong of the domestic industry requirement, which in turn was based on information available prior to the initial expert report deadline. Apple responded that it would not rely upon this disputed portion of the supplemental report when its expert testifies on the technical prong. ALJ Rogers determined that Apple would be held to its representation and on that basis denied Kodak’s motion as moot.
In Order No. 20 (dated December 9, 2010), ALJ Rogers granted-in-part Apple’s motion to strike Kodak’s second supplementary response to a contention interrogatory inquiring into the basis of Kodak’s ownership defense. According to the Order, Apple argued that Kodak filed a second supplementary response to the interrogatory on November 3, 2010, which should be considered untimely, because Kodak’s response (1) was after the August 13, 2010 deadline for responding to contention interrogatories, (2) after the deadline for fact discovery, (3) raised a “plethora of new arguments” supporting Kodak’s contention that it jointly owns the two asserted patents, and (4) relied on documents in Kodak’s possession prior to August 13, 2010. Kodak opposed the motion and countered that (1) it did not add any new argument, but rather identified parol evidence that it intends to rely upon to prove its ownership defense; (2) Apple was not prejudiced by the second supplemental response because all documents cited therein were already known to Apple prior to August 13, 2010, and many were even produced by Apple; (3) Apple’s motion violated ground rules requiring good-faith efforts to resolve the dispute, because Apple’s motion requested relief, in the alternative, to depose a further Kodak witness on this issue, when Kodak specifically offered such a witness to resolve the dispute, and Apple declined Kodak’s offer.
ALJ Rogers determined to strike as untimely Kodak’s second supplemental response to the contention interrogatory on the grounds that it was provided after the deadline for responding to the interrogatories, and after the close of discovery, Kodak did not seek an extension of time to serve the response, and it had not shown any good cause for extending time to serve the second supplemental response. Apple’s motion additionally sought to preclude Kodak from offering at trial the evidence cited in Kodak’s second supplementary response, and ALJ Rogers declined Apple’s request after determining that Kodak’s ownership defense was laid out in Kodak’s timely served first supplemental response to the contention interrogatory. ALJ Rogers also determined that Kodak’s second supplemental response did not offer new or different arguments, but rather provided more detail by referring to sixteen documents, all of which were known to Apple prior to the August 13, 2010 deadline. ALJ Rogers noted ITC precedent denying requests similar to Apple’s, where it should be reasonable for Apple to expect these documents to be used for the purposes of the ownership defense even though the documents were not specifically itemized in response to an interrogatory, when these documents were addressed in expert reports and numerous depositions, including a deposition of Kodak’s witness on the ownership defense. ALJ Rogers also determined that Apple would not be permitted to depose a further Kodak witness regarding the alleged new arguments, because the second supplemental response is stricken, and Apple had sufficient time prior the close of discovery to depose Kodak regarding the documents identified in the second supplemental response, all of which were previously known to Apple. Finally, ALJ Rogers determined that Apple had made a good faith effort to resolve the dispute, since the parties met and conferred prior to Apple filing its motion, and Apple’s rejection of Kodak’s offer to provide an additional witness on the ownership issue did not evidence bad faith, particularly since Kodak made that offer only after Apple filed its motion.
In Order No. 21 (dated December 16, 2010), ALJ Rogers granted Apple’s motion for summary determination that the importation requirement of Section 337 is satisfied and denied Apple’s motion for summary determination that Kodak holds commercially significant inventories of accused products. According to the Order, Apple argued that Kodak admitted in interrogatory responses that various accused products had been imported into the United States, that Kodak agreed not to object to the admissibility of these responses at the hearing, and that ALJ Rogers already determined that interrogatory responses can be admitted at the hearing without a sponsoring witness – all of which satisfies the importation requirement. Kodak opposed Apple’s motion as to the importation requirement by stating it “does not concede that Apple has legally satisfied the importation … requirements of Section 337.” ALJ Rogers determined that by not objecting to the admissibility of its interrogatory response, and not contesting the accuracy therein, evidence of Kodak’s importation is uncontested and Apple is entitled to summary determination.
Regarding whether Kodak holds a commercially significant inventory, Apple argued that Kodak’s interrogatory responses left no doubt that Kodak held such inventories of accused products. Kodak opposed on procedural grounds, arguing that remedy-related matters require an ALJ to issue a Recommended Determination, while grants of summary determination motions are accomplished through an Initial Determination – therefore, it would be improper to grant a motion for summary determination on a remedy-related issue. ALJ Rogers determined that the size of Kodak’s domestic inventory is relevant to his determination whether to recommend issuance of a cease and desist order should the ITC find a violation. He further agreed with Kodak and determined it would therefore be premature to issue an Initial Determination regarding this remedy-specific issue, since Commission rules require him to include findings regarding remedy in a Recommended Determination.
In Order No. 22 (dated December 17, 2010), ALJ Rogers granted-in-part Kodak’s motion to compel Apple to produce documents relating to payments from Apple or Apple’s counsel to one of the named inventors on the asserted patents. According to the Order, Kodak stated that Apple is withholding or redacting responsive documents based on attorney-client privilege and the work product doctrine. Kodak alleged Apple is paying the inventor, a fact witness, $500/hour, and Kodak contends this rate is excessive and unethical, and therefore not entitled to privilege for at least this reason, as well as the fact that Apple had not produced a privilege log. Apple opposed the motion, countering that Kodak did not comply with ground rules for bringing the motion by not earlier informing Apple of the full scope of relief Kodak’s motion would seek, and further asserting that the documents are indeed privileged and work product protected, and the rate paid to the inventor was reasonable and ethical. ALJ Rogers determined that Kodak followed the Ground Rules for bringing a motion to compel by notifying Apple more than two days prior to the date Kodak filed its motion, and that the scope of relief requested in the motion was commensurate in scope with discussions between counsel prior to filing the motion. ALJ Rogers further determined that Apple must produce a privilege log, because such a list is necessary to determine whether a document is privileged, and any responsive document not on this log must be produced to Apple. ALJ Rogers additionally determined that Kodak could renew its motion to compel if it continues to challenge the alleged privileged status of documents recited on Apple’s privilege log.
In Order No. 24 (dated December 28, 2010), ALJ Rogers denied Kodak’s motion for summary determination of non-infringement of U.S. Patent No. 6,031,964 (the ‘964 patent). According to the Order, Kodak argued that each of the asserted claims of the ‘964 patent required a “random-access memory disk,” which Kodak construed to mean “volatile memory that has been configured to emulate a hard disk drive.” Under this construction, Kodak argued none of its accused digital cameras infringe either literally or under a doctrine of equivalents. The Commission Staff (“OUII”) opposed Kodak’s motion on the grounds that its claim construction was incorrect, arguing that “random-access memory disk” means “volatile memory that has been allocated for storing unprocessed and processed image data.” Apple opposed Kodak’s motion and argued that Kodak’s claim construction improperly reads in a preferred embodiment, and that the correct interpretation of “random-access memory disk” is “a memory area that has been allocated for storing unprocessed image data and processed image data.” Apple argued that under its or the OUII’s proposed constructions, Kodak’s non-infringement argument fails, and that even under Kodak’s construction, genuine issues of material fact preclude summary determination.
ALJ Rogers determined that Apple offered expert testimony that even under Kodak’s proposed construction, Kodak’s products meet the disputed limitation literally or under the doctrine of equivalents. Accordingly, ALJ Rogers denied Kodak’s motion on the grounds that there remain genuine issues of material fact. ALJ Rogers further determined that since the parties do not agree on the construction of the limitation, it is premature for him to construe the limitation on an abbreviated summary judgment record.
In Order No. 25 (dated December 30, 2010), ALJ Rogers denied Kodak’s motion for summary determination of non-infringement of U.S. Patent No. RE38,911 (the ‘911 patent). According to the Order, Kodak argued that each of the asserted claims of the ‘911 patent include the term “image processors,” which the parties stipulated to mean “software modules which apply algorithms on image data to obtain a particular type of image transformation.” Kodak, supported by the OUII, argued that under the agreed upon construction, image processing must be performed in software, and therefore several of its accused models cannot infringe because the image processing algorithms are integrated into hardware and executed on ASICs. Apple opposed the motion, arguing that expert testimony supports its position that the accused Kodak cameras contain software modules that apply algorithms on image data to obtain image transformation. ALJ Rogers determined that Kodak is not entitled to summary determination of non-infringement because Apple’s expert testimony that Kodak’s accused cameras meet the “image processors” limitation under the agreed-upon claim construction creates a genuine issue of material fact regarding infringement.
In Order No. 26 (dated December 30, 2010), ALJ Rogers denied Kodak’s renewed motion to compel documents recited within the privilege log Apple was required to provide by Order No. 22. According to Order No. 26, Kodak argued Apple is not entitled to withhold the listed documents because (1) Apple delayed revealing its compensation of the named inventor of the asserted patents – thereby defeating any claim of privilege; (2) Apple waived any privilege by putting the nature of the inventor’s consultancy at issue; and (3) Kodak failed to meet its burden that the withheld documents are entitled to privilege. Apple opposed the motion and countered that it produced the consulting agreement in advance of the inventor’s deposition, there is nothing unethical regarding the compensation, and the listed documents are privileged because they constitute communications between the inventor and his attorneys regarding, inter alia, ongoing litigation and strategy, and factual background pertaining to ongoing litigation.
ALJ Rogers first determined several undisputed facts, including that Apple produced a copy of the consulting agreement on August 13, 2010, and Kodak deposed the inventor on October 21, 2010. At the deposition, Kodak asked questions regarding the consulting agreement and the inventor did not refuse to answer any question based on a privilege assertion. ALJ Rogers then determined that based upon American Bar Association opinions on Ethics and Professional Responsibility, and District of Columbia Rules of Professional Conduct, it is not improper to compensate non-expert witnesses for their time in preparing to testify and testifying, provided the payment is not conditioned on the content of the testimony. ALJ Rogers further determined that contrary to Kodak’s allegations, Apple did not conceal the consulting agreement in this investigation, and “Kodak has provided nothing beyond mere conjecture to support its accusation that the money Apple pays Mr. Anderson is quid pro quo for unethical behavior.” ALJ Rogers therefore declined to find that the existence of any privilege should be disregarded solely on the basis of the consulting rate. In view of this determination, ALJ Rogers also held that Kodak’s requested discovery did not relate to any substantive issue in the investigation, such as infringement, validity, or domestic industry, and therefore falls outside the scope of discovery allowed by ITC rules, because it is not relevant to any claim of defense of any party and not reasonably calculated to lead to the discovery of admissible evidence. Finally, ALJ Rogers determined that (unknown to him from the briefing immediately preceding Order No. 22) Apple and Kodak had previously agreed not to provide privilege logs to each other for documents generated after certain dates, and Ground Rule 4.10.2 prohibits motions to compel involving privileged documents in view of such agreements. ALJ Rogers determined that in view of Kodak’s allegations lacking evidentiary support, he would rely upon this Ground Rule to decline further treating the issue of privilege.