ALJ Gildea Grants Motion to Quash Nonparty Subpoenas in Certain Consumer Electronics (337-TA-839)

On November 2, 2012, ALJ James E. Gildea issued Order No. 17 granting a motion to quash subpoenas served on a nonparty in Certain Consumer Electronics, Including Mobile Phones and Tablets (Inv. No. 337-TA-839).

By way of background, this investigation is based on a complaint filed by Pragmatus AV, LLC (“Pragmatus”) alleging violation of Section 337 in the importation into the U.S. and sale of certain consumer electronics, including mobile phones and tablets, that infringe one or more claims of U.S. Patent Nos. 5,854,893, 6,237,025, 7,054,904, 7,185,054, and 7,206,809.  See our March 15, 2012 post for more details.

According to the Order, nonparty Stuart Kaler (“Kaler”) filed a motion seeking to quash the subpoenas served on him by Pragmatus, explaining that he represented an anonymous client in previous negotiations with Pragmatus regarding a patent not at issue in the investigation.  Thus, Kaler argued that the documents and testimony sought by Pragmatus are privileged, irrelevant, or otherwise duplicative of Pragmatus’ own information.  Kaler also stated that the request imposed “an unjustifiable burden” on him, as his practice “depends on maintaining confidentiality and anonymity in negotiations.” 

Pragmatus opposed the motion, arguing that the anonymous client referred to by Kaler was Samsung, a respondent in this investigation, and therefore Kaler had relevant information.  More specifically, Pragmatus asserted that Kaler had information related to licensing a patent in the same patent family as those of this investigation, and that this information is relevant to determining domestic industry.  Pragmatus also stated that the protective order could protect the identity of the client as confidential business information.

The Commission Investigative Staff (“OUII”) responded in support of a partial grant of the motion.  OUII argued that Kaler should produce relevant, non-privileged documents, and that the identity of the anonymous client would be maintained as confidential under the protective order.

ALJ Gildea stated that nonparties have a “particularly heavy burden to show that subpoenas are unreasonable and oppressive,” but noted that this does not mean that a party may take unlimited discovery from a nonparty.  The ALJ also noted that subpoenaing counsel, especially possible counsel for a respondent in the investigation, is often disfavored.  ALJ Gildea stated that if the anonymous client is indeed one of the respondents, the requested information would be encompassed by the existing discovery requests between the parties.  If the anonymous client is not one of the respondents, the ALJ determined that the burdens imposed on Kaler far outweigh any possible benefits to Pragmatus.  ALJ Gildea additionally noted that the arguments that the protective order is sufficient are misplaced, as “the whole point of seeking anonymity in this instance is not to protect the client’s identity from outsiders, but to protect it from Complainant,”  (emphasis in original) indicating his concern that this information could inadvertently pass from outside counsel to Pragmatus, even though Pragmatus would not be provided the identity directly.  Thus, ALJ Gildea granted the motion to quash the subpoenas served on Kaler.

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