ALJ Shaw Denies Motion For Protective Order And Grants Motion To Compel In Certain Personal Data And Mobile Communications Devices (337-TA-710)

Topics: ALJ Orders, ALJ Shaw

On January 11, 2013, ALJ David P. Shaw issued the public version of Order No. 124 and Order No. 125 (both dated September 19, 2012) in Certain Personal Data and Mobile Communications Devices and Related Software (Inv. No. 337-TA-710).

By way of background, Apple Inc. (“Apple”) filed an enforcement complaint on June 4, 2012 alleging that Respondents High Tech Computer Corp. and HTC America, Inc. (collectively, “HTC”) violated the Commission’s December 19, 2011 limited exclusion order (“LEO”) in the underlying investigation.  See our June 6, 2012 post for more details on Apple’s enforcement complaint against HTC.

Order No. 124

According to Order No. 124, HTC sought a protective order preventing Apple from requesting documents and information relating to:  (1) Apple’s infringement contentions regarding applications and software not accused during the underlying investigation; (2) Apple’s request for civil penalties; and (3) Apple’s request for issuance of a cease and desist order.

Regarding (1), HTC argued that in the underlying investigation Apple limited its infringement allegations to the Browser, HTC Messages and Android Messaging applications on the accused HTC devices and therefore waived infringement arguments relating to the Gmail and Calendar applications.  Apple and the Commission Investigative Staff (“OUII”) countered that Apple’s discovery requests fit squarely within the scope of the investigation and the plain language of the LEO which was directed to all HTC articles covered by the asserted claims and not limited to those articles specifically accused during the violation phase of the investigation.  ALJ Shaw agreed with Apple and OUII that nothing in the LEO suggests that the accused devices cannot be covered by the order based on infringing functionality in Gmail and Calendar applications (or any other applications not previously identified during the violation phase) even though these were not the applications on which the Commission’s infringement findings were based in the underlying investigation.

With respect to (2), HTC contended that Apple should be precluded from seeking discovery relating to pricing information, revenue, and importation dates and volumes for HTC’s mobile devices because such information relates only to Apple’s improper request for civil penalties.  However, ALJ Shaw rejected this argument on the ground that the requested information is relevant to the proper bond amount for the Presidential Review Period in the event that a new remedial order is issued or an old order is modified, as well as the extent to which HTC potentially violated the LEO and, in particular, whether a modified order or a cease and desist order is necessary.

As to (3), HTC argued that the Commission already determined that a cease and desist order was not appropriate since Apple failed to show that HTC maintains a commercially significant inventory of the accused devices in the U.S.  However, ALJ Shaw found that Apple is allowed to seek discovery relating to its request for a cease and desist order even though such an order was denied in the underlying investigation because HTC’s inventory and importation practices may have changed.

Accordingly, HTC’s motion was denied.

Order No. 125

According to Order No. 125, Apple sought to compel HTC to produce documents and supplement interrogatory responses on the grounds that “although now halfway through the fact discovery period in this enforcement proceeding, HTC has yet to provide any discovery — not a single document, not a single substantive response to any interrogatory.”  HTC responded that the motion is moot because Apple “know[s] full well that HTC would be producing documents, source code and supplement its interrogatory responses by August 24.”  OUII stated that since Apple filed its motion to compel, HTC began producing source code but “still has not come close to completing its production.”  Apple replied that the discovery so far provided includes “only the most basic information that should have been collected and produced months ago,” that HTC produced no internal communications or technical documents regarding the modifications it purportedly made to its products in response to the LEO, and that HTC still has not provided source code for several of the accused products.

ALJ Shaw observed that almost two months had passed since Apple served its discovery requests, and that HTC admitted waiting until the day after Apple filed the current motion before producing some documents and supplementing its responses to Apple’s First Set of Interrogatories.  The ALJ also noted that the enforcement proceeding is limited to two patent claims and actions occurring after the LEO issued on April 19, 2012.  Thus, “to stay on track with the procedural schedule, HTC must produce all relevant discovery” and Apple’s motion was granted.

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