Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_06-cv-03926/USCOURTS-cand-5_06-cv-03926-9/pdf.json

Nature of Suit Code: 820
Nature of Suit: Copyright
Cause of Action: 17:501 Copyright Infringement

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United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

IO GROUP, INC.,

Plaintiff,

 v.

VEOH NETWORKS, INC.,

Defendant. /

No. C06-03926 HRL

ORDER GRANTING IN PART AND

DENYING IN PART PLAINTIFF’S

MOTION TO COMPEL PRODUCTION

OF DOCUMENTS

[Re: Docket No. 54]

This is an action for alleged copyright infringement. Plaintiff Io Group, Inc. says that it

is the producer and copyright holder for various adult films. Defendant Veoh Networks, Inc.

(Veoh) says that it provides software and a website (veoh.com) that enables the sharing of userprovided video content over the Internet. Plaintiff alleges that Veoh copied, displayed, or

distributed seven of its copyrighted films on veoh.com without permission. The complaint

asserts claims for copyright infringement, contributory copyright infringement, vicarious

copyright infringement and for an accounting.

Veoh denies any liability and says that it no longer permits users to publish adult

material on its website. Additionally, Veoh maintains that it is immune from liability under the

“safe harbor” provisions of the Digital Millennium Copyright Act (DCMA), 17 U.S.C. § 512.

Plaintiff now moves to compel the production of documents which it says are necessary

*E-FILED: 4/13/2007*

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 to establish its claims for Veoh’s liability for copyright infringement. Veoh opposes the

motion. Upon consideration of the papers filed by the parties, as well as the arguments

presented at the April 10, 2007 hearing, this court grants the motion in part and denies the

motion in part as follows:

A. Veoh’s Asserted Objections

Preliminarily, plaintiff seeks a blanket order overruling all of Veoh’s stated objections –

whether asserted as “General Objections” or in response to specific requests – on the ground

that the objections are merely conclusory. Grounds for objection to discovery requests must be

stated with specificity. See Fed.R.Civ.P. 34(b). This is particularly true with claims of

privilege. See FED.R.CIV.P. 26(b)(5)(A).

Here, Veoh asserted a number of General Objections which it, in boilerplate fashion,

purported to incorporate into its specific responses – whether or not those objections were

actually raised in response to a particular request. This practice obscures the extent to which

Veoh is withholding information and does not satisfy the requirement for specificity under Fed.

R. Civ. P. 34(b). Thus, any General Objections which Veoh only implicitly asserted by

incorporation to a specific request are overruled.

Plaintiff argues that Veoh also failed to explain the reasons for objections that were

asserted in response to specific requests. Indeed, Fed. R. Civ. P. 34(b) requires that a

responding party “stat[e] the reasons for the objection.” FED.R.CIV.P. 34(b). Nevertheless, as

discussed more fully below, this court has considered Veoh’s objections asserted in response to

the particular requests at issue; and, it finds that not all of Veoh’s objections are baseless. 

Accordingly, this court declines to issue a blanket order overruling all of Veoh’s objections at

the outset.

As for Veoh’s asserted objections based on privilege, plaintiff says that Veoh has not yet

produced a privilege log. Veoh says that it will do so. A party that withholds information on

the ground of any privilege “shall make the claim expressly and shall describe the nature of the

documents, communications, or things not produced or disclosed in a manner that, without

revealing information itself privileged or protected, will enable other parties to assess the

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applicability of the privilege or protection.” See FED.R.CIV.P. 26(b)(5)(A). To the extent Veoh

has not already done so, it shall serve a privilege log forthwith.

B. Moot Issues (Request Nos. 4 and 7)

With respect to Request No. 4, plaintiff apparently has agreed to limit this request to “all

documents which constitute defendant’s procedures for verifying the accuracy and/or

appropriateness of the categorization or indexing of content submitted to veoh.com for

publication by and through veoh.com.” (See Golinveaux Decl., Ex. 1). Veoh represents that, to

the extent it understands this request (as limited), it has reviewed its records and no such

documents exist. At the motion hearing, Veoh’s counsel confirmed that the arguments set out

in plaintiff’s motion papers has not changed Veoh’s understanding of the request. She

reiterated that Veoh has no responsive documents in its possession, custody or control. Based

on defense counsel’s representation, there appear to be no documents to compel. Accordingly,

plaintiff’s motion as to this request is DENIED AS MOOT.

As for Request No. 7, plaintiff has agreed to narrow it to “specific documents identified

by Defendant, such as information packets, slide presentations, or other materials presented to

potential investors.” (See Golinveaux Decl., Ex. 1). Veoh agrees to produce responsive

documents to the request (as narrowed); and, at the motion hearing, its counsel represented that

all responsive documents have already been produced. Accordingly, plaintiff’s motion as to

this request is DENIED AS MOOT.

C. Request Nos. 2 and 21

In Request Nos. 2 and 21, plaintiff seeks information which it says is relevant to show

whether Veoh obtained a “direct financial benefit” from the infringing activity:

• Request No. 2: “All documents which constitute, describe, refer to or relate to

reports identifying the amount of daily traffic, hits, and/or visits to veoh.com

since Veoh Networks began operating veoh.com.”

• Request No. 21: “All documents which constitute, refer to or relate to

Defendant’s ability to monetize veoh.com including, without limitation, through

advertising revenue, video on demand fee sharing or any other means.”

(Mot., Ex. A).

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“One . . . infringes vicariously by profiting from direct infringement while declining to

exercise a right to stop or limit it.” MGM Studios, Inc. v. Grokster, Ltd., 545 U.S. 913, 930

(2005). “In the context of copyright law, vicarious liability extends . . . to cases in which a

defendant ‘has the right and ability to supervise the infringing activity and also has a direct

financial interest in such activities.” A&M Records, Inc. v. Napster (“Napster II”), 239 F.3d

1004, 1022 (9th Cir. 2001) (quoting Fonovisa, Inc. v. Cherry Auctions, Inc. 76 F.3d 259, 262

(9th Cir. 1996)). “Financial benefit exists where the availability of infringing material ‘acts as a

‘draw’ for customers.’” Id. (quoting Fonovisa, Inc.,76 F.3d at 263-64)).

With respect to Request No. 2, plaintiff has agreed to narrow this request to “a daily

report of traffic to veoh.com from the day the site went live to the present.” (See Golinveaux

Decl., Ex. 1). Plaintiff contends when Veoh stopped allowing users to publish adult material on

veoh.com, website traffic dropped significantly. He argues that this drop in traffic is relevant to

show the value of adult material in drawing users to veoh.com and the effectiveness of Veoh’s

filtering techniques.

Veoh argues that the request – even as narrowed – is overbroad and seeks irrelevant

information, citing Ellison v. Robertson, 357 F.3d 1072 (9th Cir. 2004). Its reliance on Ellison,

however, is misplaced. Ellison does not hold that the amount of draw is wholly irrelevant, as

Veoh seems to suggest. Rather, the Ninth Circuit held only that “[t]here is no requirement that

the draw be ‘substantial.’” Id. at 1079. In so holding, the court emphasized that “[t]he essential

aspect of the ‘direct financial benefit’ inquiry is whether there is a causal relationship between

the infringing activity and any financial benefit a defendant reaps, regardless of how substantial

the benefit is in proportion to a defendant’s overall profits.” Id.

Here, the requested website traffic information is relevant or reasonably calculated to

lead to the discovery of admissible evidence as to the “direct financial benefit,” if any, Veoh

obtained from the alleged infringing activity. Moreover, at the motion hearing, Veoh indicated

that the requested reports could be run from a database. Nevertheless, there apparently is no

dispute that Veoh stopped permitting the publication of adult material on its website. At oral

argument, Veoh stated that its website was first publicly available in early 2006 and that it

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stopped allowing adult material on its website in June 2006. Plaintiff agreed that it probably

only needs information for only a few weeks after June 2006. Accordingly, plaintiff’s motion

as to Request No. 2 (as narrowed) is GRANTED; however, the request will be further limited to

website traffic information from the day the website went “live” through July 2006. Veoh shall

produce all responsive, non-privileged documents within ten days of the date of this order.

As for Request No. 21, Veoh argues that its theoretical ability to monetize veoh.com is

irrelevant. However, as discussed above, “[f]inancial benefit exists where the availability of

infringing material ‘acts as a “draw” for customers.’” Napster II, 239 F.3d at 1023 (quoting

Fonovisa, Inc. v. Cherry Auction, Inc., 76 F.3d 259, 263-64 (9th Cir. 1996)). At least one

district court has concluded that “[Napster II’s] broad definition of ‘direct financial benefit’

would encompass even a ‘future hope to monetize.’” Perfect 10 v. Google, Inc., 416 F. Supp.2d

828, 857 (C.D. Cal. 2006) (quoting 4 Nimmer on Copyright, § 12.04[A][1] (2005)).

Veoh is not aided by its cited authority. As discussed above, Ellison holds that there is

no requirement that the draw be substantial. Ellison, 357 F.3d at 1079. The other case cited by

Veoh, Scharmer v. Agnew Assocs., Inc., 167 U.S.P.Q. 77 (E.D.N.Y. 1970), is inapposite. 

Scharmer is a patent case which concerned the allegedly infringing sales of sinks.

The court finds that the requested information is relevant to show any “direct financial

benefit” Veoh may have obtained. However, insofar as Veoh no longer allows the publication

of adult material on its website, Request No. 21 will also be limited to information through July

2006. Accordingly, plaintiff’s motion as to Request No. 21 is GRANTED as limited. Veoh

shall produce all responsive, non-privileged documents within ten days of the date of this

order.

D. Request Nos. 5 and 14

In Request Nos. 5 and 14, plaintiff seeks information about Veoh’s policies and

procedures with respect to content submitted for publication to veoh.com:

• Request No. 5: “All documents which constitute, describe, refer to or relate to

Defendant’s procedures for processing and handling content once submitted to

veoh.com for publication by and through veoh.com.”

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• Request No. 14: “All documents which discuss, refer to or relate to Veoh

Network, Inc.’s ability to discover the true identity of individuals who submit

content for publication by and through veoh.com.”

(Mot., Ex. A). Plaintiff contends that the requested information is relevant to show Veoh’s right

and ability to supervise or control the allegedly infringing activity.

“The ability to block infringers’ access to a particular environment for any reason

whatsoever is evidence of the right and ability to supervise.” Napster II, 239 F.3d at 1023. “To

escape imposition of vicarious liability, the reserved right to police must be exercised to its

fullest extent. Turning a blind eye to detectable acts of infringement for the sake of profit gives

rise to liability.” Id.

With respect to Request No. 5, Veoh contends that the request is overbroad because it

calls for most of the documents in its possession. Insofar as Veoh indicates that its “core

function” is to allow users to share content through its website, this request might well call for a

large number of documents. However, that does not necessarily mean that the request is

overbroad. Indeed, Veoh’s policies and procedures with respect to content submitted to its

website are relevant to show the scope and extent of its alleged liability for copyright

infringement. Veoh nevertheless argues that the request does not provide enough guidance as to

where to look for responsive documents. Plaintiff asserts that he does not know how

defendant’s documents are organized and that Veoh has refused to engage in any discussion that

might help it to focus the request.

As noted at the motion hearing, Veoh is in a better position than the court to know what

kinds of responsive documents actually exist, and how those documents feasibly may be

produced. Here, it has provided little information to help this court decide how the requests

fairly may be focused, if at all. The parties are encouraged to engage in dialogue which may

help them to reach an agreement here. Nevertheless, since the parties say that they have

reached an impasse:

Based on the record presented, this court concludes that the motion as to Request No. 5

should be GRANTED. At oral argument, Veoh represented that it does not have a formal

document setting out its policies and procedures as to submitted content. However, defense

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1 Plaintiff’s motion originally sought to compel documents responsive to

Request Nos. 9-12. However, plaintiff has agreed to amend Request No. 9 to incorporate

Request No. 12 and to withdraw Request No. 12. (See Golinveaux Decl., Ex. 1). 

Accordingly, plaintiff’s motion as to Request No. 12 is denied as moot.

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counsel did not exclude the possibility that there may be some sort of documentation (e.g., job

descriptions) which may contain responsive information. Moreover, even if there is no

“official” policy document, the request reasonably can be read as seeking documents (e.g., job

descriptions, emails, memoranda, and the like ) which explain, amend, clarify, amplify or

interpret Veoh’s policies and procedures for handling submitted content. Veoh argues that any

production will be burdensome. It is true that document production likely will entail some

burden; however, Veoh has not substantiated its assertion that any burden imposed will be

undue. Veoh shall produce all responsive, non-privileged documents within ten days of the

date of this order.

As for Request No. 14, Veoh argues that its ability to ascertain the true identity of its

users is irrelevant. However, the requested information is relevant or reasonably calculated to

lead to discovery of admissible evidence as to Veoh’s right and ability to supervise any

infringing activity. Although Veoh contends that the request should be limited to the seven

works at issue in the instant action, plaintiff is entitled to know whether Veoh generally has the

ability to identify users who submit material for publication on its website. Accordingly,

plaintiff’s motion as to Request No. 14 is GRANTED. Veoh shall produce all responsive, nonprivileged documents within ten days of the date of this order.

E. Request Nos. 8-11

In Request Nos. 8-11, plaintiff seeks information relating to Veoh’s policies and

procedures for reviewing “explicit” material:

• Request No. 8: “All documents which constitute, describe, refer to or relate to

defendant’s policy or policies regarding the display by and through veoh.com of

explicit material (whether such material is described as ‘explicit,’ ‘adult,’

‘pornographic,’ ‘nude,’ ‘sexual,’ or any other similar word), including all

original, draft, subsequent, or revised versions of such documents.”

• Request No. 9 (as amended)1

: “All documents which discuss if or how [the

recordkeeping and labeling requirements set forth at] 18 U.S.C. § 2257 and

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2 Title 18 United States Code Section 2257 provides in relevant part:

(a) Whoever produces any book, magazine, periodical, film, videotape,

digital image, digitally- or computer-manipulated image of an actual human

being, picture, or other matter which--

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implementing regulations at 28 C.F.R. 75.1 et seq. relate to Veoh Network’s

operations.”

• Request No. 10: “All documents which constitute, refer to or relate to Veoh

Networks, Inc.s’ policies for preventing child pornography from being published

by and through veoh.com.”

• Request No. 11: “All documents which constitute, refer to or relate to Veoh

Network, Inc.’s policies for obtaining proof that individuals appearing in explicit

material submitted to Veoh Network, Inc. for publication by and through

veoh.com were over eighteen years of age at the time the materials was

produced.”

(Mot., Ex. A; see also Golinveaux Decl., Ex. 1).

With respect to Request No. 8, plaintiff contends that the requested information is

relevant to Veoh’s right and ability to supervise any allegedly infringing activity. Veoh protests

that the information is irrelevant because there is no relationship between its right and ability to

supervise infringing activity and the “adult” or “non-adult” content of the submitted material. 

Nevertheless, the requested information is relevant or reasonably calculated to lead to the

discovery of admissible evidence showing how effectively Veoh was able to regulate the

broadcast of adult material on its website. To the extent there is no “official” policy document,

the request reasonably can be read as seeking documents (e.g., emails, memoranda or the like)

which explain, amend, clarify, or interpret Veoh’s policies and procedures as to “explicit”

material. Accordingly, the motion as to Request No. 8 is GRANTED. Veoh shall produce all

responsive, non-privileged documents within ten days of the date of this order.

As for Request Nos. 9-11, plaintiff argues that the requested information pertains to

Veoh’s ability to control what video files appear on its system – including video files containing

sexually explicit material and illegal child pornography. Here, it asserts that federal laws

require any video containing sexually explicit material to be labeled with the actual name and

business address of the producer of the material. See 18 U.S.C. § 2257.2

 Plaintiff further argues

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(1) contains one or more visual depictions made after

November 1, 1990 of actual sexually explicit conduct; and

(2) is produced in whole or in part with materials which have

been mailed or shipped in interstate or foreign commerce, or is

shipped

or transported or is intended for shipment or transportation in

interstate or foreign commerce

shall create and maintain individually identifiable records pertaining

to every performer portrayed in such a visual depiction.

18 U.S.C. § 2257(a)(1), (2).

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that if Veoh was aware of and followed this law, any infringing activity would have been all the

more apparent. Veoh maintains that 18 U.S.C. § 2257 does not apply to it and that the

requested information is, in any event, irrelevant to the question whether Veoh did or did not

infringe plaintiff’s rights in the seven films alleged in this lawsuit.

Plaintiff’s motion as to Request No. 10 is GRANTED. The requested information is

relevant or reasonably calculated to lead to the discovery of admissible evidence as to Veoh’s

ability to control or supervise content submitted for publication on veoh.com. To the extent

there is no “official” policy document, the request reasonably can be read as seeking documents

(e.g., job descriptions, emails, memoranda or the like) which explain, amend, clarify, amplify or

interpret Veoh’s policies and procedures for preventing child pornography from being

published. Veoh shall produce all responsive, non-privileged documents within ten days of the

date of this order.

However, plaintiff’s motion as to Request Nos. 9 and 11 is DENIED. Even assuming

(without deciding) that 18 U.S.C. § 2257 applies to Veoh, plaintiff has not convincingly

demonstrated that Veoh’s compliance (or not) with that statute is relevant or reasonably

calculated to lead to the discovery of admissible evidence of its alleged liability for copyright

infringement.

F. Request No. 16

Request No. 16 calls for “[e]lectronic copies, in a readily viewable format, of all files

containing adult material (whether such material is described as ‘explicit,’ ‘adult,’

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‘pornographic,’ ‘nude,’ ‘sexual’ or any other similar word) ever published by and through

veoh.com.” (Mot., Ex. A). When Veoh blocked access to all adult content on its website,

plaintiff says that it was unable to complete its review to determine if there were additional

instances of infringement in its copyrighted works. There is no dispute that information

pertaining to works owned by plaintiff is relevant. However, Veoh contends that the request is

overbroad and seeks irrelevant information as to works owned by third parties.

At oral argument, plaintiff confirmed that it is interested only in seeing whether there are

other instances of infringement of its copyrights, and not those belonging to third parties.

 However, plaintiff maintains that it needs to see all adult material that was published on

veoh.com. Here, it points out that typically, only clips of its films (that is, sans titles or credits)

would be submitted and published. Because any information as to plaintiff’s works is

indisputably relevant, and since it appears that there is no way for plaintiff’s works to be

identified except through a review of all adult material published on Veoh’s website, plaintiff’s

motion as to Request No. 16 is GRANTED. Veoh shall produce all responsive, non-privileged

documents within ten days of the date of this order.

Veoh argues that plaintiff should bear the entire cost of production, citing OpenTV v.

Liberate Techs., 219 F.R.D. 474 (N.D. Cal. 2003). For good cause shown, this court may make

any order protecting a party from any undue burden or expense, “including orders conditioning

discovery on the requesting party’s payment of the costs of discovery.” OpenTV v. Liberate

Techs., 219 F.R.D. 474, 476 (N.D. Cal. 2003). However, “[s]hifting the cost of production from

the producing party to the requesting party should be considered only when inaccessible data is

sought.” Id. (citing Zubulake v. UBS Warburg LLC, et al., 216 F.R.D. 280, 284 (S.D.N.Y.

2003). In deciding whether cost-shifting is appropriate for the discovery of inaccessible data,

the court should consider the following factors:

1. The extent to which the request is specifically tailored to

discover relevant information;

2. The availability of such information from other sources;

3. The total cost of production, compared to the amount in

controversy;

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4. The total cost of production, compared to the resources

available to each party;

5. The relative ability of each party to control costs and its

incentive to do so;

6. The importance of the issues at stake in the litigation; and

7. The relative benefits to the parties of obtaining the information.

Id.

In the instant case, Veoh has provided no information about whether and how such

information is “inaccessible,” much less any information necessary for this court to decide

whether it would be appropriate to shift all costs of production to plaintiff. Accordingly,

Veoh’s request for cost-shifting is denied. Nonetheless, the parties are encouraged to come to

an agreement as to the most efficient means of production. (Here, plaintiff notes that it has

invited such dialogue and that it is willing to provide high capacity storage devices).

G. Request Nos. 22-24

In Request Nos. 22-24, plaintiff seeks information pertaining to the operation of

veoh.com, as well as Veoh’s computer policies, procedures and guidelines:

• Request No. 22: “All documents explaining how veoh.com and each of its

features operates or was intended to operate, including without limitation, such

documents given to employees or contractors tasked with designing,

programming or constructing veoh.com.”

• Request No. 23: “All documents with reference to or written policies,

procedures and guidelines related to defendant’s computers or computer systems

including, without limitation, back up schedules and procedures, electronic

retention and preservation schedules, and file naming conventions.”

• Request No. 24: “All documents identifying computers, equipment and

software used in conjunction with the operation of veoh.com.”

(Mot., Ex. A).

Plaintiff’s motion as to Request No. 22 is GRANTED. There apparently is no dispute

that the requested information about the website’s operation is relevant. Plaintiff alleges that

Veoh’s computer systems provided the means by which Veoh allegedly infringed plaintiff’s

copyrights. Moreover, Veoh has made no effort to explain why it believes that the request is

“vastly overbroad.” In any event, the request seeks only those documents which “explain”

Veoh’s computer policies. Such documents are fair game.

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Plaintiff’s motion as to Request No. 23 is GRANTED. Veoh’s computer policies,

procedures and guidelines are relevant to show how it operated its website. Moreover, there is

some indication in the record presented that Veoh claims that it is immune from liability under

DMCA, 17 U.S.C. § 512(a) based on an assertion that it maintains material on its computer

system no longer than is reasonably necessary for the transmission, routing, or provision of

connections. As such, the requested documents also appear to relevant to show whether there is

any basis for Veoh’s claimed “safe harbor” defenses. As drafted, the phrase “all documents

with reference to” is overbroad. Nonetheless, the request reasonably can be read as seeking

defendant’s computer policies, procedures and guidelines – including any documents which

may not comprise “official” policy documents (e.g., job descriptions, emails, memoranda and

the like), but which nonetheless amend, clarify, amplify or explain those policies.

Plaintiff’s motion as to Request No. 24 is GRANTED, but the request shall be limited to

those documents that are sufficient to identify all of the computers, equipment and software

used in conjunction with the operation of veoh.com.

Veoh shall produce all non-privileged documents that are responsive to Request Nos.

22-24 in accordance with this order, within ten days of the date of this order.

IT IS SO ORDERED.

Dated:

 

HOWARD R. LLOYD

UNITED STATES MAGISTRATE JUDGE

April 13, 2007

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5:06-cv-3926 Notice will be electronically mailed to:

Michael S. Elkin melkin@thelenreid.com, rpagliaro@thelenreid.com 

Jennifer A. Golinveaux jgolinveaux@winston.com, vebert@winston.com;

docketsf@winston.com 

Dennis Gill Sperlein legal@titanmedia.com 

Gill Sperlein sperlein@aol.com 

Counsel are responsible for distributing copies of this document to co-counsel who have

not registered for e-filing under the court’s CM/ECF program.

Case 5:06-cv-03926-HRL Document 63 Filed 04/13/07 Page 13 of 13