Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_14-cv-03657/USCOURTS-cand-3_14-cv-03657-19/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 35:145 Patent Infringement

---

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

MLC INTELLECTUAL PROPERTY, LLC,

Plaintiff,

v.

MICRON TECHNOLOGY, INC., et al.,

Defendants.

Case No. 14-cv-03657-SI 

ORDER RE: DISCCOVERY

Re: Dkt. No. 215

On November 15, 2018, the Court held a hearing on plaintiff MLC’s motion to compel 

discovery and for monetary and evidentiary sanctions related to alleged discovery misconduct. 

For the reasons set forth below, the motion is GRANTED in part and DENIED in part.

DISCUSSION

MLC contends that Micron’s production of sales data is incomplete for three reasons. 

First, MLC argues that Micron improperly limited the scope of the data by only providing sales 

data related to the accused devices MLC specifically identified in its infringement contentions. 

Second, MLC argues that Micron did not produce information about its worldwide sales, and that 

MLC is entitled to foreign sales data both to verify Micron’s assertion that the sales are truly 

foreign, and because the Supreme Court has recently held that foreign sales may be used to 

calculate domestic damages. Third, MLC contends that it is entitled to sales data relating to all of 

Micron’s subsidiaries and affiliates, and that Micron has improperly limited its responses to 

exclude any sales by those entities.

Case 3:14-cv-03657-SI Document 240 Filed 11/26/18 Page 1 of 6
2

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

I. Unaccused products

MLC contends that Micron’s discovery responses are deficient because Micron did not 

provide sales data for models of its “MLC and TLC NAND Flash” products that were not 

specifically identified by manufacturing part number (“MPN”) in MLC’s infringement 

contentions. MLC’s infringement contentions identified 174 products. See Dkt. No. 27-7. MLC 

states that it propounded an interrogatory asking Micron to “[i]dentify all 2-bit and 3-bit NAND 

flash memory products (referred to by Micron as ‘MLC’/’multi-level cell’ and ‘TLC’/’triple-level 

cell’ NAND flash devices, respectively) that Micron made, offered to sell, or sold within the 

United States or imported into the United States between 2008 and June 9, 2015,” and that in 

response Micron identified 13 products by their Design ID numbers. MLC notes that these 13 

Design IDs correspond to the 174 “exemplary” products listed by their MPNs in the infringement 

contentions, and that Micron has long known that MLC claims that all of Micron’s multi-level and 

triple-level NAND flash products infringe the ‘571 patent. 

Micron refers to the products that MLC identified in its infringement contentions as the 

“Accused Products” and the 13 products that Micron identified by Design ID numbers as the 

“Covered Products.” See Kearsley Decl. ¶¶ 6-7 (Dkt. No. 225-3). MLC claims not to have 

understood, or even to have been alerted to, the distinction being made by Micron between

“accused” and “covered” products. According to MLC, there are hundreds of NAND Flash 

products for which Micron did not produce sales data, and “it was not apparent to MLC that 

Micron was even drawing a distinction between ‘Accused Products’ and ‘Covered Products’, 

claiming there are ‘Covered Products’ that are not accused, until MLC raised the issue of the 

discrepancies in Micron’s Sales Spreadsheet.” MLC’s Reply at 5 n.2 (Dkt. No. 229).

Micron’s opposition brief suggests that it only provided sales data for the Accused 

Products which Micron makes in, sells in, or imports into the United States from August 12, 2008 

through June 9, 2015. See Micron’s Opp’n at 2-3 (Dkt. No. 226). However, Micron has 

submitted the declaration of Roger Kearsley, the Micron employee who prepared the sales data 

provided to MLC, and he states,

At the request of MTI’s counsel, I worked with a team member who reports to me 

to prepare a spreadsheet describing the sales, revenue, cost and profits for all 

Case 3:14-cv-03657-SI Document 240 Filed 11/26/18 Page 2 of 6
3

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

Covered Products made, used, offered for sale, and/or sold in the United States by 

MTI, or imported into the United States by MTI and sold in the United States, 

between the period August 12, 2008 and June 9, 2015. I have been informed by 

MTI’s counsel that this spreadsheet has been produced to MLC as a document 

bearing Bates No. MICRONM047490 (“Sales Spreadsheet”).

Kearsley Decl. ¶ 15. At the hearing, it appeared that Micron’s counsel represented that although 

Micron contends that it was not required to produce sales data for products other than the Accused 

Products, Micron in fact produced data for the broader set of Covered Products. If that is the case, 

there is no dispute between the parties on this point. If Micron did not produce sales data for 

Covered Products, Micron shall notify the Court by letter no later than November 30, 2018.

II. Foreign sales

The parties dispute whether Micron should produce sales data regarding “foreign sales.” 

MLC states that it needs Micron’s worldwide sales data (1) to assess Micron’s unilateral 

determination of what constitutes a “foreign sale”; and (2) because courts have held that foreign 

sales data is relevant to determining a reasonable royalty for domestic infringement. Micron 

asserts that it has adequately explained how it determined whether a sale was “foreign,” see

Kearsley Decl. ¶¶ 15-21, and that information regarding foreign sales is not relevant to claims of 

direct infringement under section 271(a).

MLC is correct that some courts have held that “worldwide sales information is relevant to 

inducement, reasonable royalty calculations, and commercial success.” Polaris Innovations Ltd. v. 

Kingston Tech. Co., Inc., Case No. CV 16-00300 CJC (RAOx), 2017 WL 3275615, at *5 (C.D. 

Cal. Feb. 14, 2017) (citing cases); see also Power Integrations, Inc. v. Fairchild Semiconductor 

Int’l, Inc., No. CV 04-1371 LPS, 2018 WL 4804685, at *1-2 (D. Del. Oct. 4, 2018) (applying the 

Supreme Court’s analysis in WesternGeco LLC v. ION Geophysical Corp., 138 S. Ct. 2129, 2137-

38 (2018), to claims of direct infringement under section 271(a) and holding that the plaintiff was 

entitled to seek damages based on worldwide sales). The Court also recognizes that the case law 

regarding the relevance of foreign sales to the calculation of damages is developing and that the 

applicability of WesternGeco II to claims of direct infringement under section 271(a) remains 

unclear. 

Case 3:14-cv-03657-SI Document 240 Filed 11/26/18 Page 3 of 6
4

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

However, in light of the cases cited above, the Court finds it appropriate to allow discovery 

of Micron’s foreign sales, and to reserve for another day the question of precisely how (or 

whether) Micron’s foreign sales are relevant to MLC’s claim for reasonable royalties based on 

direct infringement. Further, although Micron argues that the foreign sales discovery is not 

relevant or proportional to the needs of the case, Micron has not shown that it would be 

burdensome to produce the foreign sales data, and indeed the Kearsley declaration indicates that 

the information is readily available. See Kearsley Decl. ¶ 14.

III. Subsidiaries and affiliates

MLC contends that Micron should produce sales data regarding sales made by whollyowned subsidiaries and majority-owned affiliates because that information is within the possession 

or control of Micron. MLC cites In re ATM Fee Antitrust Litigation, 233 F.R.D. 542, 545 (N.D. 

Cal. 2005), in which the court held that “[f]ederal law requires that a parent respond to [discovery 

requests] with information from a subsidiary if it has access to that information and if the 

information is relevant and not privileged.” However, in that case, there was no dispute that the 

wholly-owned subsidiary possessed relevant documents. Id. at 544. The issue was whether the 

parent company defendant could be required to produce those documents, which were in the 

possession of the non-party subsidiary. Id. 

Here, Micron contends that the documents at issue are not relevant because MLC has not 

sued any of the subsidiaries or affiliates, and therefore any sales made by those entities are 

irrelevant to whether Micron has directly infringed.1 

MLC argues that it is entitled to this information because Micron financially benefits from 

the sales made by wholly-owned subsidiaries and majority owned affiliates (a point disputed by 

Micron’s counsel at the hearing), and because Micron has put those sales at issue by asserting an 

affirmative defense that allegedly infringing sales by its subsidiaries and affiliates are approved 

under license agreements with third parties. MLC notes that Micron’s SEC 10-K filings report 

 

1

 MLC has recently filed a motion to amend the complaint to add these entities as 

defendants.

Case 3:14-cv-03657-SI Document 240 Filed 11/26/18 Page 4 of 6
5

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

combined sales for Micron and its subsidiaries and affiliates and do not identify the financial 

information on an entity-by-entity basis. 

The Court finds that MLC has demonstrated that the sales data of its wholly-owned 

subsidiaries and majority-owned affiliates is discoverable. The Court agrees that Micron has put 

those sales at issue by asserting that allegedly infringing sales by subsidiaries and affiliates were 

permitted by licenses. In addition, the redacted information in the Kearsley declaration regarding 

the location of Micron’s manufacturing facilities and sales of Covered Products to subsidiaries 

suggests that Micron’s business structure may be similar to that described in Invensas Corp. v. 

Samsung Elec. Co., No. 2:17-cv-00670-RWS-RSP, 2018 WL 5809268, at *1-2 (E.D. Tex. Nov. 6, 

2018). In Invensas, the court found that financial data for sales made by one of the defendant’s 

subsidiaries, which was not named as a defendant, was relevant and discoverable because the 

parent defendant would deliver the products to the subsidiary, and the subsidiary entered into sales 

contracts and sold the products to customers in the United States. The Court makes no finding at 

this time about whether Micron would be liable for sales by Micron’s subsidiaries and affiliates. 

IV. Sanctions

MLC argues that Micron violated the Court’s August 20, 2018 order in which the Court 

ordered Micron “to produce by September 25, 2018, documents (such as spreadsheets) showing 

sales, revenue, cost and profits for Micron’s multi-level cell and triple-level cell NAND flash 

products sold between August 12, 2008 and June 9, 2015, including products sold in that period 

corresponding to Micron Design IDs 152a, 163b, 172a, 173a, 174a, 183a, 184a, 184c, 185a, 185c, 

195b, b75a, and n85a.” Dkt. No. 193. MLC argues that the Court ordered Micron to produce 

sales data about all of its NAND flash products, and not just those identified by MLC in its 

infringement contentions, and that MLC is entitled to sanctions based on Micron’s intentional 

violation of that order.

The Court disagrees. As MLC is aware, the dispute that the Court was resolving in the 

August 20, 2018 order related to whether there should be a deadline for production, not the scope 

of production. See Dkt. No. 192 (parties’ joint discovery letter brief regarding dispute over 

Case 3:14-cv-03657-SI Document 240 Filed 11/26/18 Page 5 of 6
6

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

deadline). The language from the Court’s order regarding what documents were to be produced 

(quoted above) was taken verbatim from the parties’ letter brief and was not intended to address

the scope of Micron’s discovery obligations. See id. at 3. Further, as noted above, it appears that 

Micron did in fact produce sales data for the Covered Products, which were listed by Design ID 

numbers in the Court’s order.

The Court also finds that MLC’s request for sanctions is procedurally improper because 

MLC “did not comply with Civil Local Rule 7-8, which requires all sanctions requests to be 

brought by separately-noticed motion.” Synapsis, LLC v. Evergreen Data Sys., Inc., Civ. No. 05-

1524 JF, 2006 WL 2884413, at *1 (N.D. Cal. Oct. 10, 2006). 

CONCLUSION

For the foregoing reasons, the Court GRANTS MLC’s motion to compel discovery and 

DENIES MLC’s request for sanctions. Micron is ordered to produce the additional discovery 

regarding foreign sales of Covered Products and sales of Covered Products by its affiliates and 

subsidiaries no later than December 7, 2018. If Micron did not produce sales data regarding 

Covered Products in its initial production, Micron shall so inform the Court no later than 

November 30, 2018; in that event, the Court will issue a supplemental order regarding the scope 

of the December 7, 2018 production.

IT IS SO ORDERED.

Dated: November 26, 2018

______________________________________

SUSAN ILLSTON

United States District Judge

Case 3:14-cv-03657-SI Document 240 Filed 11/26/18 Page 6 of 6