Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_04-cv-03171/USCOURTS-cand-3_04-cv-03171-45/pdf.json

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

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United States District Court

For the Northern District of California

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1

 The Court assumes this is the word processing program’s attempt to be helpful and

“correct” the spelling of Lexecon.

C-04-3171 DISCOVERY ORDER Page 1 of 6

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

Oki America, Inc, et al.,

Plaintiffs,

v.

Advanced Micro Devices, Inc, et al.,

Defendants.

________________________________/

No. C 04-3171 CRB (JL)

ORDER DENYING MOTION TO

COMPEL DOCUMENTS AND

DEPOSITION (Docket # 398)

Introduction 

All discovery in this case has been referred by the district court (Hon. Charles R.

Breyer) as provided by 28 U.S.C. §636(b) and Civil Local Rule 72. The parties submitted

separate statement regarding a discovery dispute, as provided in this Court’s Standing

Order. The matter is suitable for submission without oral argument as provided by Civil

Local Rule 7-1(b).

The Dispute

AMD asks the Court to order Oki to: (1) disclose the work on which Troxel’s opinions

are based and (2) make Lexicon 1

 available for deposition.”

Richard B. Troxel is Oki’s testifying damages expert. Lexecon is a non-testifying

consulting company that Oki used to assist Troxel in arriving at a reasonable royalty for the

Case 3:04-cv-03171-CRB Document 464 Filed 09/27/06 Page 1 of 6
United States District Court

For the Northern District of California

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C-04-3171 DISCOVERY ORDER Page 2 of 6

AMD patents. AMD contends that Lexecon’s contribution to Troxel’s conclusion is

significant and justifies AMD’s need to obtain the Lexecon documents and a deposition of

Lexecon. AMD characterizes Troxel’s royalty as “low,” based on an “implied” royalty rate. 

Troxel’s method for calculating that royalty began with Lexecon’s determination of

the average sales price for the Oki devices accused of infringing AMD’s patents, broken

down semi-annually over the damages period. (Rebuttal Expert report on Damages at Ex.

E). AMD contends that Lexecon calculated the average sales price as “[t]otal revenue for

the products assumed to be infringing AMD’s patents.” (Troxel Depo at 66-67). AMD

interprets this to mean the compensation base for the products accused of infringing AMD’s

patents. 

However, AMD complains, Lexecon did not share that compensation base

calculation with Troxel. (Id. At 65) Oki’s alleged motive is to prevent that information from

being disclosed to AMD. However, Troxel independently verified many of Lexecon’s

calculations. 

Meet and Confer

On September 8 AMD wrote to request that Oki provide the back-up material upon

which Lexecon’s calculations were based and Lexecon’s deposition. Oki refused.

Apparently, this constituted the parties’ attempt to meet and confer. This Court by its

Standing Order requires that parties meet and confer in person to attempt to resolve any

discovery dispute before resorting to the Court. There are local counsel on both sides of

this case, and counsel in Washington, D.C. and in Texas could have met and conferred by

telephone, rather than merely by letter. Since the Court is denying the motion, it will

overlook this lack of compliance.

Analysis

AMD contends that a party may depose “an assistant or collaborator who provided

substantial assistance to a testifying expert.” Dura Automative Systems of Indiana, Inc. V

CTS Corp., 285 F3d 609, 612-614 (7th Cir. 2002) (while persons providing assistance in

formulating expert opinion normally need not testify, “opposing party can depose them in

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United States District Court

For the Northern District of California

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C-04-3171 DISCOVERY ORDER Page 3 of 6

order to make sure they performed their tasks competently”); Herman v Marine Midland

Bank, 207 F.R.D. 26, 31 (W.D.N.Y. 2002) (“In this case the evidence clearly demonstrates

that the expert report submitted by Mr. Gordon was the result of substantial collaborative

work by he and Mr. Sommer . . . Under the circumstances, the fruits of Gordon Associates’

labor is indivisible, and defendant is entitled to explore what Mr. Sommers did.”)

These cases are distinguishable from the case at bar. Unlike the arrangement in

Dura Automotive, in this case Lexecon provided its conclusions to Troxel, who

independently verified them before submitting them in his expert report. He himself did not

have access to the underlying data and therefore could not have relied on it in formulating

his conclusions. Nor was his report the “fruit of substantial collaborative work” with

Lexecon. Lexecon provided its calculation and he used it. The proposed deponent in the

Herman case was the co-author of the expert’s report. Lexecon did not co-author Troxel’s

report.

Non-testifying experts are treated differently from testifying experts. For testifying

experts, a party must timely disclose the experts’ identity and permit discovery of materials

considered by those testifying experts. Fed. R. Civ. P. 26(a) & (b). 

With respect to Mr. Troxel, Oki’s testifying expert, OKI contends, and AMD does not

dispute, that Oki provided all materials prepared by Lexecon that Mr. Troxel reviewed in

forming his opinions in this case.

For non-testifying experts, the “facts known or opinions held by” a non-testifying

expert are discoverable only “upon a showing of exceptional circumstances under which it

is impracticable for the party seeking discovery to obtain facts or opinions on the same

subject by other means.” Id. 26(b)(4)(B) (emphasis added). 

Exceptional circumstances exist where “the condition observed by the expert is no

longer observable,” Hollinger Int’l Inc. v. Hollinger Inc., 230 F.R.D. 508, 522 (N.D. Ill. 2005),

where the costs of an independent examination “would be judicially prohibitive,” Vincent v.

Mortman, 2006 WL 2349448, at *2 (D. Conn. Aug. 11, 2006), or where “there are no other

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United States District Court

For the Northern District of California

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C-04-3171 DISCOVERY ORDER Page 4 of 6

available experts in the same field or subject area” FMC Corp. v. Vendo Co., 196 F. Supp.

2d 1023, 1046 (E.D. Cal. 2002).

No exceptional circumstances in this case justify non-testifying expert discovery.

With respect to Lexecon, Oki’s non-testifying expert, AMD makes no attempt to carry its

“heavy burden” of proving the existence of “exceptional circumstances” sufficient to compel

discovery. The calculations Lexecon performed at Oki’s request were made with the same

financial information that Oki has already produced to AMD. Thus, AMD has all it needs to

perform its own calculations. Because AMD has other avenues to obtain “facts or opinions

on the same subject by other means,” Fed. R. Civ. P. 26(b)(4)(B), there is no justification

for subjecting Lexecon to a deposition regarding its work product.

Oki contends and AMD does not deny that Exhibit E to Mr. Troxel’s rebuttal report,

which AMD claims demonstrates its “need for discovery relating to [Lexecon’s] work,”

indeed undermines AMD’s position. Exhibit E to Mr. Troxel’s report includes Lexecon’s

calculation of the average sales price for certain Oki products. AMD’s motion acknowledges

that this calculation is based on “total revenue for the products assumed to be accused of

infringing divided by the total units for said products,” but that Lexecon “did not share that

compensation base calculation.” On the contrary, the calculation Lexecon used is explicit in

the very sentence AMD’s motion quotes: total revenue / total units = average sales price.

Oki contends, and AMD does not deny that all of the data used in this calculation, explicitly

referenced in Exhibit E, has already been produced to AMD (and is cited in Exhibit E using

the same Bates labels present on AMD’s copies of this information).

The work product AMD seeks from Lexecon is the same work product that AMD’s

experts could have created using the information Oki has produced. Instead, AMD wants to

get it directly from Lexecon, Oki’s non-testifying consultant. This is contrary to the Federal

Rules.

AMD received all the material Mr. Troxel reviewed, and has had a full and fair

opportunity to probe Mr. Troxel’s knowledge about that material. In such circumstances,

court after court has refused to permit discovery from non-testifying experts. See Doe v.

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United States District Court

For the Northern District of California

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District of Columbia, 231 F.R.D. 27, 40-41 (D.D.C. 2005) (denying motion to compel

information from non-testifying expert, where “other means” to obtain information existed by

reviewing testifying expert’s report, and by reviewing the material collected by non-testifying

expert and reviewed by testifying expert); Hollinger, 230 F.R.D. at 522 (denying nontestifying expert discovery where “[d]efendants have the factual information underlying the

disclosed portion of Cook’s analysis and may retain their own expert to conduct their own

analyses”); Chiquita Intern. Ltd. v. M/V Bolero Reefer, 1994 WL 177785, at *1-*2 (where

requesting party’s own experts were equally capable of making the inspection that

opposing party’s non-testifying expert had made, denying discovery because “the failure of

International Reefer to engage its own marine surveyor in a timely manner should not be

rewarded by permitting discovery of Chiquita’s expert”).

The only cases AMD cites are inapposite; as AMD admits, they involve “the work of

an assistant or collaborator.” Mot. at 1. Mr. Troxel – who is not a lawyer and is not familiar

with the nuances of the Federal Rules of Civil Procedure – referred at his deposition to

Lexecon as providing “assistance.” Troxel Dep. Tr. 167:16-18. 

Under Rule 26, however, Lexecon – a leading economic consulting firm here

providing specialized services in accounting and damages calculations at Oki’s direction –

served as a non-testifying expert. Lexecon has uniformly been treated as an expert when

providing testimony on damages. See, e.g., Abrams v. Van Kampen Funds, Inc., 2005 WL

88973, at *8-*9 (N.D. Ill. Jan. 13, 2005); In re Cylink Secur. Litig., 274 F. Supp. 2d 1109,

1114 (N.D. Cal. 2003). It has used that same specialized skill and experience to provide

work product in this case.

Conclusion and Order

The cases AMD cites have no bearing on the instant dispute, which involves the

work product of an independent non-testifying expert using information possessed by both

parties.

AMD has not demonstrated exceptional circumstances warranting discovery from a

nontestifying expert. In the absence of such a showing, Fed. R. Civ. P. 26(b)(4)(B) prohibits

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C-04-3171 DISCOVERY ORDER Page 6 of 6

discovery from a non-testifying expert such as Lexecon, and AMD’s motion should be and

is denied.

IT IS SO ORDERED.

DATED: September 27, 2006

__________________________________

JAMES LARSON

Chief Magistrate Judge

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