Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_04-cv-04801/USCOURTS-cand-5_04-cv-04801-22/pdf.json

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

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28 1 The holding of this court is limited to the facts and the particular circumstances

underlying the present motion.

ORDER, page 1

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

PHASE FOUR INDUSTRIES, INC.,

Plaintiff,

v.

MARATHON COACH, INC.,

Defendants. __________________________________

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Case No.: C- 04-4801 JW PVT

Related Cases C-05-0748 JW PVT

C-04-5105 JW

ORDER GRANTING IN PART AND

DENYING IN PART MOTION TO

COMPEL DISCOVERY

I. INTRODUCTION

In this action, plaintiff Phase Four Industries, Inc. (“PFII’) sued Defendant Marathon

Coach, Inc. (“Marathon”) for declaratory judgment of non-infringement and invalidity of U.S.

Patent No. 6,607,009 (the “‘009 Patent”), which involves waste disposal systems for recreational

vehicles.1

 Marathon filed a counterclaim for infringement of the ‘009 patent. Marathon

removed related action 04-5105 from state court where PFII sued Marathon for improper

disclosure of trade secret information and breach of confidentiality agreement. In the third

related action, 05-748, Marathon sued Monaco Coach Corporation (“Monaco”) and PFII for

infringement of the ‘009 in the District of Oregon and the case was transferred here.

Case 5:04-cv-04801-JW Document 180 Filed 08/23/07 Page 1 of 5
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ORDER, page 2

 On July 13, 2007, Defendant Marathon moved to compel production of documents and

depositions of PFII and Monaco pursuant to Rule 30(b)(6). On August 21, 2007, the Court

conducted a hearing on the motion to compel discovery. For the following reasons, the Motion

is Granted in Part and Denied in Part as described herein. 

II. DISCUSSION

On March 24, 2006, this Court issued an Order granting Marathon’s Motion to Compel

PFII to produce documents relating to sales of the wastemaster products. In the current motion,

Marathon seeks to compel: 1) production of updated sales information that was produced

pursuant to the March 23, 2006 Order, as well as underlying data sufficient to show cost of

goods and gross profit; 2) production of documents sufficient to reveal the names of corporate

purchasers, for both updated and prior sales information; 3) depositions to take place in Portland;

and 4) sanctions.

A. Legal Standard

A party is entitled to discovery if it is relevant to the claims and defenses in a lawsuit

and, for good cause shown, a court may order discovery related to the subject matter of the

litigation. Fed.R. Civ.P. 26(b)(1). Additionally, under the liberal discovery principles of the

Federal Rules, those opposing discovery are required to carry a heavy burden of showing why

discovery should be denied. Blankenship v. Hearst Corp., 519 F.2d 418, 429 (9th Cir. 1975);

Gray v. First Winthrop Corp., 133 F.R.D. 39 (N. D.Cal. Oct 25, 1990). 

B. Motion to Compel Production of Documents

1. Updated Sales Information and Cost and Profit Data

Rule 26 imposes a duty to “supplement at appropriate intervals” information provided in

initial disclosures and a duty “seasonably to amend” discovery responses that are incomplete or

incorrect. Fed. R. Civ. P. 26(e). PFII claims that it has provided appropriate supplementation in

the form of a spreadsheet that summarizes sales as well as profit and loss information. Marathon

objects to this document claiming that it is entitled to the underlying documentation and should

not have to rely upon a summary created for this litigation. Marathon clarified that it needed

gross profit information, but did not need to know actual company profit. PFII again objected,

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ORDER, page 3

claiming that it did not want to reveal sensitive information to Marathon.

Accordingly, PFII shall produce all documents showing sales and gross profits and may

designate any confidential documents as “Attorneys’ Eyes Only.” The parties shall make every

effort to agree upon disclosure to appropriate experts. If the parties are unable to reach a

reasonable agreement on disclosure to experts, either side may file a motion to resolve the

dispute. The parties are cautioned that unreasonable behavior will result in sanctions. PFII shall

provide an explanation to Marathon of what documents it is producing and what documents it no

longer possesses. PFII shall produce the profit and cost data in a format that is clear and

comprehensible.

2. Customer Names

Marathon renews its request to discover the names of all non-individual customers. 

Marathon argues that sales to coach retailers will affect the royalty that would be reasonable for

leasing of the patented technology. Because sales to original equipment manufacturers are

relevant to damages, Marathon’s motion is Granted. PFII shall produce documents sufficient to

reveal all sales to all corporate customers. PFII may redact the names of individual customers

and PFII may produce the unredacted information about corporate customers as “Attorneys’

Eyes Only.” PFII shall also update the prior production of sales information to reveal the

identities of all non-individual customers. 

C. Motion to Compel Depositions

Marathon originally sought to compel depositions of Monaco and PFII to take place in

Portland. The motion was based on medical restrictions that precluded Marathon attorney Ms.

Legaard from flying. Marathon argued that it noticed the depositions for July, when Ms.

Legaard could have flown to California, and that PFII and Monaco’s inappropriate behavior

prevented the depositions from going forward at that time. Accordingly, Marathon argued that

Monaco and PFII should travel to Portland to prevent Marathon from having to incur the

expense of another attorney having to take the depositions. Since the Motion was filed, two

significant developments have occurred: 1) Judge Ware has vacated the discovery cut-off,

allowing discovery to proceed; and 2) Ms. Legaard has started her maternity leave. 

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28 2

If Marathon claims undue hardship, it must make a detailed showing of why no attorney is

capable of taking the depositions in the locations provided in the Federal Rules of Civil

Procedure.

ORDER, page 4

In light of these developments, the motion to compel the depositions appears to be

unnecessary. Discovery is currently open and depositions may be taken. The parties shall meet

and confer and make every effort to select mutually convenient dates and places for the

necessary depositions. Absent a showing of undue hardship on Marathon, the depositions shall

take place according to the Federal Rules of Civil Procedure.2

 If the parties cannot agree on

dates and times, any party may file a motion for court intervention. Again, all parties are

cautioned that unreasonable refusals to agree will result in sanctions.

D. Motion for Sanctions

Marathon seeks $2,602.00 for having to bring this motion. Rule 37 addresses motions to

compel discovery and provides: 

 If the motion is granted or if the disclosure or requested discovery is provided

after the motion was filed, the court shall, after affording an opportunity to be

heard, require the party or deponent whose conduct necessitated the motion or the

party or attorney advising such conduct or both of them to pay to the moving

party the reasonable expenses incurred in making the motion, including attorney's

fees, unless the court finds that the motion was filed without the movant's first

making a good faith effort to obtain the disclosure or discovery without court

action, or that the opposing party's nondisclosure, response, or objection was

substantially justified, or that other circumstances make an award of expenses

unjust. 

Fed. R. Civ. P. 37 (a)(4)(A). However, Civil Local Rule 37-3 requires that any motion for

sanctions in connection with a discovery dispute must be made by a separate motion. Marathon

did not file a separate motion. Accordingly, Marathon’s request for sanctions is denied without

prejudice. 

III. CONCLUSION

For the foregoing reasons, IT IS HEREBY ORDERED that:

1. Marathon’s Motion to Compel updated sales documents and

comprehensible cost and gross profit information is Granted;

2. Marathon’s Motion to Compel production of buyer names is granted in

part as to corporate buyers, which may be produced “Attorneys’ Eyes

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ORDER, page 5

Only.”

3. Marathon’s Motion to Compel Depositions in Portland is Denied without

prejudice; and

4. Marathon’s Motion for Sanctions is Denied Without Prejudice.

IT IS SO ORDERED.

Dated: August 23, 2007

____________________________

PATRICIA V. TRUMBULL

United States Magistrate Judge

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