Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_04-cv-01268/USCOURTS-cand-3_04-cv-01268-42/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 35:271 Patent Infringement

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United States District Court

For the Northern District of California

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United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

UNIRAM TECHNOLOGY, INC,

Plaintiff,

v

TAIWAN SEMICONDUCTOR

MANUFACTURING COMPANY,

Defendant. /

No C-04-1268 VRW

ORDER

This is a trade secret misappropriation dispute between

plaintiff UniRAM Technology, Inc (“UniRAM”) and defendants Taiwan

Semiconductor Manufacturing Company LTD and TSMC North America

(collectively “TSMC”). UniRAM claims TSMC misappropriated its

trade secrets by disclosing them to certain UniRAM competitors. 

Specifically, UniRAM claims that its process for manufacturing DRAM

computer chips embedded in a logic process was a trade secret and

that TSMC communicated this secret to companies such as MoSys and

MOSAID. TSMC asserts as one of its defenses that MOSAID had been

working on a similar product (called HDRAM or ASIC DRAM) before

UniRAM and that the allegedly misappropriating HDRAM devices were

in fact developed independently of UniRAM. 

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UniRAM now moves to exclude this defense. TSMC’s theory

of independent development is premised largely on the testimony of

one Peter Gillingham. UniRAM argues that this is significant

because Gillingham’s status as a witness – as well as documents in

his possession which purport to establish independent development –

were not disclosed to UniRAM until after the close of fact

discovery, in violation of FRCP 26(a) and 26(e). As a result,

UniRAM contends it was unable to test the veracity of TSMC’s theory

and was prejudiced thereby.

For the reasons set forth below, UniRAM’s motion is

GRANTED in part and DENIED in part. TSMC will still be permitted

to defend on the grounds of independent development, but

Gillingham’s late-disclosed testimony and documents will be

disallowed.

I

At the outset of this litigation, UniRAM raised patent

claims in addition to its trade secrets claim. To defend against

the patent claims, UniRAM consulted with Dr Gillingham, the chief

engineer at MOSAID, in May 2006. Doc #387 at 3. This consultation

produced a number of documents relating to MOSAID devices, which

were turned over to UniRAM in the discovery process. Id at 4, 5. 

In March 2007, UniRAM abandoned its patent claims but

held on to its trade secrets claims. Then, in “late April or early

May 2007,” TSMC again consulted with Gillingham and learned that he

may have personal knowledge relating to the trade secrets claim,

including evidence that MOSAID had been developing HDRAM with TSMC

since before UniRAM developed its trade secrets. Id at 5-6. In

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early May, Gillingham gradually began turning over supporting

documents to TSMC, who then disclosed them to UniRAM. Id at 6. On

May 30 (after the May 23 deadline for fact discovery), Gillingham

located additional documents, which were disclosed to UniRAM on

June 6. Id. In addition to those documents, TSMC laid out its

theory in its final response to UniRAM’s interrogatories on May 24,

as permitted by Magistrate Judge James. Lastly, Gillingham filed

an “expert report” on the issue of independent development, which

was disclosed to UniRAM on June 14. UniRAM claims that June 14 was

the first it heard of Gillingham’s involvement as a witness in

TSMC’s theory of independent development. Doc #415 at 3. UniRAM

claims it subsequently attempted to depose Gillingham on factual

issues, but the parties dispute whether those attempts were

obstructed by TSMC’s objections to any deposition questions

involving Gillingham’s personal knowledge of the HDRAM product at

MOSAID and TSMC. Compare Doc #387 at 10 with Doc #415 at 12-14.

UniRAM claims that because factual discovery has closed,

it cannot submit document or subpoena requests on Gillingham or

anyone else with personal knowledge of the HDRAM product. See Doc

#415 at 14. Pursuant to FRCP 37(c)(1), UniRAM moves to exclude

from the case the above “late-disclosed evidence relating to TSMC’s

theory that Mr. Gillingham and/or MOSAID independently developed

UniRAM’s trade secrets.” Doc #415 at 2. 

II

Rule 26(a)(1) requires each party to disclose “each

individual likely to have discoverable information that the

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disclosing party may use to support its claims or defenses.” Rule

26(e) requires parties to supplement their disclosures if they are

found to be incomplete. Rule 37(c)(1) prevents any information

withheld in violation of Rule 26 from being used at trial. The

Rule 37 enforcement provision adopted in 1993 was intended as a

“broadening of the sanctioning power,” creating an “automatic

sanction” and “provid[ing] a strong inducement for disclosure of

material.” Yeti by Molly, Ltd v Deckers Outdoor Corp, 259 F3d

1101, 1106 (9th Cir 2001). The withholding party may avoid a Rule

37 sanction by showing that the failure to disclose was either

harmless or substantially justified. Id.

III

UniRAM’s strongest argument is that TSMC did not disclose

Gillingham’s role as a fact witness for at least one month after it

knew Gillingham would be crucial to its independent development

defense. Gillingham became involved in late April to early May. 

Fact discovery closed on May 23, and Gillingham was not formally

disclosed as a witness until June 14 when he submitted his expert

report. See Doc #387 at 7.

Gillingham is involved in TSMC’s defense as a fact

witness, not merely as an expert witness. He purports to testify

about which products MOSAID was developing, at which times, and at

which levels of involvement with TSMC. Moreover, he has personal

knowledge of those facts. TSMC admits Gillingham “was a percipient

witness on the issue of TSMC’s awareness in 1995 of [HDRAM]” and

that he “[h]ad [p]ersonal [k]nowledge [o]f [t]he MOSAID-TSMC

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[d]evelopment.” Doc #387 at 7. All of this information is crucial

to the claim of misappropriation and the defense of independent

development. Once TSMC knew that Gillingham would be such a key

factual witness in its independent development theory and TSMC knew

this before discovery closed, it should have disclosed that fact to

UniRAM before the close of discovery.

A

TSMC has shown neither lack of harm nor substantial

justification. UniRAM was harmed because it could not impeach

Gillingham’s factual claims or press him to provide more details. 

UniRAM could not seek additional testimony or documents to rebut

Gillingham’s statements. In effect, UniRAM could not contest

Gillingham’s factual assertions at all, which would severely impair

UniRAM’s ability to challenge the independent development defense. 

Although UniRAM knew in 1996 of Gillingham’s former role in the

case, his involvement was limited to the patent claims rather than

the trade secret claims. Once the patent claims were abandoned,

there was no reason to believe Gillingham would be relevant to the

trade secret claim. Accordingly, UniRAM was entitled to ignore

Gillingham during the remainder of discovery. The court is unaware

of any published cases supporting this view – though there are

several such unpublished cases – but this conclusion is consistent

with the letter and spirit of the FRCP discovery rules. If

Gillingham were to be involved in litigating the trade secret

claim, then under Rule 26(a)(1), TSMC had the burden of calling

UniRAM’s attention to that fact. 

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TSMC also cannot show lack of harm from its other Rule 26

violations. Even if TSMC turned over any relevant documents fairly

quickly after Gillingham provided them, UniRAM was still barred

from scrutinizing them in the normal course. The same is true of

TSMC’s disclosures in the May 24 interrogatory response. 

B

TSMC cannot show substantial justification for those

violations. TSMC chose to spring its new information on UniRAM. 

TSMC had less drastic alternatives available. As the Ninth Circuit

has described, rarely is a party substantially justified in

remaining silent:

The only justification proffered by the defendants [for

withholding their expert rebuttal report] is that they

were under the mistaken belief that [plaintiff’s expert]

report would be supplemented again and were waiting for

the final version before disclosing [the rebuttal]

report. Even if true, defendants could have issued a

preliminary report to be supplemented after [plaintiff’s]

report had been modified or they could have asked for an

extension of the discovery deadline.

Yeti by Molly, 259 F3d at 1106-07. Here, TSMC had many options

other than doing nothing. TSMC could have given UniRAM advance

notice that it had recently come across new information that would

change its defense, or TSMC could have explained the gist of its

new theory and the basis for it. And of course, TSMC could have

asked the court for a brief extension of the fact discovery

deadline to allow UniRAM a fair opportunity to test TSMC’s theory

of independent development. TSMC did none of those things. Even

in the case of the May 24 response, where TSMC had Judge James’s

permission to wait until May 24, TSMC had no good reason for

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waiting the extra day past May 23, nor any good reason to not

postpone the fact discovery deadline.

And TSMC has not even purported to justify its delay in

disclosing Gillingham as a “percipient witness,” claiming only that

it did not act in bad faith. Doc #387 at 8-9. Bad faith, however,

is irrelevant. See Yeti by Molly, 259 F3d at 1106 (“[E]ven absent

a showing in the record of bad faith or willfulness, exclusion is

an appropriate remedy for failing to fulfill the required

disclosure requirements of Rule 26(a).”).

IV

Overall, TSMC’s dilatory disclosures are neither harmless

nor substantially justified. Accordingly, Gillingham will not be

permitted to testify at trial about his personal knowledge of

MOSAID’s dealings with HDRAM and TSMC. Any statements in his June

14 expert report dealing with his personal factual knowledge will

be disallowed. Claims of independent development advanced in the

May 24 response that are based upon Gillingham’s personal knowledge

will also be disallowed. UniRAM’s motion is DENIED as to all other

evidence relating to MOSAID. Documents disclosed prior to the

close of fact discovery may be offered if relevant to TSMC’s

independent development theory.

IT IS SO ORDERED.

 

VAUGHN R WALKER

United States District Chief Judge

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