Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_03-cv-05424/USCOURTS-cand-5_03-cv-05424-4/pdf.json

Nature of Suit Code: 840
Nature of Suit: Trademark
Cause of Action: 15:1121 Trademark Infringement

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United States District Court

For the Northern District of California

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NOT FOR CITATION

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

MICROSOFT CORPORATION,

Plaintiff,

 v.

SUNCREST ENTERPRISE and YI-LING CHEN

a/k/a EILEEN CHEN,

Defendants.

/

No. C03-05424 JF (HRL)

ORDER (1) GRANTING IN PART AND

DENYING IN PART MICROSOFT’S

MOTION TO COMPEL PRODUCTION

OF ADEQUATELY PREPARED

FED.R.CIV.P. 30(b)(6) DESIGNEE; (2)

GRANTING MICROSOFT’S MOTION

TO STRIKE; AND (3) DENYING

MICROSOFT’S REQUEST FOR

MONETARY SANCTIONS

[Re: Docket No. 65]

On January 3, 2006, this court heard the “Motion to Compel Defendant Suncrest Enterprise,

Inc. to Designate and Produce Adequately Prepared 30(b)(6) Witness for Deposition” filed by plaintiff

Microsoft Corporation (“Microsoft”). Defendants Suncrest Enterprises, Inc. (“Suncrest”) and Yi-Ling

Chen (“Chen”) opposed the motion. Microsoft also filed a motion to strike portions of the Declaration

of John Gorman submitted in support of defendants’ opposition. Upon consideration of the papers

filed by the parties, as well as the arguments of counsel, the court issues the following order.

In this action, Microsoft alleges that defendants distributed counterfeit Microsoft software

products despite being on notice that such conduct infringed Microsoft’s copyrights and trademarks. 

Suncrest and Chen deny these allegations and claim that they bought software goods from vendors

they believed to be reputable. Defendants further assert that, due to financial difficulties, Suncrest has

*E-FILED ON 1/6/06*

Case 5:03-cv-05424-JF Document 94 Filed 01/06/06 Page 1 of 5
United States District Court

For the Northern District of California

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not actively been doing business since March 2004 and currently exists in name only.

On November 11 and 14, 2005, Microsoft deposed Chen as Suncrest’s corporate designee

pursuant to Fed.R.Civ.P. 30(b)(6), as well as in her individual capacity. Microsoft contends that Chen

was “woefully unprepared” to testify on Suncrest’s behalf and now moves for an order compelling

Suncrest to produce an “adequately prepared” witness. Of the twenty-two subjects of examination

listed in Microsoft’s Fed.R.Civ.P. 30(b)(6) deposition notice, Microsoft says that Chen was unable to

answer questions pertaining to the following six categories:

Topic 1 All communications between you and any other persons related to your

acquisition and/or distribution of Microsoft items.

Topic 2 All acquisitions by you of any Microsoft items from any person (including,

without limitation, sales invoices, receipts, purchase orders, or shipping service

records relating to those acquisitions).

Topic 3 All distributions by you of any Microsoft items to any person (including,

without limitation, sales invoices, receipts, purchase orders, or shipping service

records relating to those distributions).

Topic 6 Any agreement(s) that relate to your acquisition and/or distribution of

Microsoft items.

Topic 21 Your acquisition, distribution, and/or use of Microsoft Certificates of

Authenticity and Microsoft Certificate of Authenticity labels.

Topic 22 Your vendors and customers of Microsoft items.

Microsoft also requests that defendants be ordered to pay its attorneys’ fees and costs incurred in

bringing the instant motion to compel, arguing that Chen’s alleged unpreparedness is tantamount to a

failure to appear.

Under Fed.R.Civ.P. 30(b)(6), a notice for the deposition of an entity must “describe with

reasonable particularity the matters on which examination is requested.” If the notice sufficiently

describes the subjects for examination, then the entity to be deposed “shall designate one or more

officers, directors, or managing agents, or other persons who consent to testify on its behalf . . ..” 

FED.R.CIV.P. 30(b)(6). “The persons so designated shall testify as to matters known or reasonably

available to the organization.” Id. The corporate designee need not have personal knowledge of the

noticed subjects of examination. However, “[i]f the persons designated by the corporation do not

possess personal knowledge of the matters set out in the deposition notice, the corporation is obligated

Case 5:03-cv-05424-JF Document 94 Filed 01/06/06 Page 2 of 5
United States District Court

For the Northern District of California

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to prepare the designees so that they may give knowledgeable and binding answers for the

corporation.” United States v. Taylor, 166 F.R.D. 356, 361 (M.D. N.C. 1996).

Defendants oppose Microsoft’s motion, in part, by arguing about alleged deficiencies in the

testimony of Microsoft’s corporate designee. They have also submitted excerpts of the deposition

transcript of Microsoft’s corporate deponent. These arguments and materials are irrelevant to the

resolution of the matters at hand, and this court has not considered them in ruling on the instant motion. 

Accordingly, Microsoft’s motion to strike Paragraph 4 and Exhibit A of the Declaration of John C.

Gorman is GRANTED.

Nevertheless, having reviewed the submitted excerpts of Chen’s deposition testimony, this

court does not find that Suncrest acted willfully or in bad faith to evade discovery in appointing Chen

to testify on its behalf. Chen testified that she was the CEO and sole shareholder of Suncrest and

currently is its only employee. (Gorman Decl., Ex. B (Chen/Suncrest Depo., 15:19-22, 20:22-21:3)). 

Additionally, Chen has submitted a declaration in which she states that she spent several days

preparing for the deposition and that her preparation included (a) two lengthy meetings with legal

counsel, (b) her and her husband’s personal review of every Suncrest purchase order and sales

invoice involving the acquisition or resale of Microsoft’s software, (c) her and her husband’s personal

review of Microsoft’s complaint and all of Suncrest’s prior discovery responses; and (d) her

discussions with several former Suncrest employees, including her former sales manager, office

manager and warehouse manager. (See Chen Decl., ¶¶ 6-8).

Moreover, Microsoft’s noticed topics of examination are broadly worded. While it is true that

Chen was unable to fully answer certain questions, Microsoft has not convincingly demonstrated that

Chen was “woefully unprepared” to testify about the identities’ of Suncrest’s vendors, terms and

handwritten notes on invoice documents or conversations Suncrest’s technicians might have had with

Microsoft.

At the same time, however, the court finds that Suncrest reasonably should have been able to

provide its position, interpretation, understanding or belief as to questions about (1) Suncrest’s

warehouse inspection procedures (if any) (Chiarelli Decl., Ex. C, (Chen/Suncrest Depo. 54:14-56:5));

(2) whether Suncrest ever received shipments from its vendors of certificates of authenticity without

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United States District Court

For the Northern District of California

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1 This court is concurrently issuing its order on Microsoft’s separately filed “Motion

to Compel Deposition Answers from Defendant Yi-Ling Chen a/k/a Eileen Chen” in which

Microsoft is being given two hours for a further deposition of Chen. The court notes that Microsoft

shall have two hours total for the further depositions of Chen and Suncrest, and not two hours for

each deposition.

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the corresponding software (Id., 79:5-13)); and (3) Microsoft software distributed by Suncrest to its

customers as reflected in Suncrest’s invoices (Id., 136:2-23)). Accordingly, Microsoft’s motion to

compel is GRANTED only as to these topics. Suncrest shall produce Chen (or any other appropriate

witness(es)) to testify on its behalf. The deposition shall take place no later than January 31, 2006 at a

mutually agreeable time and location. Further, the deposition shall last no more than 2.0 hours

(excluding breaks).1 Microsoft’s motion to compel is otherwise DENIED.

Microsoft’s request for monetary sanctions is DENIED. Defendants correctly note that the

request did not comply with Civil Local Rule 37-3. In any event, under the circumstances presented,

this court concludes that sanctions are not warranted.

IT IS SO ORDERED.

Dated:

HOWARD R. LLOYD

UNITED STATES MAGISTRATE JUDGE

January 6, 2006

/s/ Howard R. Lloyd

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United States District Court

For the Northern District of California

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5:03-cv-5424 Notice will be electronically mailed to: 

John C. Gorman jgorman@gormanmiller.com 

Craig Alan Hansen chansen@gormanmiller.com 

Andrew K. Jacobson andy@bayoaklaw.com 

Shawn T. Leuthold leuthold@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 5:03-cv-05424-JF Document 94 Filed 01/06/06 Page 5 of 5