Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_10-cv-04435/USCOURTS-cand-5_10-cv-04435-47/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Other Contract

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Case No.: 5:10-cv-04435-EJD

ORDER DENYING PLAINTIFF’S MOTIONS FOR RELIEF FROM NON-DISPOSITIVE 

PRETRIAL ORDERS OF MAGISTRATE JUDGE

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

TESSERA, INC.,

Plaintiff,

v.

UTAC (TAIWAN) CORPORATION,

Defendant.

Case No. 5:10-cv-04435-EJD 

ORDER DENYING PLAINTIFF’S 

MOTIONS FOR RELIEF FROM NONDISPOSITIVE PRETRIAL ORDERS OF 

MAGISTRATE JUDGE

Re: Dkt. Nos. 239, 294

I. INTRODUCTION

Plaintiff Tessera, Inc. (“Tessera”) and Defendant UTAC (Taiwan) Corporation (“UTC”) 

entered into an agreement in 2001 which granted UTC a nonexclusive license to certain of 

Tessera’s patents and patent applications in exchange for the payment of royalties. After UTC 

notified Tessera that it would cease paying royalties for patents that were due to expire, Tessera 

initiated this case in 2010 for breach of contract, declaratory relief, and breach of the covenant of 

good faith and fair dealing. 

Since then, the parties have litigated no fewer than 18 discovery disputes before Magistrate 

Judge Howard R. Lloyd. In Discovery Dispute Joint Report #4, the parties could not agree 

whether UTC must produce technical and sales information relating to semiconductor packages 

for which UTC may only provide testing services. In Discovery Dispute Joint Report #7, the 

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Case No.: 5:10-cv-04435-EJD

ORDER DENYING PLAINTIFF’S MOTIONS FOR RELIEF FROM NON-DISPOSITIVE 

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parties disputed whether UTC should respond to discovery which Tessera asserts is relevant to the 

interpretation of the license agreement. 

Judge Lloyd ruled on both of these disputes. See Docket Item Nos. 225, 289. Now before 

this court are Tessera’s motions for relief from Judge Lloyd’s orders. Because its arguments are 

without merit, these motions will be denied.

II. LEGAL STANDARD

Subject to limitations not relevant here, any non-dispositive pretrial matter before the 

district court may be referred to a magistrate judge for determination. 28 U.S.C. § 636(b)(1)(A). 

Once rendered, the decision of the magistrate judge may only be reconsidered by the district court 

where the order is “clearly erroneous” or “contrary to law.” Id.; Fed. R. Civ. P. 72(a). “A finding 

is ‘clearly erroneous’ when although there is evidence to support it, the reviewing court, after 

reviewing the entire evidence, is left with the definite and firm conviction that a mistake has been 

committed.” United States v. U.S. Gypsum Co., 333 U.S. 364, 395 (1948). “An order is contrary 

to law when it fails to apply or misapplies relevant statutes, case law or rules of procedure.” 

Tompkins v. R.J. Reynolds Tobacco Co., 92 F. Supp. 2d 70, 74 (N.D.N.Y. 2000).

The § 636(b)(1)(A) standard is not easily satisfied because it affords the magistrate judge 

significant deference. United States v. Abonce-Barrera, 257 F.3d 959, 969 (9th Cir. 2001) (“[T]he 

text of the Magistrates Act suggests that the magistrate judge’s decision in such nondispositive 

matters is entitled to great deference by the district court.”). This deference is particularly strong

when it comes to discovery. “[M]agistrate judges are given broad discretion on discovery matters

and should not be overruled absent a showing of a clear abuse of discretion.” Anderson v. Equifax 

Info. Servs. LLC, No. CV 05-1741-ST, 2007 U.S. Dist. LEXIS 61937, at *5, 2007 WL 2412249

(D. Or. Aug. 20, 2007). 

III. DISCUSSION

A. Discovery Dispute Joint Report #4

Tessera argues that Judge Lloyd’s decision to deny disclosure of information related to 

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Case No.: 5:10-cv-04435-EJD

ORDER DENYING PLAINTIFF’S MOTIONS FOR RELIEF FROM NON-DISPOSITIVE 

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UTC’s testing-only services is clearly erroneous because it misconstrues the First Amended 

Complaint (“FAC”). It also argues the order is contrary to “well-established law holding that 

discovery should be liberally granted.” UTC disagrees with this assessment, and contends that 

Judge Lloyd correctly determined that royalties related testing-only services are not put at issue by 

the FAC. 

This is a dispute about relevance. Under the version of Federal Rule of Civil Procedure 

26(b) in a effect at the time of Judge Lloyd’s ruling,

1 “[p]arties may obtain discovery regarding 

any nonprivileged matter that is relevant to any party’s claim or defense - including the existence, 

description, nature, custody, condition, and location of any documents or other tangible things and 

the identity and location of persons who know of any discoverable matter.” Rule 26(b) also 

clarifies that relevance for the purposes of discovery is a concept broader than the standard used to 

determine admissibility at trial. So long as it “appears reasonably calculated to lead to the 

discovery of admissible evidence,” a party’s request for information will be deemed proper. See

Fed. R. Civ. P. 26(b)(1). 

But although broad, the universe of what “is relevant to any party’s claim or defense” is 

not unlimited. See Oppenheimer Fund v. Sanders, 437 U.S. 340, 351-52 (1978); see also

Gonzales v. Google, Inc., 234 F.R.D. 674, 680 (N.D. Cal. Mar. 17, 2006) (observing that 

relevancy for discovery “is not without ‘ultimate and necessary boundaries.’”). Indeed, Rule 26(b)

provides its own implied restriction. Since “discovery of any matter relevant to the subject matter 

involved in the action” can only be pursued upon a showing of good cause, discovery “relevant to 

any party’s claim or defense” must be a category that is more limited in scope. Fed. R. Civ. P. 

26(b)(1).

With this standard in mind, resolution of Tessera’s challenge becomes a straightforward 

exercise. Without explicitly saying as much, Judge Lloyd essentially found that Tessera failed to

satisfy its primary burden to establish that the information sought fell within the permissible scope 

 1 An amended version of Rule 26(b) became effective on December 1, 2015. 

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of discovery. See Khalilpour v. Cellco P’ship, No. C 09-02712 CW (MEJ), 2010 U.S. Dist. 

LEXIS 43885, at *4, 2010 WL 1267749 (N.D. Cal. Apr. 1, 2010) (“Once the moving party 

establishes that the information requested is within the scope of permissible discovery, the burden 

shifts to the party opposing discovery.”). This was so because, as Judge Lloyd explained, “the 

first amended complaint does not claim royalties on UTC’s testing-only services . . . . Rather, the 

first amended complaint asserts a claim only against packages that are ‘made by’ UTC.” This 

determination was not clearly erroneous; the FAC nowhere mentions royalties relating to products 

that UTC tests but does not make. 

Nor did Judge Lloyd misapply discovery law. As already noted, information is generally 

discoverable under Rule 26(b) when it is relevant to a party’s claim or defense, and Tessera did 

not attempt to make a showing of good cause for “subject matter” discovery. Thus, once Judge 

Lloyd determined that testing-only royalties were not encompassed by the FAC, discovery related 

to that topic was properly denied as irrelevant. 

Tessera’s other arguments are similarly without merit. Tessera believes that Judge Lloyd

de facto decided a disputed issue of contract interpretation by construing the FAC in a way that 

excludes testing-only royalties. But Judge Lloyd explicitly disclaimed any such decision in the 

written order and explained the ruling was based solely on the FAC, not the terms of the contract. 

This court will not read something more into the decision beyond what it says, particularly when 

using the allegations of the complaint to set the bounds of discovery is not clearly erroneous. See

Coleman v. Quaker Oats Co., 232 F.3d 1271, 1292 (9th Cir. 2000) (explaining that “[a] complaint 

guides the parties’ discovery”). As Judge Lloyd noted, the question presented by this dispute is 

not whether the parties’ contract may provide for testing-only royalties, but rather whether 

Tessera’s pleading sought such royalties. Those are distinct issues. 

Moreover, the court is not persuaded that decisions made in Tessera, Inc. v. Sony Corp., 

No. 5:11-cv-04399 EJD, 2012 U.S. Dist. LEXIS 168277, 2012 WL 5915417 (N.D. Cal. Nov. 26, 

2012), and Powertech Technology, Inc. v. Tessera, Inc., No. C 11-6121 CW, 2014 U.S. Dist. 

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Case No.: 5:10-cv-04435-EJD

ORDER DENYING PLAINTIFF’S MOTIONS FOR RELIEF FROM NON-DISPOSITIVE 

PRETRIAL ORDERS OF MAGISTRATE JUDGE

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LEXIS 5441, 2014 WL 171830 (N.D. Cal. Jan. 15, 2014), compel some other result. Neither of 

those decisions discussed whether a discovery request was permissible under Rule 26(b) based on 

the allegations in a complaint. 

Because Judge Lloyd’s decision on Discovery Dispute Joint Report #4 is neither clearly 

erroneous nor contrary to law, the court declines Tessera’s request to overrule it. 

B. Discovery Dispute Joint Report #7

According to Tessera’s motion, the discovery at issue in Discovery Dispute Joint Report

#7 is directly relevant to arguments made by UTC in a motion for summary judgment regarding 

contract interpretation. There, the parties disputed whether the licensing agreement contained an 

implicit geographical limitation based on the legal effectiveness of patents generally. This issue 

has yet to be finally resolved. 

However, the pendency of that issue does not mean that Tessera is entitled to the discovery 

which it seeks here. The court has reviewed Judge Lloyd’s determinations on Tessera’s specific 

requests and cannot find that any those decisions are either clearly erroneous or contrary to law. 

Indeed, Judge Lloyd found the requests were mostly cumulative and unnecessary or overbroad and 

unduly burdensome. This court concurs with Judge Lloyd’s findings. In addition, the court agrees 

with Judge Lloyd’s determination that some of the requests sought information irrelevant to the 

geographic scope issue. 

Tessera’s attempt to reframe Judge Lloyd’s ruling as a misapplication of California 

contract law is unpersuasive. Even if the court assumes that all of what Tessera sought through 

Discovery Dispute Joint Report #7 is somehow relevant to what the parties intended on the issue

geographic scope of royalties – which it notably is not – that does not mean that production of 

such discovery is neither cumulative, overbroad or unduly burdensome. Accordingly, the court 

will not modify the order addressing Discovery Dispute Joint Report #7. 

IV. ORDER

Tessera’s motions for relief from the orders addressing Discovery Dispute Joint Reports #4 

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Case No.: 5:10-cv-04435-EJD

ORDER DENYING PLAINTIFF’S MOTIONS FOR RELIEF FROM NON-DISPOSITIVE 

PRETRIAL ORDERS OF MAGISTRATE JUDGE

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and #7 (Docket Item Nos. 239, 294) are DENIED.

IT IS SO ORDERED.

Dated: January 15, 2016

______________________________________

EDWARD J. DAVILA

United States District Judge

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