Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_06-cv-01745/USCOURTS-casd-3_06-cv-01745-9/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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06cv1745LAB

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

MOBIAPPS, INC.,

Plaintiff,

v.

QUAKE GLOBAL, INC.,

Defendants. 

 

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Case No. 06-CV-1745-LAB (JMA)

ORDER RE PLAINTIFF/

COUNTERCLAIM DEFENDANT

MOBIAPPS’ MOTION COMPELLING

PRODUCTION OF DOCUMENTS FROM

DEFENDANT/COUNTERCLAIM

PLAINTIFF QUAKE GLOBAL

CONCERNING THE Q1000

1. Introduction

Plaintiff and Counterclaim Defendant MobiApps, Inc.

(“MobiApps”) seeks an order compelling Defendant and Counterclaim

Plaintiff Quake Global, Inc. (“Quake Global”) to produce

technical, marketing, and financial documents concerning Quake

Global’s Q1000 product in response to certain document requests. 

After counsel for the parties participated in a telephonic

discovery conference with the Court’s law clerk, the magistrate

judge ordered the parties to brief the issue by way of

alternating letter briefs. MobiApps submitted its initial letter

brief on April 23, 2007. Quake Global submitted its opposition

letter brief on April 26, 2007, and MobiApps submitted a reply

Case 3:06-cv-01745-JLS-JMA Document 79 Filed 05/02/07 Page 1 of 7
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letter brief on April 30, 2007. (Copies of the parties’ letter

briefs are attached to this Order as attachments 1, 2 & 3,

respectively.)

2. The Disputed Requests

The disputed discovery requests are contained in MobiApps’

First Set of Requests for Production of Documents and Things to

Defendant Quake Global, Inc. and include the following:

21. All documents relating to Quake’s Q1000 product.

22. All documents relating to the sale, licensing, or

other exploitation of the Q1000 product or its

technology. ...

24. All documents relating to monies received in

connection with the sale, licensing, or other

exploitation of the Q1000 product or its

technology.

25. All communications between Quake and any third

party relating to the Q1000 product.

26. All communications between Quake and Orbcomm

relating to the Q1000 product. ...

28. All documents relating to the marketing,

advertising, and promotion of the Q1000 product.

29. All documents relating to internal names used by

Quake for the Q1000 product and names used to

refer to components of the Q1000 product.

30. Documents sufficient to identify the purchasers of

the Q1000 product. ...

32. All documents relating to the Q1000 product that

Quake provided to purchasers or prospective

purchasers of the Q1000 product.

33. All communications between Quake and any third

parties relating to the Q1000 product.

In response to the each of the above-listed requests, Quake

Global responded as follows:

Case 3:06-cv-01745-JLS-JMA Document 79 Filed 05/02/07 Page 2 of 7
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Objection on grounds that this request seeks documents

not relevant to the subject matter of this action and

not reasonably calculated to lead to the discovery of

admissible evidence. Further objections on grounds of

overbreadth, vagueness, ambiguity, undue burden, and

that the requested information is proprietary,

confidential and competitively sensitive. 

3. Legal Standard

Under Federal Rule of Civil Procedure 26, 

Parties may obtain discovery regarding any matter, not

privileged, that is relevant to the claim or defense of

any party, including the existence, description,

nature, custody, condition, and location of any books,

documents, or other tangible things and the identity

and location of persons having knowledge of any

discoverable matter. For good cause, the court may

order discovery of any matter relevant to the subject 

matter involved in the action. Relevant information

need not be admissible at the trial if the discovery

appears reasonably calculated to lead to the discovery

of admissible evidence. 

Fed. R. Civ. P. 26(b)(1). In Surfvivor Media, Inc. v. Survivor

Productions, the 9th Circuit stated: 

Relevant information for purposes of discovery is

information “reasonably calculated to lead to the

discovery of admissible evidence.” Brown Bag Software

v. Symantec Corp., 960 F.2d 1465, 1470 (9th Cir.

1992)(citation omitted). District courts have broad

discretion in determining relevancy for discovery

purposes. See Hallett v. Morgan, 296 F.3d 732, 751

(9th Cir. 2002). 

Id. 406 F.3d 625, 635 (9th Cir. 2005). To reiterate the federal

rule, relevant information need not be admissible at the trial if

the discovery appears reasonably calculated to lead to the

discovery of admissible evidence. Fed.R.Civ.P. 26(b)(1).

4. Discussion

As set forth below, MobiApps’ requests for documents are

relevant to its first and fourth claims for relief in this

action. The Second Amended Complaint (“SAC”) filed November 7,

Case 3:06-cv-01745-JLS-JMA Document 79 Filed 05/02/07 Page 3 of 7
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2006 [Doc. No. 32] alleges:

23. Section 10.4 of the [Product Joint Development and

License Agreement, “JDA”] provides that: “neither

party shall, directly or indirectly ... market or

sell, or enter into any agreement with a third

party to market or sell, a product designed to be

used on the ORBCOMM system that would compete

with, or make obsolete from a technological basis,

the ASIC Product.” ...

24. MobiApps is informed and believes that, during the

course of the JDA and contrary to the provisions

of sections 7.4 and 10.4 of the JDA, Quake began

secretly developing its own competing satellite

communicator.

25. On September 14, 2005, Quake issued a press

release announcing the introduction of is Q1000

product. In the press release Quake stated that

the “new modem is now at ORBCOMM for final FCC

testing and will be available tor initial

deliveries on October.” ...

26. The press release was the first MobiApps learned

of Quake’s competing Q1000 product.

27. MobiApps is informed and believes that while Quake

was secretly developing its competing Q1000

product that operated on the ORBCOMM network,

Quake was contemporaneously failing or refusing to

provide MobiApps with the technology and

assistance it promised to provide pursuant to the

JDA, thereby frustrating MobiApps’ ability to

develop its own ORBCOMM-compliant satellite

communicator.

...

58. MobiApps had an economic relationship with ORBCOMM

that carried the probability of future economic

benefit, including but not limited to, MobiApps’

ability to have its products and technology

qualified for use on ORBCOMM’s network.

59. Quake knew about the economic relationship between

MobiApps and ORBCOMM which had the probability of

future economic benefits to MobiApps.

60. Quake, without legal justification, wrongfully,

intentionally or negligently interfered with

MobiApps’ relationship with ORBCOMM by secretly

developing its own competitive product while

frustrating MobiApps’ ability to develop the RF

ASIC pursuant to the JDA.

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Section 10.5 describes a mechanism for either party to

withdraw from § 10.4 after “the RF ASIC has been completed and

put into commercial service by customers as part of an RF

Module.”

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61. As a result of Quake’s conduct, MobiApps’

relationship with ORBCOMM was disrupted.

MobiApps’ first and fourth claims for relief, for breach of

contract and interference with prospective economic advantage

against Quake Global, are still in the case as Quake Global filed

an Answer to the SAC on November 30, 2006. [Doc. No. 53.]

The full text of JDA § 10.4 reads:

Except as allowed in Section 10.5 below, from the

Effective Date of this Restated Agreement, and during

the term thereof, through and only until June 30, 2007,

neither party shall, directly or indirectly, whether as

a shareholder, joint venture partner, member,

consultant, independent contractor, or partner, on

behalf of itself or any other person or entity, market

or sell, or enter into any agreement with any third

party to market or sell, a product designed to be used

on the ORBCOMM System that would compete with, or make

obsolete from a technological basis, the ASIC Product.1

(emphasis supplied.) The JDA was entered into by the parties on

February 27, 2003 and was terminated pursuant to its terms on

April 12, 2006. The press release for the Q1000 Modem was issued

on September 14, 2005, while the JDA was in effect between

MobiApps and Quake Global. 

Quake Global’s September 14, 2005 press release stated:

Quake Global Introduces Q1000 Modem. [¶] Quake Global,

Inc. announced the introduction of its new Q1000 — the

smallest, and lowest priced satellite communicator

(modem) ever made available for use on any satellite

system. The new modem is now at ORBCOMM for final FCC

testing, and will be available for initial deliveries

in October [2005]. The Q1000 was developed to satisfy

the strong customer demand for a very small-footprint

modem at a price point under $100. ...

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The issuance of this press release gives rise to MobiApps’

contention that Quake Global was in violation of § 10.4 of the

JDA during the pendency of the JDA and is the basis for MobiApps’

first and fourth claims for relief in the SAC.

Quake Global argues that documents related to its Q1000

product constitute “highly confidential proprietary information

on unrelated matters.” To the extent that the documents contain

confidential proprietary information, the parties entered into a

Stipulated Protective Order, signed by the Court on January 16,

2007, which governs the use and dissemination of documents

reflecting trade secrets, current research and development or

competitively sensitive information. [Doc. No. 63.] To the

extent that Quake Global contends that documents related to the

Q1000 constitute “unrelated matters,” the allegations of the SAC

and the language of § 10.4 of the JDA belie that contention. 

Documents related to the Q1000 are relevant to the issue of

whether the Q1000 was a product that would have competed with the

RF ASIC-based product. Because the documents are relevant to

MobiApps’ first and fourth claims for relief in the SAC and are

reasonably calculated to lead to the discovery of admissible

evidence, Quake Global must produce them under Rule 26(b)(1).

Quake Global’s resistance to production of documents related

to the Q1000 is, in the Court’s view, an attempt to argue the

merits of (or Quake Global’s defenses to) MobiApps’ breach of

contract and interference with prospective economic advantage

claims vis-a-vis the Q1000 product. This is not a proper basis

upon which to object to MobiApps’ document requests, and the

issues of whether MobiApps’ claims have merit or whether MobiApps

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suffered damage as a result of the introduction and marketing of

the Q1000 are not before the Court at this time.

5. Conclusion and Order

For the foregoing reasons, the undersigned magistrate judge

finds that the documents requested are relevant to MobiApps’

first and fourth claims for relief and are reasonably calculated

to lead to the discovery of admissible evidence. Accordingly,

Quake Global shall produce documents responsive to MobiApps’

requests for production of documents Nos. 21-22, 24-26, 28-30, 32

and 33 on or before May 18, 2007.

IT IS SO ORDERED. 

DATED: May 2, 2007

Jan M. Adler

U.S. Magistrate Judge

Case 3:06-cv-01745-JLS-JMA Document 79 Filed 05/02/07 Page 7 of 7