Court Opinion

ID: 2662982
Source: CourtListenerOpinion
Date Created: 2014-04-03 13:15:34.83195+00
Date Added: 2024-06-11T12:58:09.989240
License: Public Domain

IN THE UNITED STATES DISTRICT COURT
                   FOR THE DISTRICT OF COLUMBIA

EPOS TECHNOLOGIES et al.            *
                                    *
           v.                       * Civil Action WMN-07-416
                                    *
PEGASUS TECHNOLOGIES et al.         *
                                    *

     *     *    *    *     *    *     *     *      *    *       *   *

                         MEMORANDUM AND ORDER

     Both EPOS Technologies, Ltd. and Pegasus Technologies, Ltd.

make digital pens that track the motion of a pen or marker and

convert the movements for display on a computer.        In 2007, EPOS

sued Pegasus seeking a declaratory judgment that its products do

not infringe on four of Pegasus’ patents.        Pegasus then

counterclaimed and alleged infringement of six patents,

including the first four at issue in EPOS’ Complaint.        Currently

pending before the Court are two motions to compel discovery,

one filed by (Pegasus), ECF No. 93, and one filed by (EPOS), ECF

No. 97.   The motions are fully briefed.1       Upon a review of the

pleadings and applicable case law, the Court determines that

both motions will be granted in part and denied in part, as set

forth below.

1
 Both parties have also filed Motions for Leave to File a
Surreply to each other’s respective replies. ECF Nos. 107 and
110. The Court will accept the pleadings and consider them in
accordance with Local Rule 105.2(a).
I.   Pegasus’ Motion

     Pegasus has filed a motion to compel Plaintiff EPOS and

Counter-Defendants Dane-Elect S.A., Dane-Elec Memory S.A., and

Dane-Elec Corporation USA (collectively, Dane-Elec)2 to produce

additional documents and supplement their interrogatory

responses.   EPOS contends that it has adequately responded to

all discovery requests.   The crux of this dispute involves the

question of whether EPOS is required to produce information

about products other than the Zpen and particularly whether it

must produce information about products that are still in

development.

     Pegasus has served on EPOS and Dane-Elec two sets of

requests for production and two sets of interrogatories related

to “accused products.”    In the first set, Pegasus provided the

following definition of “accused products”:

     [A]ny product or service using ultrasonic location
     technology. This includes, but is not limited to pens and

2
 Dane-Elec has not filed an opposition to the motion pending
against it. Notwithstanding, in its opposition EPOS notes that
it has not provided information about EPOS’s products that are
in development to Dane-Elec and Dane-Elec has no documents
related to these products. Opp. at FN.3. In support of this
statement, it attached a Declaration signed by Oded Turbahn, CEO
of EPOS Development Ltd., ECF No. 99-10, and a Declaration
signed by Jeffrey Jacobs, General Counsel of Dane Elec Corp.
USA, ECF No. 99-11. As there is no evidence to the contrary and
Pegasus does not dispute this contention, the Court will presume
that Dane-Elec has adequately responded to the discovery
requests and is not in possession of any of the information
Pegasus is seeking to compel through its present motion, and so
deny the motion as against Dane-Elec.

                                  2
     associated bases or flash drives bearing the mark,
     trademark, or designation Zpen and/or [EPOS/Dane-Elec].

Mot. Mem. at 3.    In the second set of requests, Pegasus updated

the definition of “accused product” in order to capture

additional discovery so that it could accurately determine the

scope of EPOS’ and Dane-Elec’s infringing activity:

     [A]ny product or service concerning location technology
     related to writing or drawing. Accused products include,
     but are not limited to, (a) pens and associated bases or
     flash drives bearing the mark, trademark, or designation of
     “ZPEN,” “Hello Kitty,” “GPEN300,” “INTELLIPEN,” and/or
     “Epos” and any variants thereof; and (ii) pens that
     transmit or receive ultrasound that were made by or for
     [EPOS/Dane-Elec] and that were sent directly or indirectly
     to other entities, including, without limitation, Qualcomm
     and Motorola.

Id.; Reply at 1.   The parties have met and conferred several

times to discuss the proper scope of discovery related to

“accused products,” but have not been able to reach an

agreement.   EPOS memorialized its position in a letter dated

August 24, 2011, stating:

     Based on Pegasus’ and Ludidia’s April 8, 2011 Infringement
     Contention, Epos understands “accused products” to refer to
     the Dan-Elec Zpen . . . Until Pegasus and/or Luidia move to
     amend these contentions, only the Zpen stands properly
     accused of infringing the patents-in-suit. Epos has
     provided discovery on other products, including the
     Intellipen and IOGEAR GPEN300, but neither Pegasus nor
     Luidia has alleged that these products infringe the
     patents-in-suit.

Mot. Mem. at 5.    In essence, EPOS objects to Pegasus’ request

for discovery relating to products other than those specifically

named in the Infringement Contentions; as the Zpen is the only

                                  3
product specifically named, that is the only product for which

it contends it has any discovery obligation.3

     The Court disagrees with the narrow position taken by EPOS.

Case law from various circuits clearly states that there is no

bright-line rule limiting discovery to only those products

specifically accused in a party’s infringement contentions.

See, e.g., O2 Micro Int’l, Ltd. v. Monolithic Power Sys., 467

F.3d 1355, 1363 (Fed. Cir. 2006); Honeywell Int’l, Inc. v. Acer

Am. Corp., 655 F. Supp. 2d 650, 655-656 (E.D. Tex. 2009); Dr.

Systems, Inc. v. Fujifilm Med. Sys. USA, Inc., No. 06-CV-417,

2008 WL 1734241 at *3 (S.D. Cal. April 10, 2008).   Rather, the

rule is that “[d]iscovery concerning products not explicitly

listed in the infringement contentions is appropriate when: 1)

the infringement contentions give notice of a specific theory of

infringement; and 2) the products for which a plaintiff seeks

discovery operate in a manner reasonably similar to that

theory.”   Nidec Corp. v. LG Innotek Co., Ltd., No. 6:07-CV-108,

2009 WL 3673253, at *2 (E.D. Tex. Sept. 2, 2009) (citing

Honeywell, 655 F. Supp. 2d at 655).

     In its infringement contentions (ICs),4 filed on April 8,

2011, Pegasus alleges that Defendants have infringed “by making,

3
  As noted in its letter, EPOS has, in the spirit of cooperation,
produced information related to the few other products similar
to the Zpen that it has sold in the United States.

                                 4
using, importing, selling, and/or offering for sale ultrasonic

digital pens and software therefor including, without

limitation, the ‘DANE-ELEC’-brand Zpen ultrasonic digital pen.”

ECF No. 94-18.   The ICs then go into further detail about the

specific claims related to each patent.      Based on the limited

record and briefing as to this specific issue, the Court grants

Pegasus’ Motion to Compel insofar as EPOS is required to produce

information related to products that are reasonably similar to

the Zpen and for which it is on notice based on the theories of

infringement alleged in the ICs.       The Court notes that EPOS has

already produced information related to similar products sold in

the United States; though EPOS says it did this voluntarily,

such information was in fact required to be produced based on

the ICs and the discovery requests.      Though the Court has no

reason to believe it is the case, insofar as EPOS is in

possession of not-yet-produced information regarding additional

similar products, it is ordered to produce such information to

Pegasus within seven days after the date of this order.

     The Court, however, holds differently with respect to the

EPOS products that are still being developed.      Pegasus seeks

information about products EPOS is developing with Motorola and

4
  The Court notes that EPOS argues in its Opposition that it is
too late for Pegasus to amend the ICs and name products in
addition to the Zpen. Opp. at 7. Notwithstanding, the Court
need not decide this issue because, at present, Pegasus has not
attempted to amend its ICs.

                                   5
Qualcomm, both of which were displayed in prototype form at the

Mobile World Congress in Barcelona, Spain in February 2011.        See

ECF No. 94-19 (describing the EPOS-Qualcomm device);

http://www.slashgear.com/epos-ultrasonic-pen-turns-your-table-

into-a-tablet-video-14133516/, (last visited: January 30, 2012)

(describing EPOS-Motorola device); see also Turbahn Decl.at ¶ 8

(ECF No. 99-10).   Pegasus argues that it is entitled to receive

information about these two devices in order to confirm whether

they infringe on Pegasus’ patents.     Mot. Mem. at 8.   The Chief

Executive Officer of EPOS Development Ltd. stated in his

declaration that the Qualcomm-EPOS pen referred to by Pegasus

was a handmade pre-prototype pen, for which no commercial

production has taken place.     Turbahn Decl. at ¶ 8.    He also

stated that “the design of these products will change many times

before any of the future generation products are ready for

commercial production.”   Id.   Requiring EPOS to produce

information about these devices while they are still in

development would not advance Pegasus’ pending claims because

there is not yet any final product that can be evaluated for

infringement; the design is still in flux.    The only conduct

that has taken place with respect to these devices is their

demonstration in a pre-prototype form at a technology

conference, and such conduct, which took place in Spain, appears

to be within the bounds of the law.    See 35 U.S.C. § 271

                                   6
(prohibiting the making, use, offering for sale, or sale of any

patented invention within the United States, and the importation

into the United States of any patented invention).

  Though it is true that “[t]he scope of discovery in patent

cases should be liberally construed under the Federal Rule of

Civil Procedure 26(b)(1),” Dr. Systems, Inc., 2008 WL 1734241 at

*3 (internal citation omitted), it is not so broad as to require

the discovery of products that do not yet exist in a final form.

Once a final product is developed, if Pegasus has reason to

believe the product infringes its patents, then Pegasus

certainly may file suit and appropriately seek discovery

regarding that final product.   At the present time, however, the

Court will not require EPOS to produce discovery about its

products in development.

II. EPOS’ Motion

     EPOS filed its Motion to Compel on September 27, 2011.      ECF

No. 97.   At the time it filed this Motion, it complained that,

to date, Pegasus had produced very little discovery despite the

broad requests for production that had been served on it nearly

a year prior, on November 11, 2010.   See EPOS’ First Req.

Produc. at ECF No. 97-12.   The paltry amount of discovery

appeared to be especially deficient when contrasted with the

volume of discovery produced by the other parties.   Mot. at 7

(comparing EPOS’ production of over 154,000 pages of documents,

                                 7
Dane-Elec’s production of over 10,000 pages, and Luidia’s

production of over 9,000 pages with Pegasus’ production of only

2,310 pages).   EPOS also complained that the discovery that

Pegasus had produced did not comply with the requirements of the

Protective Order, see ECF No. 73, because Pegasus failed to

include a Bates number and confidentiality designation on each

page of the produced documents, instead merely including the

designation and Bates number on the file itself.   Mot. at 9-10.

     Pegasus opposed EPOS’ motion, arguing that the motion was

premature and factually incorrect.   Pegasus stated that it never

at any time represented that it had completed its search or had

no further documentation to produce, and in fact had since

produced a significant amount of responsive discovery, amounting

to a total production of over a million pages.   Surreply at 3.

Furthermore, Pegasus explained that the reason its first set of

production lacked page by page Bates numbering and

confidentiality designations was because it was a production of

electronically stored information in its native format, as

requested in EPOS’ Request for Production, and the native format

did not allow for numbering or designations on every “page;”

Pegasus did the best it could and included the number and

designation in the name of the native file.   Opp. at 3-4.   After

EPOS complained about the lack of page by page designations in

this first set of production, Pegasus made its second, third,

                                 8
fourth and fifth productions of documents in a non-native format

that allowed for page by page numbering and designations, and

included those designations as appropriate.   Opp. at 4.

     In the Court’s view, as things currently stand, the only

two issues that need resolution through a court order are

whether Pegasus must complete its production by a date certain

and whether Pegasus must reproduce its first set of discovery in

a format that will support page by page numbering and

designations.   The briefing does not indicate that Pegasus

opposes being given such a deadline and in light of the twin

facts that Pegasus has likely already produced the bulk of

responsive discovery and that the deadline for non-expert

discovery is quickly approaching, the Court will grant EPOS’

request and require that Pegasus complete its search for

responsive discovery within seven days after this Order and

produce all responsive, non-privileged discovery within fourteen

days after this Order.

     Additionally, EPOS, in the spirit of cooperation, has

conceded that it will use the native files produced in Pegasus’

first set of production and not require that they be reproduced

in a different format so long as

     Pegasus agrees not to assert objections to: 1) the use of
     printouts of the native files without imposing on EPOS the
     obligation to apply confidentiality markings to those
     printouts, 2) the authentication of printouts of the native

                                   9
     files, and 3) any numbering EPOS may apply to the documents
     to make the documents more useable in deposition and trial.

Reply at 6.   Though it filed a surreply, Pegasus did not address

whether it agreed to these conditions.   Because of this lack of

response and the apparent reasonableness of these conditions,

the Court will assume they are acceptable to Pegasus and deny

the motion to compel Pegasus to reproduce its first set of

production in an alternative format.   If, however, Pegasus will

not agree to these conditions, it must notify the Court within

seven days and the Court will revisit this issue.

III. Conclusion

     Accordingly, it is this 31st day of January, 2012, by the

United States District Court for the District of Columbia,

ORDERED:

     1. That both Motions for Leave to File a Surreply, ECF Nos.

       107 and 110, are GRANTED;

     2. That Pegasus’s motion to compel, ECF No. 61, is hereby;

           a. DENIED, as against Dane-Elec.;

           b. GRANTED, in that EPOS must produce within seven days

              after this Order any not-yet-produced information

              regarding additional products that are reasonably

              similar to the Zpen;

                                 10
     c. DENIED, in that EPOS is not required to produce any

       information related to its products that are still

       in-development;

3. That EPOS’ motion to compel, ECF No. 97, is hereby:

     a. GRANTED, in that Pegasus Technologies, Ltd. must

       complete its search for discovery responsive to

       EPOS’ First Request for Production within seven days

       after this Order and produce all such responsive,

       non-privileged discovery within fourteen days after

       this Order;

     b. DENIED, in that Pegasus is not required to reproduce

       its first set of production so long as it agrees to

       the proffered conditions, but if Pegasus refuses the

       conditions it must notify the Court within seven

       days so the Court can revisit this issue; and

4. That the Clerk of the Court shall transmit a copy of this

  Memorandum and Order to all counsel of record.

                                       /s/
                     William M. Nickerson
                     Senior United States District Judge

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