Monday, April 13, 2015

Discovery of Noninfringing Features as Potentially Relevant to Convoyed Sales Allowed

The court granted plaintiff's motion to compel sales information from defendant, including sales information on noninfringing products. "[Defendant's] description of the accused Airplay functionality as only a 'small feature' of certain of its iOS devices does not mean that the information [plaintiff] seeks is not relevant. To the extent that Airplay, no matter how small its role, draws more consumers to purchase video content/video games through the iTunes store so that they can, through their iPod Touch, iPad, or iPhone, direct that content to an accused AppleTV for display on a home television screen, those sales could shape the reasonable royalty analysis. . . . If [defendant] wishes to argue the convoyed sales issue at trial, to either challenge the admissibility of certain evidence or undermine [plaintiff's] theory of damages, it may do so. But the argument is unsuccessful insofar as [defendant] expects to resist discovery of the information [plaintiff] seeks here."

Aylus Networks, Inc. v. Apple Inc., 3-13-cv-04700 (CAND April 9, 2015, Order) (Westmore, M.J.)

Discovery of Noninfringing Features as Potentially Relevant to Convoyed Sales Prohibited

The court denied plaintiff's motion to compel the production of financial documents concerning defendant's functionality and services outside the scope of the claimed invention. "[W]hile [plaintiff's] patent claims concern middleware’s ORM process, it has not shown that its patent claims concern the operation of front-end applications that generate object data or the back-end databases that store the relational data. . . . [T]here appears to be no invention in the patents regarding how applications and databases perform their functions. . . . [Plaintiff] argues the requested information is still discoverable because such sales qualify as 'convoyed' or 'bundled' sales. . . . Although [in a different case] the court permitted financial discovery into e-reader content . . . the relevance of the information resulted from the fact that the content sold by Amazon operated only on the Kindle, and the same was true with respect to content sold by Barnes and Noble and the Nook. . . . While the e-reader device and the content displayed on it were coupled, that is not true for [defendant's] middleware; here, all applications and databases work with [defendant's] middleware, whether or not they are manufactured by [defendant]. As [defendant] states, '[t]he very purpose of middleware is to be a neutral bridge that decouples applications and databases, allowing customers to choose each component independently.' Thus, the Court finds that [defendant] has met its burden of showing that the discovery should not be allowed."

Thought, Inc. v. Oracle Corporation et al, 3-12-cv-05601 (CAND April 9, 2015, Order) (James, M.J.)

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