Thursday, May 26, 2016

Dismissed Corporate Parent’s Refusal to Provide Discovery Warrants OSC Re Evidentiary Sanctions and Adverse Inference of Infringement

The court accepted the magistrate judge's recommendation that defendants could not be compelled to produce discovery from their previously dismissed parent company, but ordered defendants to show cause why evidentiary sanctions or an adverse inference of infringement should not be imposed. "After the dismissal of [the corporate parent], [the remaining subsidiary defendants] stated that the technical documents sought by [plaintiff] were not in their possession or control, but might be obtained from [the parent]. [The parent] refused to provide the documents voluntarily. Unable to obtain timely discovery from [the remaining defendants], [plaintiff] sought discovery from [the corporate parent] through international Letters Rogatory. That request was denied by the Japanese Ministry of Foreign Affairs. . . . As a last resort, [plaintiff] moved to compel [defendant] to produce documents and Rule 30(b)(6) testimony regarding the design and operation of the accused products. [The magistrate judge] denied the motion, based on the legal confines effectively imposed by [a Technical Assistance Agreement]. . . . [T]he parent company of the defendants has relevant information critical to a fair and just resolution of this patent infringement case, and has erected legal barriers to the production of such information through its subsidiaries, barriers that were known but not disclosed to the court when considering dismissal. It is a defendant's obligation under this court's rules to provide all relevant, non-privileged information. The court declines to allow [defendants' parent] and defendants to use the TAA as both a sword and a shield."

Intellectual Ventures I LLC v. Ricoh Americas Corporation et al, 1-13-cv-00474 (DED May 23, 2016, Order) (Robinson, J.)

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