MobileMedia Ideas LLC v. Apple Inc.
MobileMedia Ideas LLC v. Apple Inc.
Opinion of the Court
MEMORANDUM ORDER
Procedural Background
Presently before the court are discovery issues arising not only between the parties, but also involving a third-party. Consistent with the court’s standard order dealing with discovery matters, the parties and Nokia Corporation (“Nokia”) contacted the court to schedule a telephonic conference. Thereafter, Apple, Inc. (“Apple”), the moving party, filed its speaking motion against MobileMedia Ideas LLC (“MMI”) and Nokia. MMI and Nokia timely filed their respective responses. A telephonic hearing occurred on June 7, 2012 during which all parties to the disputes presented argument. Certain issues were decided during the teleconference. Regarding the remaining matters, the parties supplemented their previous submissions and provided documents and affidavits addressing the common interest privilege.
MMI and Nokia provided their supplemental submissions on June 15, 2012. Apple provided its response on June 22, 2012. This is the court’s decision regarding privilege under the common interest privilege and related issues.
During discovery, Apple served subpoenas on three separate Nokia entities: Nokia Inc. on February 9, 2011, Nokia Capital, Inc. on June 1, 2011, and Nokia, the entity involved in the present discovery dispute, on June 29, 2011.
Factual Background
MMI, a Delaware limited liability company, was formed by Nokia, Sony Corporation (“Sony”) and another company, MPEG-LA (“MPEG”) in January 2010. Before MMI’s formation, in the beginning of 2009, Sony and Nokia discussed the formation of, and the potential patents to be transferred to an entity that would license and enforce those patents, includ
Sony and Nokia, as the patent holders and licensors, each retained counsel who provided legal analyses concerning patent infringement and validity and license contract interpretation. Through their counsel and counsel for MPEG, the analyses were shared to assess the legal merits of the patents under consideration to be contributed to the proposed legal enforcement entity, MMI. The exchange of information was made among Nokia, Sony and MPEGLA in reliance on the non-disclosure agreements and on the assumption they shared a common legal interest.
In forming MMI, Nokia, Sony and MPEG entered into various agreements memorializing their respective rights and obligations. Those agreements included the Formation Agreement, the Operating Agreement and two Patent Purchase Agreements (between MMI and Nokia Capital and MMI and SCA IPLA).
According to the Formation Agreement and the Operating Agreement, the essential purpose of MMI is
to acquire, develop, administer and manage Intellectual Property rights relating to inventions which reflect certain features of, and application used by, mobile and other devices and to collect income in respect to such inventions reflected in such Intellectual property rights and its use in end user devices.15
To enable the enforcement of the patent rights and for exploitation of the patents and consistent with the previously noted Agreements, Nokia Capital and SCA IPLA transferred the prosecution history files to MMI.
Parties’ Positions
Apple
Although Apple originally argued the common legal interest privilege did not apply, it now agrees “MMI and Nokia demonstrated that Sony and Nokia are not mere separate investors or shareholders ... [but instead] acted together to develop the litigation strategy ... implemented after MMI’s formation, and have continued to cooperate after formation to further that legal strategy, and assert their patents through MMI.”
Therefore, Apple demands production of certain documents exchanged before MMI’s formation, specifically materials that discuss Sony’s and Nokia’s patent coverage to develop a “valuable cluster” of patents or confirming value to licensees which purportedly have been improperly withheld.
As to the documents sought, Apple maintains Nokia failed to demonstrate the documents were exchanged to further a joint legal strategy. Specifically, Apple argues Nokia has not established a document-by-document analysis that an underlying privilege exists.
Apple maintains there was no delay on its part to obtain the documents sought because until the privilege logs were produced in December,
Apple requests Nokia produce all documents as previously noted herein. It also seeks an order requiring Nokia to produce a log of all communications that include non-attorneys.
Regarding MMI, Apple disputes whether MMI has established the transfer of the patent prosecution files and invention disclosure forms (“IDFs”) occurred to further a joint legal strategy. It criticizes MMI’s evidence as only vaguely suggesting these documents were provided to assist in its exploitation of the patents. Apple maintains these documents were delivered merely as part of the purported transfer of patents by referencing sections in the patent purchase agreements which allow for disclosure of other documents to assist in MMI’s enforcement of the transferred patents. Therefore, Apple demands all patent prosecution files and IDFs be produced.
MMI/Nokia
Although MMI and Nokia provided separate submissions, their interests in the present discovery matter are related.
Contrary to Apple’s arguments, Nokia contends Apple was aware of its position as early as July 2011, when Nokia formally responded to the subpoena, specifically objecting to the requested documents based on attorney-client privilege and the com
Nokia also disputes whether the documents requested are relevant. It argues Nokia’s patent coverage, which would include patents not at issue, is obviously irrelevant.
MMI owns a portfolio of patents from Nokia and SCA IPLA as a result of several agreements memorializing these entities respective rights and obligations. MMI represents no privileged documents were exchanged before the transfer of ownership of the patent portfolio. It further contends no documents were provided as part of this process for commercial purposes, such as to evaluate the respective portfolios or induce a party to enter into any agreement.
MMI further asserts what Apple demands, without reference to its privilege log or any specific document, is an open ended request for production of all the patent prosecution files and IDFs in con
MMI also claims Apple’s letter motion in June 2012 for such discovery, after fact discovery closed on October 31, 2011, after the production of its privilege log in November 2011, after completion of expert discovery, and while claim construction and summary judgment briefing was ongoing, is untimely and too late.
Standard and Applicable Law
Community of Interest or Common Interest Privilege
The community of interest privilege “allows attorneys representing different clients with similar legal interests to share information without having to disclose it to others.”
Discussion
Apple does not dispute the common interest doctrine applies. It, however, main
Transfer of Patent Prosecution Documents and IDFs to MMI
Apple’s argument that the transfer of the patent prosecution files and IDFs to MMI were not to further a joint legal strategy is refuted by the Formation and Operating Agreements which provide the central purpose of MMI was “to acquire, develop, administer and manage [ijntellectual [pjroperty rights” related to the inventions obtained from the Nokia and Sony entities. For contributing certain intellectual property, those entities received equity interests MMI and will receive distributions of any future royalties and damages collected by MMI. As shareholders, they continue to have a direct interest in MMI’s business. Pursuant to the Operating Agreement, the governing Board of Representatives of MMI are comprised of seven individuals from the Sony, Nokia and MPEG entities, and have all powers necessary to carry out the purposes and business of MMI, that is, the enforcement of the patents. MMI cannot re-assign the patents-in-suit without full Board approval, that is, the consent of the Nokia, Sony and MPEG entities. In light of their Board seats, these corporations have essentially veto power over such sales. Further, since the formation of MMI, Nokia, Sony and their respective wholly owned subsidiaries have provided assistance and cooperation to MMI’s outside attorneys, including details related to the prosecution history of the patents-in-suit. Their obligation in this regard is evidenced in the Patent Purchase Agreements under §§ 4.5-4.6 requiring them in any action involving infringement or invalidity of the assigned patents to provide “reasonable access to [their inventor] employees” for “[a] litigated patent” as well as relevant documents, including those related to the “conception and reduction to practice.” They are further obligated to “provide reasonable assistance by [their] personnel in connection with patent prosecution or other necessary activities of [MMI].” Such language strongly indicates a future cooperation with MMI in its core purpose, the successful enforcement of the transferred patents. Such future cooperation, which may involve providing additional materials, does not imply that the original transfer of the patent prosecution files and the IDFs was merely to effectuate transfer of the patents.
Further, at the time the documents in question were provided to MMI, the Nokia and Sony entities had reversionary rights allowing ownership of the patents to revert back under certain conditions.
As evidenced by the various agreements, the purpose of the transfer of the patent prosecution files and the IDFs were part of the joint legal strategy involving the Nokia and Sony entities that began before MMI’s formation and continued thereafter. MMI and the Nokia and Sony entities have operated with the expectation that any shared privilege communications would be confidential and protected from disclosure. The Nokia and Sony entities, as licensees, clearly share a common legal interest in MMI prevailing in this action. That as a result of the Formation Agreement, MMI is now the owner of the patents does not eviscerate or prevent the sharing of a common legal interest with Nokia and Sony.
Documents Sought from Nokia
In support of its demand, Apple primarily relies on exhibit 4 attached to its original submission.
Unlike in Leader Technologies v. Face-book, Apple does not dispute that a common legal interest exists.
Apple’s argument that Sony and Nokia waited six months to execute a common interest agreement also fails and ignores when the exchanges occurred, non-disclosure agreements had been executed. As noted in Rembrandt Technologies v. Harris Corp., “[a] confidentiality agreement underlying a common interest claim need not be in writing; an ‘oral agreement ... later memorialized in writing’ ... can provide the platform upon which the common interest can rest.”
Finally, despite Apple’s protestations to the contrary, the request for further discovery comes too late. Although Apple detailed the various “meet and confers” since December 2011, that process began very late in the litigation, after the close of discovery. The issue of Nokia’s production has been brewing as early as July 2011, when objections to Apple’s discovery were lodged.
Therefore, Apple’s motion for further discovery from Nokia is denied.
Consistent with the reasoning herein, IT IS ORDERED that Apple’s motion for discovery (D.I. 310) from MMI and Nokia is DENIED.
.During the teleconference, the parties advised some of the documents under seal were exhibits to an unrelated motion before Judge Robinson. Other documents evidencing the common interest privilege had not been previously produced. Those documents were provided for in camera review. In any event, any documents filed under seal remain under seal for the purpose of the discovery issues addressed herein.
. Nokia represented each subpoena contained eighty-one document requests and approximately ten to fifteen deposition topics. See D.I. 338 at 1.
. Fact discovery originally was to close by September 1, 2011. By stipulation between the parties, it was extended to October 31, 2011, allowing for certain depositions to occur after the close of fact discovery, but before the deadline to depose any trial witnesses. See D.I. 17 & 135.
. See D.I. 353 at ¶ 4; D.I. 354 at ¶ 4.
. See D.I. 353 at ¶ 5; D.I. 354 at ¶ 5.
. See D.I. 353 at ¶ 6; D.I. 354 at ¶ 6.
. Id.
. See D.I. 353 at ¶ 7; D.I. 354 at ¶ 7.
. D.I. 353 at ¶¶ 2, 8; D.I. 354 at ¶¶ 2, 8.
. D.I. 353 at ¶¶ 9-11; D.I. 354 at ¶¶ 9-11.
. D.I. 353 at ¶ 12; D.I. 354 at ¶ 12.
. D.I. 358, Ex. A-D. The date of the Formation Agreement, the Operating Agreement and the two Patent Purchase Agreements is January 10, 2010. The privileged materials presently sought were in possession of Nokia and Sony, parent corporations of Nokia Capital and SCA IPLA, and were subsequently provided to Nokia Capital and SCA IPLA. Apple does not contend this original transfer operated as a waiver of privilege.
. Prior to any transfer of intellection property to MMI, SCA IPLA obtained the patents through assignments from Sony, while Nokia Capital acquired its patents from Nokia.
. See D.I. 358 at ¶ 2.
. D.I. 358, Ex. A at first Whereas clause; Ex. B. at first Whereas clause.
. D.I. 356 at ¶ 6; D.I. 357 at ¶¶ 5, 7. See also D.I. 358, Exs. C & D at ¶ 4.1 (this paragraph of each of the Patent Purchase Agreements provides for Nokia Capital and SCA IPLA respectively to deliver to MMI the prosecution history files).
. D.I. 355 at 1.
. D.I. 370 at 1.
. Id.
. 2011 WL 2623306, at *4 (E.D.Pa. July 5, 2011).
. Id.
. Apple's motion included a production request of Sony documents through MMI under an Afros v. Krauss-Maffei, 113 F.R.D. 127 (D.Del. 1986) argument. Because Apple advised during the teleconference that Sony and Apple were still conferring on document production; Sony was absent from that discovery conference; and insufficient evidence of control by MMI over the Sony documents, the court denied Apple's request during the hearing. That decision does not address whether
The documents sought by Apple regarding patents selected to become part of this patent cluster concerned descriptions by Nokia and Sony to each other regarding patent coverage for their respective patents. See Trans, dated June 7, 2012 (erroneously dated May 12, 2012) ("Trans.”) at 11:4-13:3. See also D.I. 337, Ex. 4; D.I. 370.
Originally, Apple also sought drafts of the purchase agreements and formation agreements which were denied based on relevance. See Trans, at 41:18-42:20.
.In this regard, Apple asserts additional concerns because the affidavits mention “other employees,” assumed to be non-attorneys sharing in the communications.
. D.I. 370 at 3.
. Id.
. As noted previously, MMI maintains its privilege log was produced in November 2011.
. See D.I. 337 n. 4 listing the dates when correspondence or conferences occurred to address the present issues. The footnote indicates such discussions began with MMI on December 15, 2011, while discussions with Nokia began on January 17, 2012.
. During the June 5 teleconference, Nokia cited its response to request 19 which asked for all documents and things relating to its involvement in the formation of MMI. Nokia’s objection claimed such documents were protected by attorney-client privilege, work-product doctrine and the common interest privilege.
. Nokia also contends that despite the deficiencies in Apple's subpoena (attempting to serve a Finnish company in Finland through a subpoena issued from this court), it cooperated and produced numerous documents.
. D.I. 356 at ¶ 6; D.I. 358 at ¶ 11.
. D.I. 358, Exs. C & D.
. D.I. 356 at ¶ 6; D.I. 357 at ¶ 5; D.I. 358, Ex. B § 8.2.
. D.I. 356 at ¶¶ 8-10; D.I. 357 at ¶¶ 7-9; D.I. 358, Ex. A§ 4.03.
. Since this discovery matter was initially raised and briefed, claim construction and summary judgment briefing has been completed and the Markman hearing and oral argument occurred in late July 2012.
. In re Teleglobe Communications Corp., 493 F.3d 345, 364 (3d Cir. 2007).
. In the Matter of Bevill, Bresler & Schulman Asset Mgmt. Corp., 805 F.2d 120, 126 (3d Cir. 1986), quoting Eisenberg v. Gagnon, 766 F.2d 770, 787 (3d Cir. 1985).
. Teleglobe Communications, 493 F.3d at 365.
. In the Matter of Bevill, 805 F.2d at 126, citing In re Grand Jury Subpoena Duces Tecum Dated November 16, 1974, 406 F.Supp. 381 (S.D.N.Y. 1975); see also Grand Jury Empanelled February 14, 1978, 603 F.2d 469, 474 (3d Cir. 1979).
. Teleglobe Communications, 493 F.3d at 365.
. Id.
. Id.
. Id.
. SE. Pa. Transp. Auth. v. Caremarkpcs Health, L.P., 254 F.R.D. 253, 258 (E.D.Pa. 2008).
. Teleglobe Communications, 493 F.3d at 365.
. See D.I. 337, Ex. 4.
. The reversionary interest under § 4.03 of the Formation Agreement was eliminated in early 2012. See D.I. 240 at 3 n. 3.
.Apple acknowledges the development of a litigation strategy between Sony and Nokia predated MMI’s formation, and was implemented after MMI’s formation, and specifically notes such cooperation continued thereafter with each other and MMI "to further that legal strategy” for enforcement of the patents. See D.I. 370 at 1.
. D.I. 337.
. D.I. 352, Ex. 1 at 2.
. Id. at 1.
. Xerox Corp. v. Google, Inc., 801 F.Supp.2d 293, 304 (D.Del. 2011).
. 719 F.Supp.2d 373, 376 (D.Del. 2010).
. Id. at 304.
. C.A. No. 07C-09-059-JRS, 2009 WL 402332, at *7 (Del.Super. Feb. 12, 2009), quoting American Legacy Found. v. Lorillard Tobacco Co., C.A. No. 19406-VC Lamb, 2004 WL 2521289, at *3 (Del.Chan. Nov. 3, 2004).
. Xerox Corp. v. Google, Inc., 801 F.Supp.2d at 297 n. 1.
. Xerox, 801 F.Supp.2d at 304.
. Apple does not refute the objections were filed; it argues it did not fully understand the reasoning for them.
. 212 F.R.D. 470, 472 (D.Del. 2003).
Reference
- Full Case Name
- MOBILEMEDIA IDEAS LLC v. APPLE INC.
- Cited By
- 2 cases
- Status
- Published