Illumina, Inc. v. BGI Genomics Co., Ltd ( 2020 )

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 ILLUMINA, INC., et al., Case No. 19-cv-03770-WHO (TSH) 8 Plaintiffs, Case No. 20-cv-1465-WHO 9 v. DISCOVERY ORDER 10 BGI GENOMICS CO., LTD, et al., Re: Dkt. No. 222 (19-3770) & 144 (20- 11 Defendants. 1465) 12 13 Defendants move to compel Plaintiffs to produce for deposition the nine listed inventors 14 for the patents at issue in this case. Plaintiffs oppose. There are two separate sets of issues: (1) 15 whether this discovery is relevant and proportional under normal Rule 26 considerations, and (2) 16 what Plaintiffs’ obligations are under the assignment agreements with respect to the witnesses. 17 The Court considers each in turn. 18 A. Relevant and proportional 19 In these patent infringement actions in which Defendants plead invalidity defenses, 20 depositions of the inventors are relevant. Defendants assert defenses under section 112, arguing 21 that the asserted patents lack a written description sufficient to enable one of skill in the art to 22 make and use the claimed inventions. Defendants argue that the inventors did not possess the 23 claimed inventions at the time the priority applications were filed. They argue that evidence to 24 support those defenses is likely in the possession of one or more of the named inventors. 25 Certainly, inventor testimony could be relevant to such arguments. See, e.g., Nuvo Pharm. (Ir.) 26 Designated Activity Co. v. Dr. Reddy’s Labs. Inc., 923 F.3d 1368, 1381 (Fed. Cir. 2019) (holding 27 that “inventor testimony . . . illuminates the absence of critical description in this case”). 1 affirmative defense in granting Plaintiffs’ motion for a preliminary injunction. 19-3770, ECF No. 2 185 at 9-13, 14-17. Therefore, it will probably fail on summary judgment or at trial. However, 3 probably does not mean certainly. A litigant who is on the losing end of a preliminary injunction 4 is still entitled to take discovery in an attempt to turn the case around. Here, Defendants say they 5 have added new counsel to the case after briefing on the preliminary injunction motion was 6 completed, and they are exploring new theories for some of their affirmative defenses, including 7 enablement. They are entitled to take discovery to explore those issues. Moreover, the inventors 8 are natural and logical deponents with respect to these defenses. 9 Plaintiffs argue from the premise that there is a high bar Defendants need to clear to take 10 these depositions. Plaintiffs say that “BGI has failed to identify a substantial question as to the 11 validity of Illumina’s patents.” Plaintiffs say that Defendants “appear[] to suggest that the general 12 topic [of the depositions] might be either a written description or enablement defense, although 13 even that is vague.” And Plaintiffs argue that it should be sufficient for Defendants to depose the 14 two inventors whom Plaintiffs have selected to make available for deposition. 15 The Court disagrees that the bar is that high. Defendants are not proposing to depose a 16 long list of random people, or people who have only a tenuous connection to the case. Defendants 17 are asserting written description and enablement defenses, and the inventors are logical witnesses 18 with respect to these defenses. Defendants do not have to prove the merit of their affirmative 19 defenses before they are entitled to take discovery on them; they just need to adequately plead 20 them to make this discovery relevant. They also don’t need to turn over their deposition outline to 21 Plaintiffs ahead of time. They’ve made clear they want to depose the inventors about invalidity 22 defenses, and they have previewed what the defenses are. They don’t need to disclose more than 23 that to be entitled to these depositions. And the suggestion that Defendants should be limited to 24 deposing the inventors chosen by their opponents does not even merit discussion. 25 Plaintiffs’ arguments that the inventors are too unimportant, were involved too long ago, 26 and are simply not worth deposing are also hard to credit in light of the assignment agreements by 27 which Plaintiffs acquired these patents from the inventors. See ECF No. 222-1. In each 1 everything possible to aid” Plaintiffs “to obtain and enforce proper Patent Protection for said 2 improvements in the United States.” There is no date limit on that obligation, other than the 3 presumed lack of need for their testimony once the patents expire. 4 The assignments themselves show Plaintiffs’ belief, at least at the time the assignments 5 were entered into, that the inventors’ testimony, even years down the road, could be important. 6 Plaintiffs did not want just the legal rights to these patents, but also the meaningful ability to 7 enforce those rights and to defend against claims of invalidity. Had Plaintiffs acquired only the 8 patents without the right to require the inventors to testify, they would have known that there was 9 a potential evidentiary hole in their ability to enforce because sometimes inventor testimony is 10 important. And despite Plaintiffs’ argument today that the patents were invented so long ago that 11 the inventors likely remember nothing, Plaintiffs were careful to make sure there was no time limit 12 on the requirement to testify. 13 As to proportionality, the Court thinks that viewing the inventor depositions in isolation is 14 myopic. In their recent case management conference statement, see 20-1465 ECF No. 145, both 15 sides have proposed aggregate deposition limits in the two related cases. Aggregate limits are a 16 far better way to ensure proportional discovery than the Court deciding how many witnesses are 17 proportional for each issue in the case. The parties know their case better than the Court does, and 18 if deposing every inventor would be a waste of time, the Court expects Defendants would use their 19 aggregate time more productively elsewhere. The Court observes, however, that both sides’ 20 proposed deposition limits seem to assume that all nine inventors will be deposed. See id. at 9 21 (“Plaintiffs’ Position: There are only three additional Illumina inventors at issue in this case 22 beyond the six Illumina inventors already at issue in C.A. No. 3:19-cv-03770-WHO. Given the 23 significant overlap in subject matter between the two cases, Plaintiffs propose twenty (20) hours of 24 additional deposition time, and five (5) additional depositions, resulting in a total of 135 hours of 25 deposition time and twenty-five (25) depositions per side between both the instant case and the 26 related -03770 case.”); id. at 10 (“Defendants’ Position: Given that there are seven inventors on 27 the 973 and 444 patents and two additional inventors on the 025 patent, Defendants propose that 1 175 hours of deposition time per side between both the instant case and the related -03770 case.”). 2 B. Assignment agreements 3 As noted above, in each of the assignment agreements in which the inventors conveyed 4 their interest in the patents, the inventors “covenant and agree that we will communicate to the 5 said [assignee], its successors, legal representatives and assigns, any fact known to us respecting 6 said [patents], and testify in any legal proceeding, sign all lawful papers, execute all divisions, 7 continuing and reissue application, make all rightful oaths and generally do everything possible to 8 aid the said [assignee], its successors, legal representatives and assigns, to obtain and enforce 9 proper Patent Protection for said [patents] in the United States.” Of the nine inventors, Plaintiffs 10 say that seven are in the United Kingdom, one is in the Netherlands, and Plaintiffs do not know 11 where the last one is. The parties disagree about what these agreements to testify obligate 12 Plaintiffs to do. Defendants urge the Court to order Plaintiffs to make the inventors available for 13 deposition. Plaintiffs say that the inventors are not their employees, officers, directors or 14 managing agents, so they cannot be compelled to produce them under Federal Rule of Civil 15 Procedure 30. Instead, Plaintiffs contend that the proper procedure is to seek foreign depositions 16 through the Hague Convention. 17 The Court agrees with Defendants. In Amgen, Inc. v. Ariad Pharmaceuticals, Inc., 2007 18 WL 1425854 (D.Del. May 14, 2007), the Court confronted a similar request by a plaintiff in a 19 patent infringement lawsuit to force the defendant to bring foreign-based inventors to the U.S. for 20 a deposition. The defendant argued that absent Rule 30, the plaintiff’s only options were a 21 subpoena under Rule 45 (which wouldn’t work because the inventors were outside the U.S.) or the 22 Hague Convention. The court disagreed, explaining that “the analysis of whether the court should 23 require the inventors’ appearance does not end at that point.” Id. at *2. The court then explained 24 that “[e]ach inventor executed an assignment.” Id. The court concluded that in each of the 25 assignments, “the ‘giving of testimony’ is specifically required ‘in any . . . other proceeding in 26 which said invention . . . or patent . . . may be involved.’” Id. Citing precedents enforcing such 27 agreements to testify, the court ordered the defendant to “produce the foreign-based inventors . . . 1 inventor whose location was unknown, the court ordered the defendant to “advise the court . . . of 2 defendant[’s] efforts to locate him and to explain what is meant that ‘[defendant] has not been able 3 to contact’ him.” Id. at *3. 4 Other courts have likewise enforced agreements to testify. “Courts interpreting assignment 5 agreements containing similar language have required the foreign inventor to sit for a deposition in 6 connection with litigation over the patent.” Industrial Tech. Research Institute v. LG Corp., 2012 7 WL 12883204, *1 (S.D. Cal. Dec. 4, 2012); see also Aerocrine AB v. Apieron Inc., 267 F.R.D. 8 105, 111-12 (D.Del. 2010) (“Apieron’s motion to compel Drs. Persson and Stromberg to travel to 9 the United States to be deposed is GRANTED. Drs. Persson and Stromberg are parties to an 10 assignment agreement that specifically contemplated the provision of testimony for purposes of 11 enforcing the patent rights that were the subject of the assignment agreement; it also specifically 12 references enforcement in the United States.”) (emphasis original); Mineba Co., Ltd., v. Papst, 370 13 F. Supp. 2d 302, 308 (D.D.C. 2005) (“With respect to the inventors . . . the Court is persuaded that 14 Papst has the ability to compel them to appear for testimony at trial and should have had the 15 ability to make them available in the United States for deposition testimony. The inventors had all 16 executed written assignment agreements with Papst Motoren which contained express agreements 17 to provide testimony at the request of Papst Motoren and its successors and assigns.”). 18 When a litigant has the contractual right to require a foreign inventor to testify in a U.S. 19 legal proceeding, courts bring skepticism to any argument that the litigant is unable to produce the 20 witness. For example, in Mineba, “Papst . . . delivered letters to all of the witnesses requesting 21 their voluntary appearance for deposition. All of the witnesses declined.” 370 F. Supp. 2d at 303. 22 The court explained that “[b]ecause the inventors are expressly required to testify at the request of 23 Papst by written contracts, the Court cannot but conclude that Papst’s ‘request’ for the voluntary 24 appearance of the inventor witnesses was made with a wink and a nod and that their failure to 25 appear must be attributed to Papst.” Id. at 310. The court concluded that “Papst has willfully 26 failed to produce these witnesses. If it continues to fail to produce them for testimony at trial, the 27 Court will instruct the jury what adverse inferences may be drawn from Papst’s failure to produce 1 Similarly, in Industrial Tech. Research Institute, ITRI claimed to be trying to get the 2 inventor to testify by “requesting” that he appear for a deposition. 2012 WL 12883204 at *3. 3 “Notably,” the court observed, “the email makes no mention of [the inventor’s] contractual 4 obligation to testify regarding the [] patent.” Id. (emphasis original). The court also expressed 5 skepticism that the ITRI employees who contacted the inventor had sufficient title and influence to 6 persuade him. Id. Ultimately, as in Mineba, the court ordered ITRI to make the witness available 7 for a deposition in the U.S. and then threatened ITRI with sanctions if it did not produce him. Id. 8 at *3 (“There is no dispute Sheen’s testimony is relevant to the case, and the failure to secure his 9 testimony pursuant to the assignment agreement would not present an ideal circumstance for either 10 side. For ITRI, it could possibly result in consequences under Fed.R. Civ. P. 37, including 11 evidence preclusion sanctions at trial.”); see also Amgen, 2007 WL 1425854, at *3 (noting that in 12 In re Nifedipine Capsule Patent Litig., 1989 WL 111112 (S.D.N.Y. Sept. 20, 1989), “[t]he court 13 required plaintiff to produce the inventors for deposition in the United States, pursuant to the 14 Federal Rules of Civil Procedure, or be subject to sanctions.”). 15 The cases Plaintiffs cite are inapposite. The court in Koninklijke Philips N.V. v. Wangs 16 Alliance Corp., 2018 WL 283893 (D.Mass. Jan. 2, 2018), did not hold that the proper procedure is 17 to seek foreign depositions through the Hague Convention. Rather, the court assumed for the sake 18 of argument that the foreign inventor could be made to appear because of his contractual 19 agreement to testify, see id. at *2 (“Even crediting WAC’s argument that Flaissier is contractually 20 obligated to appear . . .”), but held the effort was not worth the candle because his testimony was 21 unlikely to be relevant. 22 In Medpointe Healthcare, Inc. v. Apotex, Inc., 2007 WL 211202 (D.Del. Jan. 26, 2007), the 23 assignment required the inventor to testify in any legal proceedings and do everything necessary or 24 desirable to aid the assignee to obtain and enforce proper protection everywhere in the world. Id. 25 at *1 (“. . . in the United States, their territories and possessions, and all foreign countries.”). The 26 court “decline[d] to find . . . that this language inherently includes a specific assent to be subjected 27 to an American-style deposition, governed by American discovery laws, over and above 1 familiar to Mr. Hettche at the time of signing.” Id. at *2. The court therefore held that proceeding 2 under the Hague Convention was appropriate. Id. Similarly, in Murata Mfg. Co., Ltd. v. Bel Fuse, 3 Inc., 242 F.R.D. 470 (N.D. Ill. 2007), the assignment required the inventor to testify in any 4 proceeding in connection with the patent “in any country.” Id. at 478. The Court was skeptical 5 that this obligated the inventor to “travel the world in his retirement,” id. at 480, and concluded 6 that “there is nothing to suggest he envisioned and agreed to being deposed around the globe.” Id. 7 The court accordingly followed Medpointe and declined to order the inventor to sit for a 8 deposition in the U.S. Id. 9 To see why Medpointe and Murata are off point, let’s take another look at the agreement to 10 testify in this case: The inventors “covenant and agree that we will communicate to the said 11 [assignee], its successors, legal representatives and assigns, any fact known to us respecting said 12 [patents], and testify in any legal proceeding, sign all lawful papers, execute all divisions, 13 continuing and reissue application, make all rightful oaths and generally do everything possible to 14 aid the said [assignee], its successors, legal representatives and assigns, to obtain and enforce 15 proper Patent Protection for said [patents] in the United States.” (emphasis added). 16 They were agreeing to testify in legal proceedings in one country and only one: the U.S. 17 The inventors could not reasonably have thought that the “familiar . . . practices in [their] home 18 country,” Murata, 242 F.R.D. at 480, or the “customary (and more restrictive) . . . discovery 19 practices which would have been most familiar to [them] at the time of signing,” Medpointe, 2007 20 WL 211202, at *2, would apply to their testimony because they were specifically agreeing to 21 testify in U.S. legal proceedings and only in U.S. legal proceedings. Medpointe and Murata 22 therefore do not support Plaintiffs. 23 The Court concludes that Plaintiffs must make the inventors available for deposition in this 24 case. But the Court must also be a bit more specific about what that means. Judge Orrick will 25 have to decide what the obligation to “testify in any legal proceeding . . . in the United States” 26 means for trial. In normal times, the Court might very well conclude that language obligates a 27 witness to travel to the U.S. for a deposition. However, during the current pandemic, nearly all 1 deposed from the comfort and convenience of their living room in the U.K. or the Netherlands, 2 they will be testifying in this U.S. legal proceeding the same way that any U.S.-based witness 3 would. There is no need for them to travel to the U.S. Unlike in mainland China, for example, 4 there is no legal prohibition on the inventors being deposed in the U.K. or the Netherlands for a 5 U.S. legal proceeding. 6 Accordingly, in line with the case law, the Court orders Plaintiffs to make the inventors 7 available for deposition by videoconference or face sanctions. For the inventor Plaintiffs have 8 been unable to locate, the Court orders Plaintiffs to advise the Court within 10 days of their efforts 9 to locate him. See Amgen, 2007 WL 1425854, at *3. 10 The Court has some concerns that Plaintiffs may have been priming the inventors to refuse 11 to attend a deposition. At the August 13, 2020 hearing, Plaintiffs repeatedly described the 12 inventor depositions as optional and said that no one had volunteered: “So we haven’t had anyone 13 volunteer to participate. It’s not like we haven’t inquired. Tr. at 9:19-20; see also Tr. at 14:7 (“we 14 told him our desire”); Tr. at 15:16-17 (“In this case I don’t think there’s any reason to believe, for 15 example, people with competitors are just going to, like, appear, you know, voluntarily.”). If that 16 is how Plaintiffs have been describing the depositions to the inventors – as voluntary – that is the 17 specific strategy that was condemned in Mineba. 370 F. Supp. 2d at 310 (“Papst’s ‘request’ for 18 the voluntary appearance of the inventor witnesses was made with a wink and a nod and . . . their 19 failure to appear must be attributed to Papst.”). 20 Plaintiffs also repeatedly argued at the hearing that there would be some sort of legal 21 problem with conducting an American-style deposition in the U.K., Tr. at 8:10-11, 8:14-21, 21:17- 22 20, which is not true. If this is the position Plaintiffs are taking in court, it seems inconceivable 23 they told the inventors they are required to be available for deposition or that this message was 24 strongly conveyed by executives the witnesses would listen to. See Industrial Tech. Research 25 Institute, 2012 WL 12883204 at *3. 26 Plaintiffs also constantly described the requested relief as physically traveling to the U.S., 27 the country most ravaged by the novel coronavirus, during the height of the pandemic here. Tr. at 1 ”); id. at 14:12-15 (“You know, they haven’t said, really, no, but they haven’t agreed to comply 2 with U.S.-style discovery. And they certainly haven’t agreed to come to the U.S.”); id. at 26:17- 3 23 (“And then of the two others, like I say, I think we’ve – they’ve been responsive and we’ve had 4 discussions with them. Their request has been, you know, come to the United States and other 5 things. So we haven’t really gotten to the Zoom question, and I think that, with respect to those 6 witnesses, that that could be well received . . .”). It is true that Defendants are partly to blame for 7 this because they did ask for the inventors to travel to the U.S. for deposition. During the August 8 13 hearing, Defendants disclaimed that request and agreed that videoconference was appropriate, 9 but they did argue for travel to the U.S. in the discovery letter brief. Nonetheless, Plaintiffs knew 10 perfectly well that depositions in the U.S. are being done by videoconference during the pandemic. 11 If they had actually been trying to get the inventors to appear for deposition, they would of course 12 have told them it could be done by videoconference, like essentially all depositions now being 13 conducted in the U.S. 14 Plaintiffs also presented argument as if the only options they understood were possible 15 were a deposition in a foreign country under the Hague Convention or traveling to the U.S. for a 16 deposition, again underscoring that they never mentioned to the inventors that videoconference 17 from home was the likely form of the deposition. Tr. at 15:24-16:7 (“The Court: . . . When 18 plaintiffs contacted the inventors, did you describe BGI’s request as coming to the United States 19 for a deposition? [¶] Mr. McClellan: I think we – I don’t know that we got that specific. We just 20 said that they need to – to do a deposition. And we didn’t get into whether it would be done by 21 Hague or U.S., so we haven’t gotten to that level of detail.”); id. at 17:1-6 (“The Court: Okay. 22 But you didn’t necessarily call – even if you assumed Zoom, you didn’t necessarily tell them that. 23 Mr. Reines: I don’t think we got into the particulars at all, whether it would be Hague style or 24 nonHague style. We didn’t do any of that.”). 25 In summary, it may be that Plaintiffs’ efforts to compel the inventors to make themselves 26 available for deposition have consisted of meekly asking them to volunteer to travel great 27 distances and imperil their lives. If Plaintiffs cannot make any of the inventors available for a 1 || justifiable reason why they could not make one or more of the inventors available, sanctions may 2 not be warranted. At the hearing, Plaintiffs stated that one of the inventors has cancer, but it is 3 || unclear if he cannot testify or how dated this information is. Tr. at 14:8-9 (“we didn’t really push 4 || it at that point in time.”); id. at 23:16-25. They also stated that they cannot find one of the 5 || inventors, and that others have been nonresponsive. If Plaintiffs can show that despite all diligent 6 || efforts to enforce their contractual right to have the inventors testify in this legal proceeding, 7 events beyond their control made that impossible, the Court might not award sanctions. However, 8 the evidence relevant to the diligence inquiry does not include only the steps Plaintiffs take 9 starting tomorrow. It also includes communications to date, including any that may have 10 suggested that a deposition was voluntary, inconvenient, or dangerous. 11 IT IS SO ORDERED. 12 13 Dated: August 24, 2020 = □ («4 TAM. | THOMAS S. HIXSON 5 United States Magistrate Judge 16 17 Z 18 19 20 21 22 23 24 25 26 27 28