Schlich v. Broad Inst., Inc. (In Re Schlich)

United States Court of Appeals
For the First Circuit
No. 17-1377
IN RE: APPLICATION OF GEORGE W. SCHLICH
GEORGE W. SCHLICH,
Petitioner, Appellant,
v.
THE BROAD INSTITUTE, INC., FENG ZHANG,
NAOMI HABIB, and LE CONG,
Respondents, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSCHUSETTS
[Hon. F. Dennis Saylor IV, U.S. District Judge]
Before
Torruella, Lipez, and Kayatta,
Circuit Judges.
Melissa Arbus Sherry, with whom Michael A. Morin, Ryan C.
Grover and Latham & Watkins LLP were on brief, for appellant.
Raymond N. Nimrod, with whom William B. Adams, Matthew D.
Robson and Quinn Emanuel Urquhart & Sullivan LLP were on brief,
for appellees.
June 20, 2018
TORRUELLA, Circuit Judge. Petitioner-Appellant
George W. Schlich, a patent agent for Intellia Therapeutics, Inc.,
appeals from the district court's denial of a petition for
discovery under 28 U.S.C. § 1782. That statute allows a party to
file a petition in district court to obtain discovery for use in
a foreign proceeding. 1 Here, Schlich sought discovery from
Respondents-Appellees The Broad Institute, Inc., Dr. Feng Zhang,
Dr. Naomi Habib, and Dr. Le Cong (collectively, "Broad") in
relation to opposition proceedings currently before the European
Patent Office ("EPO").2 In the opposition proceedings, Schlich
challenges the validity of several of Broad's European patents
involving CRISPR-Cas9 technology used in the programmable genome
editing of mammalian cells. Schlich contends that the district
1 28 U.S.C. § 1782(a) provides in pertinent part:
The district court of the district in which a person
resides or is found may order him to give his testimony
or statement or to produce a document or other thing for
use in a proceeding in a foreign or international
tribunal, including criminal investigations conducted
before formal accusation. The order may be made pursuant
to a letter rogatory issued, or request made, by a
foreign or international tribunal or upon the
application of any interested person and may direct that
the testimony or statement be given, or the document or
other thing be produced, before a person appointed by
the court.
2 An opposition proceeding before the EPO "allows any member of
the public to challenge a European patent within nine months of
its grant."
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court erred in requiring him to prove the EPO's receptivity to the
district court's assistance in providing the requested discovery,
and in denying the request for discovery under § 1782 for lack of
relevance to the foreign proceeding. After careful consideration,
we affirm.
I. Background
A. Factual Background
The Broad Institute, Inc. is a nonprofit medical
research organization founded in 2003 by Eli and Edythe Broad,
alongside Harvard University, Harvard-affiliated hospitals, and
the Massachusetts Institute of Technology. The nonprofit launched
in 2004, focusing on the development of genomic research for the
advancement of medical science. Dr. Feng Zhang is a member of the
Broad Institute, and both Dr. Naomi Habib and Dr. Le Cong are
Postdoctoral Associates who worked with Dr. Zhang. Dr. Zhang
dedicates part of his research to the CRISPR-Cas9 system for genome
editing.
Intellia is a "genome editing company" whose primary
focus is the development of "potentially curative therapeutics"
using the CRISPR-Cas9 system. Schlich is a European patent
attorney providing legal services to Intellia in the EPO opposition
proceedings against four of Broad's patents related to CRISPR-
Cas9. Dr. Jennifer Doudna is a founding member of Intellia, and
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the company holds an exclusive license to Dr. Doudna's
intellectual property in the CRISPR-Cas9 therapeutics field.
The CRISPR-Cas9 system emerged from research on certain
bacteria that can precisely target and "carve up" genetic material.
When applied to human DNA, the potential curative value of this
technology is allegedly tremendous, and its potential worth is
estimated to be in the billions of dollars.
Dr. Doudna and Dr. Emmanuelle Charpentier led a team
working on the bacteria associated with the CRISPR-Cas9 technology
and, on May 25, 2012, filed a provisional patent application3 at
the United States Patent and Trademark Office ("U.S.P.T.O.") for
certain "methods and compositions" for "DNA modification."
Additionally, they published an article describing their findings
in June 2012. See Martin Jinek et al., A Programmable Dual-RNA-
Guided DNA Endonuclease in Adaptive Bacterial Immunity, 337(6096)
Science 816 (2012).
3 A provisional patent application "serves as a placeholder with
the [U.S.P.T.O.] that grants the applicant 'the benefit of
priority' for an invention," United States v. Camick, 796 F.3d
1206, 1218 (10th Cir. 2015) (quoting U.S. Patent & Trademark
Office, Manual of Patent Examination Procedure § 201.04 (9th ed.
2014)), if the applicant subsequently files a non-provisional
application within a certain period of time, see Chinsammy v.
United States, 417 F. App'x 950, 951 (Fed. Cir. 2011) (citing
35 U.S.C. §§ 119, 154).
-4-
On October 5, 2012, Dr. Zhang and other members of the
Broad team, including Dr. Habib and Dr. Le Cong, submitted a
manuscript that "reported the first successful programmable genome
editing of mammalian cells using CRISPR-Cas9." On December 12,
2012, Broad filed its first provisional patent application with
the U.S.P.T.O. relating to genomic sequence manipulation, and
subsequently filed several other related provisional patent
applications in the following months.
Based on two provisional patent applications filed by
Broad in December 2012 and January 2013, Thomas Kowalski, a U.S.
Patent Attorney, filed a Patent Cooperation Treaty ("PCT")
application4 on behalf of Broad. Since Broad's provisional patent
applications included various inventions, Kowalski and Dr. Smitha
Uthaman conducted an inventorship study to determine the different
inventions and the corresponding contributions from each inventor.
Subsequently, Broad filed ten separate PCT applications. The
subject matter of the initial provisional patent applications was
divided among these PCT applications listing different inventors
and a "divided priority" based on the findings of the inventorship
4 A PCT application, also known as an international patent
application, allows an applicant to simultaneously seek protection
for an invention in over 150 countries. See World Intellectual
Prop. Org., http://www.wipo.int/pct/en/ (last visited June 8,
2018).
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study. Eventually, the PCT applications resulted in several
European patents, which Intellia now challenges at the EPO.
Schlich filed oppositions with the EPO seeking the
revocation of four of Broad's European patents. At the opposition
proceedings, Schlich argued, among other things, that Broad's
European patents cannot claim right of priority to Broad's
provisional patent applications filed with the U.S.P.T.O. because
the applicants listed in the latter are not the same as those
listed in the subsequent PCT applications, as is required by
European patent law. In response, Broad argued that United States
law, and not European law, should determine whether its European
patents can claim priority to the provisional applications because
those provisional patent applications were filed in the United
States. According to Broad, United States law allows multiple
inventions to be disclosed and multiple inventors to be listed in
a provisional application without requiring that every inventor
have contributed to every invention. The right of priority from
that provisional application could then be severed into different
PCT applications without requiring complete identity between the
inventors listed in both applications, as long as the applicant
"claim[s] priority in [the PCT] application with regard to an
invention to which [he or she] contributed." In support of its
contention that the proper procedure was followed here, Broad
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submitted a declaration from Kowalski describing the process he
followed and the findings of his inventorship study.
B. Procedural History
In September 2016, Schlich filed an application for
discovery under 28 U.S.C. § 1782 in the United States District
Court for the District of Massachusetts. Schlich sought documents
and testimony from Broad. The discovery sought focused on the
inventorship study conducted by Kowalski and Dr. Uthaman, as well
as the assignment of the relevant rights over the corresponding
inventions. Broad opposed discovery and a hearing was held on
October 24, 2016. At the hearing, the parties disputed, among
other things, whether the discovery sought was relevant to the EPO
proceedings and whether the EPO would be receptive to the requested
discovery. Broad informed Schlich and the court that it would
submit a request to the EPO to confirm "that the EPO is not
receptive to the discovery sought by [] Schlich." Broad filed the
request on October 31, 2016.
On November 1, 2016, the district court ordered
supplemental briefing after noting that the parties had not
addressed the issue of the EPO's receptivity to the district
court's assistance in providing the requested discovery prior to
the hearing. 5 The parties then submitted their supplemental
5 The supplemental briefing order directed the parties to address
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briefs. Broad's submission included a declaration from a former
EPO official, who stated that the issue presented by Schlich in
his § 1782 application "is a potential dispute over inventorship"
or "entitlement," yet, "the EPO has no authority or jurisdiction
to resolve issues of entitlement," including "whether inventorship
is or is not correct." The declarant thus concluded that
"discovery relating to this issue would not be considered relevant
and therefore would not be considered by the EPO." On December 9,
2016, the district court denied Schlich's petition without
prejudice. In re Schlich, 2016 WL 7209565 (D. Mass. Dec. 9, 2016).
It found that three of the four statutory requirements of § 1782
were met -- including that the discovery be "for use" in a foreign
proceeding -- and assumed without deciding that the fourth
requirement was also satisfied. Id. at *3. The court then
considered the factors established by the Supreme Court in Intel
Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241 (2004) (the
Intel factors) and concluded, inter alia, that "because the EPO
will not make a determination as to inventorship in the
[o]pposition proceeding[s]," Schlich had not demonstrated that the
the EPO's receptivity issue, including the following questions:
"(1) why the Kowalski affidavit was submitted to the EPO,
(2) whether the EPO has authority or jurisdiction to resolve issues
of inventorship in the pending proceeding, and (3) if it does not
have such authority or jurisdiction, how the EPO would be receptive
to this Court's assistance in providing the requested discovery."
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discovery sought was "relevant" to the opposition proceedings and
thus had "failed to show that the EPO would be receptive to the
Court's assistance." In re Schlich, 2016 WL 7209565 at *6.
Relying heavily on this reasoning, the court denied Schlich's
petition, but clarified that if it became clear that the EPO would
be receptive to the assistance of the court, or if fairness
otherwise required that the decision be reconsidered, Schlich
could renew his petition. Id. at *7.
On March 15, 2017, the district court denied Schlich's
Motion for Reconsideration. Schlich timely appealed. Shortly
after the notice of appeal was filed, the EPO issued a preliminary
and non-binding opinion and summoned the parties for oral
proceedings.
II. Discussion
A. Standard of Review
Because § 1782 is a mechanism for obtaining discovery,
and "[t]he trial court is in the best position to weigh fairly the
competing needs and interests of parties affected by discovery,"
Seattle Times Co. v. Rhinehart, 467 U.S. 20, 36 (1984), we
generally review the grant or denial of a discovery request under
§ 1782 for abuse of discretion, In re Asta Medica, S.A., 981 F.2d
1, 4 (1st Cir. 1992), abrogated on other grounds by Intel Corp.,
542 U.S. at 259-61. However, if the district court's decision is
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based on an interpretation of the law, we review it de novo.
See Santiago-Sepúlveda v. Esso Standard Oil Co. (P.R.), 643 F.3d
1, 4 (1st Cir. 2011); see also Consorcio Ecuatoriano de
Telecomunicaciones S.A. v. JAS Forwarding (USA), Inc., 747 F.3d
1262, 1268 (11th Cir. 2014); In re Bayer AG, 146 F.3d 188, 191 (3d
Cir. 1998).
B. Section 1782(a)'s statutory requirements and the Intel factors
Today's § 1782 is the product of over 150 years of
Congressional effort and manifests the intent to provide "federal-
court assistance in gathering evidence for use in foreign
tribunals." Intel Corp., 542 U.S. at 247. The text of § 1782
provides that granting discovery is proper only if: 1) the person
from whom discovery is sought "resides or is found" in the district
where the court sits; 2) the request seeks evidence (the "testimony
or statement" of a person or the production of a "document or other
thing") "for use in a proceeding in a foreign or international
tribunal"; 3) the request is made by a foreign or international
tribunal or by "any interested person"; and 4) the material sought
is not protected by "any legally applicable privilege."6 28 U.S.C.
6 We note that although the district court and the parties all
make reference to these four requirements as the "statutory
requirements" of § 1782, some circuits only consider the first
three of these as statutory requirements. See, e.g., Certain
Funds, Accounts and/or Inv. Vehicles v. KPMG, L.L.P., 798 F.3d
113, 117 (2d Cir. 2015). We do not delve into this because it has
not been raised by the parties and, in any event, the statute does
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§ 1782(a). If all of these statutory requirements are met, the
district court is authorized, but not required, to provide judicial
assistance by permitting discovery. Intel Corp., 542 U.S. at 247;
see 28 U.S.C. § 1782(a) ("The district court . . . may order
. . . .") (emphasis added).
The district court's discretion to allow discovery if
all § 1782 requirements are met is not boundless. Rather, district
courts must exercise their discretion under § 1782 in light of the
twin aims of the statute: "providing efficient assistance to
participants in international litigation and encouraging foreign
countries by example to provide similar assistance to our courts."
Intel Corp., 542 U.S. at 252 (quoting Advanced Micro Devices, Inc.
v. Intel Corp., 292 F.3d 664, 669 (9th Cir. 2002)). The Supreme
Court has identified four discretionary factors that also "bear
consideration" in arriving at a decision. Id. at 264. The first
factor to consider is whether the person from whom discovery is
sought is a party to the foreign proceeding, in which case "the
need for § 1782(a) aid generally is not as apparent" because a
"foreign tribunal has jurisdiction over those appearing before it,
and can itself order them to produce evidence." Id. The second
prohibit compelling a person "to give his testimony or statement
or to produce a document or other thing in violation of any legally
applicable privilege." 28 U.S.C. §1782(a).
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factor, at issue here, was adopted from a Senate Report explaining
that a court "may take into account the nature of the foreign
tribunal, the character of the proceedings underway abroad, and
the receptivity of the foreign government or the court or agency
abroad to U.S. federal-court judicial assistance." Id. (citing
S. Rep. No. 88-1580, at 7 (1964), as reprinted in 1964 U.S.C.C.A.N.
3782, 3788 (hereinafter "Senate Report")). The third factor to
consider is whether the request "conceals an attempt to circumvent
foreign proof-gathering restrictions or other policies of a
foreign country or the United States." Id. at 265. Finally, the
fourth factor addresses whether the request is "unduly intrusive
or burdensome" to the extent that it should either be "trimmed" or
rejected outright. Id. In sum, a district court must first
determine whether the statutory requirements are met. If they
are, the district court should then consider the four discretionary
factors before arriving at a decision.
C. The district court's decision
Here, the district court addressed the statutory
requirements and the discretionary Intel factors before arriving
at its decision. It found that the first three statutory
requirements were met, and assumed without deciding that the fourth
requirement was also satisfied. In re Schlich, 2016 WL 7209565
at *6. Specifically as to the "for use" requirement, the district
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court noted as "undisputed" that "the material is requested for
use in a pending [o]pposition proceeding before the EPO." Id. at
*3. It then considered the Intel factors. The district court
found that the last two Intel factors weighed in favor of granting
the discovery request because the request was "not obviously
frivolous" nor appeared to be pursued for "improper means," and
because Broad "d[id] not contend that all of the information sought
[was] confidential or would be damaging if revealed" and, in any
event, the court could "narrowly tailor[]" the request and issue
protective orders. Id. at *6-7. The district court, however,
found that the first two discretionary factors weighed in favor of
denying the petition. Id. at *4-5. Regarding the first Intel
factor, the district court noted that Broad is a party in the
foreign proceeding and, although Drs. Zhang, Habib, and Le Cong
were not named parties, "the information sought from them relates
to their employment with Broad" and "appears to come within the
EPO's jurisdiction." Id. at *4-5. With respect to the second
discretionary factor, the court noted that "[t]he requested
discovery relates to the issue of inventorship," yet inventorship
determinations or disputes regarding inventorship seemed to be out
of the jurisdiction of the EPO in opposition proceedings. Id. at
*5-6. The court also noted that Schlich had not shown that the
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requested discovery was relevant to the foreign proceeding.7 Id.
at *6. After considering and balancing all of the Intel factors,
the court denied the petition, primarily because it did not appear
that the foreign tribunal would be "receptive to the assistance of
the [c]ourt in providing discovery." Id. at *7.
Both parties agree that the only issue on appeal is the
district court's interpretation of the second Intel factor.
Specifically, Schlich argues that, as the party opposing
discovery, Broad should have borne the burden of establishing, by
authoritative proof, 8 that the foreign tribunal would not be
receptive to the discovery sought. He further claims that the
district court erroneously inverted the burden of proof and
required him to provide authoritative proof that the foreign
tribunal would be receptive to the assistance of the court in
obtaining discovery. Had the district court properly placed the
burden of proof on Broad, Schlich's argument goes, it would have
granted the discovery request because "Broad had not definitively
7 The court's memorandum and order stated that "Broad" had not
demonstrated that the discovery sought was relevant, but it is
evident that the court was referring to "Schlich." Id. at *6.
8 "Authoritative proof" has been defined as proof that provides
"clear directive" of something, such as proof "embodied in a forum
country's judicial, executive or legislative declarations."
Euromepa S.A. v. R. Esmerian, Inc., 51 F.3d 1095, 1100 (2d Cir.
1995).
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and conclusively shown by authoritative proof or otherwise that
the EPO would not be receptive to the discovery."
Broad urges us to find Schlich's arguments on appeal
waived. It argues that Schlich did not argue below that Broad
bore the burden to demonstrate that the EPO would be unreceptive
to the requested discovery, "let alone that Broad was required to
submit 'authoritative proof' of the EPO's position." Broad
further argues that Schlich's arguments also fail on the merits
because although Schlich -- as the "party seeking relief" -- did
have the burden to prove the elements of his claim, the district
court never placed the burden on Schlich to provide "'authoritative
proof' of the EPO's receptivity -- indeed, that standard appears
nowhere in the district court's decision." Instead, Broad posits,
the district court's determination "was based on undisputed
evidence submitted by Broad" showing that the requested discovery
was irrelevant to the foreign proceedings "and thus did not turn
on the burden of proof." We first address Broad's waiver argument.
Because we conclude that Schlich's arguments were adequately
preserved, we then turn to the merits of his arguments.
D. The arguments were adequately preserved
Broad acknowledges that Schlich addressed the "differing
views" regarding who bore the burden of proof, but claims that he
"did not take a position as to which view was correct" and,
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instead, argued in the district court that, under any of these
views, the second Intel factor weighed in favor of granting the
requested discovery. Broad further argues that Schlich did not
develop the legal standard argument below. In consequence,
according to Broad, Schlich has waived the arguments he now makes
on appeal.
We find the issues adequately preserved below. Schlich
raised the burden of proof argument in the district court, both in
his writings prior to the hearing and at the hearing. On several
occasions, Schlich recognized that the First Circuit has yet to
determine the issue, but argued that Broad, as a respondent
opposing discovery, should prove the foreign tribunal's
unreceptivity. See, e.g., ECF No. 27, Transcript of Hearing at 14
("[O]nce you show that the discovery is relevant . . . then the
burden shifts to the opposing party, to Broad, to demonstrate that
the petition should not be granted."); id. at 18 ("[S]everal . . .
other courts . . . presume that the foreign tribunal will accept
the evidence unless the respondents prove otherwise, in other
words, the burden is on the other side to prove that the Court
won't be receptive."). Furthermore, Schlich sufficiently developed
his legal standard argument by referencing other courts applying
that same standard, and by further characterizing his evidence as
meeting that standard. See ECF No. 22 at 5 (stating that while
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"Broad failed to offer any evidence that the EPO would be
unreceptive to the requested discovery, [Schlich] has offered
authoritative evidence to the contrary") (emphasis added).
Therefore, the issues were adequately preserved. We thus address
the merits of Schlich's arguments.
E. Merits
The Supreme Court has not established the appropriate
burden of proof, if any, for any of the discretionary factors, or
the legal standard required to meet that burden. Intel Corp.,
542 U.S. at 264-65; see Certain Funds, Accounts and/or Inv.
Vehicles v. KPMG, L.L.P., 798 F.3d 113, 118 (2d Cir. 2015) (noting
that the Intel opinion lacks guidance regarding "minimum
requirements or tests to be met").
It is undisputed that Schlich, as the party seeking
discovery under § 1782, had the burden of establishing that all
the statutory requirements were met in order for the court to even
consider exercising its discretion to grant the requested relief.
See, e.g., Certain Funds, Accounts and/or Inv. Vehicles, 798 F.3d
at 120 (burden on movant to establish the statutory requirements);
Consorcio Ecuatoriano de Telecomunicaciones S.A., 747 F.3d at 1271
(implying that the movant must "satisf[y] the prima facie
requirements" of § 1782). Nor do the parties challenge the district
court's conclusion that the first three statutory requirements
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were met here, and that the fourth requirement was presumed to
have been met. The parties part ways, however, as to what, if
any, burden applies to the second Intel factor, and who bears it.
There are differing views as to the second Intel factor.
Some courts have ruled that the party opposing discovery bears the
burden of proving that the foreign tribunal would be unreceptive
to the evidence and that, absent such proof, the factor weighs in
favor of granting discovery. See In re Chevron Corp., 633 F.3d 153,
162-63 (3d Cir. 2011) (the party opposing discovery bears the
burden of proof as to the second Intel factor and thus must
"present adequate evidence to support [its] contention" that the
"foreign jurisdiction" is not receptive to the discovery sought);
Euromepa S.A. v. R. Esmerian, Inc., 51 F.3d 1095, 1100 (2d Cir.
1995) (holding that "a district court's inquiry into the
discoverability of requested materials should consider only
authoritative proof that a foreign tribunal would reject evidence
obtained with the aid of section 1782. . . . Absent this type of
clear directive, however, a district court's ruling should be
informed by section 1782's overarching interest in 'providing
equitable and efficacious procedures for the benefit of tribunals
and litigants involved in litigation with international aspects'"
(quoting Senate Report at 3783)).
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Other courts have required "authoritative proof" of the
receptivity of the foreign tribunal before finding that this factor
weighs in favor of discovery. See, e.g., In re Babcock Borsig AG,
583 F. Supp. 2d 233, 241 (D. Mass. 2008) (denying discovery until
there was an affirmative indication of the relevant foreign
tribunal's receptivity to the requested materials, despite
recognizing it had authority under the statute to allow the
discovery "even in the face of uncertainty about the [foreign
tribunal's] position").
Still other courts have not specifically placed a burden
of proof on either party as to any of the Intel factors and,
instead, seem to have neutrally analyzed the contentions and
supporting evidence presented by all the parties in deciding
whether to exercise their discretion. See, e.g., In re Clerici,
481 F.3d 1324, 1335 (11th Cir. 2007) (considering the "particular
factual circumstances" of the case as to the first Intel factor;
looking at the entire record to conclude that there was nothing in
it "to suggest that the district court should have declined to
grant the § 1782 application" as to the second and third Intel
factors; and noting that if the party opposing discovery "wished
to pursue his 'unduly intrusive' argument" under the fourth Intel
factor, that party should have moved the court to limit discovery);
see also Consorcio Ecuatoriano de Telecomunicaciones S.A.,
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747 F.3d at 1271, 1273 (noting that the Supreme Court established
in Intel the "factors to be considered" and refusing to find abuse
of discretion where the party opposing the discovery failed to
substantiate its "blanket claim" that the discovery sought was
unduly burdensome under the fourth Intel factor); Heraeus Kulzer,
GmbH v. Biomet, Inc., 633 F.3d 591, 598 (7th Cir. 2011) (holding
that the district court's denial of discovery was unreasonable
because, among other things, the party opposing discovery
"refus[ed] to present any evidence" in support of its contention
that granting the discovery request would be burdensome); see also
In re ASML U.S., Inc., 707 F. App'x 476, 477 (9th Cir. 2017)
(second Intel factor met because movant submitted "unrebutted
declarations [] that the foreign tribunals would welcome the
discoverable evidence"); Chevron Corp. v. Shefftz, 754 F. Supp. 2d
254, 261–62 (D. Mass. 2010) (acknowledging there are different
views on who bears the burden of proof on the second Intel factor
and taking "a middle ground between the two views").
In Intel, the Supreme Court set out a list of factors
-- rather than elements of a claim -- "that bear consideration" by
the district court when it exercises its discretion under the
statute, leaving it up to the district court to assign those
factors weight based on the particular circumstances of each case.
Intel Corp., 542 U.S. at 264. Because the Supreme Court gave
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great flexibility and discretion to district courts in weighing
the different factors, we believe the Supreme Court did not intend
to place a burden on either party. Rather, it intended for both
parties to make their arguments as to all of the factors, and for
the district court to then determine whom those factors favor. In
this sense, we do not see the factors as creating a "burden" for
either party to meet, but rather as considerations to guide the
district court's decision. Both parties are free to argue their
positions and submit evidence in support thereof, and the district
court is then to consider all of that in weighing these factors.
Of course, a party who relies on a "blanket assertion" or does not
properly substantiate its contentions runs the risk of not
persuading the court to exercise its discretion in its favor.
We understand the Second and Third Circuits' reasoning
for placing the burden of proof on the party opposing discovery,
especially in light of the interest in "providing equitable and
efficacious procedures for the benefit of tribunals and litigants
involved in litigation with international aspects." Euromepa
S.A., 51 F.3d at 1100 (quoting Senate Report at 3783). We,
however, do not believe that such a requirement is necessary to
further these interests. It is clear that, even if all of the
statutory requirements are met, the district court may still deny
the discovery request if it finds that the weighing of the Intel
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factors favors denial, regardless of whether the respondent has
proffered reasoning for the district court to exercise its
discretion. Likewise, the fact that courts may adjudicate ex
parte petitions under § 1782, see Gushlak v. Gushlak, 486 F. App'x
215, 217 (2d Cir. 2012) (noting that "it is neither uncommon nor
improper for district courts to grant applications made pursuant
to § 1782 ex parte"), and should still consider the Intel factors
regardless of the absence of the respondent, further suggests that
respondent does not bear a burden of proof as to the discretionary
factors. Furthermore, requiring the party opposing discovery to
present "authoritative proof" of the foreign tribunal's
unreceptiveness, as Schlich proposes, could place pressure on the
foreign tribunal and could exacerbate comity and parity concerns
which "may be important as touchstones for a district court's
exercise of discretion." Intel Corp., 542 U.S. at 261. And, if
the opposing party fails to provide such exigent proof, then that
could give carte blanche to the moving party for seeking discovery
that is only marginally relevant to the foreign proceeding, thus
potentially promoting fishing expeditions. We thus believe that
the construction we have given to the Intel factors is consistent
with the purpose of the statute, as well as with Congress's intent
to give the district court broad discretion to determine whether
discovery is warranted in a specific case.
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Here, both parties argued and submitted authority in
support of their respective positions as to the EPO's receptivity
to assistance from U.S. courts. Schlich pointed to Akebia
Therapeutics, Inc. v. FibroGen, Inc., 793 F.3d 1108, 1112-13
(9th Cir. 2015), where, after the Ninth Circuit affirmed the
district court's grant of discovery pursuant to § 1782, the
evidence obtained pursuant to that order was submitted to the EPO
in an opposition proceeding, and the EPO admitted and relied upon
the evidence obtained with the U.S. court's assistance. Broad
tried to rebut Schlich's contention by arguing that Akebia is
distinguishable inasmuch as the discovery sought there was
relevant to the EPO proceedings in that case, as opposed to the
discovery being sought here which, according to Broad, is not
relevant to these opposition proceedings. Broad also submitted a
declaration from a former EPO official stating that the EPO lacked
jurisdiction to determine inventorship issues and, thus, that the
evidence sought by Schlich would be irrelevant. Schlich did not
rebut this evidence. The district court considered these arguments
and evidence and determined that, because it appeared that the EPO
would not make a determination as to inventorship in the opposition
proceedings, the EPO would not be receptive to the evidence sought
by Schlich. The district court then concluded that, because
Schlich had not demonstrated that the evidence he was seeking was
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relevant, as the evidence in Akebia was, he had failed to convince
the court that the EPO would be receptive to the court's
assistance. Contrary to Schlich's assertions, we do not read the
court's decision as placing the burden of proof on Schlich on the
receptiveness issue. Instead, our reading indicates that the
district court correctly considered all of the arguments and
evidence submitted by both parties, found Broad's position and
supporting evidence more convincing, and thus found itself
unconvinced that the second Intel factor favored granting the
discovery.
We note that the district court considered the relevance
of the discovery sought as part of its consideration of the EPO's
receptivity to assistance from U.S. courts under the second Intel
factor. Broad argues that relevance should instead be treated as
a threshold statutory factor that the applicant must prove before
the court exercises its discretion. We have not had the opportunity
to address the role of relevance in the § 1782 analysis since Intel
was decided, but the Second Circuit has stated that the statutory
requirement prescribing that information be "for use" in a foreign
proceeding incorporates a relevance requirement. See Certain
Funds, Accounts and/or Inv. Vehicles, 798 F.3d at 120 n.7; Mees v.
Buiter, 793 F.3d 291, 299 n.10 (2d Cir. 2015). We agree with the
Second Circuit that "it is difficult to conceive how information
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that is plainly irrelevant to the foreign proceeding could be said
to be 'for use' in that proceeding." Certain Funds, Accounts
and/or Inv. Vehicles, 798 F.3d at 120 n.7. Therefore, a request
for discovery under § 1782 that is plainly irrelevant to the
foreign proceeding will fail to meet the statutory "for use"
requirement, and must be denied before the court reaches the
discretionary Intel factors.
However, even when a discovery request is sufficiently
relevant to be deemed "for use" in a foreign proceeding, there is
nothing that prevents district courts from considering relevancy
under the discretionary Intel factors, including the second
factor, which focuses on the "nature of the foreign tribunal, the
character of the proceedings underway abroad, and the receptivity
of the foreign government or the court or agency abroad to U.S.
federal-court judicial assistance." Intel Corp., 542 U.S. at 264.
For example, although evidence may be broadly relevant to the
applicant's claims in a foreign tribunal, the nature of the foreign
proceedings and the rules of the foreign tribunal may relegate the
information to marginal relevance. Where the information sought
is only marginally relevant, the district court may decide to
exercise its discretion to exclude the evidence because other
concerns outweigh the need for the discovery. See Mees, 793 F.3d
at 299 n.10 (noting that "[a] request that appears only marginally
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relevant to the foreign proceeding" may be denied as a
discretionary matter because it "may in certain cases suggest that
the application 'is made in bad faith, for the purpose of
harassment, or unreasonably seeks cumulative or irrelevant
materials'" (quoting Euromepa S.A., 51 F.3d at 1101 n.6)); In Re
Green Dev. Corp. S.A. De C.V., No. CCB-15-2985, 2016 WL 640791
(D. Md. 2016) (finding the "for use" requirement satisfied where
petitioner requested discovery in relation to an adverse party's
alleged ex parte communications with the Honduran Supreme Court in
order to submit that discovery to the Honduran Supreme Court and
mitigate the effect of the improper communications, but ultimately
denying the requested discovery under the Intel discretionary
factors because the request was based on "sheer speculation," among
other reasons).
Here, although the information sought by Schlich may
have been relevant to the EPO opposition proceeding in a general
sense, the district court concluded that limitations on the EPO's
jurisdiction to consider inventorship rendered it irrelevant.
Accordingly, although the district court treated as "undisputed"
Schlich's satisfaction of the "for use" statutory requirement, it
was well within its discretion to conclude that the second
discretionary factor weighed against ordering discovery because
the information sought was irrelevant due to the nature of the
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proceedings before the EPO, and to deny the discovery request based
on that conclusion.
III. Conclusion
For the reasons stated above, we conclude that the
district court did not misapply the law in denying the requested
discovery under § 1782. Based on its finding that the requested
discovery would be irrelevant under the second Intel factor and,
thus, that the EPO would be unreceptive to that information, the
district court did not abuse its discretion.9 Furthermore, the
district court also ordered supplemental briefing to better
apprehend the issues before it and showed foresight and restraint
in denying without prejudice pending further developments. We thus
affirm the district court's order denying discovery under § 1782.
Affirmed.
9 We decline Broad's invitation to consider the EPO's preliminary
and non-binding opinion of April 13, 2017 -- which stated that the
discovery proceedings underlying this appeal "are based on issues
of entitlement in so far as they attempt to put into question the
inventorship as allocated by the distribution of the contribution
by Mr. Kowalski," and that "the EPO has no power to resolve . . .
matters of entitlement" -- because it was issued after the district
court had rendered its decision and, thus, was not considered or
relied on by the district court.
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