July 27, 2012
Previously published on July 26, 2012
On July 23, 2012, ALJ E. James Gildea issued the public version of Order No. 22 (dated July 10, 2012) granting Respondents Sony Corporation, Sony Computer Entertainment Inc., Sony Corporation of America, Sony Electronics Inc., and Sony Computer Entertainment America LLC’s (collectively, “Sony”) motion to compel domestic industry discovery in Certain Blu-Ray Disc Players, Components Thereof and Products Containing Same (Inv. No. 337-TA-824). According to the Order, Complainant Walker Digital, LLC (“Walker Digital”) relies on its licensing activities and the activities of its licensees to support the domestic industry requirement, and included claims of licensing investment related to all of its portfolio of over 400 patents in the complaint. Sony served discovery to determine the allocation of investments Walker Digital made toward the asserted patent, including Document Request Nos. 69 and 88 regarding licensing activities. Walker Digital refused to produce the requested documents on the grounds that the requests are overbroad and seek irrelevant information related to Walker Digital’s unasserted patents. Sony maintained that the document requests are narrowly tailored and seek documents relevant to whether Walker Digital’s licensing investments are substantial, and that Walker Digital failed to show that the requested information is outside the scope of discovery. In opposition, Walker Digital argued that Sony sought unbounded discovery regarding all of Walker Digital’s licensing activities, including those with no nexus to the asserted patent. Specifically, Walker Digital asserted that (1) to the extent the requested discovery is relevant, it is unduly burdensome because it requires the production of licenses related to over 400 patents; (3) Document Request No. 69 is overbroad because it seeks subject matter unrelated to the asserted patent and is not relevant to any claim or defense at issue; and (4) Document Request No. 88 asks for documents relating to royalties paid by third parties for licenses unrelated to the asserted patent or its industry, and therefore seeks information that is not relevant to proving substantial investment in the exploitation of the asserted patent. The Commission Investigative Staff (“OUII”) supported the motion, arguing that the documents requests seek information directly related to Walker Digital’s domestic industry assertions in the complaint. OUII further stated that determinations of whether investments are substantial are context-dependent, and that the requested information would provide the contextual information necessary to determine whether Walker Digital’s licensing expenditures are substantial within the meaning of Section 337. ALJ Gildea found that the documents requested by Sony appeared to be relevant to the domestic industry issue, particularly whether the investments as alleged by Walker Digital satisfy the requirements of Section 337 which are: (i) that the investment relates to exploitation of the asserted patent; (ii) that the investment relates to licensing; (iii) that the investment occurs in the U.S.; and (iv) that any qualifying investments are substantial. The ALJ also found that Walker Digital provided no evidence to support its assertion that the burden of producing the requested documents outweighs any relevance they may have. Accordingly, the motion was granted.
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