United States District Court, D. Nebraska
MEMORANDUM AND ORDER
F. Bataillon, Senior United States District Judge
matter is before the court on objections filed by defendants
TCL Communication Technology Holdings Limited, TCT Mobile
(US), Inc., TCT Mobile Limited, TCT Mobile, Inc.
(collectively, “defendants”), D.I. 340/343
(redacted), to the order of the Magistrate Judge dated
December 14, 2017, D.I. 327/342 (redacted) granting IP
Bridge's motion to compel production of financial
information relevant to the plaintiff's calculation of
damages, D.I. 281.
an action for patent infringement. IP Bridge asserts
infringement of U.S. Patent Nos. 7, 373, 295; 8, 351, 538;
and 8, 385, 239 (the “Patents-in-Suit”) by
TCL's sales of mobile phones and tablets in the United
States and seeks as relief, among other things, a reasonable
royalty for TCL's infringement. The Patents-in-Suit
relate to mobile telecommunication technology for
transmitting data over the air.
subparagraph (A) of 28 U.S.C. § 636(b)(1), “[a]
district court may refer a nondispositive motion to a
magistrate judge ‘to hear and determine[.]'”
EEOC v. City of Long Branch, 866 F.3d 93,
99 (3d Cir. 2017) (quoting 28 U.S.C. § 636(b)(1)(A)).
Following a magistrate judge's issuance of an order on a
nondispositive matter, the parties may serve and file
objections to the order within 14 days of being served with a
copy of the order. Id.; see Fed.R.Civ.P. 72(a).
“If a party objects to a magistrate judge's order
regarding a nondispositive matter, the district court
‘must consider timely objections and modify or set
aside any part of the order that is clearly erroneous or is
contrary to law.'” EEOC, 866 F.3d at 99 (quoting 28
U.S.C. § 636(b)(1)(A)). “This standard requires
the District Court to review findings of fact for clear error
and to review matters of law de novo.” Id.
finding of fact can be set aside as clearly erroneous when
the reviewing court is “left with the definite and firm
conviction that a mistake has been committed.”
Green v. Fornario, 486 F.3d 100, 104 (3d Cir. 2007).
The district court must accept the ultimate factual
determination of the fact-finder unless that determination
either (1) is completely devoid of minimum evidentiary
support displaying some hue of credibility, or (2) bears no
rational relationship to the supportive evidentiary data.
Giles v. Kearney, 571 F.3d 318, 322 (3d Cir. 2009).
object to the Magistrate Judge's decision granting IP
Bridge's motion to compel the production of certain
financial discovery by defendants. Specifically, the
defendants object to: (1) the Magistrate Judge's order
compelling defendants to produce all monthly Invoicing
Reports created between July 2015 and the date of the
Magistrate Judge's order along with additional Rule
30(b)(6) deposition testimony concerning those reports; (2)
the Magistrate Judge's order compelling defendants to
produce documentation identifying costs for
“intellectual property rights” (or
“IPR”) for each accused device; and (3) the
Magistrate Judge's order compelling defendants to produce
data regarding the profits to Chinese TCL entities
incorporated into the price of the device when it is sold to
the U.S. entities. They argue none of the information that
the Magistrate Judge orders produced is relevant to the
plaintiff's damages analysis. They contend that the issue
with respect to damages is the value of the smallest saleable
patent-practicing unit, and evidence of overall profits is
not relevant to that inquiry. Also, they argue the Magistrate
Judge erred in ordering production of information relating to
the cost of intellectual property rights for the accused
devices, contending that the information would include fees
for the purchase of any license related to the accused
products, regardless of effects on the narrow functionality
implicated by the asserted patents.
response, IP Bridge states that that the information
addressed in the order relates to actual profits made on
sales of accused products which is key to the determination
of a reasonable royalty. Further, the plaintiff argues that
its expert has reserved the right to rely on the evidence
once it is produced. Also, it argues, and the defendants do
not dispute, that the information will complete and confirm
the accuracy of the summarized-for-litigation sales data the
defendants have provided thus far.
court finds the Magistrate Judge's ruling is not clearly
erroneous or contrary to law. The court agrees with the
Magistrate Judge's conclusion that the financial
information is relevant and discoverable. The defendants'
arguments with respect to damages calculations-including the
impact of application of a smallest saleable
patent-practicing unit and/or functionality tests-may
eventually determine the admissibility of the information,
but does not mean the information is not discoverable. The
evidence is clearly relevant to the determination of a
reasonable royalty as it relates to the defendants'
actual profits from sales of the accused products. Further,
the plaintiff should not be required to blindly accept
attorney-generated summary spreadsheets without access to the
underlying financial data. The court agrees with the
Magistrate Judge's conclusion that the limited financial
data the defendants produced was incomplete and unreliable in
light of the defendants various and evolving explanations of
the data. Accordingly, the defendants' objections to the
Magistrate Judge's rulings will be overruled.
Objections filed by defendants TCL Communication Technology
Holdings Limited, TCT Mobile (US), Inc., TCT Mobile Limited,
TCT Mobile, Inc. (D.I. 340/343) to the Magistrate Judge's
Order (D.I. 327/342) are overruled.
Pursuant to the Magistrate Judge's oral order dated
December 20, 2017, within seven (7) days of the date of this
order, defendants are ordered to produce the underlying
Invoicing Reports supporting defendants' spreadsheets on
the sales, profit, and loss ...