ORDER DENYING APPLICATIONS FOR LEAVE TO OBTAIN DISCOVERY FOR USE IN FOREIGN PROCEEDINGS

(Re: Docket No. 1)

PAUL S. GREWAL, United States Magistrate Judge.

A few months back, Applicant Qualcomm Incorporated received an Examiner's Report from the Korean Fair Trade Commission. The news was not good: the Examiner charged Qualcomm and its licensing of standard-essential patents with violating South Korean antitrust law. The KFTC has set a date for Qualcomm to respond, but Qualcomm must do so without access to any materials the Examiner considered or even cited that were supplied by third parties. Deprived of this access in Korea, Qualcomm now turns to this court for help pursuant to 28 U.S.C. § 1782.1 Constrained in its discretion by the factors set forth by the Supreme Court,2 the court must DENY Qualcomm's application, as set forth below.

I.

A curious quirk of our law is that American courts are not limited to American disputes. If foreign tribunals and parties to their proceedings need evidence from third parties located in the United States, they may take discovery of such evidence through a court-supervised procedure enacted by Congress. If the third party is willing to turn over the evidence, no problem. United States law "does not preclude a person within the United States from voluntarily giving his testimony or statement, or producing a document or other thing, for use in a proceeding in a foreign or international tribunal before any person and in any manner acceptable to him."3 But if the third party is not so eager, relief is available from the federal courts in the form of an order authorizing the issuance of a subpoena.4

To that end, Section 1782(a) holds that "[t]he 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 statute adds that "[t]he order may be made...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." A further provision adds that "[t]he order may prescribe the practice and procedure, which may be in whole or part the practice and procedure of the foreign country or the international tribunal, for taking the testimony or statement or producing the document or other thing. To the extent that the order does not prescribe otherwise, the testimony or statement shall be taken, and the document or other thing produced, in accordance with the Federal Rules of Civil Procedure."

The KFTC is an administrative agency that enforces compliance with the Republic of Korea's Monopoly Regulation and Fair Trade Act.5 MRFTA investigations are led by Examiners from the KFTC's administrative staff and case teams from the KFTC's Anti-Monopoly Bureau.6 When conducting an investigation, the KFTC is empowered to request production of documents and materials and interview individuals associated with both the target of the investigation or any interested parties.7 Like many of its international counterparts, the KFTC often depends on the cooperation of third parties when investigating alleged antitrust violations.8 To encourage third parties to provide complete submissions and protect their sensitive and confidential information, Article 62 of the MRFTA mandates that third party submissions be kept confidential.9 If a preliminary investigation shows that there is reason to believe that an examinee's conduct violated the MRFTA, an Examiner's Report is sent to the KFTC General Counsel's office and the examinee.10 The General Counsel then dockets the case for hearing before the KFTC Committee, which makes the final ruling on whether there has been an antitrust violation.11

The Examiner's Report is akin to a statement of charges, and it must include what is known as appended data, or evidence supporting the Examiner's position.12 Although the examinee receives a copy of the Examiner's Report, it does not automatically receive all of the appended data. The KFTC Case Handling Procedures allow an examinee to request access to any withheld exhibits, but they also allow appended data exhibits to be redacted or withheld from the examinee to prevent the disclosure of a third party's confidential or competitively sensitive information.13 Even if the exhibits contain confidential information, the examinee may nonetheless ask the KFTC to allow it access.14 Following such a request, the Lead Commissioner will weigh the countervailing interests to determine whether to allow such access or the copying of such materials.15 Confidential materials also may be delivered to the examinee with the consent of the submitting party.16 An Examiner's Report's appended data does not necessarily contain all of the third-party documents acquired by the Examiner during an investigation, since only documents supporting the Examiner's position are included in appended data.17 In other words, it is possible for a third party to give the Examiner documents exculpating the examinee and for these documents to not be provided to the examinee or the Committee.18

After the Report is issued, the examinee may present a written response and defend itself at a hearing.19 The KFTC Committee oversees these hearings, and both the Examiner and the examinee present their positions.20 At the hearing, the Examiner and the examinee are in adversarial roles.21 The Committee then makes a final determination whether the examinee violated antitrust regulations, and if necessary, issues a binding order imposing monetary sanctions or remedial measures.22 The Committee's written ruling is appealable to the Seoul High Court and then to the Supreme Court of Korea.23

Qualcomm is in the business of selling chips used in mobile phone and other devices that run on cellular networks. Qualcomm also licenses its vast portfolio of cellular-related patents to others who make these phones and other devices. Late last year, KFTC Examiner Gyu-Ha Chai, who serves as Director General of the Anti-Monopoly Bureau, issued an Examiner's Report against Qualcomm.24 The Report alleges that Qualcomm's practices regarding standard-essential patent licensing25 violate MRFTA, and recommends that the KFTC impose monetary penalties and order Qualcomm to modify its business practices,26 based on statements and documents either obtained from or concerning Respondents.27 Qualcomm initially received a portion of the Report's appended data, requested access to the material it had not received and received some more of the appended data, but with redactions.28 Qualcomm's request for the remaining appended data is still pending.29

Qualcomm now applies ex parte under Section 1782 for leave to take discovery from Respondents to prepare its response to the Examiner's Report and for hearing before the KFTC Committee.30 The discovery Qualcomm seeks includes both a broad set of documents and deposition testimony. Qualcomm's justification for these demands is straightforward: it needs the documents and testimony to defend its licensing practices before the full KFTC Committee. Five of the Respondents — Apple, Intel, MediaTek, Samsung Entities and Texas Instruments — oppose.31 Significantly, the KFTC itself, as amicus curiae, also opposes Qualcomm's applications.32 Qualcomm has filed an omnibus reply brief, and the court heard oral argument on February 9, 2016.33

II.

This court has subject matter jurisdiction over Qualcomm's applications under Section 1782. Although these applications may be sought ex parte under Civ. L.R. 7-10, this court exercised its discretion to allow briefing at this stage by the targets of interest.34

One question — among many — raised by Qualcomm's applications is who bears the burden of proof on the many issues of fact disputed by the parties. Normally that burden falls on the moving party, but no appellate court to the undersigned's knowledge has established this explicitly in the specific context of Section 1782 applications. This court need not resolve that question here because, even if the burden on these disputed facts lies entirely with the targets of the proposed subpoenas, those targets have established that the Intel factors collectively weigh against granting the applications.

III.

When considering a Section 1782 application, the court must first determine whether Section 1782's three statutory requirements are satisfied, and then whether the four factors laid out in Intel support issuing a subpoena. Section 1782 first requires that "the person from whom the discovery is sought resides or is found in the district of the district court to which the application is made."35 When applied to corporations, the word "found" "may safely be regarded as referring to judicial precedents that equate systematic and continuous local activities with presence."36 The second requirement is that "the discovery is for use in a proceeding before a foreign tribunal."37 Congress' use of the term "tribunal" was intended to "ensure that `assistance is not confined to proceedings before conventional courts', but extends also to `administrative and quasi-judicial proceedings'."38 The third requirement is that "the application is made by a foreign or international tribunal or any interested person."39 If these factors are satisfied, then the "court may grant [the] application."40

However, simply because a court has the authority under Section 1782 to grant an application does not mean that it is required to do so.41 In Intel, the Supreme Court identified several factors that a court must take into consideration in ruling on a Section 1782 request, once the statutory requirements are satisfied:

Applying the above standards, while Qualcomm's applications satisfy Section 1782's statutory requirements, the Intel considerations weigh against granting Qualcomm's requested subpoenas.

First, taking the statutory requirements in order, the first factor is satisfied: all of the Respondents reside or are found in this district. Apple and Intel are headquartered in this district. MediaTek acknowledges that it is found in this district.43 Broadcom is headquartered in Irvine, in the Central District, but it maintains offices in San Jose, Santa Clara and Sunnyvale, which are within the Northern District.44 Texas Instruments is headquartered in Texas but maintains an office in Sunnyvale.45 VIA Technologies is similarly headquartered outside this district but maintains an office in Fremont, also in the Northern District.46 Through these in-district offices, Broadcom, Texas Instruments and VIA Technologies conduct "systematic and continuous local activities" and thus may be found within the Northern District for the purposes of Section 1782.47

As for the Samsung Entities — the only Respondent to seriously contest this factor — while they do not reside here,48 they conduct systematic and continuous local activities in this district and thus are found here. Even a quick look at this court's docket shows they have availed themselves of the jurisdiction of this court in many protracted lawsuits.49 What's more, SEA is and STA was registered and authorized to do business in California and SEC's wholly-owned subsidiary, Samsung Research America, Inc., is a California corporation headquartered in this district.50

The Samsung Entities argue that none of these facts is sufficient to render them found in this district.51 It is true that courts have held that each of these contacts when taken alone may be insufficient to establish a systematic and continuous presence in a district.52 What the Samsung Entities do not address, however, is whether the combined effect of all of these activities and contacts adds up to systematic and continuous local activities in this district. The court finds that it does. After all, the Samsung Entities brought suit against Apple here as plaintiff and counterclaimant, rather than being haled into this forum as a defendant.53 And in contrast to many of the cases the Samsung Entities cite,54 here, part of the discovery Qualcomm seeks relates to Samsung's position in those very same lawsuits.55 Put another way, the lawsuits are not an unrelated pretext for Section 1782 jurisdiction. The combination of the Samsung Entities' deliberate choice of this forum for its litigation with the relatedness of that litigation to the Section 1782 application, SEA and STA's registration to do business in California56 and the presence of a Samsung subsidiary in this district57 makes it clear that the Samsung Entities engage in systematic and continuous activities in this district. Any one activity standing alone might be insufficient, but these activities do not stand alone, and taken as a whole, they are systematic and continuous local activity.58

Section 1782's second and third statutory requirements also are satisfied. As to the second requirement, the discovery sought is for use in a proceeding before the KFTC, which is a foreign administrative agency. Intel held that Section 1782 "authorizes, but does not require, a federal district court to provide assistance to a complainant in a European Commission proceeding that leads to a dispositive ruling, i.e., a final administrative action both responsive to the complaint and reviewable in court."59 Like the European Commission, the KFTC is an administrative agency empowered to render a "final administrative action," and its rulings are reviewable in court.60 As for the third requirement, the application is made by Qualcomm, which qualifies as an interested person because it is the subject of the KFTC proceeding.61 All three statutory requirements thus are satisfied as to each Respondent.

Second, the Intel factors nonetheless collectively weigh against granting Qualcomm's applications. The first factor, "whether the material sought is within the foreign tribunal's jurisdictional reach and thus accessible absent Section 1782 aid,"62 is neutral. The Supreme Court has noted that

Apple, MediaTek and the Samsung Entities argue that they are participants in the KFTC proceedings because they gave documents and information to the KFTC's investigatory team.64 Intel argues that it has provided most of the discovery that Qualcomm seeks to the KFTC, and that because it cooperated with the agency's requests, it is within the KFTC's reach.65 Texas Instruments makes the related argument that it gave documents and information to the KFTC investigators.66

It is unclear from the information available to the court, however, whether cooperating with the Examiner's investigation makes these Respondents participants in the KFTC proceedings. The KFTC Committee makes the final ruling whether an antitrust violation has occurred, and both Qualcomm and the Examiner will appear before the Committee to argue their positions. None of the Respondents argues that it will be appearing before the Committee, or that it bears any relevant relation to either Qualcomm or the Examiner. In that light, Qualcomm and the Examiner are the participants in the KFTC proceedings, and so cooperating with the Examiner's investigation does not mean that the Respondents are participants before the foreign tribunal responsible for adjudicating the dispute.67

The issue of whether an entity is a participant, however, is not dispositive; Intel puts it in the context of whether the foreign tribunal has the authority to order an entity to produce the disputed evidence. Other courts have interpreted this to focus on whether the evidence "is available to the foreign tribunal," because in some circumstances, evidence may be available to a foreign tribunal even if it is held by a non-participant to the tribunal's proceedings.68 Qualcomm states that there is no means for it to compel production of the evidence from Respondents,69 but it is unclear whether the Committee can do so, such that the evidence is available to it. This Intel factor thus is neutral.

The second Intel factor, which is "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,"70 strongly favors Respondents. Courts conducting this analysis focus on the utility of the evidence sought and whether the foreign tribunal is likely to receive the evidence.71 The KFTC's amicus brief asks this court "to deny Qualcomm's applications in their entirety as a matter of comity" and states that "the KFTC has no need or use for the requested discovery."72 It may be true that the KFTC's views are not dispositive,73 but the KFTC is clear that it is not at all receptive to U.S. federal-court judicial assistance in this matter.74

Qualcomm argues that the court should disregard the information in the amicus brief, because it "does not come from the General Counsel's office responsible for administration of the hearing phase of the proceedings or from the KFTC Committee that will make the ultimate decision."75 In fact, the brief was written by the Examiner leading the Qualcomm investigation.76 Qualcomm thus implies that the brief states only the Examiner's views, and so while the Examiner might not want the requested discovery, the Committee, which is a separate entity, might be receptive to it.77 In not so many words, Qualcomm's argument is that the amicus brief does not represent the views of the KFTC or the KFTC Committee, but Qualcomm's adversary in the KFTC proceedings.

Be that as it may, the court must take the amicus brief at face value. While it is true that the brief is signed by Gyu-Ha Chai, the Examiner investigating Qualcomm, there is no indication that it represents his own views and not the KFTC's as a whole, or that he is speaking only in his capacity as an Examiner and not for the KFTC. The brief is on KFTC letterhead. The first paragraph states that "[t]he Korea Fair Trade Commission (the `KFTC') respectfully submits this letter," and the brief repeatedly states the positions of "the KFTC."78 Qualcomm cites no previous case where a court disregarded the stated position of the tribunal that it did not want the discovery sought. Without any concrete reasons to reject these markers of authenticity, the court must accept the amicus brief as representing the KFTC's position. This Intel factor thus strongly favors Respondents.

The third Intel factor, which is whether an applicant seeks "to circumvent foreign proof-gathering restrictions or other policies of a foreign country or the United States," also favors Respondents. The KFTC states that it has procedures for requesting "copies of documents and data supporting" the Examiner's Report and that Qualcomm has a pending request for those materials.79 Given that there is an existing procedure in Korea, the KFTC believes that Qualcomm's Section 1782 applications "seek[ ] to improperly bypass Korean legal procedures for obtaining documents submitted to the KFTC by third parties."80 The consequences of allowing Qualcomm to do this would be grave:

Qualcomm argues that its applications do not circumvent the KFTC's Case Handling Procedures because it seeks more discovery under its Section 1782 applications than it can obtain through the Case Handling Procedures.82 These procedures allow Qualcomm to request only the materials in the appended data, which are the documents that the Examiner chose to attach to the Report as evidence supporting the allegations of anticompetitive behavior.83 Any documents that Respondents produced to the KFTC that would support Qualcomm's defense are unlikely to be in the appended data, and any documents that Respondents did not give to the KFTC would not be in the appended data. Qualcomm needs these documents to defend itself, and to obtain these documents, Qualcomm argues, it needs a Section 1782 subpoena.

It is true that the KFTC's existing procedures provide Qualcomm a narrower set of documents than it could discover under U.S. law, and that to a large extent Qualcomm seeks documents not discoverable through the KFTC's procedures. But Qualcomm's applications raise additional concerns. According to the KFTC, allowing Qualcomm to do an end run around existing Korean procedures is problematic not just because it colors outside the lines, but because it may discourage third parties from cooperating with future KFTC investigations and hinder the KFTC's ability to enforce antitrust law. "The KFTC relies heavily on third parties to gain information," and so "the KFTC and Korean law have measures in place to protect the identities of cooperating companies and the confidentiality of the information they provide."84 "Exposing the Companies and other third parties to discovery under U.S. law would...discourage them from cooperating with the KFTC in future investigations and from reporting anticompetitive conduct to the KFTC."85 In essence, the KFTC states that it has a system for protecting its investigatory enforcement capabilities, third party interests, and a target's right to obtain information to defend itself, and allowing U.S. discovery would upset that delicate balancing act. Even if Qualcomm's applications only seek to circumvent KFTC procedures as to a portion of the requested discovery, these real concerns weigh against granting the applications. Qualcomm argues that there are methods for addressing the KFTC's policy concerns,86 but principles of comity direct this court not to substitute its own judgment for the KFTC's on how to best manage its affairs.87

The fourth Intel factor, which is "whether the subpoena contains unduly intrusive or burdensome requests,"88 also favors Respondents. Requests are unduly intrusive and burdensome where they are not narrowly tailored, request confidential information and appear to be a broad "fishing expedition" for irrelevant information.89 In the more recent parlance of the December 1, 2015 Amendments to the Federal Rules of Civil Procedure, requests must be "proportional" "considering the importance of the issues at stake in the action, the amount in controversy, the parties' relative access to relevant information, the parties' resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit."90

From Apple, Qualcomm seeks the following:

From Intel, Broadcom, MediaTek, Samsung, Texas Instruments and VIA Technologies, Qualcomm requests the following:

From Samsung, Qualcomm also requests "[a]ll documents filed or served by" Samsung in or with respect to five different lawsuits.100

Qualcomm's requests are not narrowly tailored temporally, geographically or in their subject matter. They are not limited to documents or information connected to the KFTC proceedings at issue or to activity in or affecting Korea;101 they cover a span of five to eleven years;102 they include documents that Qualcomm should already have103 or that were served by other parties; and they contain confidential information.104 In particular, many of the documents responsive to Qualcomm's requests for documents filed or served by Samsung in the five lawsuits between Samsung and Apple contain information designated as confidential by Apple, Samsung or third parties and subject to protective orders issued by this court and the United States International Trade Commission.105 Those protective orders bar Apple or Samsung from unilaterally producing many of the documents designated as confidential, and responding to Qualcomm's request would require significantly time-consuming measures to comply with the redaction protocols and protective orders in place.106

Qualcomm argues that its requests are not unduly burdensome or intrusive for several reasons. Most importantly, while production may be burdensome or intrusive, the inquiry is whether it is unduly so in light of the relevance of the information, and these documents are, in Qualcomm's view, highly relevant.107 It also argues that the Respondents would have collected the responsive documents when assisting the Examiner in his investigation108 and the documents are directly relevant to whether Qualcomm's licensing practices adversely affected chipset manufacturers' ability to compete.109 Additionally, with respect to the requests for "documents sufficient to show" customer concerns or whether a Respondent made decisions about Modem Chipset sales and development, Qualcomm believes that those events never occurred, and so the Respondents will not be put to the burden of producing any responsive documents because none exist.110

Qualcomm's arguments are unpersuasive, however, because when weighed against the relevance of the information sought, the requests are overbroad. It specifically seeks more documents than those that Respondents collected and gave to the Examiner; indeed, one purpose of pursuing discovery under Section 1782 rather than the KFTC's Case Handling Procedures is that the Procedures give Qualcomm access to a more limited range of material than Section 1782 does. As for the "documents sufficient to show" requests, even if Qualcomm believes that no responsive documents exist, the requests for production and deposition nonetheless require Respondents to search through troves of material spanning over a decade. These requests are not narrowly tailored.

IV.

The Intel factors strongly weigh against granting Qualcomm's requests for Section 1782 subpoenas. Qualcomm's applications are DENIED.

SO ORDERED.