CHRISTOPHER J. BURKE, Magistrate Judge.
Plaintiff Princeton Digital Image Corporation ("Plaintiff') has moved for relief against . Defendant Konami Digital Entertainment Inc. ("Konami US") regarding certain discovery disputes. (D.I. 227; D.I. 249)
Plaintiff has two remaining ripe disputes that are directed to Konami US. (D.I. 243 at 1; D.I. 253 at 1 & n. 1) The Court will address each in tum.
First, Plaintiff requests that Konami US produce communications between it and other Defendants concerning "the infringement by the Defendants' unrelated accused products, damages, or other issues where the Defendants' legal interests are not identical[.]" (D.I. 229 at 3 (citing RFP Nos. 19, 20 & 22)) Konami US has resisted production by invoking the common interest privilege, (D.I. 232 at 3), which protects: (1) communications made by separate parties in the course of a matter of common legal interest; (2) that are designed to further that common legal interest; where (3) the privilege has not been waived, INV/STAN Am. S.a.r.l. v. M&G Corp., Civil Action No. 11-1007-SLR-CJB, 2013 WL 12171721, at *5 (D. Del. June 25, 2013). It is Konami US's burden to show that the privilege has been established. See id
It does seem that if there are communications between Defendants about whether their respective products do or do not infringe the patent-in-suit and why (and what damages might result), those communications will very likely be protected by the common interest privilege. But the briefing on this issue was not fulsome, and the Court realizes that it really has little information about: (1) how many such records/communications are being withheld on this ground of privilege; (2) what those records/communications look like; and (3) why it is exactly that those particular records/communications are, in fact, covered by the privilege. It would not be responsible for the Court to finally resolve the dispute (and to find Konami US has met its burden here) without at least reviewing some such records/communications and satisfying itself that the privilege in fact applies.
Thus, by no later than
The second live Konami US-related dispute regards Plaintiffs request for documents and communications relating to the citation of Plaintiffs patent-in-suit (United States Patent No. 5,513,129) by Konami US, its affiliates and their patent attorneys. (D.I. 229 at 3-4 (citing, inter alia, RFP No. 11); D.I. 253 at 1-3)
Plaintiff has alleged that during the prosecution of certain United States patents held by non-party Konami Digital Entertainment Co., Ltd. ("Konami Japan") (dating from as early as 2001 and through at least April 2004), certain Konami Japan patent attorneys and Konami Japan employees cited to, reviewed or were aware of the patent-in-suit. (D.I. 94 at ¶¶ 69-71) Plaintiff expects that the sought-after documents and communications will provide support for its claim of Konami US's pre-suit knowledge of the patent-in-suit (which, in tum, is relevant to Plaintiffs pending allegations of indirect and willful infringement).
Konami US, however, has repeatedly stated that any documents relating to the prior citation of the patent-in-suit are not in its physical possession. Instead, it asserts that any such documents are in the possession of Konami Japan,
And so, this discovery dispute turns on whether Konami US should be required to obtain and turn over such documents (even if they are in the physical possession of Konami Japan). To obtain an order requiring such production, Plaintiff would need to show that these documents are nevertheless under the "control" of Konami US, pursuant to the meaning of Federal Rule of Civil Procedure 34(a)(1). Plaintiff asserts that it has made such a showing, in that it has demonstrated that "the litigating corporation [Konami US] acted with its sister [Konami Japan] in effecting the transaction giving rise to suit and is litigating [this suit] on [Konami Japan's] behalf[.]" Gerling Int'l Ins. Co. v. Comm'r of Internal Revenue, 839 F.2d 131, 141 (3d Cir. 1988); see also (D.I. 253 at 2).
The Court previously addressed this issue in an August 31, 2016 Memorandum Order (the "August 31 Order"). There it determined that Plaintiff had not yet met its burden to demonstrate Konami US's control over documents in the possession of Konami Japan. (D.I. 176)
The record now clearly contains the following additional relevant facts relating to the above-described test for "control" under Rule 34:
(D.I. 253, ex. 1 at 3, 6; id., ex. 3 at 48-49, 65-66; id., ex. 5 at 2; id., ex. 6 at 1-2; id., ex. 8 at 1-2; id., ex. 9 at 1; id., ex. 10 at 1; id., ex. 11 at 1-3; id., ex. 12 at KDE-DEF0000021; id, ex. 13 at KDE-DEF0000315; D.I. 255, ex. A at ¶¶ 10-13; Tr. at 26, 31)
As is noted above, there are certain portions of the record that remain unclear to the Court regarding the "control" issue: those relating to the position and responsibilities of Ms. Tasaki and Mr. Kubo, and as to the respective roles of the Konami US and Konami Japan Legal Departments. The Court also believes that this lack of clarity is the fault of Konami US (and not Plaintiff, who admittedly bears the burden on the underlying legal issue). Below, the Court provides further information about the state of the record as to these issues.
The Court first addresses the record regarding Ms. Tasaki and the respective Legal Departments. In its initial letter brief, filed on February 14, 2018, Plaintiff had asserted that "employees of the Konami group in Japan also handle patent matters for [Defendant] Konami [US] in the United States." (D.I. 229 at 4) In support of this assertion, Plaintiff alleged that when Konami US "filed its petition for inter partes review of [Plaintiffs patent-in-suit], the Power of Attorney was signed by a Konami employee in Japan, and [Plaintiff] needs discovery concerning the knowledge of these employees of the [patent-in-suit]." (Id.) The employee Plaintiff was referring to was Ms. Tasaki, who had signed this Power of Attorney form on behalf of Konami US on November 18, 2014. (Id., ex. 11) In this document, Ms. Tasaki listed her title at Konami US as "Vice President Legal Department"; the document also makes clear that she signed it while located in Tokyo, Japan. (Id. at 2) It was thus clear from Plaintiffs argument that Plaintiff believed that Ms. T_asaki (in part because she was located in Japan when she executed this document) might have been affiliated not only with Konami US, but also with Konami Japan. And Plaintiff was suggesting that because Ms. Tasaki had oversight regarding patent matters with Konami US, she may also have played a similar role at Konami Japan (and in that role, may have gained knowledge of the patent-in-suit).
At the time, Ms. Tasaki's role was certainly relevant to the issue of "control" that is now before the Court. As was previously noted above, the test for "control" requires that, inter alia, Plaintiff show that in this case, Konami US is litigating "on behalf of' Konami Japan. If for a portion of this litigation, Ms. Tasaki was not only (1) serving as a primary point of contact at Konami US for Konami US's attorneys in this lawsuit, but was also (2) managing and overseeing Konami Japan's Legal Department at the same time, then (3) that would be helpful to Plaintiffs ability to show the requisite "control." Put differently, it might indicate that Konami US's and Konami Japan's Legal Departments were, in essence, managing this litigation together. That would also seem to gibe with the way Ms. Tasaki described her role (and the role of the Legal Departments of the two companies) in the October 2012 Walker Digital declaration described above.
Another reason why Ms. Tasaki's role was important relates to how-even if Plaintiff obtains the sought-after documents-Plaintiff would be able to show that such documents are relevant to its claims of indirect or willful infringement. If there are documents in Konami Japan's possession that show that Konami Japan employees had presuit knowledge of the patent-in-suit, that fact alone would not help Plaintiff. Plaintiff needs to show that Konami US had pre-suit knowledge of that patent. But if Ms. Tasaki held important roles in the Legal Departments of both Konami Japan and Konami US at the time of suit here, and if she had pre-suit knowledge of the patent-in-suit, then her knowledge would almost surely be imputed to Konami US (even if she gained such knowledge while acting on behalf of Konami Japan). Cf. Integra LifeSciences Corp. v. HyperBranch Med. Tech., Inc., Civil Action No. 15-819-LPS-CJB, 2016 WL 4770244, at *10 (D. Del. Aug. 12, 2016) (citing cases).
However, in its responsive letter, which was filed on February 16, 2018, Konami US was firm. (D.I. 232) It clearly stated that "Plaintiff's assertion that `employees of the Konami group in Japan also handle patent matters for Konami [US] in the United States' is unsupported." (D.I. 232 at 4 (emphasis added)) Konami US explained that "Plaintiff miscites [the November 2014] Power of Attorney that Plaintiff claims was `signed by a Konami employee in Japan'"; in actuality, Konami US explained, "the employee[, Ms. Tasaki] signed the document as Vice President of Konami US while spending time with family in Japan on a leave of absence, before leaving Konami one month later." (Id.; see also id., ex. 3 at ¶¶ 2-4) Konami US said nothing about whether Ms. Tasaki also either (1) was then an employee of Konami Japan, or (2) had ever in the past been an employee of Konami Japan. Indeed, the tone and tenor of this February 16, 2018 letter suggested that Ms. Tasaki had not been associated with Konami Japan-and that if Plaintiff thought otherwise (e.g., due to the fact that Ms. Tasaki had signed the Power of Attorney while in Japan) it was sorely mistaken. (Tr. at 11 (Plaintiffs counsel noting that after it reviewed Konami US's response, it understood Konami US to be indicating that Ms. Tasaki "was an employee just of [Konami US] who coincidentally happened to have gone to Japan to visit family, and that was the reason why the [November 2014 Power of Attorney] was signed and indicated that it was executed in Japan"))
It turns out, though, that Ms. Tasaki had been a Konami Japan employee. The Court now knows, pursuant to certain documents cited above, that Ms. Tasaki managed Konami Japan's Legal Department from at least 2008 through at least October 2012. And it also turns out that Ms. Tasaki (and perhaps others) working in the Konami Japan Legal Department did "handle patent matters" for Konami US during those periods of time-a fact demonstrated by the content of some of the declarations listed above. Thus, Plaintiffs prior suggestion that "employees of the Konami group in Japan also handle patent matters for Konami [US]" was not "unsupported"-as Konami US indicated in its February 16, 2018 letter. (D.I. 232 at 4) Instead, it was very much "supported"-albeit by factual information that Konami US had not yet shared with Plaintiff or with the Court.
Moreover, if Ms. Tasaki continued in her role as General Manager of the Legal Department of Konami Japan on and after November 13, 2012 (the date that this suit was filed), then as to this very case, she would clearly have been an "employee[]" of Konami Japan (one who managed Konami Japan's Legal Department, no less) who also "handle[d] patent matters" for Konami US. It is not obvious from the current record when Ms. Tasaki's tenure as General Manager of Konami Japan's Legal Department ended. (Tr. at 25 (Defendant's counsel asserting that Ms. Tasaki had been "replaced" in her role at Konami Japan as of November 2014, but that "at times prior to the signing" of that document she "played two roles"); id. at 27-28) But the Court intends to find out.
Mr. Kubo's association with Konami Japan is also still unclear to the Court. And obtaining clarity on Mr. Kubo's association with Konami Japan is similarly relevant to the Rule 34 "control" issue. If Mr. Kubo has or had a substantial executive role with Konami Japan, that would mean that both of Konami US's Directors (that is, Mr. Kubo and Mr. Hayakawa) would also have been high-level executives at Konami Japan during the time of this litigation. The fact of such shared Directors/executives could, in tum, help Plaintiff demonstrate that Konami US "acted with its sister [Konami Japan] in effecting the transaction giving rise to suit and is litigating [this suit] on [Konami Japan's] behalf' for purposes of showing the requisite "control." Gerling, 839 F.2d at 141.
On this topic, Plaintiff submitted a March 16, 2018 document, issued by Konami Japan, which is titled "Announcing Official Personnel Changes" (the "March 2018 personnel changes document"). (D.I. 253, ex. 8 at 1-2 ("Konami [Japan] hereby announces the following personnel changes.")) The two-page document lists 10 people who have received a "[n]ew [p]osition" and goes on to list each person's new title, along with their former title. (Id.) At least eight of the 10 people on this list appear to clearly be employees of Konami Japan. (Tr. at 40) Mr. Kubo's name is last on the list. (D.I. 253, ex. 8 at 2) There, his title was noted to have changed to "General Manager, US Branch, Sales Division (Director, President Konami Digitial Entertainment, Inc)[.]" (Id.)
One way to interpret this document is to conclude that (as Plaintiff argues) Mr. Kubo (like most or all of the other employees listed) is a Konami Japan employee. Under this reading, the document is explaining that Mr. Kubo holds the title of "General Manager, US Branch, Sales Division" at Konami Japan (while also concurrently serving as a "Director" of Konami US). (Id) And, if all one had was this document, this reading would surely make sense. After all, the document was disseminated by Konami Japan, and it otherwise largely includes reference to Konami Japan employees. And why would Mr. Kubo's title at a U.S.-based company (Konami US) include the seemingly redundant term "US Branch"? Such a title suggests that there are other non-US. branches at whatever company employs Mr. Kubo. And yet the Court has been told by Konami US that "almost all [of its employees] are located in the Los Angeles area where Konami US is headquartered." (D.I. 255, ex. A at ¶ 6) So again, one would assume from this new title that Mr. Kubo works for a non-U.S.-based company (like Konami Japan)-and that is why his title is listed as "General Manager, U.S. Branch, Sales Division."
Konami US, however, suggests a different reading. Its counsel acknowledges that the language used in the March 2018 personnel changes document is "imprecise"; counsel suggests, however, that the reference to "General Manager, US Branch, Sales Division" is not a reference to a position or title. (Tr. at 38) Instead, this language was simply meant to be a "description of [Mr. Kubo's] role" at Konami US since "there's not a legal entity or a division known as `U.S. [B]ranch Sales Division'" at Konami US. (Id.) According to counsel, the document is not indicating that Mr. Kubo is a Konami Japan employee. (Id at 39 ("My understanding is that [Mr. Kubo is] not a Konami Japan employee or officer."))
Additionally, Konami US submitted a declaration from a Senior Director of its Legal Department, Nobuko Minerd, which flatly states that Mr. Kubo is "not an employee, officer or director of Konami Japan[.]" (D.I. 255, ex. A at ¶ 11) The Court notes, however, that this statement is phrased in the present tense. Now mindful that it must be wary of Konami US's phraseology-in light of the Court's prior experience with Konami US's description of Ms. Tasaki's role-this causes the Court to question whether Mr. Kubo ever has previously been (including during the time period of this litigation) an "employee, officer or director of Konami Japan." The Court also wonders whether Mr. Kubo has some other current or prior association with Konami Japan that simply does not fall into the category of "employee, officer or director." The submitted declaration from Mr. Minerd is not clear on this front, and again, the Court intends to get clarity as to this portion of the record.
The Court will now address how it intends to resolve this dispute, in light of the uncertainty in the record set out above.
On the one hand, Plaintiff has had time to develop its theory as to why it thinks that Konami US has control over Konami Japan's records. Nothing the Court sets out below should be interpreted as giving Plaintiff, at this late stage, the ability to pursue additional discovery regarding new theories of control that have not yet been articulated to the Court.
On the other hand, as to the role of particular individuals (Ms. Tasaki and Mr. Kubo) whom Plaintiff has asserted are key to its theory of control, and as to the role of the companies' respective Legal Departments, Plaintiff and the Court have been provided with an incomplete picture. Indeed, as to certain of those issues, Konami US has made statements to Plaintiff and to the Court that were, at a minimum, extremely misleading. In light of this, Plaintiff should have the opportunity to supplement the evidence on those topics, so that it and the Court have a fair and complete record on which to evaluate Plaintiffs theory of control.
Therefore, Plaintiff may take additional, limited discovery from Konami US on the following topics:
By no later than
For the foregoing reasons, the Court will not definitively resolve either pending discovery dispute between Plaintiff and Konami US. Instead, it will resolve the issues in the near term after obtaining the additional information described in this Memorandum Order.
Because this Memorandum Order may contain confidential information, it has been released under seal, pending review by the parties to allow them to submit a single, jointly proposed, redacted version (if necessary) of the Memorandum Order. Any such redacted version shall be submitted no later than