Via Vadis Controlling GmbH v. Skype Inc. et al, No. 1:2012mc00193 - Document 16 (D. Del. 2013)

Court Description: MEMORANDUM OPINION re 1 Petition for Discovery for Use in a Foreign Proceeding Pursuant to 28U.S.C 1782. Signed by Judge Richard G. Andrews on 2/21/2013. (nms)

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I IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE VIA V ADIS CONTROLLING GMBH, Petitioner v. Civil Action No. 12-mc-193-RGA SKYPE, INC., et al, Respondents MEMORANDUM OPINION Daniel A. Griffith, Esq., WHITEFORD TAYLOR PRESTON, LLC, Wilmington, DE. Attorney for PlaintiffVia Vadis Controlling GmbH. 'Jack Blumenfeld, Esq., Rodger Smith II, Esq., MORRIS, NICHOLS, ARSHT & TUNNEL LLP, Wilmington, DE. Attorneys for Defendants, Skype, Inc., et al. February& 2013 ' ~~ .. Petitioner Via Vadis Controlling GmbH, a German corporation, asks this Court to order Skype, Inc. ("Skype"), Skype Communications S.A.R.L. ("SkypeC"), Skype Global S. .R.L. ("SkypeG"), Skype Software S.A.R.L. ("SkypeS"), and Skype Technologies, S.A. ("S ypeT") (collectively, "Respondents") to produce the source code and other core technical doc underlie Respondents' telecommunications service system. Asserting that this discove enable it to prove patent infringement claims it has brought against Respondents in Ge f any and Luxembourg, Via Vadis requests that this Court exercise its discretion, under 28 U.S. f I ' to compel the discovery. BACKGROUND Via Vadis is the exclusive licensee of European Patent No. 1-151-591 ("the '5 1 patent"). at~ (D.I.2-1 4). On January 21, 2011, Via Vadis filed an infringement claim against re pondent SkypeS in Germany based on the '591 patent. (!d. at~ 6). On the same day, at the requ st of Via Vadis, a Luxembourg court issued an Ordonnance (the functional equivalent of a searc order) permitting two court-appointed experts to inspect SkypeS' business premises in Luxe bourg. (!d. at~ 17). Six days later, the experts executed the Ordonnance; they searched Skype ' Luxembourg office, but were not provided with the source code. (!d. at~ 19). On April21, 2011, Via Vadis brought an infringement claim against SkypeS in Luxembourg based on the 591 patent. (!d. at~ 7). In the course of parallel U.S. litigation, this Court let Via Vadis discover, subje t to a protective order, relevant portions of Respondents' source code. (!d. at~ 23). Via Vadi now asks this Court to compel production of the source code and other core technical documents for use in the foreign proceedings. DISCUSSION "The district court of the district in which a person resides or is found may ord him to give his testimony or statement or to produce a document or other thing for use in a pr ceeding in a foreign or international tribunal .... The order may be made ... upon the applicatio of any interested person." 28 U.S.C. § 1782(a). Accordingly, three statutory requirements mu be met for this Court to have authority to compel discovery under§ 1782(a): (1) the party fro whom discovery is sought must reside or be found in the district; (2) the discovery must be fo use m a proceeding before a foreign tribunal; and (3) the application must be made by an intere ted person.Jd; see also Schmitz v. Bernstein Liebhard & Lifshitz. LLP, 376 F.3d 79, 83 (2 . Cir. 2004). If a district court has the authority to compel the production of evidence under § 1782(a), whether to do so becomes a matter of discretion. Intel Co . v. Advanced Micro Devic s Inc., 542 U.S. 241, 264 (2004). Factors that inform this discretion are: (1) whether the perso from whom discovery is sought is a participant in the foreign proceeding; (2) the nature ofth foreign tribunal, the character of the foreign proceedings, and the receptivity of the foreign gov mment to federal judicial assistance; (3) whether the request conceals an attempt to circumvent foreign proof-gathering restrictions or other policies; and (4) whether the request is unduly in burdensome. !d. at 264-65. Courts must also bear in mind the twin aims of§ 1782(a):" roviding efficient assistance to participants in international litigation and encouraging foreign co ntries by example to provide similar assistance to our courts." !d. at 252. Respondents concede that Skype is a Delaware corporation, and thus resides in t e District of Delaware for the purposes of§ 1782. (D.I.12 at 6, n.4). Because Respondents share a telecommunications system, they also share an underlying source code. Thus, as Respon ents acknowledge, any challenges to § 1782's reach over the remaining respondents would practical consequence. (!d.). The parties further agree that proceedings have begun in and Luxembourg and that Via Vadis seeks this discovery for use in those proceedings. 3). As a litigant in the proceedings abroad, Via Vadis is an interested party. See Intel, 5 2 U.S. at 256-57. The proceeding is properly before this Court, and whether to grant discovery is therefore a discretionary matter. On balance, this Court finds that it should not exercise its discretion to grant th petition. First, at least one respondent, SkypeS, is a defendant in both foreign lawsuits. (D.I.2-1 t ~ 6-7). As the Supreme Court stated in Intel, "when the person from whom discovery is sought is a participant in the foreign proceeding ... the need for § 1782(a) aid generally is not as a parent as it ordinarily is when evidence is sought from a nonparticipant in the matter arising abro d." Intel, 542 U.S. at 244. SkypeS, a defendant in the foreign litigation, is subject to the jurisdicti n of the foreign courts. Those courts may order SkypeS to produce whatever evidence their law require. Via Vadis' arguments to the contrary focus on the narrow scope of German discovery 1 ws and SkypeS' alleged noncompliance with the Luxembourg Ordonnance. (D.I.2 at 7). These circumstances, if true, do not take SkypeS out of the foreign proceedings. Therefore, th Intel factor counsels against compelling the discovery. The second Intel factor considers the receptivity of the foreign courts to U.S. fed ral-court assistance. Importantly, the inquiry is not whether the foreign court has analogous disco ery laws that would lead to production of the materials, but whether the foreign court would con ider the evidence revealed from a§ 1782 order. In re Chevron Corp., 633 F.3d 153, 163 (3rd Cir 2011). As the parties opposing discovery, Respondents bear the burden of proof on this issue. ~ . Here, however, the evidence produced by the parties provides no clear answer. Via Vadis' insi tence that the foreign courts will consider the § 1782 materials rests on the opinions of two fits own lawyers and a treatise that only superficially addresses 28 U.S.C. § 1782. (D.I.2-1 at ,-r 4-15, 2021; D.l.15-2 at ,-r 13; D.l.15-1 at 8). Respondents offer no evidence on the issue. (D.I.l at 1213). Thus, while it is not entirely persuasive, it appears that the German court would li consider the § 1782 materials, and this factor favors granting the discovery. The third Intel factor calls for a determination of whether the § 1782 request is ssentially an attempt to circumvent foreign proof-gathering restrictions. However, the Court also tressed that district courts may compel discovery of materials that cannot be discovered in fore gn jurisdictions. Intel, 542 U.S. at 259-63. Despite that permission, this Court declines, es ecially in the absence of any request from the foreign courts, to help Via Vadis overcome the rul s and procedures of the foreign courts. Despite their jurisdiction over SkypeS, the foreign co shave not forced SkypeS to produce the requested materials. Discovery under § 1782 would b , in essence, a circumvention ofthe foreign courts' rules and enforcement procedures. Finally, this Court looks to whether production of the materials would be undul intrusive or burdensome. Via Vadis argues that its request for the "computer source code and rel ted core technical documents underlying the Skype technical services" is neither intrusive nor burdensome because it is narrowly drawn and because Respondents have produced the aterials in prior litigation. (D.1.2 at 10). However, production of the source code would intrude n the protective order from that prior litigation. The protective order specifically prohibits dis losure of the source code in the proceedings in Germany and Luxembourg. (D.I.2-1 at ,-r 23). In a dition, a general request for the source code and related documents places a heavy burden on Respondents. Source codes are the most sensitive and confidential property of Respond nts. When disclosed in U.S. litigation, extreme measures are ordered to protect their confide tiality. Thus, this Intel factor, as well as the overall balance of all the factors, counsels against granting the request for discovery. An appropriate order will be entered.
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