Patagonia, Inc. et al v. Anheuser-Busch, LLC Case No. CV 19-02702 VAP (JEMx) United States District Court, C.D. California Filed February 26, 2020 Counsel Alexandra Nicole Martinez, Ryan T. Bricker, Beatrice O'Neil Strnad, Gia Louise Cincone, Hannah T. Yang, Gregory S. Gilchrist, Kilpatrick Townsend and Stockton LLP, San Francisco, CA, Nichole D. Chollet, Pro Hac Vice, Kilpatrick Townsend and Stockton LLP, Atlanta, GA, for Patagonia, Inc. et al. Adam S. Paris, Michael H. Steinberg, Sullivan and Cromwell LLP, Los Angeles, CA, Amanda A. Main, Angela L. Dunning, Cooley LLP, Palo Alto, CA, Dina Roumiantseva, Cooley LLP, San Francisco, CA, Marc De Leeuw, Pro Hac Vice, Michael P. Devlin, Pro Hac Vice, Sullivan and Cromwell LLP, New York, NY, Marcus D. Peterson, Bobby A. Ghajar, Cooley LLP, Santa Monica, CA, for Anheuser-Busch, LLC. McDermott, John E., United States Magistrate Judge Proceedings: (IN CHAMBERS) ORDER RE DEFENDANT ANHEUSER-BUSCH LLC'S MOTION TO COMPEL RESPONSES TO INTERROGATORIES, REQUESTS FOR PRODUCTION, AND REQUESTS FOR ADMISSION (Docket No. 57) *1 Defendant Anheuser-Busch, LLC (“AB”) presents a Motion To Compel Responses To Interrogatories, Requests For Production And Requests For Admissions (“Motion”) to Plaintiffs Patagonia, Inc. and Patagonia Provisions, Inc. (“Patagonia” or “Plaintiffs”). (Dkt. 57.) The Court GRANTS the Motion in part and DENIES it in part. Fed. R. Civ. P. Rule 26(b)(1) provides that parties may obtain discovery regarding “any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case.” Rule 26(b)(1) further provides that information within this scope of discovery need not be admissible in evidence to be discoverable. The Court also acknowledges the District Court's admonition in its Scheduling Order (Dkt. 55) that discovery “should be kept to a minimum and should focus only on issues genuinely in dispute.” AB's contentions fall into five categories: A. Patagonia's Awareness Of AB's Trademark Rights (Interrogatory No. 2, Request For Production Nos. 1, 2, 7, 45 and 46) Interrogatory No. 2. AB obtained a registered trademark to Patagonia beer in 2012, relating back to a 2006 application. Plaintiffs learned of AB's Patagonia beer registration in 2013 but they claim they were not aware of any use by AB of its trademark for Patagonia beer until 2018. AB's Interrogatory No. 2 seeks information about Plaintiffs' first awareness of AB's Patagonia mark, its related company Quilmes and predecessor-in-interest Warsteiner, in order to establish its laches defense. Patagonia claims it has properly responded to Interrogatory No. 2 based on a review of the six custodians most likely to have relevant information responsive to the Interrogatory. AB challenges the sufficiency of the Plaintiffs' search and seeks an order requiring a much broader search than Plaintiffs conducted, including those responsible for Plaintiffs' expansion into beer, present and former in-house legal personnel, outside counsel and those responsible for Plaintiffs' marketing and branding from 2012 through 2016. (Proposed Order, Dkt. 57-6, ¶ 1.) Plaintiffs searched the files of their trademark lawyers in the Patagonia legal department and the people involved in developing Patagonia's beer products for documents reflecting their awareness of AB's registration and use. (JS 17.) The Court finds persuasive the declaration of Robert Tadlock, Patagonia's Associate General Counsel, Brand and Activism, who joined the company in 2014. (Dkt. 57-5.) He states that it is unlikely an employee became aware that Quilmes produced Patagonia beer, made a note and did not send it to the legal department. The same would be true of sales of AB produced Patagonia beer in the United States. Plaintiffs produced responsive documents from the people most likely to have information responsive to the Interrogatory. Extending the search to all employee files and email accounts who either are unlikely to have the information requested in the Interrogatory or already sent a note to the legal department would be disproportionate. AB has not demonstrated that any of the additional custodians whose files it seeks to search contain or are likely to contain unique responsive documents or information. See Fort Worth Employees' Ret. Fund v. J. P. Morgan Chase & Co., 299 F.R.D. 99, 107 (S.D.N.Y. 2013); Mortg. Resolution Servicing LLC v. J. P. Morgan Chase Bank, 2017 WL 2305398*2 (S.D.N.Y.). *2 Nonetheless, the Court ORDERS Plaintiffs to identify all custodians whose files were searched, and search the files of Gwen De Santis and any other legal personnel in the trademark department before 2014, going back to 2006. Further, as discovery continues and AB reviews the documents produced by Plaintiffs, AB may request a search of the files of any particular employee who it is reasonable to think may have documents or information responsive to Interrogatory No. 2. The Court expects Patagonia to cooperate in responding to such requests. Request For Production Nos. 1, 2 and 7. These Requests seek business plans, marketing plans, and documents and communications about those plans, reflecting Plaintiffs' decision to use or not use “Patagonia” in connection with any alcoholic beverage products, including beer, wine or other alcoholic beverages. (Joint Stipulation or “JS” at 7-9.) Plaintiffs have agreed to produce all nonprivileged documents located in an ESI search regarding Long Root Pale Ale, Long Root Wit, Patagonia and Patagonia, Inc., and Patagonia Provisions, Inc. and the decision or reasons not to use Patagonia on beer products. (JS 8.) Plaintiffs also agreed to make an ESI search for nonprivileged documents that discuss the potential impact of AB's rights on any decision to use or not use Patagonia on other alcoholic beverages. (JS 8, 9.) Plaintiffs also agreed to produce business plans to sell or market beer in connection with the terms Patagonia, Patagonia Provisions, Patagonia, Inc. or Patagonia Provisions, Inc. (JS 9.) Plaintiffs apparently agreed to produce documents regarding business plans for wine and must do so. Plaintiffs say that there are no custodians for spirits or hard seltzers and no such products, and, if so, must serve a verification from a Patagonia principal (not counsel) under oath and subject to penalty of perjury that no documents regarding spirits or hard seltzers exist. Additionally, Plaintiffs must produce both business and marketing plans regarding their decision not to use Patagonia on alcoholic beverages, i.e., beer and wine. Request For Production Of Documents Nos. 45 And 46. Request No. 45 requests communications between Plaintiffs and AB, including those relating to the use of “Patagonia” on beer or other alcohol products. (JS 11.) Plaintiffs agreed to conduct a reasonable ESI search for its communications with AB related to alcoholic beverages. (JS 11.) Plaintiffs make clear that their search is not limited to trademark lawyers or employees responsible for producing and marketing beer. (JS 24.) The Court finds no deficiency in Plaintiffs' response to Request No. 45. Request No. 46 seeks internal documents referring to AB's registration of the mark Patagonia for beer. (JS 11.) Plaintiffs agreed to produce internal documents within the trademark department referencing AB's trademark registration for the Patagonia mark for beer. (JS 12.) Plaintiffs also agreed to conduct a reasonable ESI search of relevant custodians responsible for producing and marketing beer for documents referencing AB's trademark registrations for Patagonia on beer. (JS 12.) AB seeks an order requiring Plaintiffs to search the files of other relevant custodians beyond those responsible for producing and marketing beer. The Court finds that Plaintiffs' search limitation to the trademark department and those responsible for producing and marketing beer is reasonable. As to Quilmes, Plaintiffs have addressed Quilmes in their answer to Interrogatory No. 2 and accompanying documents. Request No. 46, moreover, refers to AB, not Quilmes. The Court finds no deficiency in Plaintiffs' response to Request No. 46. B. Plaintiffs' Awareness Of Third Party Uses Or Registrations (Int. No. 4, RFP Nos. 6, 9, 11, 34, 35, 40, 42, 43). *3 RFP Nos. 6 and 34. RFP No. 6 seeks documents concerning any person using the designation “Patagonia” in regard to the sale of alcoholic beverage products. (JS 28.) Plaintiffs agreed to search their trademark department files and produce nonprivileged documents reflecting their enforcement of their rights in the Patagonia trademark against any third party use in connection with the sale of alcoholic beverages since 2006. (JS 28.) Plaintiffs also agreed to search their trademark file for Patagonia trademark registrations for any Patagonia-formative mark covering alcoholic beverages. (JS 28.) Plaintiffs have produced 100 different examples of third party uses that were the subject of enforcement proceedings, agreements or settlements. (JS 42.) Plaintiffs, however, cannot limit their search and production to third party uses which were the subject of their enforcement efforts. They also must search and produce documents reflecting Plaintiffs' decision to allow a party to use the Patagonia brand or otherwise to forego enforcement measures. AB again seeks expansion of the custodians to be searched beyond those in the trademark department. (Proposed Order, 57-6, ¶ 4.) As before, the Court finds Plaintiffs' limitation reasonable. RFP No. 34 seeks all documents concerning the use of the designation of “Patagonia” in the marketing and sale of any good or service offered by third parties. (JS 29-30.) This request is duplicative of RFP No. 6 except it also applies to non-alcoholic products. Plaintiffs agreed to search their trademark enforcement files and produce nonprivileged documents showing Plaintiffs' initial enforcement against third parties using a Patagonia mark. (JS 30.) The Court's prior comment that Plaintiffs cannot limit their search and production to their enforcement efforts applies here as well. RFP No. 9. AB seeks copies of licenses relating to the registration of Patagonia marks provided by Plaintiffs and all communications regarding same. (JS 28.) Plaintiffs agreed to produce all licenses for use of Patagonia marks related to the lawsuit in effect at any time since 2012. (JS 28, 29, 52.) Plaintiffs' supplemental response (JS 29) resolves the parties' dispute over this Request. AB's Proposed Order (57-6) seeks no relief in regard to Request No. 9. RFP No. 11. This Request seeks all agreements and proposed agreements (co-existence, consent agreements, settlement agreements and concurrent use agreements) between Plaintiffs and third parties, including communications regarding such agreements. (JS 29.) Plaintiffs agreed to produce final but not proposed agreements. (JS 29.) Plaintiffs note that they already are producing documents in response to AB's RFP Nos. 6 and 35 that show origination of enforcement matters from which AB would know of any unresolved matter. Plaintiffs also have agreed to produce documents showing any instances in which a third party asserted rights in the Patagonia mark against Plaintiffs. (JS 53.) The Court finds Plaintiffs' response sufficient. RFP No. 35. AB seeks documents referencing searches into whether Plaintiffs' Patagonia trademarks conflict with the rights of others from 2006 to present for any goods or services. (JS 30.) Plaintiffs agreed to produce any nonprivileged search report results they received in connection with trademark clearance searches conducted prior to their filing of US trademark applications for Patagonia trademarks for alcoholic beverages. (JS 30.) The Court sees no reason why Plaintiffs cannot search trademark department files for search reports outside a particular trademark filing. RFP No. 40. AB seeks documents concerning Plaintiffs' awareness of a beer product sold under the name or trademark Patagonia, including when Plaintiffs first became aware of a beer product sold under the name or mark Patagonia. (JS 30-31.) Plaintiffs searched for and produced documents within the trademark department and employees responsible for their beer business reflecting knowledge of any use of the Patagonia mark in connection with beer by AB at any time from 2012 to present. (JS 50.) Plaintiffs must do so regardless of jurisdiction. *4 RFP Nos. 42 and 43. Request No. 42 seeks all documents concerning any efforts by Plaintiffs to enforce their rights to the Patagonia marks. (JS 31.) Plaintiffs argue this Request is duplicative and overbroad but have agreed to produce nonprivileged documents sufficient to show they originated and concluded matters involving enforcement of the Patagonia marks. (JS 31.) The Court finds Plaintiffs' response sufficient. Request No. 43 seeks documents concerning Plaintiffs' decision not to enforce their rights in the Patagonia marks against any third party. (JS 31-32.) Plaintiffs complain that documents responsive to this Request will be privileged but Plaintiffs must search for any nonprivileged such documents. Plaintiffs also must search for responsive documents of particular third parties AB identified as Plaintiffs have suggested. Interrogatory No. 4. AB asks Plaintiffs to state all facts regarding each third party use or registration for a Patagonia mark. (JS 32.) Plaintiffs agreed to produce trademark department files to the extent they show awareness of third party registrations or uses and the outcome of any actions taken regarding trademarks containing a Patagonia term. The Court finds Plaintiffs' response sufficient as many of the documents responsive to the Request are contained in documents Plaintiffs already agreed to produce. C. Strength Of Plaintiffs' Patagonia Marks (RFP Nos. 13, 14, 15, 37 and 38) Request Nos. 13 and 14. Request No. 13 seeks USPTO documents rejecting Plaintiffs' application to register a Patagonia mark for any goods or services due to a perceived likelihood of confusion with a preexisting application. (JS 55.) Plaintiffs agreed to produce nonprivileged communications discussing any 2(d) refusal issued by the USPTO for their applications for a Patagonia trademark for alcoholic beverages. (JS 55.) Elsewhere, Plaintiffs agreed to produce the requested refusals and documents discussing them for the alcoholic beverage applications. (JS 62:4-8.) Plaintiffs are not required to produce online publicly available USPTO records. AB's Proposed Order for the Request No. 14 would require Plaintiffs to do a keyword search containing these terms: “likelihood of confusion” or “geographical place” or “geographic indication” or “South America” or “Patagonia region” or “geographically descriptive.” (Dkt. 57-6, ¶ 11.) Plaintiffs agreed to produce nonprivileged communications discussing any findings by the USPTO that the term Patagonia refers to a region in South America in connection with Plaintiffs' applications to register a Patagonia mark for alcoholic beverages. (JS 56.) In its Supplemental Response, Patagonia further agreed to search trademark law department custodians for the terms “South America,” “Patagonia region,” “geographically descriptive,” but limited to no more than 200 documents. (JS 56.) The Court also requires Plaintiffs to include the term “likelihood of confusion” and rejects the 200 document limit as arbitrary and unreasonable. Request Nos. 15, 37 and 38. AB seeks an order requiring Plaintiffs to produce documents relating to incomplete consumer surveys and surveys relating to educational goods or services. (Dkt. 57-6, ¶ 12.) The Court will not require Plaintiffs to produce incomplete surveys but will require Plaintiffs to produce surveys relating to educational goods and services which were raised by Plaintiffs in the SAC. D. Plaintiffs' Damages (RFP Nos. 33 and 44.) *5 AB's Request No. 33 seeking Plaintiffs' P+L's from their inception is overbroad but the Court will ORDER Plaintiffs to produce P+L's from 2006 forward. AB also seeks documents that demonstrate Plaintiffs have not been damaged or that otherwise would undermine their claimed damages. AB's request does not satisfy Rule 34(b)(1)(A)'s reasonable particularity requirement. The Request would require Plaintiffs to speculate about what AB would view as undermining Plaintiffs' damages claims. The Court, however, will require Plaintiffs to produce any documents they reviewed and considered but chose not to rely on in formulating their damages claims. E. Requests For Admissions Relating To Specific Examples Of Third Party Use (RFAs 1, 6, 7, 8, 13, 14, 20, 24, 25, 26, 30, 31, 32, 35, 36, 37, 41, 42, 43, 47, 48, 49, 53, 54, 55, 59, 60, 61, 65, 66, 67, 71 and 72.) The Court DENIES AB's Motion as to each of its RFAs. AB's RFAs call for a legal conclusion which is improper and not authorized by Rule 36(a)(1)(A). See Playboy Enterprises, Inc. v. Welles, 60 F. Supp. 1050, 1057 (S.D. Cal. 1999) (“Requests for admission cannot be used to compel an admission of a conclusion of law”). Additionally, these Requests require Plaintiffs to address hypothetical issues unnecessary to decide in this case, and on which Plaintiffs do not necessarily have an opinion and that would require considerable work to answer. (Tadlock Decl., ¶ 7, Dkt. 57-5.) This Court rejected nearly identical requests to AB's requests here in Gibson Brands, Inc. v. John Hornby Skewes & Co., 2015 WL 12681376*6 (C.D. Cal.), where the Court stated that RFAs are not the appropriate discovery tool for the information described in the requests. The Court further stated, “The use of RFA's as discovery devices to obtain new information, particularly when that information may require complex judgments and nuanced appraisals, is generally improper.” AB's RFAs are also disproportionate to their probative value and the effort they would require to answer. * * * Plaintiffs are required to supplement their responses and produce additional documents as ordered above within 20 days of this Order. The Court DENIES Plaintiffs' request for attorneys' fees as the Court granted AB's Motion in part. AB's Motion was substantially justified under Rule 37(a)(5)(A)(ii).