CPC PATENT TECHNOLOGIES PTY LTD., Applicant, for an order pursuant to 28 U.S.C. § 1782 Case No. 21-mc-80091-JST (NC) United States District Court, N.D. California Signed July 15, 2022 Counsel Christina Noel Goodrich, Zachary T. Timm, K&L Gates LLP, Los Angeles, CA, George C. Summerfield, K&L Gates LLP, Chicago, IL, for Applicant. Cousins, Nathanael M., United States Magistrate Judge REPORT & RECOMMENDATION TO DENY EX PARTE APPLICATION FOR DISCOVERY Re: ECF 34 *1 Applicant CPC Patent Technologies PTY Ltd. applied ex parte under 28 U.S.C. § 1782 for an order permitting discovery from Apple, Inc. ECF 1. After this Court denied CPC's initial application, District Judge Jon S. Tigar affirmed the denial for lack of clear error, but the Ninth Circuit Court of Appeals ruled that de novo review, not clear error, is the appropriate standard of review. This application is again before the Court, this time for a report and recommendation to Judge Tigar, who will review the Court's recommendation de novo. After reviewing the application and the parties’ arguments, I recommend that CPC's § 1782 application be DENIED. I. BACKGROUND A. Factual Background CPC is the owner of several patents related to biometric security. ECF 1-1 at 2. Apple is a corporation that produces electronic devices such as iPhones, iPads, and personal computers with biometric security measures. Id. CPC and Apple are currently litigating a patent infringement suit that was initiated in the Western District of Texas but was recently transferred to this district. Id.; see CPC Patent Tech. PTY Ltd. v. Apple, Inc., 22-cv-02553-EJD (N.D. Cal.). The patents at issue are U.S. Patent Nos. 9,269,208 (‘208 Patent); 9,665,705 (‘705 Patent); and 8,620,039 (‘039 Patent). ECF 1-1 at 2. In its April 2021 application, CPC stated that it intends to file a separate suit for patent infringement—involving the ‘705 Patent—against Apple in Germany. Id. CPC has not yet filed suit in Germany. B. Procedural Background CPC filed its initial § 1782 application on April 22, 2021. ECF 1. This Court denied CPC's application as “unduly burdensome” on April 27, 2021. ECF 5. On April 29, 2021, CPC moved for de novo review of the denial under Rule 72 and Civil Local Rule 72-3. ECF 6. Following the motion, the case was reassigned to Judge Tigar. ECF 8. On June 28, 2021, Judge Tigar denied CPC's motion for de novo review and, finding no clear error, affirmed this Court's decision. ECF 15. CPC appealed the decision to the Ninth Circuit, which ruled that Judge Tigar had incorrectly applied the clear error standard of review instead of de novo review. ECF 17; ECF 18. On remand, Judge Tigar referred the § 1782 application back to this Court for a report and recommendation. ECF 22. At the June 29, 2022, hearing on the application, the Court ordered the parties to meet and confer and file a joint discovery letter brief by July 6, 2022, which they did. ECF 30; ECF 34. The brief detailed CPC's revisions on some of its requests: (3) & (6) narrowed scope on steps for fingerprint matching to focus on Apple Touch ID functionality; (8) & (9) narrowed request to role of the Application Processor in functionality of Touch ID; (10) & (11) revised “Secure Application Processor” to “Secure Enclave.” ECF 34 at 4-6. The Court held a second hearing on the matter on July 7, 2022. Thus, on this report and recommendation, the Court considers the application as narrowed and revised in the joint discovery letter brief. ECF 34. Both parties have declined Magistrate Judge jurisdiction. ECF 28; ECF 32. II. LEGAL STANDARD *2 Title 28 U.S.C. § 1782 provides federal court assistance in gathering evidence for use in foreign tribunals. Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241, 247 (2004). It aims to provide efficient assistance to participants in international litigation and to encourage foreign countries to provide similar assistance in U.S. litigation. Id. at 246. The statute requires that an applicant seeking discovery meet three criteria: (1) the discovery sought must be from a person residing in the district of the court to which the application is made; (2) the discovery must be for use in a proceeding before a foreign tribunal; and (3) the applicant must be a foreign tribunal or an “interested person.” See 28 U.S.C. § 1782. Even once the statutory requirements are met, the district court retains discretion to determine whether to grant an application under § 1782. 542 U.S. at 246. The Supreme Court articulated the following non-exhaustive factors to help district courts determine how to exercise their discretion in granting discovery under § 1782: (1) whether the person from whom the discovery is sought is a participant in the foreign proceeding; (2) the nature of the foreign tribunal, the character of the proceedings underway abroad, and the receptivity of the foreign government, court, or agency to U.S. federal court judicial assistance; (3) whether the discovery request is a concealed attempt to circumvent foreign proof-gathering restrictions or other policies of a foreign country or the U.S.; and (4) whether the discovery is unduly intrusive or burdensome. See Intel, 542 U.S. at 264–65. III. DISCUSSION A. Section 1782 Statutory Requirements CPC meets the statutory requirements of § 1782. First, CPC seeks discovery from Apple, which is headquartered in Cupertino, California, and therefore resides in this district. Second, CPC seeks discovery to initiate a lawsuit in Germany. See Intel, 542 U.S. at 258–59 (stating that the foreign adjudicative proceeding for which discovery is sought needs only be “within reasonable contemplation,” not “pending” or “imminent”). Finally, as the plaintiff in an anticipated lawsuit, CPC is an “interested person” under § 1782. See id. at 256–57. Thus, the Court has authority to grant CPC's application. B. Intel Discretionary Factors The first three Intel discretionary factors are neutral and do not weigh in favor of or against granting CPC's application because: (1) Apple would be a participant in the potential foreign proceeding[1]; (2) German courts are generally receptive to U.S. federal court judicial assistance; and (3) Apple does not assert that CPC's request is an attempt to circumvent foreign proof-gathering restrictions. See Intel, 542 U.S. at 264–65; Palantir Techs., Inc. v. Abramowitz, 415 F. Supp. 3d 907, 915 (N.D. Cal. Nov. 22, 2019) (finding that German courts are receptive and not hostile to foreign discovery); ECF 34 at 7 (Apple asserting that the first three Intel factors are neutral). After evaluating the fourth Intel factor, however, the Court recommends denial of CPC's application as unduly intrusive and burdensome for four reasons. First, CPC is requesting information that is strictly confidential and central to Apple's products. See In re Belparts Group, N.V., Case No. 3:21-mc-0062, 2021 U.S. Dist. LEXIS 203899, at *14 (D. Conn. Oct. 22, 2021) (vacating a prior order granting a § 1782 application for “highly sensitive proprietary trade secret information”). The hardware and software for Apple's secure facial recognition and touch identification technology is highly sensitive and central to its business, and CPC's request of documents “sufficient to show” the functioning of these central processes could require Apple to disclose highly confidential source code. ECF 34 at 7. Given the high value of such information, this broad request is unduly intrusive and burdensome even if produced subject to a protective order. *3 Second, there are insufficient safeguards to protect the confidentiality of the discovered information in Germany. See Baxalta Inc. v. Genentech, Inc., Case No. 16-mc-80087-EDL, 2016 U.S. Dist. LEXIS 195669, *29 (N.D. Cal. Aug. 9, 2016) (quashing a § 1782 subpoena where “it is unclear that [a] proposed protective order would govern disclosure to or use by the Japanese court or the parties or lawyers before it, or sufficiently protect Genentech's confidential information in that forum if it were disclosed either inadvertently or intentionally”). Even with the parties’ protective order and CPC's assurances of confidentiality, the Court does not have jurisdiction to enforce protection of Apple's confidential information in Germany; without that control, it is uncertain whether this highly sensitive technology can be protected in the case of inadvertent or intentional disclosure. Given that CPC has yet to file a case, the lack of established protections to keep the information confidential makes this request unduly burdensome for Apple. Third, CPC has not demonstrated that Apple's publicly available information regarding Face ID and Touch ID technology is insufficient for it to determine whether it has grounds to file suit in Germany. Apple has published various articles outlining its work in facial recognition and touch identification, including a May 2021 report titled “Apple Platform Security” that “describes the protection and flow of user identify information through Apple products.” ECF 34 at 9. Without CPC's explanation of why this public information is insufficient, the Court finds this request unduly burdensome. Lastly, CPC's wording of the discovery request is too vague and cumbersome to enforce. The Court previously held that CPC's “sufficient to show” descriptor was undefined and overly broad and would result in unduly burdensome discovery. ECF 5 at 3. On this second review, CPC still does not explain why “sufficient to show” is the necessary descriptor. Thus, the Court again finds the descriptor vague, cumbersome, and unduly burdensome. IV. CONCLUSION Accordingly, the Court FINDS that although CPC's application meets the statutory § 1782 requirements, the request is unduly burdensome and intrusive. Thus, the Court RECOMMENDS that CPC's § 1782 application be DENIED. Because the Court recommends denying the application, it does not reach the proposed protective order, ECF 33. Any party may object to the recommended disposition but must file a written objection with Judge Tigar within fourteen days of being served with this order. See Fed. R. Civ. P. 72(b)(2). IT IS SO ORDERED. Footnotes [1] Although Apple does not contest this factor, the Court finds that because Apple would be a participant to the potential German litigation and could be ordered to produce discovery through that proceeding, the first Intel factor weighs against granting CPC's § 1782 application. See Intel, 542 U.S. at 264 (finding that if the party is a participant, the foreign tribunal can exercise its own jurisdiction to order production of evidence).