Blue Spike LLC, et al., Plaintiffs, v. Universal Music Group, Inc., et al., Defendants Case No. 2:22-cv-06331-GW-SSCx United States District Court, C.D. California Filed June 05, 2024 Counsel Andrew J. Sherman, Pro Hac Vice, Christopher L May, Pro Hac Vice, Deepali Brahmbhatt, Joel William Glazer, Pro Hac Vice, Devlin Law Firm LLC, Wilmington, DE, David Michael Newman, The Internet Law Group, Beverly Hills, CA, Joseph J. Zito, Pro Hac Vice, DNL Zito Castellano, Washington, DC, for Plaintiff. Darren M. Franklin, Sheppard Mullin Richter and Hampton LLP, Los Angeles, CA, Martin R Bader, Michael K. Heins, Sheppard Mullin Richter and Hampton LLP, San Diego, CA, Paul W. Garrity, Pro Hac Vice, Sheppard Mullin Richter and Hampton LLP, New York, NY, for Defendants. Christensen, Stephanie S., United States Magistrate Judge MEMORANDUM AND ORDER *1 In this patent suit, Plaintiffs seek discovery from two foreign companies and moves this Court to issue letters of request to obtain it. The discovery being essential to the question of infringement and relevant to the question of damages, and Defendants not having convincingly demonstrated that granting the motions would be futile or cause delay, Plaintiffs' motions are GRANTED IN PART. Plaintiffs are instructed to submit amended proposed letters of request in conformance with this order. I On September 6, 2022, Plaintiffs Blue Spike LLC, Blue Spike International Ltd., and Wistaria Trading Ltd., filed this patent infringement lawsuit, and on December 13, 2022, their amended complaint. (ECF 1; ECF 25.) Plaintiffs are the assignees and owners of four patents which cover “systems and methods that protect digital information by identifying and encoding a portion of the format information.” (ECF 25 at 4–6.) They have sued Defendants Universal Music Group, Inc., UMG Manufacturing & Logistics, Inc., and Universal Music Publishing, Inc. d/b/a Universal Music Publishing Group. Plaintiffs allege that Defendants are leading music producers that distributed digital audio content knowing that the content used the MQA file format, an allegedly infringing instrumentality. (Id. at 9–23.) “Defendants deny any wrongdoing or infringement.” (ECF 40 at 2.) On February 22, 2024, the district judge entered a scheduling order requiring Plaintiffs to serve final infringement contentions by April 11, 2024, and Defendants to serve their final invalidity contentions by May 9, 2024. (ECF 83.) The current scheduling order requires the parties to complete fact discovery by June 27, 2024, and expert discovery by September 27, 2024; the deadline to hear dispositive motions is November 4, 2024, and trial is set for December 10, 2024. (ECF 83.) Plaintiffs' motion to amend the scheduling order is currently pending before the district judge and set for hearing on June 20, 2024. (ECF 98; ECF 100.) On April 12, 2024, Plaintiffs moved for the issuance of letters of request on MQA Limited (MQA) and the Lenbrook Group of Companies (Lenbrook) “to obtain document production concerning the technology and customers of UK company MQA Limited.” (ECF 87; ECF 87-1 at 2; ECF 88; ECF 88-1 at 2.)[1] Plaintiffs filed their motions pursuant to Rule 26 of the Federal Rules of Civil Procedure and the Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters (“the Convention”), 23 U.S.T. 2555; T.I.A.S. No. 7444; 847 U.N.T.S. 231, implemented in 28 U.S.C. § 1781. Plaintiffs make the following representations: “MQA is a business located in, and operating under the laws of, the United Kingdom, with a primary place of business in Huntingdon, Great Briton.” (ECF 87 at 4; ECF 88 at 4.) “Lenbrook currently owns and maintains the MQA Software,” and “is a business located in, and operating under the law of, Canada, with a primary place of business at 644 Granite Court, Pickering, Ontario, Canada.” (ECF 87 at 4; ECF 88 at 4.) Through the requests, Plaintiffs seek to obtain or inspect documents falling broadly into two categories: technical information related to the allegedly infringing MQA file format, and information relevant in determining damages for that alleged infringement. (ECF 87-1 at 6; ECF 88-1 at 6.) Defendants oppose the issuance of the letters. (ECF 94; ECF 95.) *2 On May 21, 2024, the Court held a hearing on the motions and took the matter under submission. (ECF 107.) Counsel for Plaintiffs appeared via videoconference and counsel for Defendants were present in court. (Id.) II A letter of request, or letter rogatory, is “a formal request from a court in which an action is pending[ ] to a foreign court to perform some judicial act.” 22 C.F.R. § 92.54; see also Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241, 247 n.1 (2004) (defining “letter rogatory” as “the request by a domestic court to a foreign court to take evidence from a certain witness”); 28 U.S.C. § 1781 (discussing letters rogatory or request). A federal district court has the inherent authority to issue a letter rogatory. United States v. Staples, 256 F.2d 290, 292 (9th Cir. 1958); see 28 U.S.C. § 1781 (governing the U.S. Department of State's role in issuing and receiving letters rogatory or request, and recognizing the courts' power to transmit and receive the same). The decision to issue letters rogatory lies squarely within the Court's discretion. See Min Shian Indus. Co. v. Liquid Metal Motorsports, Inc., No. 8:19-cv-00233-JLS-KES, 2020 WL 2405274, at *2 (C.D. Cal. Jan. 31, 2020). “When determining whether to exercise its discretion, a court will generally not weigh the evidence sought from the discovery request nor will it attempt to predict whether that evidence will actually be obtained.” Asis Internet Servs. V. Optin Global, Inc., No. C-05-05124 JCS, 2007 WL 1880369, at *3 (N.D. Cal. June 28, 2007). III A As a threshold matter, Defendants contend that because “Canada is not a signatory to the Hague Evidence Convention,” to obtain a letter of request as to Lenbrook, Plaintiffs should “follow the procedure established under the ‘Canada Evidence Act.’ ” (ECF 94 at 6–7.) “The proper method for compelling the production of documents and obtaining deposition testimony in Canada for use in a United States action is to proceed by means of a letter rogatory.” SPS Techs., LLC v. Briles Aerospace, Inc., No. CV 18-9536 MWF (ASX), 2020 WL 12740646, at *1 (C.D. Cal. Apr. 14, 2020). Although Canada is not a signatory to the relevant article of the Convention, “the Canada Evidence Act specifically provides that a court outside of Canada may serve letters rogatory upon a Canadian court.” Id. (citing R.S.C.1985, c. C-5, s. 46 (“a Canadian court maintains the discretion to ‘command the attendance of [a] party or witness for the purpose of being examined’ when ‘any court or tribunal outside Canada, before which any civil, commercial or criminal matter is pending, is desirous of obtaining the testimony in relation to that matter of a party or witness within the jurisdiction of the first mentioned court’ ”)); accord Allianz Sigorta, A.S. v. Ameritech Indus., Inc., No. 15-CV-1665, 2016 WL 1127705, at *2 (E.D. Cal. Mar. 23, 2016) (finding that “under the applicable Canadian law, a Canadian court can order [discovery] from a non-party if so requested by a letter rogatory”); Asis Internet Servs., 2007 WL 1880369, at *3; Goldberg v. Dufour, No. 16-21301, 2020 WL 373206, at *4 (D. Vt. Jan. 23, 2020). Thus, a letter of request is the proper vehicle but Plaintiffs should ensure that the revised letter ordered below complies with and refers to the Canada Evidence Act. B *3 Next, Defendants contend that the Court should deny Plaintiffs' motions due to their “lack of diligence” in attempting to obtain the information they seek. (ECF 95 at 7–8.) In Defendants' view, Plaintiffs “knew that MQA had relevant knowledge and information ... at least as early as May 5, 2023,” and at latest, by July 21, 2023, when “Blue Spike attempted to subpoena MQA through its bankruptcy administrator ....” (Id. at 8.) Defendants assert that “[i]t would be highly prejudicial and costly to Defendants” if Plaintiffs were allowed to “rely on late obtained documents and testimony when such delay was entirely avoidable but for the lack of diligence ....” (Id. at 8.) Plaintiffs represent that any delay in bringing the instant motions is attributable to Defendants' ongoing failure to convey explicitly that none of the three entities named as Defendants maintained the items that are now requested in the letters. (ECF 96 at 2–3.) “[A] showing of prejudicial delay may [be] a valid ground for denying a request for a letter rogatory ....” Min Shian Indus. Co., 2020 WL 2405274, at *4; see Fisher & Paykel Healthcare Ltd. V. Flexicare Inc., No. SA CV 19-00835-JVS (DFMx), 2020 WL 5900155, at *2 (C.D. Cal. Aug. 17, 2020). Regarding delay, the Court agrees that Plaintiffs could have acted faster in seeking some of the requested information during the nine-month period between its failed July 2023 MQA subpoena attempt, and the filing of these motions—particularly, in seeking the source code related to the MQA file format, which Defendants asserted was not in their possession as early as June 1, 2023. (ECF 94 at 7–9; ECF 95 at 6–8.) Moreover, much of the damages information sought in the requests was never likely to be in Defendants' possession, given that it relates to MQA's business with other entities. (ECF 87-1 at 6 (“Documents sufficient to show the purchase amount and transfer of assets resulting from the purchase of MQA by [Lenbrook]” and “Documents sufficient to identify all importers, distributors, wholesalers, resellers, integrators, and third-party support organizations for digital content processed by MQA Watermarking”); ECF 88-1 at 6 (same).) But, given that Plaintiffs filed their motions more than two months before the deadline for completing fact discovery, the Court declines to find Plaintiffs' pace to be dispositive. See Min Shian Indus. Co., 2020 WL 2405274, at *4 (finding no prejudicial delay where “deadline for completing fact discovery [wa]s nearly 4 months away, and the pleadings ha[d] not yet closed”). Moreover, it is not yet clear that prejudice to Defendants would result from the purported delay. If seeking relief from the British and/or Canadian courts causes undue delay, then the district judge can address any prejudice to Defendants by other means, such as extending case management deadlines and excluding late-obtained evidence. See id.; Fisher & Paykel Healthcare Ltd., 2020 WL 5900155, at *2. C Consistent with Rule 26 of the Federal Rules of Civil Procedure, “[i]n exercising their discretion to issue letters rogatory, courts sometimes consider whether the evidence can be obtained through other, less burdensome means, such as domestic discovery processes.” See Min Shian Indus. Co., 2020 WL 2405274, at *3; Fed. R. Civ. P. 26(b)(2)(C)(i) (“the court must limit the frequency or extent of discovery otherwise allowed by these rules or by local rule if it determines that ... the discovery sought is unreasonably cumulative or duplicative, or can be obtained from some other source that is more convenient, less burdensome, or less expensive”). Plaintiffs represent that they are “aware of no means of obtaining the documents sought” concerning the MQA format beyond the proposed letters of request. (ECF 87 at 6; ECF 88 at 6.) Likewise, Defendants assert that they have “produced the very limited number of documents relating to the MQA format that they had within their possession, custody, or control (none of which addressed how MQA files are encoded or the format of MQA files ...).” (ECF 95 at 4.) At the hearing on the subject motions, Defendants indicated they do not dispute that the information sought is otherwise unavailable via Defendants. D *4 The Court now turns to the scope of the proposed requests and applies Rule 26, governing requests for the production of documents. See Fed. R. Civ. P. 26(b)(1); Min Shian Indus. Co., 2020 WL 2405274, at *2; Asis Internet Servs., 2007 WL 1880369, at *3. Plaintiffs seek to either obtain or inspect documents that they have grouped into seven bulleted categories in the proposed letters. (ECF 87-1 at 5–6; ECF 88-1 at 5–6.) Defendants object to the first bulleted request as overbroad in that it seeks information regarding all “parties licensed or approved to create and/or distribute MQA files,” pursuant to a 2017 agreement executed between Defendants and MQA. (ECF 87-1 at 5; ECF 88-1 at 5.) At the May 21st hearing, Defendants contended that the request should be limited to three identified streaming entities that actually create and distribute the MQA files. Plaintiffs confirmed, at that same hearing, that additional discussions between the parties have yielded these specific parties. The Court agrees that the request should be tailored to the three entities identified by Defendants. As to the second bulleted request,[2] concerning the MQA format and encoding, Defendants raised no written objection and further stipulated to the request in its current form at the May 21st hearing. (ECF 95 at 9.) The Court finds that the request seeks information about “nonprivileged matter[s] that [are] relevant to a[ ] party's claim or defense and [is] proportional to the needs of the case ....” Fed. R. Civ. P. 26(b)(1). The first amended complaint alleges that “the Accused Instrumentalities include, but are not limited to, computing devices and/or software that encode and/or distribute digital content in the MQA file format ....” (ECF 25 at 10.) In their Rule 26 initial disclosures, Defendants identified MQA as the entity having relevant knowledge of “[i]nformation regarding the MQA file format.” (ECF 94-4 at 5.) And Defendants concede that the format and encoding of MQA files is a “central” issue in this infringement action. (ECF 95 at 4–5.) Thus, the Court considers this request properly resolved by the parties' stipulation during the hearing. Defendants object to several unspecified requests as overbroad and “highly burdensome” in that they seek information from foreign third parties regarding other third parties not involved in this action. (ECF 95 at 9.) Defendants ostensibly refer to the inclusion of “WMG”[3] in the third, sixth, and seventh bulleted requests, which seek information about royalties paid to MQA related to the use of the MQA format; sales negotiations, sales, marketing, and training documents; and “[d]ocuments specifying any modification of MQA watermarking” since the 2017 agreement. (Id.; ECF 87-1 at 7–8; ECF 88-1 at 7–8.) At the hearing, Plaintiffs offered to narrow the scope of the requests to exclude all references to “and/or WMG.” The Court agrees that, under Rule 26, the requests are overbroad in this respect. Accordingly, all references to “and/or WMG” should be removed from the third, sixth, and seventh bulleted requests. (ECF 87-1 at 7–8; ECF 88-1 at 7–8.) *5 Regarding the fourth bulleted request, seeking documents “show[ing] the purchase amount and transfer of assets resulting from the purchase of MQA by [Lenbrook]” (ECF 87-1 at 7; ECF 88-1 at 7), Defendants object that the request seeks information that is not “necessary to [Plaintiffs'] claim for damages against Defendants.” (ECF 95 at 9 (emphasis in original).) At the hearing, Plaintiffs indicated that they had no independent need for this information, should Defendants elect not to introduce it at trial as a metric for damages. To the extent that Defendants seek to rely on such information, the Court agrees that it is also discoverable by Plaintiffs. The parties should meet and confer to determine the necessity of the request. Plaintiffs should not include it in the revised letters if Defendants affirm in writing that they will not rely on this category in the litigation. As to the fifth bulleted request, concerning the identification of “all importers, distributors, wholesalers, resellers, integrators, and third-party support organizations for digital content processed by MQA watermarking” (ECF 87-1 at 7; ECF 88-1 at 7), the Court understands, based on representations made at the May 21st hearing, that Plaintiffs are amenable to narrowing this request to the three streaming entities discussed above. The request should be so narrowed. IV The motions are GRANTED in PART. Within seven (7) days, Plaintiffs are ORDERED to submit revised letters of request that comply with this Order. The revised letters of request must be formatted pursuant to the Central District of California's filing procedures, see Letter Rogatory / Letter of Request for Judicial Assistance, available at http://www.cacd.uscourts.gov/court-procedures/filing-procedures/letters-rogatory, and, for the request to Canada, must reference the Canada Evidence Act and/or any other applicable Canada authority or rule of court. IT IS SO ORDERED. Footnotes [1] The Court relies on Plaintiffs' corrected submissions (ECF 87; ECF 88) for its analysis and notes that Plaintiffs originally filed the motions one day prior, on April 11, 2024 (ECF 85; ECF 86). [2] The full request reads: “Documents sufficient to show the design, structure, function, operation, and/or use of the MQA Watermarking, including technical specifications, functional specifications, design specifications, encoding specifications, watermarking specifications, key specifications, masking specifications, user materials, implementation materials, operations materials, and/or administrator's materials.” (ECF 87-1 at 5–6; ECF 88-1 at 5–6.) [3] At the May 21st hearing, Plaintiffs represented that “WMG” refers to Warner Music Group, a named defendant in a different action brought by Plaintiffs.