4:12-cv-11758-GAD-MKM Doc # 182 Filed 10/23/13 Pg 1 of 10 Pg ID 9343
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`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF MICHIGAN
`SOUTHERN DIVISION
`
`Civil Action No.12-cv-11758
`HONORABLE GERSHWIN A. DRAIN
`
`EVERLIGHT ELECTRONICS CO., LTD.,
`and EMCORE CORPORATION,
`
`Plaintiffs and
`Counter-Defendants,
`
`v.
`
`NICHIA CORPORATION, and
`NICHIA AMERICA CORPORATION,
`
`Defendants and
`Counter-plaintiffs,
`
`v.
`
`EVERLIGHT AMERICAS, INC.,
`
`Defendants.
`
`
`
`ORDER GRANTING EVERLIGHT’S EMERGENCY MOTION TO COMPEL THE
`PRODUCTION OF NON-PRIVILEGED DOCUMENTS [#152] AND GRANTING
`NICHIA’S EMERGENCY MOTION TO ENFORCE DOCKET 144 ORDER [#158]
`
`I.
`
`INTRODUCTION
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`This action between Everlight Electronics Co., Ltd. (“Everlight”) and Nichia Corporation
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`and Nichia America Corporation (collectively “Nichia”) concerns the parties’ claims and
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`counterclaims for patent infringement in the field of light emitting diode (“LED”) technology.
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`Presently before the Court are the following motions: (1) Everlight’s Emergency Motion to Compel
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`the Production of Non-Privileged Documents Needed for Inventor Depositions in Osaka, Japan and
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`(2) Nichia’s Emergency Motion to Enforce the Docket 144 Order and Everlight’s Representations
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`Made in Court.
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`These matters are fully briefed and a hearing was held on October 22, 2013. For the reasons
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`that follow, the Court GRANTS Everlight’s Emergency Motion to Compel the Production of Non-
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`Privileged Documents Needed for Inventor Depositions in Osaka, Japan and GRANTS Nichia’s
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`Emergency Motion to Enforce the Docket 144 Order and Everlight’s Representations Made in
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`Court.
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`II.
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`FACTUAL BACKGROUND1
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`This matter is currently in the discovery phase and discovery cutoff is November 15, 2013.
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`On August 27, 2013, this Court held a hearing on Nichia’s First Motion to Compel, which sought
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`a full production of documents responsive to Nichia’s Requests for Production (“RFP”) Nos. 25,
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`47-49, 53-54, 57, 77, 79-81, and 83-84. At the hearing, Everlight made several representations to
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`the Court concerning its production of documents as of that date, as well as claimed that additional
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`documents were forthcoming, specifically were to be produced by September 10, 2013. Relying on
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`these representations, the Court’s August 30, 2013 Order stated in relevant part:
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`Everlight has represented to the Court that it has provided Nichia with all responsive
`documents and any documents containing phosphor composition information are not
`in Everlight’s possession, custody or control.
`*
`*
`*
`[T]he Court will require Everlight’s counsel to prepare an affidavit declaring that
`Everlight has produced all responsive documents in its possession and identify what
`it has not produced because such documentary evidence is in the control of third
`parties.
`*
`*
`*
`Accordingly, for the foregoing reasons, Nichia’s Motion to Compel is denied.
`
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`Dkt. No. 144 at 8-9. On September 3, 2013, Nichia drafted an email to Everlight that outlined in
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`detail what was missing from Everlight’s document production with respect to RFP Nos. 25, 47-49,
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`1 The factual background giving rise to this action has been set forth in previous orders
`of this Court, therefore the Court will address only those facts pertinent to the pending motions.
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`53-54, 57, 77, 79-81, and 83-84. Nichia requested the Court ordered affidavit by September 9, 2013
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`
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`After several more communications from Nichia to Everlight, Everlight responded to Nichia
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`on September 9, 2013, discussing various documents it had already produced, including sales reports
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`for certain time periods, a number of bills of material documents relating to Everlight’s LED
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`products and documents concerning phosphor components in Everlight’s products. Everlight
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`promised to produce additional financial documents, bills of material (“BOM”) documents and
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`phosphor component data sheets by September 10, 2013. Lastly, Everlight stated that it “may make
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`additional productions to the extent it identifies additional information relating to the phosphor
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`components used in its LED products pursuant to a reasonable search.” See Nichia’s Mot., Ex. C
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`at 3-4.
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`After several more attempts by Nichia to ascertain whether Everlight’s document production
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`sufficiently responded to RFP Nos. 25, 47-49, 53-54, 57, 77, 79-81, and 83-84, Everlight finally
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`responded to Nichia on September 22, 2013 claiming to have produced all BOM documents in its
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`possession, custody or control relating to its LED products, and that after it produced a daily
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`financial report, it will have fully responded to Nichia’s request for worldwide sales information
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`concerning Everlight’s LED products. Everlight further claimed that after two relatively small
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`document productions, “we expect that Everlight will have produced all data sheets, and technical
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`information relating to phosphor components, phosphor compositions, and phosphor-based LED
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`products that Everlight designates as emitting white-colored light that are responsive to Nicha’s
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`requests and that Everlight has identified pursuant to a reasonable search.”
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`Contrary to Everlight’s representations, Nichia argues that Everlight has failed to fully
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`respond to its RFP Nos. 25, 47-49, 53-54, 57, 77, 79-81, and 83-84, contrary to its representations
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`to the Court. Nichia claims that it is still missing key technical information concerning Everlight’s
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`products, which is severely prejudicial to Nichia because it has been unable to take the depositions
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`of Everlight, third parties and pursue follow up discovery.
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`Additionally, the parties have recently returned from taking depositions in Osaka, Japan.
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`One of the deponents, Ichiro Matsushita, the former manager of Nichia’s patent department and the
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`current manager of its legal department, provided testimony that suggests Nichia has been
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`improperly withholding documents based on the attorney-client privilege. Specifically, Matsushita
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`testified that from 1992 through 1998, Nichia did not employ any lawyers or patent agents in its
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`patent department. Matsushita further testified that the Nichia employee responsible for drafting and
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`filing the priority applications that led to Nichia’s patents-in-suit was Hiroyuki Yamamoto, who is
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`not a lawyer. Therefore, in light of Matsushita’s testimony, Everlight maintains that Nichia has been
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`improperly withholding roughly 54 documents2 relating to the subject matter of this action.
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`III.
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`LAW & ANALYSIS
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`A.
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`Everlight’s Emergency Motion to Compel
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`Rule 26(b)(1) of the Federal Rules of Civil Procedure permits broad discovery on any matter
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`that is not privileged if it is reasonably calculated to lead to the discovery of admissible evidence.
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`Fed. R. Civ. P. 26(b)(1). The purpose of the attorney-client privilege “is to encourage full and
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`frank communication between attorneys and their clients and thereby promote broader public
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`interests in the observance of law and administration of justice.” Upjohn v. United States, 449 U.S.
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`383, 389 (1981). Therefore, communications that fall within the attorney-client privilege are
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`immune from discovery. Cuno, Inc. v. Pall Corp., 121 F.R.D. 198, 199 (E.D.N.Y. 1988). A party
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`2 Everlight originally argued that 75 documents were being improperly withheld,
`however Nichia has since provided some of the documents that were previously withheld based
`on the attorney-client privilege.
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`resisting discovery based on the attorney-client privilege has the burden of showing that the
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`privilege applies. See Cunningham v. Smithkline Beecham, 255 F.R.D. 474, 480 (N.D. Ind. 2009).
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`The Sixth Circuit Court of Appeals has established the following elements for evaluating
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`attorney-client privilege:
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`(1) Where legal advice of any kind is sought (2) from a professional legal advisor
`in his capacity as such, (3) the communications relating to that purpose, (4) made in
`confidence (5) by the client (6) are at his instance permanently protected (7) from
`disclosure by himself or by the legal advisor (8) except the protection be waived.
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`Humphreys, Hutcheson & Moseley v. Donovan, 755 F.2d 1211, 1219 (6th Cir. 1985). “Each
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`document in a privilege log should contain details including: date, author and all recipients of the
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`document, subject matter, and an explanation as to why the document should be privileged and not
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`produced in discovery. Clark Constr. Group, Inc. v. City of Memphis, No. 01-2780, 2005 U.S.
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`Dist. LEXIS 5559, *11 (W.D. Tenn. Feb. 9, 2005).
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`Nichia raises several arguments in support of its contention that Everlight’s present motion
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`should be denied. First, Nichia maintains that the instant motion should not have been brought
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`because, true to its word, Nichia undertook another investigation and promptly produced 6
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`documents previously withheld based on attorney-client privilege. Nichia also produced a
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`Supplemental Privilege Log. Nichia insists that the remaining withheld documents are subject to
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`privilege because they were requests for legal advice from Japanese patent agents, or benrishi.
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`While Nichia is correct that many courts across the country have concluded that
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`communications with Japanese benrishi may be withheld based on the attorney-client privilege,3
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`3 See Eisai Ltd. v. Reddy’s Labs., Inc., 406 F. Supp.2d 341, 342-43 (S.D.N.Y. 2005)
`(rejecting the defendant’s objections to the magistrate judge’s recommendation that “documents
`reflecting legal advice provided by Japanese benrishi or requests for such advice are privileged
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`Nichia’s supplemental privilege log does not contain sufficient information for this Court to
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`conclude that these documents have been properly withheld.
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`Everlight argues that Nichia continues to improperly withhold at least 54 documents that are
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`not protected by the attorney-client privilege. The supplemental privilege log listing these
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`communications does not indicate that any attorney or patent agent provided legal advice in
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`connection with these documents nor does it not contain sufficient information for this Court to
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`determine whether the subject documents are properly withheld on the basis of attorney-client
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`privilege. For instance, the document identified as PRIV-00968, authored by Hiroyuki Yamamoto,
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`is purportedly privileged based on the following explanation: “Draft of prosecution document with
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`hand-written revisions from Mr. Yamamoto for Japanese Patent No. 8-244339 attached to
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`privileged memorandum regarding filing.” See Everlight’s Reply, Ex. 11 at 1. The entry in the
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`privilege log fails to disclose the date this document was authored, nor does it identify the recipient
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`of the document. Thus, based on this description alone it would appear that this document was not
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`properly withheld as there is no indication that this document was prepared in anticipation of
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`litigation, nor that it was prepared for the purpose of obtaining legal advice from an attorney or
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`benrishi.
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`Conversely, Nichia maintains that many of the withheld documents consist of confidential
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`communications between employees of “Nichia’s IP department staff, Nichia’s outside benrishi
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`firms . . . and Nichia’s U.S. counsel, that contain or reflect requests for legal advice concerning
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`Nichia’s patent applications.” See Nicha’s Resp. at 4-5. However, Nichia cannot claim privilege
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`without identifying the benrishi firm from which the legal advice was sought. See Ypsilanti, 2009
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`and need not be produced.”); Knoll Pharms. Co. v. Teva Pharms. USA, Inc., No. 01-c-1646,
`2004 U.S. Dist. LEXIS 24057, *3 (N.D. Ill. Nov. 22, 2004).
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`U.S. Dist. LEXIS 99707, *11-12 (requiring a privilege log to “identify the parties to the
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`communication including carbon copies, by name, title and employer, identify the attorney(s) on the
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`communication, the purpose of the communication and whether or not it sought and/or conveyed
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`legal advice.”).
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`Thus, Nichia has failed in its burden to demonstrate that the attorney-client privilege applies
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`to the documents at issue. The 54 documents that are listed in exhibit 11 to Everlight’s Reply Brief
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`have been improperly withheld as the attorney-client privilege does not extend to the non-lawyers
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`working in Nichia’s patent department. Accordingly, Everlight’s Emergency Motion to Compel the
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`Production of Non-Privileged Documents Needed for Inventor Depositions in Osaka, Japan is
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`GRANTED. Nichia shall produce the subject documents within ten days from the date of this Order.
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`B.
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`Nichia’s Emergency Motion to Enforce the Docket 144 Order and Everlight’s
`Representations Made in Court
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`In the present motion, Nichia argues that Everlight has failed to produce the documents it
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`represented it would produce to the Court during the August 27, 2013 hearing on Nicha’s First
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`Motion to Compel. Nichia is still missing key discovery such as phosphor identification,
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`composition, distribution and manufacturing procedures for many of Everlight’s products.
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`Moreover, testimony from one of Everlight’s witnesses suggests that Everlight has been less than
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`candid concerning its possession of phosphor composition information. Mars Kang, Deputy
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`Manager of Everlight’s Material Chip and Backlight Components Technology Department, testified
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`that Everlight receives this information from its suppliers and tests the phosphors it purchases.
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`Everlight has not produced any documents reflecting this testing.
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`Further, attached to Nichia’s Reply Brief is the declaration of Margareta K. Sorenson, an
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`associate at Foley & Lardner, LLP in Washington, D.C., who delineates the key technical
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`information that Everlight has yet to produce. See Nichia’s Reply, Ex. A. Sorenson also explains
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`that Everlight’s “production has been artificially inflated by including highly redundant and
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`duplicate information, as well as a substantial volume of irrelevant and incomprehensible
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`documents. This serves to artificially inflate the volume of production, while simultaneously burying
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`relevant information, and wasting Nichia’s resources on unnecessary review.” Id. For example, the
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`BOM documents have either not been produced for a significant number of the Accused Products
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`or they are redundant with respect to certain products. Further, with respect to the BOM documents,
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`they do not provide adequate information because they either do not list the product at issue, or list
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`the product but not its components, or lists both product and some component information without
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`any phosphor information.
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`Additionally, Everlight maintains detailed manufacturing protocols for each product, entitled
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`“Specification of Process” (“SOP”) documents. However, Everlight has not produced SOP
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`documents for a significant number of Accused Products, and the SOP documents that have been
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`produced do not adequately describe each step in the manufacturing process. Rather, the SOPs
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`simply refer to another document, which has not been similarly produced. Because of Everlight’s
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`insufficient document production, Nichia has been severely prejudiced because it is still missing
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`key technical information for a number of the Accused Products identified in Everlight’s
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`Supplemental Response to Nichia’s Interrogatory No. 1.
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`Conversely, Everlight maintains that Nichia is attempting to discredit Everlight’s extensive
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`document production, which consists of roughly one million pages worth of responsive information.
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`Everlight also argues that the Court should reject Nichia’s demand for an affidavit because preparing
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`an affidavit at this juncture would be premature given the status of fact discovery.
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`Everlight further argues that it has produced what it has been able to identify pursuant to a
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`reasonable search, therefore Nichia’s motion should be denied and its requests for fees and costs
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`should likewise be denied. Everlight’s arguments are wholly unavailing. On August 27, 2013,
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`Everlight represented to this Court that it was “prepared to produce the bills of materials that
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`Everlight has within its possession, custody or control with respect to the phosphor-based products
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`at issue . . . in two weeks . . . .” See Nichia’s Mot., Ex. A at 31-32. However, Everlight has yet to
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`make a complete production of the BOM documents and represented during the hearing on October
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`22, 2013, that it was still investigating whether it has BOM and SOP documents in its possession
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`that are responsive to Nichia’s First Request for Production of Documents. It is unacceptable that
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`Nichia has yet to receive key information concerning the Accused Products, particularly in light of
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`the fact that Everlight has not yet produced the court ordered affidavit and discovery is set to expire
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`in less than thirty days.
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`Lastly, Everlight’s reason for failing to comply with this Court’s August 30, 2013 Order
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`lacks merit. The Court’s August 30, 2013 Order required Everlight to provide an affidavit
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`concerning its production with respect to the documents sought by Nichia in its First Motion to
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`Compel. The fact that Nichia has served additional requests for production has no bearing on
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`Everlight’s ability to prepare an affidavit concerning its production with respect to the documents
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`at issue in Nichia’s First Motion to Compel. Accordingly, Everlight shall produce documents
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`responsive to Nichia’s RFP Nos. 25, 47-49, 53-54, 57, 77, 79-81, and 83-84 within ten day from the
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`date of this Order. Everlight’s production shall remedy the deficiencies identified by Nichia’s
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`counsel in her September 4, 2013 email correspondence to Everlight, as well as any additional
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`deficiencies that are identified in Sorenson’s affidavit. Everlight shall also serve its affidavit within
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`ten days of this Order. The affidavit shall identify the documents that have not been produced
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`because they are not within Everlight’s possession, custody or control.
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`IV.
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`CONCLUSION
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`For the foregoing reasons, Everlight’s Emergency Motion to Compel the Production of Non-
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`Privileged Documents Needed for Inventor Depositions in Osaka, Japan [#152] is GRANTED.
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`Nichia’s Emergency Motion to Enforce the Docket 144 Order and Everlight’s
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`Representations Made in Court [#158] is GRANTED.
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`Both parties shall produce the discovery that is the subject of this Order within ten days from
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`the date of this Order. Everlight shall also prepare an affidavit consistent with this Order within ten
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`days from the date of this Order.
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`Any violation of this Order will result in the imposition of a $5,000.00 sanction award
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`against the disobedient party.
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`SO ORDERED.
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`Dated: October 23, 2013
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`/s/Gershwin A Drain
`GERSHWIN A. DRAIN
`UNITED STATES DISTRICT JUDGE
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`-10-