Case 2:14-cv-00111-AJS Document 106 Filed 11/03/14 Page 1 of 25
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF PENNSYLVANIA
`DRONE TECHNOLOGIES, INC.,
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`14cv0111
`ELECTRONICALLY FILED
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`Plaintiff,
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`v.
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`PARROT S.A., PARROT, INC.,
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`Defendants.
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`MEMORANDUM OPINION RE: PLAINTIFF’S MOTION FOR ORDER TO
`SHOW CAUSE WHY DEFENDANTS SHOULD NOT BE HELD IN CONTEMPT
`(DOC. NO. 78)
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`Defendants, through their counsel,1 have engaged in a systematic campaign to willfully
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`defy this Court’s Orders, prevent Plaintiff from receiving evidence necessary to develop its case-
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`in-chief on infringement, delay the prosecution of this case, and substantially increase the costs,
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`efforts, and time expended by Plaintiff to complete discovery and prepare for trial on liability
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`issues. Defendants’ legal and factual positions as to whether they have complied with the
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`Court’s Orders, or why they have not complied, are ever-changing, inconsistent, and appear to be
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`designed to thwart justice in this case.2 Defendants’ continual motions practice, lack of candor
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`1 This comment does not apply to Defendants’ well-respected local Pittsburgh counsel because it
`appears to this Court (from the briefing and hearings) that Defendants’ in-house counsel (“Head
`of Legal”) from France and chief trial counsel from Texas are directing and controlling the
`litigation strategy and tactics.
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`2 The factual determinations contained within this Memorandum Opinion are based upon the
`Court’s review of the filings in this case, witness testimony received during the hearing on
`Plaintiff’s Motion to Show Cause Why Defendants Should Not be Held in Contempt, and oral
`argument during the same. Witness testimony has been weighed by the Court based upon its
`ability to judge the credibility of the witnesses and the weight their testimony deserves. These
`determinations have been guided by the appearance and conduct of the witnesses, the manner in
`which they testified, the character of the testimony given, and by evidence or testimony to the
`contrary.
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`Case 2:14-cv-00111-AJS Document 106 Filed 11/03/14 Page 2 of 25
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`with the Court, and other conduct, has effectively impeded “the just, speedy, and inexpensive
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`determination [of this] action . . . .” Fed.R.Civ.P. 1.
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`I. Introduction
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`The proceedings in this case have been fraught with disagreements over the most basic
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`disclosure and discovery matters. In just over nine (9) months, the Court has had to intervene
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`because of disputes related to initial disclosures, Alternative Dispute Resolution (“ADR”), and
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`depositions, among other routine matters. The most persistent dispute between the Parties relates
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`to the scope and the method of production of Court-ordered initial disclosures. Defendants have
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`been required to produce specific information as part of their initial disclosures, as ordered by
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`this Court and in compliance with the Local Patent Rules of this District Court, since July 9,
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`2014. Doc. No. 48. After numerous unsuccessful attempts to evade this obligation through
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`motions practice, and over four months later, Defendants still have not complied with this
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`Court’s Orders.
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`The Parties have filed almost a dozen Motions related to standard pre-trial proceedings,
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`and the Court has ruled accordingly:
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` Defendants’ Motion to Stay Pending Inter Partes Review (May 7, 2014, Doc. No.
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`17);
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` Which was denied by this Court on May 19, 2014 (Doc. No. 29);
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` Defendants’ Motion for Clarification of the Protective Order to Include a Limited
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`Patent Prosecution Bar (May 27, 2014, Doc. No. 35);
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` Which was denied by this Court on May 30, 2014 (05/30/14 Text Order);
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` Defendants’ Motion to Bifurcate Discovery and Trial (June 27, 2014, Doc. No.
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`44);
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` Which was denied by this Court on July 9, 2014 (07/09/14 Text Order);
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`Case 2:14-cv-00111-AJS Document 106 Filed 11/03/14 Page 3 of 25
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` Plaintiff’s Motion to Compel Initial Disclosure Documents (June 19, 2014, Doc.
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`No. 41);
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` Which was granted by this Court on July 1, 2014: Defendants were ordered to
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`comply on or before July 9, 2014 (Doc. No. 48);
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` Plaintiff’s Motion to Compel Attendance at the ADR [Session] of a Decision
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`Maker Who Has Full Settlement Authority (July 1, 2014, Doc. No. 49);
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` Which was denied by this Court on July 8, 2014 (Doc. No. 54);
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` Defendants’ Emergency Motion for Reconsideration of this Court’s July 1, 2014
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`Order (July 3, 2014, Doc. No. 51);
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` Which was denied by this Court on July 8, 2014 (07/08/2014 Text Order);
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` Defendants’ Motion to Compel the Deposition of Mr. Bruce Ding (July 8, 2014,
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`Doc. No. 57);
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` Which was denied by this Court on July 9, 2014 (07/09/14 Text Order);
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` Plaintiff’s Motion to Compel Defendants to Obey this Court’s July 1, 2014 Order
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`(July 22, 2014, Doc. No. 61);
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` Which was granted by this Court on July 25, 2014: Defendants were given until
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`August 13, 2014, to comply with the July 1, 2014 Order (Doc. No. 63);
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` Defendants’ Emergency Motion to Modify the Protective Order (August 1, 2014,
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`Doc. No. 64);
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` Which was denied by this Court (August 7, 2014, Doc. No. 70);
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` Defendants’ Motion to Compel the 30(B)(6) Deposition of Drone Technologies,
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`Inc. and the Depositions of Mr. Bruce Ding and Ms. Diane Lee (August 11, 2014,
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`Doc. No. 72);
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` Which was granted in part and denied in part by this Court on August 19, 2014
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`(Doc. No. 81);
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` Defendants’ Motion for Relief from the Court’s Order Dated July 25, 2014, or in
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`the Alternative, for a Stay Pending a Petition for Writ of Mandamus (August 13,
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`2014, Doc. No. 74); and
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` Which was denied by this Court (August 14, 2014, Doc. No. 77).
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`Case 2:14-cv-00111-AJS Document 106 Filed 11/03/14 Page 4 of 25
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` Presently before this Court is Plaintiff’s Motion for Order to Show Cause Why
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`Defendants Should Not be Held in Contempt. Doc. No. 78. A hearing was held on October 23,
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`2014. Doc. No. 99. Karin Wittkotter, Parrot SA’s Head of Legal, and Francois Callou, a Drone
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`Project Manager at Parrot SA, testified during this hearing. Doc. No. 99.
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`II. Background of the Western District of Pennsylvania’s Participation in the
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`Patent Pilot Program and Local Patent Rule 3.1
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`A. Patent Pilot Program
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`The United States District Court for the Western District of Pennsylvania enacted Local
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`Patent Rules, which took effect on April 1, 2005, and have been applied to any “civil action in
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`which the infringement, validity or enforceability of a utility patent is an issue . . . .” LPR 1.4.
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`This District is one of the 14 United States District Courts that have been chosen to participate in
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`a 10-year patent cases pilot program designed “to encourage enhancement of expertise in patent
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`cases among district judges.” Pub.L.No. 111-349- Jan. 4, 2011, 124 Stat. 3674, 28 U.S.C. § 137.
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`In January, 2011, the Honorable Gary L. Lancaster, former Chief Judge of the Western District
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`of Pennsylvania, appointed himself, the Honorable Joy Flowers Conti (now Chief Judge of the
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`United States District Court for the Western District of Pennsylvania), the Honorable Nora Barry
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`Fischer, and this Court, as “Designated Patent Judges” to hear cases arising under any Act of
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`Congress relating to patents. In re: Implementation of Patent Pilot Program, Misc. No. 11-
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`00283, Oct. 12, 2011. Since that time, the Honorable Cathy Bissoon and the Honorable Mark R.
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`Hornak have also been designated as Patent Judges for the Western District of Pennsylvania.
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`Case 2:14-cv-00111-AJS Document 106 Filed 11/03/14 Page 5 of 25
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`B. Local Patent Rule 3.1
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`The United States District Court for the Western District of Pennsylvania’s Local Patent
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`Rules apply to all patent cases pending before this Court, and are promulgated as authorized by,
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`and subject to, the limitations of Federal Rule of Civil Procedure 83. LPR 1.1.
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`Rule 3.1 of the Local Patent Rules governs initial disclosures and provides, in
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`relevant part, that:
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`No later than fourteen (14) days before the Initial Scheduling Conference, the
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`parties shall exchange the initial disclosures required by Fed.R.Civ.P. 26(a)(1)
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`(“Initial Disclosures”).
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`*
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`*
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`*
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`With the Initial Disclosures of the party opposing a claim of patent
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`infringement, such party shall produce or make available for inspection
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`and copying, among other items:
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`Source code, specifications, schematics, flow charts, artwork, formulas,
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`drawings or other documentation, including sales literature, sufficient to
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`show the operation of any aspects or elements of each accused apparatus,
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`product, device, process, method or other instrumentality identified in the
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`claims pled of the party asserting patent infringement; and
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`A copy of each item of prior art, of which the opposing party is aware, that
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`allegedly anticipates each asserted patent and its related claims or renders
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`them obvious. (emphasis added.)
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`C. Standard Patent Protective Order
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`This District’s Local Patent Rules also provide for a standard protective order that
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`governs the exchange of information that the parties believe are “Confidential Information” or
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`Case 2:14-cv-00111-AJS Document 106 Filed 11/03/14 Page 6 of 25
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`“Confidential Attorney Eyes Only.” Appendix LPR 2.2. The Standard Patent Protective Order
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`sets forth procedures designed to ensure that confidential information and attorney work product
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`is protected and only accessed by the appropriate individuals. Id. Specifically, the Order
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`provides that “information designated as Confidential Information or Confidential Attorney Eyes
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`Only Information may only be used for purposes of preparation, trial and appeal of this action
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`and . . . may not be used under any circumstances for prosecuting any patent application, for
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`patent licensing or for any other purpose.” Id. at ¶ 6. In essence, the Standard Patent Protective
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`Order provides for the designation and maintenance of information, who may access confidential
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`information and/or attorney work product, the disclosure and use of confidential information, and
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`available remedies for violations of the Protective Order. Appendix LPR 2.2.
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`The Parties in this case utilized the Standard Patent Protective Order.
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`III. Procedural Posture
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`This case centers on the alleged infringement of two United States Patents (United States
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`Patent Nos. 7,584,071 (“the ‘071 patent”) and 8,106,748 (“the ‘748 patent”)). Doc. No. 1.
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`These patents relate to remote control systems, which consist of a remote controller and a
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`remote-controlled device such as a remote-controlled toy airplane or helicopter. Id. at ¶ 11.
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`Plaintiff, a Taiwanese company, alleges that Defendants, a French public limited company and a
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`related New York corporation, have sold and/or imported the Parrot AR.Drone and the Parrot
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`AR.Drone 2.0 (“the Parrot drones”) in the United States. Id. at ¶¶ 5-6, 14, 16. The Drones are
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`controlled by software applications for Android and Apple devices. Id. Plaintiff contends that
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`the use of the Parrot Drones in the United States of America infringes the ‘071 and ‘748 patents.
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`Id. at ¶¶ 30-39.
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`Case 2:14-cv-00111-AJS Document 106 Filed 11/03/14 Page 7 of 25
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`On May 7, 2014, Defendants filed a Motion to Stay Pending Inter Partes Review, in
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`which they moved this Court to stay this litigation pending the outcome of an Inter Partes review
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`of the relevant patents by the United States Patent and Trademark Office. Doc. No. 17.
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`Defendants alternatively moved this Court to transfer the case to the United States District Court
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`for the Eastern District of Michigan. Id. Plaintiff opposed this Motion in its entirety. Doc. No.
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`23. This Court denied Defendants’ Motion to stay due to pending proceedings before the United
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`States Patent and Trademark Office. Doc. No. 29. The Court also found that Defendants had not
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`presented a compelling reason to disturb Plaintiff’s choice of venue and denied Defendants’
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`alternative request for relief. Id.
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`In late May, 2014, Defendants filed a Motion to Clarify the Protective Order to Include a
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`Limited Prosecution Bar. Doc. No. 35. Defendants argued in their Motion that they would “be
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`required to produce extremely sensitive documents relating to the control systems for Parrot’s
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`accused AR.Drone products no later than June 11, 2014.” Doc. No. 36, 3. Defendants moved
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`this Court to order that trial counsel for Plaintiff, who received confidential technical information
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`from Defendants in this litigation, be barred from directly or indirectly assisting administrative
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`counsel for Plaintiff in the Inter Partes Review before the United States Patent and Trademark
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`Office. Doc. No. 36. Plaintiff opposed this Motion. Doc. No. 37. This Court denied
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`Defendants’ Motion. 05/30/14 Text Order.3
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`On June 19, 2014, Plaintiff filed a Motion to Compel Initial Disclosure Documents, in
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`which Plaintiff moved this Court to order Defendants to produce:
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`3 To grant Defendants’ Motion would have greatly increased the expense of this case to Plaintiff
`and substantially delayed the prosecution of this case because Plaintiff would have been required
`to retain new and additional patent attorneys.
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`Case 2:14-cv-00111-AJS Document 106 Filed 11/03/14 Page 8 of 25
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` [A]ll source code, specifications, schematics, flow charts, or other
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`technical documentation relating to the operation of the accused products
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`(Parrot’s AR.Drone, AR.Drone 2.0, MiniDrone, and Bebop Drone) and
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`any associated remote-controller software applications, including all
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`versions and drafts of Defendants’ FreeFlight software app.
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`Doc. No. 41-4. Defendants opposed this Motion and contended that the requested disclosures
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`are not relevant to Plaintiff’s claims and are not required under the United States District Court
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`for the Western District of Pennsylvania’s Local Patent Rule 3.1. Doc. No. 43. Defendants
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`posited that Plaintiff’s purpose in filing the Motion to Compel was to stall the litigation. Id. at 6.
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`The Court granted Plaintiff’s Motion to Compel on July 1, 2014, finding that the initial
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`disclosures shall cover the AR.Drone, AR.Drone 2.0, the MiniDrone, and Bebop Drone. Doc.
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`No. 48. The Court ordered Defendants to “produce” the documents (not merely “make
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`available”) by July 9, 2014. Id.
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`Two days later, Defendants filed an Emergency Motion for Reconsideration of this
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`Court’s July 1, 2014 Order, presumably because they understood that “production” of
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`information relating to the MiniDrone and Bebop Drones was required, as well as to the
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`AR.Drone and AR.Drone 2.0, rather than simply making the information “available.” Doc. No.
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`51. Defendants moved this Court to modify its July 1, 2014 Order as to both: (1) the
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`methodology of production - - to allow Defendants to make source code available for inspection
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`under Federal Rule of Civil Procedure 34 with “adequate protections” under Federal Rule of
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`Civil Procedure 26(b)(2) and (c), and produce electronically stored technical documents on a
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`rolling basis beginning on July 9, 2014, and (2) the scope of production - - to order that
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`Defendants were not required to produce documents with respect to the “MiniDrone” or “Bebop
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`Drone.” Doc. No. 51, 1. The Court denied this Motion. 07/08/2014 Text Order. Therefore,
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`Case 2:14-cv-00111-AJS Document 106 Filed 11/03/14 Page 9 of 25
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`Defendants remained obliged to comply with the Order of Court on Plaintiff’s Motion to Compel
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`of July 1, 2014, by “produc[ing] all source code, specifications, schematics, flow charts, or other
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`technical documentation relating to the operation of the accused products (Parrot’s AR.Drone,
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`AR.Drone 2.0, MiniDrone, and Bebop Drone),” by July 9, 2014. Doc. No. 48.
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`On July 22, 2014, Plaintiff filed a Motion to Compel Defendants to Obey this Court’s
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`July 1, 2014 Order. Doc. No. 61. Plaintiff moved this Court to order Defendants to comply with
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`the Court’s previous Order requiring “produc[tion]” of specified information. Id. In response,
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`Defendants contended that they “ha[d] produced, or [were] producing imminently, all of the
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`documents necessary to comply with the Court’s July 1 Order and more.” Doc. No. 62, 1. On
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`July 25, 2014, the Court entered an Order requiring Defendants to fully comply with the Court’s
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`Order and extended the deadline for their compliance to on or before August 13, 2014. Doc. No.
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`63. The Court noted that it appeared “that Defendants simply ignored this Court’s Order and
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`have continued to refuse to provide documents to Plaintiff on the Court-ordered schedule.” Id.
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`at 2 (emphasis added). The Court also ordered that an officer or director of Defendant file a
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`written confirmation, under oath and penalty of perjury, that Defendants have fully complied
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`with the July 1, 2014, Order on or before August 15, 2014. Id. The Court ordered that “[i]f
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`Defendants again fail to comply, Plaintiff shall file a Motion to Show Cause why Defendants
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`Should Not be Held in Contempt, and the Court will promptly schedule a hearing thereon.” Id.
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`Seven days later, on August 1, 2014, Defendants filed an Emergency Motion to Modify
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`the Protective Order. Doc. No. 64. Defendants moved the Court to modify the Standard Patent
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`Protective Order to include additional safeguards to protect against unauthorized use of its source
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`code. Id. Specifically, Defendants sought to restrict (and possibly track) counsel for Plaintiff’s
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`access to the “source code material” to “stand-alone computer(s),” located in the office of
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`Case 2:14-cv-00111-AJS Document 106 Filed 11/03/14 Page 10 of 25
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`Defendants’ “outside counsel” between 9:00a.m. and 6:00p.m (unless Plaintiff provided notice of
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`need for documents outside of these times “not less than three (3) business days in advance”), or
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`through a “secure connection.” Doc. No. 64-1. Defendants’ proposed method included the
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`provision that Plaintiff would be unable to make any copies without Defendants’ permission or
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`as the Court ordered. Id. at ¶¶ 10-11. Plaintiff opposed this Motion. Doc. No. 67. The Court
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`found that Defendants’ Motion appeared to be “be based upon Defense Counsel’s belief that
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`Plaintiff’s counsel are incapable of completing routine discovery or conducting themselves in
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`accordance with the confidentiality and other provisions designed to protect both parties during
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`the process.” Doc. No. 70, 1. The Court denied Defendants’ Motion and found that it was
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`“another attempt to have the Court reconsider its prior Orders on discovery and/or add additional
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`burdens to Plaintiff during discovery.” Id. The Court noted that all previous Orders remained in
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`effect, including the Order that Defendants fully comply by August 13, 2014. Id. at 2.
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`On August 13, 2014, the day Defendants were required to comply with this Court’s
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`Orders, Defendants filed a Motion for Relief from this Court’s Order Dated July 25, 2014, or in
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`the Alternative, for a Stay Pending a Petition for Writ of Mandamus. Doc. No. 74. A
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`Declaration of Francois Callou, a Project Manager of Defendant Parrot S.A., was attached to the
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`brief in support of this Motion. Doc. No. 75-1. Defendants contended that they were now “able
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`to comply with the Court’s July 25 Order in large part to the extent that Parrot has produced
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`nearly 80,000 documents (nearly 1 million pages) and is in the process of producing an
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`additional 500GB of data relating to the Accused Products,” but Defendants sought “to be
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`excused from complying with the Court’s July 25 Order in its entirety, because such compliance
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`would cause extreme prejudice to [Defendants] and would amount to a fundamental miscarriage
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`of justice.” Doc. No. 75, 1-2. These statements evidence Defendants’ belief that they were not
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`Case 2:14-cv-00111-AJS Document 106 Filed 11/03/14 Page 11 of 25
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`in compliance with the Orders of Court. On August 14, 2014, this Court denied Defendants’
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`Emergency Motion, finding that although the Court is “sensitive to Defendants’ desire to protect
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`confidential information,” Defendants’ proposed modification “may permit Defendants to have a
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`window into Plaintiff’s discovery and trial strategies.” Doc. No. 77, 3-4.
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`To date, Defendants have not filed a “written confirmation” by an officer or director of
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`the companies that they have fully complied with the Court’s Order of July 1, 2014, as required.
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`On August 18, 2014, Plaintiff filed a Motion for Order to Show Cause Why Defendants
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`Should Not be Held in Contempt. Doc. No. 78. The Court ordered briefing from the Parties and
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`scheduled a Contempt Hearing for September 18, 2014. 08/19/14 Text Order. The hearing was
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`rescheduled by the Court to October 23, 2014. 08/28/14 Text Order.
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`On September 24, 2014, Defendants filed two (2) Petitions for Writ of Mandamus in the
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`United States Court of Appeals for the Federal Circuit. In re: Parrot S.A., 14-156, 14-157.
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`Defendants contend that Writs of Mandamus should issue because: (1) this Court exceeded its
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`authority by compelling Defendants to produce confidential source code without a showing of
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`relevance and without adequate protections; and (2) this Court abused its discretion by refusing
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`to grant Defendants’ Motion to Transfer this case to the United States District Court for the
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`Eastern District of Michigan. Id.
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`The October 23, 2014, Evidentiary Hearing on Plaintiff’s Motion to Show Cause
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`consisted of the direct and cross-examination Karin Wittkotter and Francois Callou and argument
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`from Plaintiff’s Counsel and Defendants’ Counsel as to whether Defendants are in compliance
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`with Orders of Court, and if not, what sanctions would be appropriate. Following the hearing,
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`the Court ordered the Parties to file a brief, not to exceed 15 pages, on the applicability of the
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`Case 2:14-cv-00111-AJS Document 106 Filed 11/03/14 Page 12 of 25
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`Poulis factors, and a brief, not to exceed 10 pages, on specific sanctions. Doc. No. 99. The
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`Court has received and reviewed the Parties’ briefs. Doc. Nos. 102-105.
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`On October 28, 2014, the United States Patent and Trademark Office Patent Trials and
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`Appeals Board issued institutional decisions in both inter partes review proceedings. The Board
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`ordered the institution of inter partes review as to all claims in both patents based on
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`obviousness or anticipation over prior art. IPR2014-00730, Paper No. 8, 2; IPR2014-0732,
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`Paper No. 8, 2.
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`IV. Standard of Review
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`Federal Rule of Civil Procedure 37(b)(2)(A) provides that a party may seek sanctions in
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`the District where an action is pending if a party or the party’s officer, director, or managing
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`agent fails to obey an order to provide or permit discovery. The Rule specifies that the Court
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`may issue “further just orders” including:
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`(i)
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`directing that the matters embraced in the order or other designated facts
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`be taken as established for purposes of the action, as the prevailing party
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`claims;
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`(ii)
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`prohibiting the disobedient party from supporting or opposing designated
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`claims or defenses, or from introducing designated matters in evidence;
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`(iii)
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`(iv)
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`(v)
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`(vi)
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`striking pleadings in whole or in part;
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`staying further proceedings until the order is obeyed;
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`dismissing the action in whole or in part;
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`rendering a default judgment against the disobedient party; or
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`(vii)
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`treating as contempt of court the failure to obey any order except an order
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`to submit to a physical or mental examination.
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`Fed.R.Civ.P. 37(b)(2)(A)(i)-(vii).
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`The United States Court of Appeals for the Third Circuit has enumerated the factors to be
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`balanced by a District Court when assessing the propriety of sanctions. Namely: (1) the extent
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`Case 2:14-cv-00111-AJS Document 106 Filed 11/03/14 Page 13 of 25
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`of the party’s personal responsibility; (2) the prejudice to the adversary caused by the failure to
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`meet scheduling orders and respond to discovery; (3) a history of dilatoriness; (4) whether the
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`conduct of the party or the attorney was willful or in bad faith; (5) the effectiveness of sanctions
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`other than dismissal, which entails an analysis of alternative sanctions; and (6) the
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`meritoriousness of the claim or defense. Poulis v. State Farm Fire & Cas. Co., 747 F.2d 863,
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`868 (3d Cir. 1984). It is not necessary that all of the Poulis factors be met in order to impose
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`sanctions, including default judgment. Mindek v. Rigatti, 964 F.2d 1369, 1373 (3d Cir. 1992).
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`V. Discussion
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`Plaintiff has filed a Motion to Show Cause why Defendants Should Not be Held in
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`Contempt because of Defendants’ persistent refusal to comply with this Court’s July 1, 2014
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`Order. Doc. No. 78. Defendants’ defiance of their Court-ordered discovery obligation continues
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`to this day, over four months after the Court first ordered Defendants to produce specific
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`information. Plaintiff contends that unless this Court finds Defendants in contempt and imposes
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`sanctions, it “will be forced to prosecute this case without Defendants’ fundamental initial
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`disclosure documents required under the Local Patent Rules and this Court’s Orders.” Doc. No.
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`79, 2. Plaintiff posits that the “most severe in the spectrum of sanctions” must be seriously
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`considered to penalize Defendants and to deter others who might be tempted to take similar
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`action in future cases. Id. (citing National Hockey League v. Metropolitan Hockey Club, Inc.,
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`427 U.S. 639, 642-43 (1976) and Mindek, 964 F.2d at 1374).
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`Defendants’ refusal to produce discovery, to which this Court has found that Plaintiff is
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`entitled, has impeded the just, speedy, and inexpensive determination of this matter in
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`contradiction of the Federal Rules of Civil Procedure. Although Defendants have argued that
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`Plaintiff seeks to stall proceedings, Defendants’ own actions have inhibited Plaintiff’s
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`Case 2:14-cv-00111-AJS Document 106 Filed 11/03/14 Page 14 of 25
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`prosecution of this case. Defendants’ refusal to accept that the Parties’ dispute will be
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`adjudicated by this Court based upon discovery the Court has ordered be produced (not materials
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`Defendants believe to be relevant), has caused needless motion practice, extensive Court
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`involvement, and has distracted from the core of this patent litigation. Doc. No. 43, 6. If
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`Defendants were really “eager to resolve this case promptly and on the merits,” as they argue,
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`they would have complied with the Court’s repeated Orders to come into compliance with their
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`discovery obligations. Defendants’ willful failure to do so leads this Court to the inevitable
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`conclusion that Defendants seek to delay and impede this litigation. Defendants’ obstructionist
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`actions cannot be allowed to continue and merit severe sanctions.
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`1. Defendants’ Personal Responsibility
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`The Court has endeavored to provide the litigants with a process that will allow for a just,
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`fair, and expeditious resolution of their disputes, in line with the Court’s inherent authority to
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`manage its docket. However, Defendants have proactively and steadfastly refused to comply
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`with Orders of Court, which has resulted in extensive motions practice and repeated Court
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`involvement over what should be routine discovery matters. Defendants contend that they
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`“accept[] full responsibility for [their] actions.” Doc. No. 104, 8.
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`Defendants were first ordered to produce initial disclosures on July 1, 2014. Doc. No. 48.
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`Karin Wittkotter, who is in charge of this litigation, testified that she understood that “the
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`Court’s July 1 Order required Parrot to produce, among other things, all source code for Parrot’s
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`AR Drone, AR Drone 2.0, MiniDrone, and Bebop Drone, even if [Defendants] did not agree with
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`Case 2:14-cv-00111-AJS Document 106 Filed 11/03/14 Page 15 of 25
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`it.” Transcript, pg. 19, lines 20-24.4 The Court’s Order on Plaintiff’s Motion to Compel Initial
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`Disclosures specified that Defendants “produce” the specified information. Doc. No. 48. The
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`plain meaning of this Order is that Defendants were required to “produce” the information, rather
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`than “make available for inspection and copying.” As stated above, Defendants understood this
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`“production” requirement, as was made clear in their Emergency Motion to Modify the
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`Protective Order. Doc. No. 64. If the Court had intended to permit Defendants to have the
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`option to either produce the information or allow access to it, the Order would have included
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`either option in its Order. It did not.
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`Despite the Court’s Order, Defendants chose “to offer an access to the source code, but
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`not to provide a copy of the source code . . . .” Transcript, pg. 24, lines 18-19. Defendants
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`testified that they understood that the Court rejected Defendants’ argument that they should be
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`permitted to provide Plaintiff with access to information, rather than producing the information.
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`Thus, Defendants were aware that providing access to information on their terms, rather than
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`actually producing the same, would not comply with the Court’s Orders. Transcript, pg. 26, lines
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`15-19. Wittkotter testified that Defendants will not produce source code (as ordered by a Court
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`of the “first degree”) until a “further jurisdiction” compels them to do so. Id. at pg. 28, lines 1-6.
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`As previously stated, Defendants have still not produced a digital source code as ordered.
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`Transcript, pg. 104, lines 22-25. Defendants chose not to produce all of the source code required
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`and instead have stated that they will comply with the Orders of Court when, and only if,
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`Defendants are “sure” that they “will really be forced to do that”; presumably after the United
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`4 Wittkotter testified that she is akin to a solicitor and serves as “Head of Legal” at Parrot SA.
`Transcript, pg. 13, lines 12-16. As such, she is “in charge of legal matters of the company []
`inside.” Id. at lines 19-20.
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`Case 2:14-cv-00111-AJS Document 106 Filed 11/03/14 Page 16 of 25
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`States Court of Appeals for the Federal Circuit (a court of the “second degree”) issues its ruling
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`on the pending Motions for Petitions for Writs of Mandamus. Transcript, pg. 35, lines 24-25.
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`Thus, the Court finds that Defendants are personally involved in the decision to not
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`produce required initial disclosures and, therefore, are responsible for their failure to comply
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`with this Court’s discovery Orders.
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`2. Prejudice Caused to Plaintiff by Defendants’ Failure to Comply with this
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`Court’s Orders
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`Defendants’ refusal to comply with these Orders of Court has:
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` prevented Plaintiff from reviewing the information prior to the October
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`24, 2014, claim construction hearing;
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` caused Plaintiff to expend substantial funds, time, and energy on Motions
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`to Compel and responses in opposition to Defendants’ Motions on settled
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`discovery issues; and
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`
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`inhibited Plaintiff’s ability to prepare this case for trial.
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`Plaintiff is no closer to obtaining complete initial disclosures today than it was on June
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`19, 2014. This has inevitably prejudiced Plaintiff and its ability to prosecute its claims.
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`Defendants’ actions during the discovery phase of this litigation is unprecedented and presents
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`this Court with the first instance of such tactical and pervasive defiance in a patent case.
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`Although the Court is “intimately familiar with the disruptions and difficulties caused by the
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`behavior,” the full extent of the prejudice caused to Plaintiff is unknown because the required
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`initial disclosures have still not been produced. Shahin v. Delaware, 345 Fed.Appx. 815, 816-17
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`(3d Cir. 2009). This factor weighs heavily towards the imposition of severe sanctions.
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`Case 2:14-cv-00111-AJS Document 106 Filed 11/03/14 Page 17 of 25
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`3. History of Dilatoriness/Conduct was Willful/in Bad Faith
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`Defendants’ failure to produce relevant discovery and their failure to comply with
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`numerous Court Orders is the result of a conscious and deliberate strategy