When this patent infringement action began, the plaintiff explained that it was concerned that it would not be able to obtain important discovery if Ricoh Company Ltd. ("RCL"), which is the parent company of the defendants, Ricoh Electronics, Inc. ("REI") and Ricoh Americas Corp. ("RAC") were dismissed as a party. When they moved for dismissal, the defendants represented that: "IV identifies no information exclusively within the possession of RCL that is germane to its infringement case. On the other hand, it would be unreasonable and a hardship on RCL to force it to participate in litigation halfway around the world, particularly when RAC and REI are able and willing to contest IV's claims."

As explained by the district court, after the dismissal of RCL, REI and RAC stated that the technical documents sought by IV were not in their possession or control, but might be obtained from RCL. RCL then refused to provide the documents voluntarily. Unable to obtain the discovery from REI and RAC, IV sought discovery from RCL through international Letters Rogatory. That request was denied by the Japanese Ministry of Foreign Affairs.

REI then produced a Technical Assistance Agreement ("TAA") between RCL and REI, which apparently limited the flow of information from RCL to REI in several ways. "According to the court's understanding, RCL has agreed to provide only information related to REI's non-infringement defenses, as opposed to all relevant core technical information."

IV also moved to compel REI to produce documents and provide a Rule 30b)(6) deposition regarding the design and operation of the accused products. The Magistrate Judge denied the motion based on the legal confines imposed by RCL.

The district court determined that restrictions may be appropriate on the defendants based on the failure to produce documents from the parent company. "The court understands that litigation in this country is much more intrusive than elsewhere in the world, including Japan. However, the fact remains that the parent company of the defendants has relevant information critical to a fair and just resolution of this patent infringement case, and has erected legal barriers to the production of such information through its subsidiaries, barriers that were known but not disclosed to the court when considering dismissal. It is a defendant's obligation under this court's rules to provide all relevant, non-privileged information. The court declines to allow RCL and defendants to use the TAA as both a sword and a shield."

Accordingly, the district court order the defendants to show cause why they should not be precluded from using any information provided by their parent in their defense.

Intellectual Ventures I LLC v. Ricoh Americas Corp., Case No. 13-474-SLR (D. Del. May 2016)