On December 4, 2014, Chief ALJ Charles E. Bullock issued the public version of Order No. 63 (dated October 31, 2014) in Certain Flash Memory Chips and Products Containing Same (Inv. No. 337-TA-893).
By way of background, the investigation is based on a complaint filed by Spansion LLC ("Spansion") alleging violation of Section 337 by Macronix International Co., Ltd.; Macronix America, Inc.; Macronix Asia Ltd.; Macronix (Hong Kong) Co., Ltd.; Acer Inc.; Acer America Corporation; ASUSTek Computer Inc.; Asus Computer International (America); Belkin International, Inc.; D-Link Corporation; D-Link System, Inc.; Netgear Inc.; Nintendo Co., Ltd.; and Nintendo of America, Inc. in the importation into the U.S. and sale of certain flash memory chips and downstream products containing the same that infringe one or more claims of U.S. Patent Nos. 6,369,416 (the '416 patent); 6,900,124 (the '124 patent); 7,018,922 (the '922 patent); 6,459,625 (the '625 patent); 7,151,027 (the '027 patent); and 6,731,536 (the '536 patent). See our August 5, 2013 and September 9, 2013 posts for more details on the complaint and Notice of Investigation, respectively.
According to the Order, Spansion filed an emergency motion to compel Respondents Macronix International Co., Ltd.; Macronix America, Inc.; Macronix Asia Limited; Macronix (Hong Kong) Co., Ltd. (collectively, Macronix) to produce documents that were the subject of Spansion's request for production. Spansion also requested a certification of production from Macronix as well as leave to re-depose in the U.S. certain Macronix witnesses and submit supplemental witness testimony. Spansion argued that in response to its Production Request No. 77, Macronix responded that "no non-privileged, non-immune, relevant documents containing information responsive to this Request exist," but that on the eve of the evidentiary hearing in this investigation, Macronix produced reports in the 337-TA-916 investigation that Spansion argued would have been relevant in the present investigation. Spansion further argued that it was harmed by Macronix's failure to timely produce the documents because it had not been able to properly depose Macronix's witnesses or have Spansion's experts review or opine on the missing discovery.
In view of Spansion's emergency motion, ALJ Bullock issued a separate order setting a response deadline for after the evidentiary hearing. Further, after the evidentiary hearing, ALJ Bullock allowed Spansion to supplement its motion and further extended the deadline for responses to the motion. In its supplementation, Spansion focused on witness testimony showing that Macronix had decided to alter several accused products during the course of the investigation and deliberately delayed producing relevant documentation in order to effect its design around.
In response, Macronix argued that the motion was untimely. Macronix also argued that Spansion could have pieced together the equivalent of the design documents from Macronix's other productions and should have known to compel further discovery and to ask the right questions of Macronix's witnesses. Macronix further stated that it did not produce the design files at issue because they were duplicative and irrelevant in light of its other productions. Additionally, Macronix asserted that it had since produced the design reports at issue and that Spansion had a chance to question Macronix's witnesses at the hearing.
ALJ Bullock noted that he was "troubled" about the "conduct of discovery in this investigation." Specifically, ALJ Bullock found that Macronix had not articulated a sufficient basis for withholding the specific discovery requested by Spansion because Macronix had not identified whether the design files at issue pre- or post-dated the changes to the accused products at issue or adequately addressed Spansion's position that it would not have been possible to derive the missing information from the sources provided by Macronix. Additionally, ALJ Bullock found that Macronix had not satisfactorily explained how Spansion should have known to compel design reports or other documents or how to question Macronix's witnesses on certain topics based on Macronix's response to Spansion's Production Request No. 77. ALJ Bullock also found that there was no evidence that Spansion was provided with the details it requested or informed of the timing or purpose of Macronix's design around. ALJ Bullock further found that Macronix's decision to withhold certain categories of documents in its response to Production Request No. 77 impeded Spansion's efforts to develop its infringement allegations.
Accordingly, ALJ Bullock granted in part Spansion's motion to compel and ordered Macronix to file a written certification that all responsive documents were produced. ALJ Bullock also ordered Macronix to produce witnesses for depositions. ALJ Bullock further ordered the parties to provide proposals as to how best to proceed after the additional discovery was completed. Lastly, ALJ Bullock ordered Macronix to show cause as to why it should not be sanctioned for what appeared to be a misleading and improper supplemental response to Spansion's Production Request No. 77.