Xinuos, Inc. v. International Business Machines Corporation

Background

During discovery, the parties disputed whether the defendants had to produce source code for four products. Xinuos argued that the code could show cross-compatibility among the defendants’ products and support its antitrust allegations that the defendants created barriers to competition. Xinuos submitted an expert affidavit stating that technical design documents were not an adequate substitute for source code and that producing copies would not impose a substantial burden.

The defendants argued that Xinuos’s request was not relevant or necessary and that the requested production would be unduly burdensome. They said the source code for one product was spread across multiple repositories and contained millions of lines of code. According to an IBM employee’s affidavit, producing the code for all four products would require dozens of people to gather it and create a secure review process. The defendants also offered to produce high-level design documents, product release notes, application programming interface publications, and related product documents.

Court’s Analysis

The court applied discovery rules requiring requested information to be relevant and necessary, with necessity assessed through proportionality. That assessment weighs the sensitivity of the information, the burden of producing it, and whether other ways exist to obtain the same information.

The court found that Xinuos had shown relevance. The allegations that the defendants developed cross-compatible products to impede or foreclose competition provided a sufficient connection between the source code and the antitrust claims. The court did not decide whether cross-compatibility itself amounted to anticompetitive conduct because that question concerned the merits of the claims rather than the scope of discovery.

The court nevertheless found that Xinuos had not shown that broad source-code production was necessary or proportional. It emphasized that source code is highly sensitive, that production would be burdensome given the volume and number of repositories involved, and that the request was broad and unfocused. The court also found that less burdensome alternatives—including design documents, product release notes, application programming interface publications, interrogatories, and depositions—could provide information about product functionality and cross-compatibility.

Ruling

Judge Victoria Reznik denied Xinuos’s request for source-code production without prejudice to renewal. The defendants were directed to produce their high-level design documents, product release notes, application programming interface publications, and other relevant product documentation concerning the four products. After reviewing those materials, Xinuos may renew its request if it still believes source-code production is necessary, but the court said any renewed request should be narrowly tailored and more targeted. The parties were directed to submit a joint status letter by December 13, 2024.