Carvana, LLC v. International Business Machines Corporation

Background

Carvana sued International Business Machines Corp. seeking a declaration that it did not infringe several patents. IBM counterclaimed for patent infringement. The dispute addressed in this opinion concerned whether IBM could depose Jessica Wilson, Carvana’s in-house counsel. Carvana moved for a protective order, which is a court order limiting or preventing discovery.

Court’s analysis

The court applied four factors used to evaluate depositions of opposing counsel: the need for the deposition, the lawyer’s role, the risk of attorney-client privilege or work-product issues, and the amount of discovery already completed.

IBM sought testimony about three subjects: (1) communications between the parties before the lawsuit, (2) Carvana’s awareness of the patents at issue, and (3) Carvana’s general licensing policies and its prior patent-licensing negotiations and agreements.

The court found that a limited deposition was justified on the first and third subjects. Wilson had participated in phone conversations with IBM, and Carvana’s other witness did not know what was said during those calls. The court also found that Wilson had more knowledge than Carvana’s other witness about Carvana’s licensing negotiations and practices. Because Wilson was in-house counsel rather than trial counsel, the court concluded that a limited deposition would not disrupt Carvana’s relationship with its trial counsel.

The court found little privilege risk concerning Wilson’s communications with IBM because IBM had participated in those conversations. The risk was greater concerning third-party licensing negotiations, but the court concluded that Wilson could provide comparable non-privileged information without disclosing legal advice or work product. By contrast, Carvana’s other witness had already testified sufficiently about Carvana’s awareness of the patents, and further questioning of Wilson about Carvana’s investigation would likely raise privilege issues. The court therefore identified a written interrogatory as a reasonable alternative for additional non-privileged information on that subject.

The court also noted that, although the fact-discovery deadline had passed, expert discovery and a claim-construction hearing had not yet occurred. It therefore viewed the case as being midway through discovery, which slightly supported allowing the limited deposition.

Ruling

The court granted in part and denied in part Carvana’s motion for a protective order. Carvana must produce Wilson for a deposition of no more than three hours on the communications she had with IBM before the lawsuit. If Carvana did not produce her on that subject, Carvana could be barred from offering trial testimony going beyond the written communications. The deposition could also cover Carvana’s general patent policies and practices and the non-privileged aspects of Wilson’s negotiations and execution of prior patent-licensing agreements, with questioning limited to a level of detail similar to IBM’s witness’s testimony. IBM could not use the deposition to pursue additional questions about Carvana’s awareness of the patents when those questions would create privilege concerns; such information could instead be sought through interrogatories.