Dolby Laboratories Licensing Corporation v. Adobe Inc.

Background

The court entered Pretrial Order No. 5 after considering the parties’ filings and submissions at the second pretrial conference. The case includes Dolby’s claims against Adobe and a related counterclaim. The order primarily established procedures for the upcoming trial and addressed Adobe’s motion for relief from a magistrate judge’s pretrial order.

Evidence and Trial Procedure

The court ruled that a party does not generally need a sponsoring witness with personal knowledge to provide the foundation for an opposing-party statement under Federal Rule of Evidence 801. The offering party must still satisfy the rule’s other requirements, including showing that the statement was authorized by the opposing party or made by its agent or employee about matters within the scope of the agency relationship. A witness also may not testify about the subject matter of a hearsay statement unless the witness has personal knowledge of that subject matter.

The parties must exchange documents they intend to use during direct examination at least 24 hours before the witness testifies. They need not exchange documents that may be used only during cross-examination. If testimony from another proceeding is used for impeachment, the party using it must provide the complete transcript to the court, the witness, and opposing counsel when the document is used.

The court presently denied Dolby’s request for its damages expert, Paul Meyer, to hear other witnesses’ testimony because Dolby had not made a sufficient showing. The order states that the parties’ software experts may not use conclusory terms such as “functional” or “expressive,” although they may use other language to explain those concepts. The parties must also meet and confer about their experts’ access to confidential source code and admit only source-code portions essential to their claims and defenses.

The court required additional briefing about when evidence concerning attorneys’ fees should be presented. Evidence concerning pre-judgment interest must be presented as part of Dolby’s affirmative case. The parties also received instructions concerning deposition designations, the availability of certain witnesses for live testimony, and the possible use of video deposition testimony.

Copyright Issues

The court stated that, before instructing the jury, it must conduct an “analytic dissection” of the asserted Dolby works. This process involves separating computer code into levels of abstraction and filtering out elements that are not protected by copyright.

The court explained that source code is the human-readable form of a computer program, while object code is the machine-language form executed by a computer. If Dolby shows that the object-code libraries provided to Adobe were a direct representation of Dolby’s copyrighted source code, the copyright may extend to the object code. If the compiled object code does not contain protectable expression, it receives no copyright protection.

Because Dolby was pursuing copyright claims as an alternative form of relief and confidentiality issues could affect the trial, the court was inclined to bifurcate, or divide, the copyright portion of the trial. The court tentatively described a process in which the jury would first decide whether the dispute fell within one or more licensing agreements. If it did, the jury would decide the remaining contract-breach issues and the copyright phase might not be needed. If it did not, the parties would proceed to the copyright phase. The court said it would discuss this issue further at the next conference.

Adobe’s Motion Concerning Discovery

Adobe sought relief from Magistrate Judge Ryu’s pretrial order concerning a special master. Adobe challenged the ruling that 27 documents identified as attorney work product would be sent back to the special master for a determination of whether there was a “substantial need” for them.

The court disagreed with Adobe’s challenge. It stated that, because the parties had raised discovery disputes involving thousands of documents and trial was approaching, Magistrate Judge Ryu had full authority to refer certain matters to the special master. The court would consider remaining disputes only after the magistrate judge and special master completed the review required by Magistrate Judge Ryu’s procedure. Any appeal of a magistrate judge’s or special master’s ruling had to be filed with the court at least three business days before the party sought to introduce the evidence at trial. The order terminated Docket No. 363.

Other Orders and Scheduling

The parties were told that trial would continue even if they reached a settlement in principle unless the action was dismissed or the settlement’s finality was confirmed on the record or in writing. The order set trial days during the weeks of February 3, February 10, February 18, and February 24, 2020, with some scheduling flexibility later in the period.

Disposition

Judge Yvonne Gonzalez Rogers entered the pretrial directives, presently denied Dolby’s request concerning its damages expert, rejected Adobe’s challenge to the discovery procedure, and terminated Docket No. 363. The order did not resolve the underlying contract or copyright claims.