Uniloc USA, Inc. v. Apple Inc.
- Edward Davila
- 5:19-cv-01692
- U.S. District Court · Northern District of California
- 4
In Uniloc USA v. Apple, Judge Davila denied Uniloc’s request to overturn a discovery order requiring financial statements about patent valuations.
The Uniloc plaintiffs and Apple Inc.; the ruling leaves in place Apple’s discovery request for Uniloc financial statements concerning intangible-asset and patent valuations.
What happened
Uniloc USA, Inc. v. Apple Inc. concerns Apple’s request for Uniloc’s financial statements showing the value of intangible assets, including the patent involved in the case. Uniloc objected that the documents were not relevant to calculating damages.
A magistrate judge ruled that the statements were sufficiently connected to the possible reasonable royalty calculation to be discoverable, even though their ultimate value as evidence was uncertain. Uniloc asked the district court to set aside that discovery ruling.
Judge Davila denied Uniloc’s motion. He concluded that Uniloc had not shown that the magistrate judge’s decision was clearly wrong or contrary to law, and agreed that the financial statements were discoverable at this stage.
The detailed version
- Uniloc USA, Inc. v. Apple Inc. · No. 5:19-cv-01692
- Edward Davila
- Oct. 26, 2020
Background
Uniloc acquired U.S. Patent No. 7,587,207 in 2018 as part of a larger collection of patents. Apple sought financial statements for each year beginning when Uniloc acquired the patent through the present, including audit reports. Apple sought documents showing valuations of Uniloc’s intangible assets, including patent rights.
Uniloc acknowledged that it had responsive documents, but argued that the valuations were irrelevant because they did not assign value specifically to the patent at issue or to a patent portfolio containing it. Uniloc did not argue that producing the documents would be burdensome or disproportionate.
Magistrate Judge’s Discovery Ruling
The parties presented the dispute to Magistrate Judge DeMarchi. She concluded that the record did not establish whether, or to what extent, the valuations would help assess a reasonable royalty for Apple’s alleged infringement. But because the financial statements appeared to contain the only valuations encompassing the patent’s value, other than the transaction documents, and Uniloc had provided no information about how the valuations were prepared, she found the statements discoverable.
District Court Review
The district court could reconsider this nondispositive pretrial ruling only if it was clearly erroneous or contrary to law. That standard gives substantial deference to the magistrate judge and does not allow the district court simply to substitute its own judgment.
Uniloc argued that the valuations were not relevant because they were mathematical calculations based on amortizing the assets’ purchase price over their useful lives, rather than subjective valuations. The court held that this distinction did not show a mistake because the discovery ruling did not depend on the valuations being subjective. The court also rejected Uniloc’s argument that the lack of a cited case involving similar financial statements established an error.
Disposition
Judge Davila agreed that the financial statements were discoverable at the discovery stage, regardless of whether they would ultimately be admissible as evidence. The court denied Uniloc’s Motion for Relief from Nondispositive Pretrial Order of Magistrate Judge, docketed as Dkt. No. 177.
Read the full 4-page opinion on CourtListener, the free public archive maintained by the Free Law Project.