Carl Zeiss Meditec, Inc. v. Topcon Medical Systems, Inc.

Background

The court addressed three discovery disputes in litigation in which Zeiss contended that Topcon developed products using misappropriated Zeiss trade secrets obtained from former Zeiss employees. The parties’ products diagnose eye disease. The disputes concerned: (1) the scope and timing of information about a forensic audit of Topcon’s computer systems; (2) whether Zeiss should pay the costs of reviewing email attachments and parent emails; and (3) discovery concerning the DICOM decoder in Topcon’s Harmony product, including a deposition of Topcon engineer Artur Kowalski.

Audit Report

Topcon’s third-party forensic investigator, Kroll, was conducting an audit to identify Zeiss confidential files that named defendants who previously worked for Zeiss may have transferred to Topcon. Zeiss sought information about the custodians searched and the search parameters and protocols. Zeiss also argued that the search should cover more than the enjoined Glaucoma Module, including the Harmony product, its decoder and plug-ins, and the Glaucoma and discontinued Retina Modules.

The court found that the Kroll report was nearly finished and that Topcon had agreed to produce it within 30 days. The court considered that compromise reasonable and sufficient. It also granted Topcon 90 additional days to complete any further investigation and supplement its written discovery responses and document productions, with the proviso that Topcon supplement on a rolling basis if possible.

Fees for Email-Attachment Production

Under the electronic-discovery protocol, Topcon was required to produce all metadata, including family files. Zeiss’s vendor created a set of source files, including email attachments, and Topcon’s counsel reviewed documents for privilege before producing responsive, nonprivileged material. Zeiss later identified more than 2,000 source files that were email attachments. Topcon argued that Zeiss’s vendor had separated the attachments from their parent emails and sought about $40,000 for reviewing 6,500 parent emails and attachments for privilege.

The court held that the record did not show how Zeiss could have avoided the costs or whether the costs were duplicative. It denied Topcon’s request for fees without prejudice and ordered Topcon to review and produce the files.

Harmony DICOM Decoder

The DICOM decoder is a software component in Topcon’s Harmony product that reads optical-coherence-tomography data. DICOM is a public standard for exchanging digital data. Topcon argued that the decoder was unrelated to the Glaucoma Module and outside the scope of discovery. Zeiss argued that Topcon employees developed the decoder after improperly obtaining a Zeiss software license and that Zeiss was entitled to relevant discovery.

At the hearing, Zeiss said that Topcon had already produced substantial discovery but that it wanted to complete discovery and depose Kowalski. Topcon explained its position that the decoder had been independently developed and that the discovery concerned structure and function rather than the structural data read by the decoder. The court concluded that a deposition of Kowalski was the next appropriate step and ordered that deposition.

Disposition

The court ordered Topcon to produce the Kroll report within 30 days, allowed 90 days for additional investigation and supplementation, and required rolling supplementation if possible. Judge Laurel Beeler denied without prejudice Topcon’s request for fees for the remaining electronic-discovery production, ordered Topcon to review and produce the files, and ordered Kowalski’s deposition.