Lyft, Inc. v. Quartz Auto Technologies LLC

Background

Lyft operates a peer-to-peer marketplace for on-demand ridesharing transportation services. Quartz acquired patents and contacted Lyft about licensing a portfolio that included five patents. After Quartz sued Lyft for infringement in another district, Lyft filed this action seeking a declaration that it did not infringe any of the five patents. Quartz denied Lyft’s claims and asserted five infringement counterclaims.

The order addresses two discovery disputes. Discovery is the pretrial process through which parties obtain information and documents relevant to their claims and defenses. Quartz filed a motion to compel, asking the court to require Lyft to provide further responses to six interrogatories. An interrogatory is a written question that a party must answer under oath. Lyft filed a separate motion to compel responses to one interrogatory and two requests for production, which seek documents or other materials.

Quartz’s Motion to Compel

Quartz’s Interrogatory No. 1 asked Lyft to explain the factual and legal basis for Lyft’s position that its platforms and methods did not infringe the patents. Quartz argued that Lyft’s answers were conclusory and did not explain why each patent limitation was absent. Lyft responded that Quartz’s infringement contentions were themselves too vague to identify what additional information Quartz wanted and that the request improperly sought to make Lyft disprove infringement.

The court held that the party seeking an order compelling discovery bears the initial burden of showing relevance and cannot meet that burden through general statements. Because Quartz did not identify with sufficient specificity what additional information was missing or why it was entitled to that information, the court found that Quartz had not shown an entitlement to further details. The court therefore DENIED Quartz’s request concerning Interrogatory No. 1.

Quartz’s Interrogatory Nos. 2 through 6 sought descriptions of Lyft’s rider-driver matching process, the software modules involved, data used for monitoring and notifications, information and processing used by matching algorithms, and the step-by-step operation of Lyft’s Smart Trip Check-In feature. Quartz criticized Lyft’s answers, including Lyft’s references to source code under Federal Rule of Civil Procedure 33(d).

The court explained that Rule 33(d) can permit a party to direct the requesting party to business records when both parties would bear substantially the same burden in obtaining the answer. The court stated that merely directing Quartz to all of Lyft’s source code would not have been enough for interrogatories seeking narrative descriptions of functionality. But after reviewing Lyft’s actual responses, the court found that Lyft had provided narrative descriptions and citations to specific source-code repositories, subject to objections. Because Quartz again failed to identify specifically what was missing or why the citations were inadequate, the court found that Quartz had not shown an entitlement to additional responses. The court DENIED Quartz’s request to compel further responses to Interrogatory Nos. 2 through 6.

Lyft’s Motion to Compel

Lyft sought information about direct or indirect financial interests in the case, including the people or entities holding those interests and related agreements. Lyft also sought documents concerning rights in the asserted or related patents, including negotiations, offers, licenses, payments, royalties, technology transfers, authorizations to use the patents, and agreements not to sue.

Lyft argued that the information could bear on disclosure obligations, Quartz’s ownership of substantial patent rights and ability to sue, potential witness bias, patent damages, and Quartz’s reliance on an Uber license as evidence of industry recognition. Quartz objected that the interrogatory was too broad and stated that it had already produced documents showing that Quartz was the sole present owner of the asserted patents and had disclosed a third party’s financial interest.

The court stated that using a discovery motion to enforce the Northern District of California’s disclosure rules was not the proper method; the court said an administrative motion directed to the presiding judge would be more appropriate for that purpose. The court nevertheless found Lyft’s other arguments largely persuasive.

For Interrogatory No. 1, the court OVERRULED in part and SUSTAINED in part Quartz’s objections. The court GRANTED Lyft’s request using the phrasing requiring Quartz to identify all parties with ownership or financial interests in Quartz, describe the nature of those relationships, and identify agreements connected with them. The court DENIED the request to the extent it also sought identification of draft agreements because Lyft had not shown their relevance.

For Requests for Production Nos. 6 and 7, the court OVERRULED Quartz’s objections and GRANTED Lyft’s request to compel the materials covered by those requests. The court stated that privacy and confidentiality concerns could be handled under the existing protective order and that privilege concerns could be addressed through a privilege log.

Disposition

The court denied Quartz’s motion to compel. It overruled in part and sustained in part Quartz’s objections to Lyft’s Interrogatory No. 1, granted Lyft’s request in the narrower form described above, denied the request concerning draft agreements, overruled Quartz’s objections to Requests for Production Nos. 6 and 7, and granted Lyft’s request for the materials covered by those requests. The order was signed by Robert M. Illman, United States Magistrate Judge, on November 18, 2022.