Carnegie Institution of Washington v. Mahendra Brothers Exports Private Limited

Background

The court considered two discovery applications seeking to compel the opposing side to produce information. Plaintiffs sought documents allegedly held by Nouveau Diamonds, an Indian company that was not a party to the action. Fenix sought financial and business information responsive to its document requests.

Plaintiffs’ application

Plaintiffs argued that Fenix controlled Nouveau, relying on Fenix’s advertising statement that it owned its own growing facility and on documents Nouveau had produced through Fenix’s counsel. Fenix submitted sworn declarations stating that it did not own or control Nouveau. Fenix’s counsel also represented that, when documents were received from Nouveau and produced to plaintiffs, Fenix was not allowed to review them.

The court held that plaintiffs had not rebutted Fenix’s evidence or shown that Fenix had the practical ability to access Nouveau’s technical information. It therefore denied plaintiffs’ application. The denial was without prejudice to a further application if discovery disclosed additional information about Fenix’s alleged control. The court also noted that plaintiffs had applied through the Hague Convention to obtain documents directly from Nouveau.

Fenix’s application

The court ruled separately on each category of information Fenix requested:

- Categories 1–3: These concerned financial statements and sales, cost, and price data. Because plaintiffs represented that they would produce responsive documents that week, the court denied Fenix’s application as moot. - Categories 4 and 6–8: These concerned business planning, market share, industry conditions, and marketing. The court granted the application and ordered plaintiffs to produce nonprivileged responsive documents, including emails, by July 15, 2020. - Category 5: This concerned research-and-development budgets and spending, and investment-return analyses involving chemical-vapor-deposition diamonds. The court rejected plaintiffs’ argument that the information was irrelevant, explaining that Fenix sought financial information relevant to assessing a reasonable royalty and other damages issues. The court granted the application as to this category and ordered production of nonprivileged responsive documents. - Category 9: This concerned license agreements. Plaintiffs said they had produced all licenses and drafts associated with the patents at issue except one missing license. The court ordered plaintiffs to provide, by July 8, 2020, sworn declarations sufficient to show the process they used to try to locate that license.

Disposition

The court denied plaintiffs’ application and granted Fenix’s application in part and denied it in part. The order addressed discovery obligations and did not decide the underlying patent claims.

Judge

The memorandum order was signed by Judge Jed S. Rakoff of the U.S. District Court for the Southern District of New York.