Nespresso USA, Inc. v. Williams-Sonoma, Inc.

Background

This opinion concerns Williams-Sonoma’s motion for the issuance of letters of request, also called letters rogatory, to Switzerland under the Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters. Williams-Sonoma sought documents from four Nespresso affiliates: Société de Produits Nestlé S.A., Nestlé Nespresso S.A., Nestlé S.A., and Nestec S.A.

The underlying case involves Nespresso’s claim that it has the exclusive right to use the “Original NESPRESSO Capsule Trade Dress” in the United States and that Williams-Sonoma’s coffee capsules infringe that trade dress. “Trade dress” refers here to the product design or appearance that Nespresso claims identifies its products. Williams-Sonoma asserted defenses including non-infringement and that the claimed trade dress is functional and therefore not protected under the federal trademark law.

Williams-Sonoma initially proposed 15 requests and later submitted a supplemental request, for a total of 16 requests across four proposed letters. The requests sought, among other things, agreements concerning the sale and distribution of the capsules, research and development materials, documents related to patents and a trade-dress application, warranty and consumer communications, and emails from the “competition@nespresso.com” domain.

Legal standard

The court explained that issuing letters of request is discretionary. It applied the discovery standards in Federal Rule of Civil Procedure 26, which allow discovery of nonprivileged information relevant to a claim or defense and proportionate to the needs of the case. Discovery may be limited when it is cumulative, unnecessarily burdensome, or disproportionate to its likely benefit. The court also said it should be especially careful about unnecessary burdens on foreign entities and authorities.

Timeliness

Nespresso argued that Williams-Sonoma waited too long to seek the Swiss discovery. The court rejected that argument. It noted that the discovery deadline had been extended, that the court had directed Williams-Sonoma to review Nespresso’s productions before deciding whether the Swiss process was necessary, and that Nespresso’s document production had contributed to the timing. The court therefore did not deny the motion based on delay, although it recognized that the Swiss process could delay the litigation.

Agreements

The court declined to issue the broad requests for agreements concerning the sale, distribution, or trade dress of the Original Line capsules. It found that those agreements were unlikely to provide information about the capsule’s inherent distinctiveness, secondary meaning, or the likelihood of consumer confusion. The court also found that any possible relevance to Nespresso’s ability to bring the claims did not justify the breadth of the requests.

The court separately denied the request for agreements concerning Starbucks-branded capsules compatible with Nespresso’s machines. It relied on its prior ruling that the Starbucks agreement was irrelevant or, at most, marginally relevant and disproportionate. The court stated that Williams-Sonoma could renew that narrow request if Judge Preska later overruled the prior ruling.

Research and development materials

The court found relevant the requests for research and development documents concerning the Original Line capsule’s compatibility with Nespresso machines, the reasons for using aluminum and related design constraints, and the compatibility of third-party capsules. These materials could address why the capsule was designed as it was and how the design affected manufacturing costs, issues relevant to Williams-Sonoma’s functionality defense.

The court permitted these requests directed to Nestlé Nespresso S.A., Nestlé S.A., and Nestec S.A., particularly because it was unclear whether Nespresso’s counsel had specifically asked those entities whether the materials existed. If the entities had already been asked, the court said they could respond by stating that no such documents existed.

Patent, trademark, and foreign-decision materials

The court found relevant documents supporting the application for the older “202 Patent” and related application materials, but allowed Williams-Sonoma to revise the request so that it sought only the 202 Patent, its application, and supporting documents filed with that application. The court denied the request for materials supporting the “965 Patent” because the application was publicly available.

The court rejected the broad request for documents concerning efforts to oppose any third-party utility-patent applications involving capsules compatible with Nespresso machines. It found the request overbroad and said the information could be obtained more efficiently through depositions. The court left open the possibility of a narrower renewed request if witnesses identified specific patent applications warranting further investigation.

The court also declined to issue the request for orders, decisions, or judgments from any jurisdiction concerning the validity of intellectual-property claims in the capsule’s design or shape. Foreign decisions were mostly irrelevant to the United States trade-dress dispute, while United States decisions were publicly available. The court likewise rejected the request for any documents concerning the trade-dress application filed by Société de Produits Nestlé S.A., finding that the application was publicly available and that the request was too broad.

Warranty, consumer, and competitor communications

The court denied without prejudice the request for documents showing whether third-party capsules affected warranties for Original Line machines. It concluded that the information could be obtained more efficiently through specific questions during a deposition and that more tailored document requests could be made later if needed.

The court allowed the request for communications from United States consumers about third-party capsules and Original Line machines, including questions, complaints, warranty inquiries, and repair requests. It found those communications relevant to how consumers viewed Nespresso’s trade dress, the design’s distinctiveness and secondary meaning, the strength of the claimed trade dress, and possible actual consumer confusion.

The court declined to issue the supplemental request for communications sent to or from the “competition@nespresso.com” domain concerning third-party capsules. The court found that the emails primarily circulated publicly available competitor articles and press releases, offered little analysis, and were unlikely to address functionality, secondary meaning, or consumer confusion.

Disposition

The court granted Williams-Sonoma’s request for the issuance of letters of request, but only to the extent consistent with the opinion’s analysis and limitations. It ordered Williams-Sonoma to file revised letters of request by March 19, 2021. The opinion was signed by Katharine H. Parker, United States Magistrate Judge.