FCX Solar, LLC v. FTC Solar, Inc.

Background

FCX brought patent-infringement and breach-of-contract actions against FTC. FCX alleged that FTC’s Voyager and Voyager+ solar trackers infringed FCX’s ’782 patent. FTC had previously held a license to use the patent, but FCX alleged that FTC’s use became unauthorized after FTC terminated the license in May 2021.

FCX served requests seeking documents about the design, development, testing, manufacture, and production of FTC’s next-generation solar trackers. FCX sought information about designs that FTC had prototyped, developed, made available, or failed to develop. FTC objected because FCX had not identified the next-generation trackers as accused infringing products and argued that discovery about unaccused products was irrelevant.

Court’s Analysis

Federal Rule of Civil Procedure 26 allows discovery of nonprivileged information that is relevant to a claim or defense and proportional to the case’s needs. The court explained that relevance in discovery is broad and that the party seeking discovery has a relatively light burden. Once that burden is met, the opposing party must justify limiting discovery. Discovery may be limited if it is repetitive or if its burden or expense outweighs its likely benefit.

The court identified three independent reasons why the requested discovery was relevant.

First, the next-generation designs could bear on FCX’s damages calculation. A reasonable royalty is an amount the parties hypothetically would have agreed upon before infringement began. One factor in that calculation is the cost and availability of non-infringing alternatives. Information about FTC’s next-generation design could therefore help determine whether FTC could have switched to an alternative, how difficult or costly that change would have been, and the economic value of FCX’s patented technology. The court rejected FTC’s argument that information about a non-infringing alternative could only help FTC, explaining that discovery is allowed when information is relevant to either side’s claim or defense.

Second, the discovery could bear on whether any infringement was willful. Willful infringement means deliberate or intentional infringement and may support increased damages. The court explained that evidence about an accused infringer’s efforts to design around a patent can be relevant to this issue. FTC’s argument that the next-generation design was not a design-around because there was no evidence that counsel directed its creation did not defeat discovery. The court also noted that a letter from FTC’s general counsel discussed FTC’s design of new dampers and stated that the new design did not infringe FCX’s patents.

Third, the discovery could bear on patent validity. FTC had asserted that FCX’s patent was invalid because it was obvious. Evidence that FTC tried and failed to develop a solar tracker serving the same need could be relevant to secondary considerations of nonobviousness, which are objective evidence considered when deciding whether an invention was obvious.

The court distinguished decisions denying discovery about unaccused products because those cases involved broad requests aimed at finding additional infringing products or requests to nonparties. FCX instead sought targeted information from FTC, a party to the case, about a limited number of next-generation designs that FTC had publicly connected to the accused Voyager and Voyager+ products. The court also noted that FTC had not argued that the requested discovery was cumulative or unduly burdensome.

Disposition

The court granted FCX’s motion to compel. FTC was required to produce the requested documents concerning its next-generation solar trackers. The Clerk was directed to terminate the motion at ECF No. 125.