North Star IP Holdings, LLC v. Icon Trade Services LLC

Background

The parties submitted a joint letter asking the court to resolve three discovery disputes. The disputes concerned computer-aided design sketches, testimony about royalties, and documents held by Morris Missry. The court also ruled on Icon Trade Services LLC’s request to seal documents.

Computer-aided design sketches

Icon sought documents containing computer-aided design sketches, or “CADs,” that Sunrise Brands, LLC allegedly created for goods in product categories covered by Icon’s licenses. Icon argued that the CADs were relevant to its claims and defenses concerning the termination of its licenses and North Star’s alleged efforts to market goods in Icon’s licensed categories. North Star argued that the CADs were not covered by its document requests, that Icon’s request was untimely, that the CADs were in Sunrise’s possession rather than North Star’s, and that they were not relevant to the first phase of discovery.

The court ordered North Star to produce the CADs. The court stated that Icon’s learning of the CADs during Gerard Guez’s deposition excused any delay in requesting them, that North Star’s position did not show that it lacked access to the CADs, and that production was relevant to the first phase of discovery and proportional to the needs of the case.

Additional company testimony about royalties

North Star sought another deposition of Icon under Federal Rule of Civil Procedure 30(b)(6), which allows an organization to designate a witness to testify about specified topics. The requested topic concerned all royalties paid by or owed by Icon for products offered under or bearing the relevant trademarks. North Star argued that Icon’s earlier witnesses were not prepared to answer the questions. Icon argued that the information could instead be provided through focused written questions and answers.

The court ordered Icon to produce a Rule 30(b)(6) witness able to testify about royalties paid or owed from February 2022 to the present. The court limited the supplemental deposition to that royalty-payment topic and required the parties to complete it by April 28, 2023. The court denied North Star’s request that Icon pay the expenses associated with the additional deposition.

Documents from Morris Missry

North Star sought an order requiring Icon to search for and produce nonprivileged documents in Morris Missry’s possession, custody, or control relating to Icon’s negotiations to acquire the Rebecca Minkoff assets and knowledge of the foreclosure and sale under Article 9 of the Uniform Commercial Code. North Star argued that Missry was substantially involved in the negotiations and owned a plurality of Icon’s stock. Icon argued that the request was untimely and disproportionate, and that Missry acted only as outside counsel.

The court ordered Icon to collect and produce documents in Missry’s possession relating to the acquisition of the Rebecca Minkoff assets and the Article 9 foreclosure on those assets. The parties were directed to negotiate in good faith to reduce the burden on Missry of identifying responsive, nonprivileged documents.

Sealing request

The court denied Icon Trade Services LLC’s motion to seal, without prejudice to renewal. The court found that Icon had offered only a statement that the material was nonpublic and confidential, without explaining why disclosure could cause competitive harm or another injury sufficient to overcome the presumption favoring public access to court filings. The court permitted Icon to renew the motion by April 21, 2023, in a letter of no more than three pages describing the potential harm from disclosure and citing supporting case law.

Ruling

Judge Lorna G. Schofield resolved the discovery disputes by ordering production of the CADs, ordering a prepared royalty witness and a supplemental deposition, denying North Star’s request for deposition expenses, and ordering the collection and production of relevant nonprivileged documents from Missry. The court also denied Icon’s sealing motion, without prejudice to renewal.