Nike, Inc. v. Lululemon USA Inc.

Background

The provided filing is Nike’s response opposing lululemon’s motion to compel an answer to Interrogatory No. 5. Nike stated that it seeks a reasonable royalty based on lululemon’s sales and does not seek damages under a lost-profits theory. Nike said its proposed royalty would use a hypothetical negotiation between a willing licensor and willing licensee, with an expert assessing the factors commonly associated with the Georgia-Pacific framework.

Nike said it had identified relevant evidence, including agreements with other parties and sales information produced by lululemon. It argued that this information was sufficient for the stage of the litigation.

Parties’ Positions

Nike argued that Interrogatory No. 5 was a contention interrogatory because it requested the factual and legal bases for Nike’s damages claim, the royalty base, royalty rate, date of the hypothetical negotiation, and the amount and calculation of damages. Nike relied on Local Rule 33.3(c), which provides that interrogatories seeking an opposing party’s claims and contentions may be served only at the conclusion of other discovery unless the court orders otherwise.

Nike also argued that discovery was not yet complete because lululemon had continued producing documents, including documents relevant to the royalty analysis. It further argued that the detailed calculation of a reasonable royalty involves a complex, multi-factor analysis better addressed through expert discovery rather than an interrogatory response during fact discovery.

Ruling

As explained at the October 13, 2023 discovery conference, the court denied lululemon’s motion to compel without prejudice to refiling as discovery progresses. The order did not require Nike to provide the requested damages amount or royalty rate at that stage. Judge Arun Subramanian also directed the Clerk of Court to terminate the motion at ECF No. 72.