4WEB, Inc. v. NuVasive, Inc.

Opinion

1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 SOUTHERN DISTRICT OF CALIFORNIA 8 9 4WEB, INC. and 4WEB, LLC, Case No.: 24-cv-01021-JLS-MMP

10 Plaintiffs, ORDER GRANTING IN PART 11 v. 4WEB’S MOTION TO COMPEL NUVASIVE TO ANSWER 12 NUVASIVE, INC., INTERROGATORY NO. 6 13 Defendant. [ECF No. 149] 14 15 16 In this patent infringement action, 4WEB asserts NuVasive’s “Modulus” spinal 17 implant products1 (“Accused Products”) infringe nine of 4WEB’s United States Patents2 18 related to 3D-printed, titanium interbody fusion devices. ECF No. 21 ¶ 62. Before the Court 19 is 4WEB’s Motion to Compel NuVasive to Answer Interrogatory No. 6 pursuant to Federal 20 Rules of Civil Procedure (“Rule”) 37 and 33. ECF No. 149. The matter has been fully 21 briefed, and the Court heard oral argument on May 7, 2025. ECF Nos. 149, 150, 151, 161. 22 For the reasons set forth below, the Court GRANTS IN PART 4WEB’s motion. 23

24 25 1 The Modulus line of implants include Modulus ALIF, Modulus Cervical (or Modulus- C), Modulus XLIF, Modulus TLIF-0, and Modulus TLIF-A. 26

27 2 U.S. Patent Nos. 8,430,930; 9,999,516; 9,545,317; 11,278,421; 9,271,845; 9,549,823; 9,572,669; 10,849,756; and 9,636,226 (collectively, “Patents-in-Suit”). ECF No. 130 at 1– 28 1 I. RELEVANT DISCOVERY BACKGROUND 2 4WEB’s Interrogatory No. 6 provides: 3 For each of the Accused Products, identify, by month from release of the first sale to the present date, an explanation of what was sold if the sale involved 4 bundling any of the Accused Products with any other product for the number 5 of units sold (either alone or in combination with other accessories or products). 6

7 ECF. No. 149-3 at 10. 8 NuVasive initially asserted objections based on relevance, undue burden, and 9 proportionality. ECF No. 149-3 at 10. NuVasive also found the interrogatory unintelligible, 10 vague, and ambiguous. Id. In its First Supplemental Response, NuVasive further objected 11 to the phrase “bundling” as vague and ambiguous and responded by identifying a 12 spreadsheet, NUVA0011982. ECF No. 150 at 4. NuVasive explains this spreadsheet 13 includes data concerning product sales on the Accused Products as well as the Modulus 14 ALIF Blade and Modulus XLIF Plate—two “accessories that can be used with the Accused 15 Products.” Id.; see also ECF No. 149-3 at 10. 16 4WEB contends NuVasive’s response is deficient because it fails to identify (other 17 than the Modulus ALIF Blades and Modulus XLIF Plates) the accessory products sold 18 alongside the Accused Products. ECF No. 149-1 at 3. 19 On February 26, 2025, the Court held an informal discovery conference regarding 20 this dispute. ECF No. 135. After hearing from both sides, the Court directed the parties to 21 further meet and confer as to the scope of information sought in Interrogatory No. 6 and 22 NuVasive’s claimed burden. If the parties did not agree after the meet and confer the Court, 23 Plaintiff was permitted to file a motion to compel. 24 Following the Court’s discovery conference, 4WEB modified its request to seek 25 financial information on a yearly rather than monthly basis for accessories that are 26 functionally related to the Accused Products, which it believes are: (i) supplemental 27 fixation products; (ii) integrated fixation products; (iii) biologics; (iv) neuromonitoring 28 equipment; (v) neuromonitoring services; (vi) neuromonitoring instruments and 1 disposables; (vii) retractors; (viii) blades; (ix) light sources; (x) light cables; (xi) shims; and 2 (xii) any billable product that is part of the surgical procedure (collectively, the “Accessory 3 Products”). ECF No. 149-1 at 3.3 4 II. LEGAL STANDARD 5 Rule 26(b)(1) establishes the scope of discovery as follows: 6 Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense and proportional to the needs of the 7 case, considering the importance of the issues at stake in the action, the 8 amount in controversy, the parties’ relative access to relevant information, the parties’ resources, the importance of the discovery in resolving the issues, and 9 whether the burden or expense of the proposed discovery outweighs its likely 10 benefit.

11 Fed. R. Civ. P. 26(b)(1). “Information within this scope of discovery need not be admissible 12 in evidence to be discoverable.” Id. 13 “An interrogatory may relate to any matter that may be inquired into under Rule 14 26(b).” Fed. R. Civ. P. 33(a)(2). “The grounds for objecting to an interrogatory must be 15 stated with specificity, [and] [a]ny ground not stated in a timely objection is waived unless 16 the court, for good cause, excuses the failure.” Fed. R. Civ. P. 33(b)(4). Any interrogatory 17 not objected to must be answered fully in writing under oath. Fed. R. Civ. P. 33(b)(3). 18 Any party, on notice to all other parties and all affected persons, may apply for an 19 order compelling discovery. Fed. R. Civ. P. 37(a)(1). Rule 37 provides for an entry of an 20 order compelling discovery where a party has failed to answer an interrogatory. Fed. R. 21 Civ. P. 37(a)(3)(B)(iii). 22 The party seeking to compel discovery has the burden of establishing relevance. 23 Alves v. Riverside Cnty., 339 F.R.D. 556, 559 (C.D. Cal. 2021). “District courts have broad 24 discretion in determining relevancy for discovery purposes.” Surfvivor Media, Inc. v. 25 Survivor Prods., 406 F.3d 625, 635 (9th Cir. 2005) (citing Hallett v. Morgan, 296 F.3d 26 27 3 During the hearing, the Court overruled NuVasive’s objection that the modified requested 28 1 732, 751 (9th Cir. 2002)). “Once the propounding party establishes that the request seeks 2 relevant information, ‘[t]he party who resists discovery has the burden to show discovery 3 should not be allowed, and has the burden of clarifying, explaining, and supporting its 4 objections.’” Goro v. Flowers Foods, Inc., 334 F.R.D. 275, 283 (S.D. Cal. 2018) (internal 5 citations omitted). “The party resisting discovery must specifically detail the reasons why 6 each request is objectionable, and may not rely on boilerplate, generalized, conclusory, or 7 speculative arguments.” Licea v. Beshay Foods, Inc., No. 19-cv-1565-JM-AHG, 2020 WL 8 1975059, at *1 (S.D. Cal. Apr. 23, 2020) (citing F.T.C. v. AMG Servs., Inc., 291 F.R.D. 9 544, 553 (D. Nev. 2013)). “Arguments against discovery must be supported by specific 10 examples and articulated reasoning.” Id. (citation and quotations omitted). 11 In ruling on a motion to compel discovery, the court has discretion to modify the 12 discovery requests rather than sustain the responding party’s objections in total. See Green 13 v. Baca, 219 F.R.D. 485, 490 (C.D. Cal. 2003); see Licea, 2020 WL 1975059, at *2 14 (recognizing a district court may “expand, limit, or differ from the relief requested”). 15 III. ANALYSIS 16 A. The Parties’ Positions 17 4WEB contends this interrogatory seeks “basic financial information related to 18 accessory products sold alongside—i.e., ‘bundled’ with—the Accused Products” relevant 19 to its damages theories. ECF No. 149-1 at 1, 7. 4WEB further contends the information 20 sought is relevant because the jury will consider the Georgia-Pacific factors, including the 21 extent of convoyed sales, in its reasonable royalty calculation related to damages. Id. at 2. 22 4WEB argues the discovery of all Accessory Products is proper because “they are 23 functionally related to the Accused Products,” and thus sales of the Accessory Products 24 along with the Accused Products would be reasonably foreseeable. Id. at 6–7; see ECF No. 25 151 at 5. In addition, 4WEB contends the information sought is proportional to the needs 26 of the case—particularly in light of the amount in controversy and the parties’ resources— 27 and the information is “squarely within” NuVasive’s possession. ECF No. 149-1 at 2. 28 NuVasive objects, asserting 4WEB has failed to carry its burden to show any—let 1 alone all—of the 12 categories of Accessory Products are “functionally related” to the 2 Accused Products and thus relevant to 4WEB’s convoyed sales theory. ECF No. 150 at 8. 3 NuVasive further objects the interrogatory is not proportional to the needs of the case. 4 During oral argument, NuVasive’s counsel represented for the first time that NuVasive 5 provides various instruments and tools for use in the surgery on a consignment basis, so 6 the accessories are not sold and thus not relevant or proportional to a convoyed sales theory. 7 See ECF No. 168, Transcript of May 7, 2025 Hearing (“Tr.”) at 23:17-20; 25:9–29:17. 8 Specifically, at the time of surgery, NuVasive’s representative provides a surgery kit to 9 surgeons that includes an array of implants and instruments available for use in the 10 procedure (e.g., various implants in different sizes, inserts to determine the appropriate 11 size, scrapers, retractors, etc.). Surgeons then choose an implant and determine which tools 12 or instruments, if any, to use during the surgery. NuVasive represents the surgeon is only 13 invoiced for the “consumables” (e.g., the implant, biologics, etc.) actually used but not for 14 any of the instruments or tools provided on consignment. Tr. 30:5-16. NuVasive further 15 represents its databases cannot provide data included on invoices by products sold and 16 invoices are not organized by product type; therefore, a series of data pulls would be 17 required across multiple systems as well as keyword searches. Tr. 32:15-23. NuVasive also 18 argues the merger between NuVasive and Globus makes obtaining the information sought 19 in Interrogatory No. 6 more burdensome. Tr. 32:23-25. 20 B. Analysis 21 4WEB contends Interrogatory No. 6 is relevant to its reasonable royalty calculation. 22 A court will “award the claimant damages adequate to compensate for [patent] 23 infringement, but in no event less than a reasonable royalty.” 35 U.S.C. § 284. In 24 determining the reasonable royalty for patent damages, parties often utilize the fifteen 25 factors set out in Georgia-Pacific Corp. v. U.S. Plywood Corp., 318 F. Supp. 1116, 1120 26 (S.D.N.Y. 1970) mod. and aff’d, 446 F.2d 295 (2d Cir. 1971), cert. denied, 404 U.S. 870. 27 Relevant here, the sixth Georgia-Pacific factor is: “The effect of selling the [accused 28 product] in promoting sales of other products of the licensee” and “the extent of such 1 derivative or convoyed sales.” Georgia-Pacific, 318 F. Supp. at 1120. “A ‘convoyed sale’ 2 refers to the relationship between the sale of a patented product and a functionally 3 associated non-patented product.” Am. Seating Co. v. USSC Grp., Inc., 514 F.3d 1262, 4 1268 (Fed. Cir. 2008). 5 In its March 17, 2025 Order, the Court addressed a request for production (“RFP”) 6 seeking documents related to 4WEB’s convoyed sales theory. ECF No. 145 at 16–19. This 7 Court found 4WEB’s RFP did not identify specific products relevant to its convoyed sales 8 theory and was not narrowly tailored. Id. at 18–19. The Court expressly noted 4WEB is 9 likely entitled to information about NuVasive’s non-accused products with a more targeted 10 search, but the RFP was overly broad as written. Id. at 19. 11 4WEB contends this interrogatory, as narrowed, “identifies specific categories of 12 Accessory Products that are sold alongside (i.e., ‘bundled’) with the Accused Products” 13 and “aligns with how NuVasive identified functionally related [non-accused] products in 14 its prior litigation involving spinal implants.” ECF No. 149-1 at 4 (emphasis omitted). 15 4WEB relies on a report in another matter, NuVasive, Inc. v. Alphatec Holdings, Inc., No. 16 18-cv-347-CAB-MDD, in which NuVasive’s expert opined that access tools, implants, and 17 neuromonitoring necessary to perform the XLIF (eXtreme Lateral Interbody Fusion) 18 procedure were all “functionally related” to a different patented spinal implant system at 19 issue in that case. See ECF No. 149-3 at 41–60, ¶ 26. 4WEB contends it specifically 20 identifies “access tools” such as retractors, blades, shims, and neuromonitoring equipment, 21 as well as several accessories it contends are “specifically designed to improve surgical 22 outcomes, such as biologics and fixation tools.” ECF No. 149-1 at 6–7 (citing ECF No. 23 149-3 ¶ 26, quotations and emphasis omitted). 4WEB contends these are all functionally 24 related to the Accused Products, and therefore relevant and discoverable. Id. at 7. 25 In opposition, NuVasive contends 4WEB “ignores that each of the Accessory 26 Products ‘has a use independent of the patented device, that suggests a non-functional 27 relationship.’” ECF No. 150 at 3 (quoting Warsaw Orthopedic, Inc. v. NuVasive, Inc., 778 28 F.3d 1365, 1375 (Fed. Cir. 2015)). NuVasive contends the Accessory Products can be used 1 without the Accused Products and therefore the discovery sought is neither functionally 2 related nor relevant under Rule 26(b)(1). ECF No. 150 at 10. 3 In reply, 4WEB counters NuVasive’s arguments go to admissibility at trial when 4 calculating a reasonable royalty but should not prevent NuVasive from providing the 5 requested information during discovery. ECF No. 151 at 3 (citing Haworth, Inc. v. Herman 6 Miller, Inc., 162 F.R.D. 286, 288 (W.D. Mich. 1995)). 4WEB also contends it seeks 7 information related to convoyed sales in the context of reasonable royalties (as opposed to 8 lost profits), which requires a lower showing that the Accessory Products may be promoted 9 by the sales of the Accused Products (as opposed to no independent use). See Tr. 13–14. 10 The Court finds 4WEB has made a sufficient showing of relevance for purposes of 11 discovery. “In patent cases where the plaintiff does not claim lost profits, damages are 12 assessed by determining the ‘reasonable royalty’ the plaintiff would have received through 13 arms-length bargaining. [] The court tries to calculate the royalty upon which the parties 14 would have agreed had they successfully negotiated an agreement just before the 15 infringement began.” Positive Techs., Inc. v. Sony Elecs., Inc., No. 11-cv-2226-SI-KAW, 16 2013 WL 707914, at *3 (N.D. Cal. Feb. 26, 2013) (citation omitted). Here, the effect of 17 selling the Accused Products in promoting sales of surgery tools and accessories (e.g., 18 fixation, biologics, neuromonitoring, retractors, blades, shims, and lighting equipment) 19 may be a relevant consideration in determining a reasonable royalty under sixth Georgia- 20 Pacific factor. See Infinity Comput. Prods., Inc. v. Epson Am., Inc., No. 18-cv-2532-RGK- 21 RAOX, 2018 WL 7890859, at *2 (C.D. Cal. Dec. 14, 2018) (citing Trans-World Mfg. 22 Corp. v. Al Nyman & Sons, Inc., 750 F.2d 1552, 1568 (Fed. Cir. 1984)) (“[T]he extent of 23 the profits from such sales could be relevant in determining the amount of a reasonable 24 royalty. If, for example, sales were increased because of the infringing use of the displays, 25 that fact could affect the amount of royalties a potential licensee would be willing to pay.”). 26 Though much of the parties’ briefing focuses on whether the Accessory Products are 27 in fact “functionally related” sufficient to recover damages based on a convoyed sales 28 theory, the Court finds this question relates to admissibility, rather than discovery, and is 1 therefore premature at this juncture. See Infinity Comput. Prods., 2018 WL 7890859, at *3 2 (rejecting argument the non-patented products cannot be considered “convoyed sales” 3 because they do not have a functional relationship to the patented technology for purposes 4 of discovery in the context of reasonable royalty determination); Positive Techs., 2013 WL 5 707914, at *6 (“At this stage of the proceedings, it is unclear whether some of the discovery 6 sought may be correlated to the value of Plaintiff’s patented invention, and therefore 7 admissible. . . Plaintiff has made a preliminary showing of relevance for discovery 8 purposes pursuant to the Georgia-Pacific factors, and that is all that it is required to do at 9 this point.”). The Court finds 4WEB has demonstrated relevancy as to the sixth Georgia- 10 Pacific factor regarding the extent of the effect of the sales of the Accused Products on the 11 promotion and sale of the Accessory Products. 12 NuVasive maintains the motion should be denied because the interrogatory is vague, 13 overbroad, and unduly burdensome. As a preliminary matter, the Court is not persuaded 14 by NuVasive’s argument that 4WEB did not sufficiently identify which specific products 15 fall within its twelve categories of Accessory Products. The terminology appears consistent 16 with NuVasive’s references in its own materials and the expert report in Alphatec 17 Holdings, Inc., No. 18-cv-347-CAB-MDD. 18 NuVasive primarily objects based on burden. NuVasive represents in its opposition, 19 without a declaration or other evidentiary support, it “does not keep an electronic 20 repository (such as a database) from which the requested data could be easily generated.” 21 ECF No. 150 at 4. NuVasive also vaguely asserts answering the interrogatory “requires 22 NuVasive to review invoices associated with over 80,200 transactions and then demands 23 NuVasive produce a detailed financial accounting for products that happen to be included 24 on the same invoice as an Accused Product.” Id. NuVasive further represents it “would 25 have to pull and review invoices for each sale of an Accused Product to identify the 26 Accessory Products (if any) sold with the Accused Product” and it “stores invoices in 27 multiple repository systems and does not organize invoices by product type.” Id. at 11. 28 NuVasive states, again without a declaration or other evidentiary support, its “IT 1 department has represented it could take weeks to obtain the invoices through a series of 2 data pulls.” Id. 3 The Court finds NuVasive’s unsupported and vague assertions do not satisfy its 4 burden of supporting its objections. See Goro, 334 F.R.D. at 283; Licea, 2020 WL 5 1975059, at *1. Moreover, much of NuVasive’s arguments focus on providing “detailed 6 financial information” in response to the interrogatory. See ECF No. 150 at 4, 11. Relying 7 on the representations from Counsel during the hearing that many of the Accessory 8 Products identified by 4WEB may not be sold but instead provided to surgeons on a 9 consignment basis and then returned to NuVasive, the Court finds it is not proportional to 10 the needs of the case at this time—prior to production of the invoices of the Accused 11 Products by NuVasive as discussed below—to require NuVasive to answer the detailed 12 financial information sought by Interrogatory No. 6. 13 Rather, in light of NuVasive’s representation during the May 7, 2025 hearing that 14 many of the Accessory Products are provided on a consignment basis, the Court finds the 15 invoices of the Accused Products are both relevant and proportional to the needs of the 16 case. In assessing the relevant factors, the Court notes NuVasive has not put forward a less 17 burdensome way to identify the Accessory Products sold with the Accused Products; 18 rather, it’s the Court’s understanding based on NuVasive’s representations in its briefing 19 and during oral argument the invoices for the Accused Products are the only way to identify 20 which Accessory Products, if any, were sold with the Accused Products. The Court has 21 also considered NuVasive’s alleged undue burden but finds NuVasive has not 22 demonstrated this burden with any particularity, despite numerous opportunities to do so. 23 Accordingly, the Court finds NuVasive’s general claim of undue burden, without more, 24 does not outweigh the likely benefit of the invoices. In addition, the Court finds numerous 25 other proportionality factors weigh in favor of requiring production of the invoices for the 26 Accused Products, including the amount in controversy, the parties’ relative access to 27 information, and the importance of the invoices in identifying Accessory Products sold 28 with the Accused Products. 1 CONCLUSION 2 For the reasons stated above, the Court GRANTS IN PART 4WEB’s Motion to 3 ||Compel as to Interrogatory No. 6. The Court ORDERS NuVasive to produce invoices for 4 || the Accused Products. 5 IT IS SO ORDERED. 6 Dated: May 28, 2025 | | | Ny HON. MICHELLE M PETTIT 8 United States Magistrate Judge 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28