Philips North America LLC v. Advanced Imaging Services, Inc.

District Court, E.D. California·Decided May 3, 2022·No. 2:21-cv-00876·Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 PHILIPS NORTH AMERICA LLC, No. 2:21-cv-00876 KJM AC 12 Plaintiff, 13 v. ORDER 14 ADVANCED IMAGING SERVICES, et al., 15 Defendants. 16

17 18 This action was filed on May 13, 2021. ECF No. 1. Presently before the court is 19 plaintiff’s motion to compel discovery responses, ECF No. 106, which was taken under 20 submission on the papers, ECF No. 107. The undersigned has previously ruled on one motion to 21 compel and one motion for a protective order. ECF No. 57. The discovery deadline is currently 22 August 12, 2022. ECF No. 94. For the reasons explained below, the motion at ECF No. 106 is 23 GRANTED in part and DENIED in part. 24 I. BACKGROUND 25 Plaintiff Philips North America LLC (“Philips” or “Plaintiff”) develops, sells, supports, 26 maintains, and services medical imaging systems, such as computed tomography (CT) systems, x- 27 ray systems, nuclear medicine systems, PET scanners, magnetic resonance (MR) scanners, and 28 ultrasound machines used at hospitals and medical centers, including the proprietary hardware, 1 software, and documentation for such systems. ECF No. 1 at 2. Defendant Advanced Imaging 2 Services, Inc. d/b/a Advanced Imaging Parts (“AIP”) is a medical device equipment servicing 3 company that services Philips medical imaging devices, and defendant Wang Xiuyuan a/k/a Sean 4 Wang (“Wang”) is a sales manager at AIP. Id. 5 Plaintiff alleges that AIP, by and through Wang, has (1) received and used Philips’ 6 proprietary materials relating to Philips medical imaging systems by fraudulently and without 7 authorization accessing Philips’ proprietary computers and computer networks; (2) has 8 fraudulently created, obtained, and/or used counterfeit, intentionally modified, or otherwise 9 unauthorized Philips access control certificates, authorized versions or copies of which are only 10 made available by Philips to Philips’ developers and engineers and licensed customers; and (3) 11 has used one or more software exploits and hacked Philips’ access controls on Philips’ medical 12 imaging machines to access, without authorization, Philips’ copyright-protected service and 13 diagnostic software on its medical imaging devices, which contain Philips’ trade secrets. Plaintiff 14 brings claims for violation of the Computer Fraud and Abuse Act (“CFAA”), 18 U.S.C. §1030; 15 the California Comprehensive Computer Data Access and Fraud Act (“CDAFA”), Pen. Code, § 16 502; the Digital Millennium Copyright Act (“DMCA”), 17 U.S.C. §§ 1201; the Defend Trade 17 Secrets Act (“DTSA”), 18 U.S.C. § 1836; the California Uniform Trade Secrets Act (“CUTSA”); 18 the California Unfair Trade Practices Act, Cal. Bus. & Prof. Code § 17200 et seq.; and fraud. Id. 19 at 3. Plaintiff seeks to recover damages and obtain a permanent injunction preventing defendants 20 from accessing Philips’ systems and from further disclosing and/or using Philips’ confidential and 21 trade secret information. Id. 22 II. LEGAL STANDARDS 23 The scope of discovery in federal cases is governed by Federal Rule of Civil Procedure 24 26(b)(1). The current Rule states: 25 Unless otherwise limited by court order, the scope of discovery is as follows: Parties may obtain discovery regarding any nonprivileged 26 matter that is relevant to any party's claim or defense and proportional to the needs of the case, considering the importance of 27 the issues at stake in the action, the amount in controversy, the parties’ relative access to relevant information, the parties’ resources, 28 the importance of the discovery in resolving the issues, and whether 1 the burden or expense of the proposed discovery outweighs its likely benefit. Information within this scope of discovery need not be 2 admissible in evidence to be discoverable. 3 Fed. R. Civ. P. 26(b)(1). Evidence is relevant if: (a) it has any tendency to make a fact more or 4 less probable than it would be without the evidence; and (b) the fact is of consequence in 5 determining the action. Fed. R. Evid. 401. Relevancy to the subject matter of the litigation “has 6 been construed broadly to encompass any matter that bears on, or that reasonably could lead to 7 other matter that could bear on, any issue that is or may be in the case.” Oppenheimer Fund, Inc. 8 v. Sanders, 437 U.S. 340, 351 (1978). Relevance, however, does not establish discoverability; in 9 2015, a proportionality requirement was added to Rule 26. Under the amended Rule 26, 10 discovery must be proportional to the needs of the case. 11 A party seeking to compel discovery has the initial burden to establish that its request is 12 proper under Rule 26(b)(1). If the request is proper, the party resisting discovery has the burden 13 of showing why discovery was denied; they must clarify and support their objections. 14 Blankenship v. Hearst Corp., 519 F.2d 418, 429 (9th Cir. 1975). General or boilerplate 15 objections, without explanation, are not prohibited but are insufficient as a sole basis for an 16 objection or privilege claim. Burlington Northern & Santa Fe Ry. v. United States Dist. Court, 17 408 F.3d 1142, 1149 (9th Cir. 2005). 18 III. DISCUSSION 19 A. Scope of the Dispute 20 Plaintiff seeks an order compelling further responses to various requests for admission and 21 requests for production, and overruling objections that are summarized as follows: 22 Definition Objections: Defendants objected to certain discovery requests that contain the terms “materials,” “software,” “Philips CT 23 systems,” “Philips MR systems,” and “IST Certificate”, among others, claiming that the terms were “vague, ambiguous, and 24 overbroad”, rendering the requests “too uncertain and unintelligible” for Defendants to “wager a guess as to what Philips means.”2 (RFA 25 Nos. 1-4, 9, 16, 20-30, 60-62; RFP 44) 26 Dongle vs. IST Certificate Distinction: Defendants have objected to certain discovery requests related to Defendants’ use of unauthorized 27 Philips IST Certificates, limiting their responses only to use of the “dongle” they possess, which Philips asserts renders them non- 28 responsive. (RFP Nos. 38-43; RFA Nos. 7, 17-19, 31-38, 40-47, 59) 1 Privacy/Constitution Objections: Defendants objected on “privacy” and “Constitution” grounds to discovery requests seeking 2 information about their servicing or use of Philips systems in China. (RFP Nos. 34, 36-37; Interrogatory No. 12) 3 Financial Records: Defendants have refused to produce financial 4 information (revenue, profit, compensation) associated with their servicing of Philips systems. (RFP No. 45) 5 Previously Promised Supplemental Responses: After the meet and 6 confer, Defendants agreed to supplement their responses to certain requests by March 22. As of the date of this filing, Defendants have 7 not provided these agreed supplemental responses. (RFA Nos. 5 and 6; Interrogatory Nos. 3, 5, and 13; RFP No. 44 and 46) 8 9 ECF No.

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Philips North America LLC v. Advanced Imaging Services, Inc., (E.D. Cal. 2022).

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