Enplas Display Device Corp. et al. v. Seoul Semiconductor Co., Ltd., Case No. 13-5038 (Magistrate Judge Nathanael Cousins)
Depositions in patent cases are expensive, particularly when they take place outside the United States. Magistrate Judge Cousins recognized that fact in a recent ruling in which he limited the number of depositions in a patent declaratory judgment action involving foreign parties. He further required that depositions of party witnesses take place in the Northern District of California, regardless of where the witnesses reside, in an apparent recognition of the significant costs associated with flying US patent lawyers overseas to conduct depositions in accordance with foreign rules. The ruling may inform parties who negotiate over whether to conduct foreign depositions in cases going forward.
The Enplas defendants in this case include a Japanese company and U.S. affiliates based in California and Georgia. They filed this action after receiving a demand letter from Defendant SSC, a South Korean company, concerning alleged infringement of LED patents.
The parties were unable to agree on where depositions should take place. Enplas urged the Court to allow depositions where witnesses reside, which would include Enplas employees in Japan and SSC employees in South Korea. SSC asked instead that Rule 30(b)(6) company witnesses and persons who may testify at trial be deposed in California where the action is pending.
Magistrate Judge Cousins began his analysis by noting the Court's duty under Rule 26 to limit permitted discovery, which under Rule 30 carries a presumptive ten deposition limit up to seven hours each, when the burden or expense outweighs likely benefit. He also noted that expense and certain other factors are considerations in determining whether a company should be deposed somewhere other than its principal place of business.
The Court then referenced the scattershot locations of the parties and the "especially expensive" nature of conducting depositions in Japan. Indeed, as any attorney that has navigated the Japanese deposition process will likely attest, taking a deposition in Japan is not only costly, it can be quite complex and require a great deal of planning and bureaucratic involvement. See http://japan.usembassy.gov/e/acs/tacs-7116.html ("Depositions in Japan"). The Court went on to pose several rhetorical questions—e.g., "Would the traveling witnesses and attorneys fly coach or first class?"—and found that, although precise numbers could not be known, non-expert foreign depositions could cost each side many hundreds of thousands of dollars.
In the end, Magistrate Judge Cousins limited each side to eight party employee depositions (including Rule 30(b)(6) designees) and refused to increase the presumptive seven-hour deposition limit even for witnesses requiring a translator. Perhaps to dissuade any party from seeking leave for additional depositions, the Court also expressly encouraged written depositions if any party believes additional deposition discovery is needed.
More significantly, despite the general presumption that a company's depositions should be conducted at its principal place of business, the Court required all party witnesses to come to the Northern District for depositions. The Court reasoned that such a requirement would not only reduce costs, but also would allow the Court to "better ... supervise" the depositions. However, the Court did not "at this time" require third-party witnesses to travel to the Northern District for depositions.
Magistrate Judge Cousins' Order provides a valuable lesson that Courts will often honor requests designed to make litigation more efficient and less costly for all parties, and that one should not shy away from seeking limitations on discovery before costs spiral out of control.
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