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Spread Spectrum Screening LLC v. Eastman Kodak Company

August 26, 2011

SPREAD SPECTRUM SCREENING LLC, PLAINTIFF,
v.
EASTMAN KODAK COMPANY, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Marian W. Payson United States Magistrate Judge

DECISION & ORDER

PRELIMINARY STATEMENT

Spread Spectrum Screening LLC ("S3") commenced this action on February 18, 2010, alleging that Eastman Kodak Company ("Kodak") infringed its patent for a digital halftoning screen, United States Patent No. 5,689,623 ("the '623 patent"), by making, using and selling Kodak "Staccato" software products. (Docket ## 1, 181-11 at 2). Currently pending before this Court is a motion by Kodak to stay the litigation. (Docket # 181). Although S3 does not oppose a limited stay of certain aspects of the litigation, it opposes a stay of fact discovery. (Docket # 186).

For the reasons discussed below, Kodak's motion for a stay is granted, except that S3 shall be permitted to apply for the issuance of letters rogatory authorizing depositions of two witnesses who are Canadian citizens, Daniel Blondal and Lawrence Croft.

BACKGROUND

On February 18, 2010, S3 filed suit in the Northern District of Illinois against Kodak and four of Kodak's customers that are licensed users of the Staccato software. (Docket # 173-11 at 3). After being granted an extension of time to answer the complaint (Docket ## 25, 44), Kodak moved for a severance from the other defendants and to transfer the case to this district (Docket # 82). Kodak's motion was granted on September 1, 2010. (Docket # 167).

The district judge to whom the case was assigned in the Northern District of Illinois declined to stay discovery while Kodak's transfer motion was pending, and the parties thus began exchanging initial disclosures under the supervision of a magistrate judge pursuant to that court's local rules. (Docket # 108). On June 10, 2010, Kodak disclosed prior art to S3. (Docket # 186 at 11 n.12). On June 29, S3 served Kodak with document requests. (Id. at 6). On July 19, Kodak moved for an extension of time to respond to S3's interrogatories and requests for production (Docket # 154), and was granted extensions until August 18 to respond to S3's interrogatories and September 1 to respond to the requests for production (Docket # 159). Kodak did not produce the requested discovery by those deadlines. (Docket # 173). On September 1, 2010, the transfer motion was granted. (Docket # 160).

Kodak did not respond to S3's discovery requests even after the case was transferred to the Western District of New York, maintaining that the "prior orders of the Northern District of Illinois have no force before [the Western District of New York]." (Docket # 173-9). On December 6, 2010, S3 moved to compel Kodak's responses. (Docket # 173).

Ten days later, Kodak filed a petition for an ex parte reexamination with the United States Patent and Trademark Office ("PTO"). (Docket # 181-11 at 4). Shortly thereafter, on January 10, 2011, Kodak filed the instant motion to stay the lawsuit pending the PTO's determination of Kodak's petition for reexamination. (Docket # 181). The PTO granted Kodak's petition for reexamination on February 1, 2011, and thereafter preliminarily rejected all claims of the patent-in-suit. (Docket ## 188, Ex. J; 206; 207).

S3 opposes the requested stay in part, agreeing that the "claim scope-dependent aspects of the case"*fn1 should be stayed, but maintaining that fact discovery should proceed. (Docket # 186). S3 contends that a stay of discovery would reward Kodak's "serial delay" in this case. (Id. at 3).

On February 9, 2011, this Court held argument on S3's motion to compel and Kodak's motion to stay. (Docket # 196). This Court granted S3's motion to compel and reserved on Kodak's motion for a stay. (Docket # 194).

S3 opposes a complete stay and requests permission to take three depositions during the pendency of the PTO's reexamination "in order to preserve critical evidence." (Docket # 197 at 1). Specifically, S3 seeks to conduct a limited Rule 30(b)(6) deposition of Kodak and to depose two individuals, Daniel Blondal and Lawrence Croft, who, according to S3, "worked closely with [the '623 patent inventor] during Kodak's efforts to research and develop" the Staccato software ten years ago. (Id. at 3). Because the two named witnesses are Canadian citizens, S3 must apply for the issuance of letters rogatory in order to secure their testimony.*fn2

(Docket # 199 at 6). Kodak opposes permitting S3 to conduct the depositions, but does not oppose S3 applying for the letters rogatory so that the depositions may commence ...


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