United States District Court, W.D. New York
DECISION AND ORDER
HUGH B. SCOTT, Magistrate Judge.
Pending before the Court is a motion (Dkt. No. 198) by defendant Optimum Energy LLC ("Optimum") for miscellaneous discovery relief, including 1) further responses to discovery requests that it served on plaintiff Armstrong Pump, Inc. ("Armstrong"); 2) an extension of discovery deadlines for the case; 3) an additional deposition of a witness named Peter Thomsen ("Thomsen"); and 4) sanctions for failure to produce discovery earlier. Optimum argues that the July 25, 2014 deposition of Thomsen and the documents that Armstrong has provided since then indicate that still other documents exist that would be responsive to Optimum's discovery requests; and that the documents that Armstrong furnished in the last few weeks and months should have been furnished a few years ago. Armstrong counters that Optimum should not have filed the motion before reviewing all of the documents produced; that Armstrong has complied with all of its discovery obligations; and that at least some of Optimum's representations about discovery failures are false.
The Court had scheduled oral argument on October 23, 2014. That day, the parties requested additional briefing instead. The Court now deems the motion submitted on papers under Rule 78(b) of the Federal Rules of Civil Procedure. For the reasons below, the Court grants Optimum's motion in part and orders additional discovery as explained below.
A) Optimum's Claims
For the sake of brevity, the Court presumes general familiarity with the docket and focuses only on background information pertinent to Optimum's pending motion. On February 4, 2005, defendant Thomas Hartman ("Hartman") and Armstrong entered a License Agreement concerning three patents that Hartman owned. ( See, e.g., Dkt. No. 55-1.) Section 1 of the License Agreement contains definitions for several terms, including the terms "factory implementation" and "field implementation." "Factory Implementation' means implementing the Licensed Technologies into chiller, pumping, control systems and/or tower products as a part of the factory production process." ( Id. at 3.) "Field Implementation' means implementing the Licensed Technologies into the chiller, pumping, control systems and/or tower products after the products have been delivered to the site." ( Id. ) Put another way, to the Court's best understanding, factory implementation means that an HVAC product rolls out of Armstrong's factory with Hartman's patent technology fully installed and ready for use. Field implementation, in contrast, means that an HVAC product rolls out of Armstrong's factory fully compatible with Hartman's patent technology, but that the technology would be added to the product at the place where the product would be installed. Section 2.1 of the License Agreement gave Armstrong "a license, to make, have made, use, sell, and otherwise distribute factory packaged chilled water systems, pumping and/or other mechanical products that incorporate the Licensed Technologies at the factory implementation level, and to use and otherwise practice the Licensed Technologies in Licensed Products." ( Id. ) Under Section 3.3(c), Armstrong, without special permission from Hartman, "has no rights granted under this agreement to field implemention of the Licensed Technologies (e.g. implementing the Licensed technologies without an integrated equipment/control package)." ( Id. at 5.)
The restriction that the License Agreement imposed on Armstrong regarding field implementation served as the basis for Optimum's counterclaims in this case. Optimum filed an answer to Armstrong's first amended complaint on March 22, 2011 (Dkt. No. 57); the answer included five counterclaims. Three of the counterclaims pertain more to the patent-related history of this case and are not relevant here. The first and fifth counterclaims are particularly relevant to the pending motion. In the first counterclaim, Optimum asserted that "[u]pon information and belief, Armstrong has committed multiple breaches of the Armstrong License Agreement." ( Id. at 15.) Optimum then specified several projects involving Armstrong that went beyond factory implementation into field implementation:
Field implementation at the Erieview office building and retail mall in downtown Cleveland, Ohio in 2009;
Sales of Armstrong's IPC 11550 Control System for the Massachusetts College of the Arts project in Cambridge, Massachusetts in 2010;
Marketing of the IPC 11550 Control System for three real estate projects on Binney Street in Cambridge, Massachusetts, the marketing apparently having occurred in late 2010; and
General sales and marketing of the IPC 11550 Control System on a "stand alone" basis, that is, selling the control system apart from a fully factory-assembled HVAC product.
(Dkt. No. 57 at 15-17.) In the fifth counterclaim, Optimum accused Armstrong of "actively engag[ing] in activities directed toward making, using, offering for sale, and selling the IPC 11550 as a stand-alone product in a manner that is outside the limited scope of its license rights under the Licensed Patents, and which ...