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Joint Stock Company Channel One Russia Worldwide v. Infomir LLC

United States District Court, S.D. New York

April 25, 2018

JOINT STOCK COMPANY CHANNEL ONE RUSSIA WORLDWIDE, et al., Plaintiffs,
v.
INFOMIR LLC, et al., Defendants.

          DISCOVERY ORDER AND REPORT AND RECOMMENDATION TO THE HON. GEORGE B. DANIELS

          BARBARA MOSES, UNITED STATES MAGISTRATE JUDGE.

         For the reasons stated on the record at the April 19, 2018 discovery conference, and the further reasons set forth below, the parties' disputes are resolved as follows:

         1. Kartina TV Documents

         The application of defendant Infomir, LLC (Infomir) to compel plaintiffs to produce documents responsive to Infomir's Document Requests No. 41-45, relating to Kartina TV (Kartina) (Dkt. No. 535), is GRANTED IN PART. Plaintiffs must promptly produce all non-privileged communications and other documents created by, received from, sent to, or discussed with Kartina concerning the factual allegations set forth in the First Amended Complaint (Dkt. No. 211).

         Infomir bases its request for additional Kartina-related documents (including all “contracts, licenses, or agreements” with Kartina, see Infomir Doc. Reqs. No. 42-43) on its contention that plaintiffs “are pursuing this lawsuit as a proxy for Kartina, ” which is licensed to distribute a version of plaintiffs' television programming (Programming) in the United States, and Kartina's business partner Dune HD, which manufactures internet protocol television (IPTV) set-top boxes competing with the Infomir set-top boxes at issue here. See Joint Ltr. dated Apr. 16, 2018 (Dkt. No. 566), at 2. According to Infomir this constitutes “copyright misuse, ” id., as further evidenced by recent deposition testimony confirming that Kartina is paying the legal fees for at least one plaintiff. Id. Plaintiffs respond that how they finance their litigation “has no bearing on any legal issue in this action, ” and that communications relating to “legal strategy and case financing by a licensee are privileged.” Id. at 3.

         The Court disagrees. The fact that persons other than plaintiffs are financing plaintiffs' litigation is not per se privileged. See, e.g., Vingelli v. U.S., Drug Enf. Agency, 992 F.2d 449, 452 (2d Cir. 1993) (“in the absence of special circumstances client identity and fee arrangements do not fall within the attorney-client privilege”); accord United States v. Zarrab, 2017 WL 1753466, at *3 (S.D.N.Y. Apr. 5, 2017) (collecting cases). Moreover, plaintiffs' financing arrangements become relevant here because there are pending cross-motions for security pursuant to Local Civil Rule 54.2. (Dkt. Nos. 383, 414.) See generally Atlanta Shipping Corp. v. Chem. Bank, 631 F.Supp. 335, 353 (S.D.N.Y. 1986) (ordering plaintiff to post security after noting that plaintiff was bankrupt but that “one of its creditors has agreed to finance up to $300, 000 in fees for this and related litigations”), aff'd, 818 F.2d 240 (2d Cir. 1987).

         However, Infomir is not entitled to broader discovery concerning plaintiffs' relationship with Kartina. Although Infomir has pleaded copyright misuse as one of its 25 affirmative defenses, see Infomir Answer (Dkt. No. 253) at 26, it does not allege any tying arrangements or other pre-filing anti-competitive conduct. Nor has it identified any authority for the proposition that the filing of an infringement action - without more - can constitute copyright misuse and thereby furnish the defendant with a defense to the same action. See generally UMG Recordings, Inc. v. Lindor, 531 F.Supp.2d 453, 458-59 (E.D.N.Y. 2007) (striking copyright misuse defense based on record companies' allegedly heavy-handed tactic of filing collective litigation against individual consumer who used popular music file-sharing software). Absent any factual basis for its copyright misuse defense, Infomir cannot rely on that defense to justify the broad discovery it seeks into plaintiffs' business relationships.

         2. Cross-Motion for Summary Judgment

         Plaintiffs' letter-brief in opposition to Infomir's application asks this Court to grant summary judgment on Infomir's copyright misuse defense. See Pl. Ltr. dated March 9, 2018 (Dkt. No. 538), at 3-5. Notwithstanding the lack of factual support for that defense, it is respectfully RECOMMENDED that the District Judge DENY plaintiffs' cross-motion for summary judgment, without prejudice, for failure to comply with Fed.R.Civ.P. 56(c) or Local Civil Rule 56.1(a).[1]

         3. Investigatory Documents

         Infomir's application to compel plaintiffs to produce additional documents responsive to its Document Requests No. 54 and 56, relating to plaintiffs' “piracy” investigations, Joint Ltr. at 4, is GRANTED IN PART. Plaintiffs must promptly produce all non-privileged documents concerning any investigation conducted (by plaintiffs or others) prior to the filing of this action into the “piracy” of the Programming at issue herein, including but not limited to documents concerning generic, routine, or preliminary investigations not yet focused on a specific claim against a specific party. See United States v. Adlman, 68 F.3d 1495, 1502 (2d Cir. 1995) (noting that the work-product doctrine applies where the material claimed to be non-discoverable focuses on “a specific claim, ” rather than the “abstract possibility” that the party's intellectual property “may someday become the focus of an as-yet unidentified claim”); Gould Inc. v. Mitsui Mining & Smelting Co., Ltd., 825 F.2d 676, 680 (2d Cir.1987) (work product rule requires the “existence of a real, rather than speculative, concern”).

         4. Vidulich Deposition and Documents

         Plaintiffs must also produce Christopher Vidulich, a paralegal in the employ of their counsel, for deposition. Plaintiffs have filed a series of declarations executed by Vidulich - most recently on March 23, 2018 (Dkt. No. 549), in support of Channel One's motion for partial summary judgment against Infomir - in which Vidulich describes the investigations he has conducted into defendants' systems and services. The matters covered by those declarations cannot be protected from discovery by the work product doctrine. See United States v. Nobles, 422 U.S. 225, 239-40 (1975) (“Respondent, by electing to present the investigator as a witness, waived the privilege with respect to matters covered in his testimony. Respondent can no more advance the work-product doctrine to sustain a unilateral testimonial use of work-product materials than he could elect to testify in his own behalf and thereafter assert his Fifth Amendment privilege to resist cross-examination on matters reasonably related to those brought out in direct examination.”); Stokes v. City of New York, 2006 WL 2064976, at *2 (E.D.N.Y. July 24, 2006) (“If and when the affidavit is filed in this action or otherwise publically disclosed, then work product protection clearly will be waived.”).

         However, “any waiver of work product by disclosing that work product to one's opponent waives the privilege only as to matter[s] covered in the waived documents.” Fullerton v. Prudential Ins. Co., 194 F.R.D. 100, 104 (S.D.N.Y. 2000). Vidulich does not claim to be an expert and does not offer any opinion testimony. His declarations are confined to the facts concerning the websites, apps, and software he accessed or utilized, the observations he made when he did so, and the information and data he acquired as a result of these activities. The Vidulich deposition shall be similarly limited. Defendants may not inquire into the instructions (if any) that Vidulich received, the opinions (if any) he developed, or the reports (if any) he made to plaintiffs' attorneys concerning those activities.

         Prior to the Vidulich deposition, plaintiffs must produce any additional documents in their possession, custody, or control (beyond those attached as exhibits to the witness's various declarations) constituting or recording the information and data that Vidulich acquired as a result of his investigatory activities. These documents are responsive to Infomir's Document Request No. 56 and are not themselves privileged. Documents concerning the instructions (if any) that Vidulich received, the opinions (if any) he developed, or the reports (if any) he made to plaintiffs' attorneys concerning his activities need not be produced.

         5. Rights to Programming under Russian Law

         Infomir seeks an order compelling plaintiffs to produce additional documents substantiating their ownership rights, under Russian law, in the Programming at issue in this action, including agreements and licenses concerning the “legal or beneficial ownership by plaintiffs of each work” at issue in this action; agreements and licenses showing that plaintiffs “transferred the right” to broadcast any such work via IPTV in the United States; and documents “sufficient to identify and establish plaintiffs' alleged property rights in each compilation of works in which they claim a protected interest infringed by Infomir.” Joint Ltr. at 5-6; see also Infomir Doc. Req. No. 17 (seeking all documents “substantiating” plaintiffs' “claim of property rights in each Work”).

         Plaintiffs respond that their copyright claims are based on “neighboring rights” in the Programming as a whole, which rights are protected under Russian law and the Berne Convention, and therefore that they need not establish the actual or beneficial ownership of the copyrights to any particular portion of that Programming. Joint Ltr. at 6; see also id. Ex. B (Pl. Ltr. dated March 6, 2018), at 1 (confirming that plaintiffs “do not intend to base their claims on any particular copyright or trademark registrations”); id. Ex. C (Pl. Ltr. dated March 9, 2018), at 8-9 (stating, in response to Document Requests No. 34-39, that plaintiffs “are not making any claims based on trademark registrations” but instead base their claims on “neighboring rights under the Russian Copyright Law”).

         Since plaintiffs do not base any of their claims in this action on their rights (legal or beneficial) to the individual works comprising the Programming, they need not produce agreements, licenses, or other documents concerning the existence or transfer of their rights in such individual works. But since plaintiffs do claim “neighboring rights” in the Programming as compiled for broadcast, they must promptly produce documents sufficient to show that they possess such rights as to that Programming. If plaintiffs contend that there are no such documents within their possession, custody, and control (and therefore that their proof will consist entirely of witness ...


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