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Considering Chinese Law When Responding to US Discovery

Posted by James Juo | Sep 25, 2023 | 0 Comments

“Foreign laws that block the production of discoverable material do not automatically excuse a party from its Rule 26 obligations.” Philips Medical Systems (Cleveland), Inc. v. Buan, No. 19 CV 2648, 2022 WL 602485, at *2 (N.D. Ill. Mar. 1, 2022); see also Société Nationale Industrielle Aérospatiale v. U.S. Dist. Ct. for S. Dist. of Iowa, 482 U.S. 522, 544 n.29 (1987) (“well settled that [foreign] statutes do not deprive an American court of the power to order a party subject to its jurisdiction to produce evidence even though the act of production may violate that statute”).

But courts should exercise “special vigilance” to protect foreign litigants from the danger that unnecessary, or unduly burdensome, discovery may place them in a disadvantageous position. Philips, 2022 WL 602485, at *2; Aérospatiale, 482 U.S. at 546.

Courts apply a two-step process.

First, the party seeking to block discovery must show that foreign law “actually bars the production at issue.” Republic Techs. (NA), LCC v. BBK Tobacco & Foods, No. 16 CV 3401, 2017 WL 4287205, at *1 (N.D.Ill. Sept. 27, 2017).

If so, then the second step is to weigh the interests of the United States and those of the foreign state. Inventus Power v. Shenzhen Ace Battery, 339 F.R.D. 487, 501 (N.D. Ill. 2021). In doing so, the following five factors which are relevant to any comity analysis, are balanced:

  1.  the importance to the investigation or litigation of the documents or other information requested;
  2.  the degree of specificity of the request;
  3.  whether the information originated in the United States;
  4.  the availability of alternative means of securing the information; and
  5.  the extent to which noncompliance with the request would undermine important interests of the United States, or compliance with the request would undermine the important interests of the state where the information is located.

Aérospatiale, 482 U.S. at 544 n.28 (citing Restatement (Third) of the Law of Foreign Relations §442 (1987)); see also Reinsurance Co. of America, Inc. v. Administratia Asigurarilor de Stat, 902 F.2d 1275, 1281-83 (7th Cir. 1990) (relying on the same factors to determine whether Romanian law barred production of discovery).

Motorola v. Hytera Patent Lawsuit

Motorola sued Hytera for patent infringement related to digital, two-way radio technologies. Discovery included the source code for specific digital mobile radios (“DMR radios”).

Hytera, however, asserted that despite its diligent efforts to prepare the code for inspection in the United States, it had not yet received authorization from the government of the People's Republic of China to do so.

The District of Illinois held that, although Chinese law—namely, Article 37 of the Cybersecurity Law—blocks the production of the source code absent approval by Chinese authorities, the comity factors weighed in favor of production of the code under the Federal Rules of Civil Procedure. Motorola Solutions Inc. v. Hytera Communications Corp. Ltd., No. 1:17-cv-01972 (N.D. Ill. Sept. 12, 2023).

The source code is important to this litigation, and this factor weighs in favor of production.

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United States's interest in protecting its intellectual property outweighs China's interest in preventing its corporations from violating its data security laws.

To the extent that the source code at issue was created in and is currently maintained in China, this would weigh slightly against production of such code. But this was the only factor that the Court found weighed in favor of nonproduction by Hytera.

The patent attorneys at Thomas P. Howard, LLC enforce patents and defend against infringement in litigation nationwide including in Colorado.

About the Author

James Juo

James Juo is an experienced intellectual property attorney. He has successfully litigated various intellectual property disputes involving patents, trademarks, copyrights, and trade secrets. He also has counseled clients on the scope and validity of patent and trademark rights.

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