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Law360 (June 26, 2020, 9:55 PM EDT) -- Citing the pandemic, an Eastern District of Texas federal judge has given the green light to a novel way to review source code that was specially developed by Apple during its wide-ranging patent dispute with Maxell.
In an order issued Thursday, U.S. District Judge Robert Schroeder said that in light of the "exceptional exigencies" due to COVID-19, he is allowing Apple to send laptops to Maxell's reviewers to remotely access the smartphone giant's source code.
Noting that "virtually every state" has restricted movement outside of homes, Apple's special laptops are a temporary measure "to allow discovery of source code in this action to continue while the public health restrictions are in place," the judge wrote.
The order also lists rules for using the laptops, including that reviewers must store them in a locked safe or room in their homes, and make sure that the laptops are positioned so that the screen is not visible from "any external window" in the room.
The new accommodation will stay in effect until Sept. 1 unless otherwise extended, according to Thursday's order.
Kyoto-based Maxell sued Apple in March 2019, claiming infringement of 10 patents covering technology ranging from cellphones to batteries to cameras. The case has been hotly contested in Texas, with Maxell in March urging the judge to sanction Apple for alleged "discovery abuses," leading Apple to blast what it called Maxell's "scorched earth" discovery tactics.
Judge Schroeder had rejected Apple's bid to transfer the lawsuit to the Northern District of California, prompting Apple to file a mandamus petition that argued that the judge's refusal rested on a "series of legal and factual errors in analyzing the factors that govern transfer."
While Judge Schroeder acknowledged that Northern California was more convenient than Texas for both Cupertino-based Apple's possible witnesses and Maxell's witnesses living in Japan, he said that only leaned "slightly" towards transfer.
In May, a split Federal Circuit panel denied Apple's request to move the case, despite a forum selection clause in Apple's contract with Maxell's parent Hitachi in 2011 that calls for fights to be handled in the Northern District of California.
U.S. Circuit Judges Sharon Prost and Todd Hughes said the agreement between Apple and Hitachi wasn't related to the current infringement dispute, so the forum selection clause didn't apply. U.S. Circuit Judge Pauline Newman disagreed, saying her colleagues' ruling was "as improper as it is illogical." The case is now back in district court.
Counsel for the parties did not immediately respond to requests for comment Friday.
Reviewing source code while sheltering in place has been an issue in other cases, including one involving Canon and Chinese electronics giant TCL over the TCL Roku TV.
Canon had sought remote access to Roku's operating system source code due to COVID-19 restrictions. Roku Inc., which is not named in the underlying case, filed a motion to quash the subpoena in May, calling the request "unprecedented, unnecessary, and [an] unjustifiable risk to its key business asset."
Hulu — also not a party in that case — weighed in on the issue last month, saying that its own business is at risk given its partnership with Roku, and that the precedent is dangerous for all tech companies aiming to protect their data from malware or hackers.
"Hulu has significant and serious concerns about the diminished security to that source code if similar requests are granted in patent cases where Hulu's source code has been or will be made available for inspection," Hulu's amicus brief states.
Maxell is represented by Jamie B. Beaber, Alan M. Grimaldi, Kfir B. Levy, James A. Fussell III, William J. Barrow, Baldine B. Paul, Tiffany A. Miller, Michael L. Lindinger, Saqib J. Siddiqui, Bryan C. Nese, Alison T. Gelsleichter, Robert G. Pluta, Amanda Streff Bonner, Luiz Miranda and Graham M. Buccigross of Mayer Brown LLP, and Geoffrey Culbertson and Kelly Tidwell of Patton Tidwell & Culbertson LLP.
Apple is represented by Luann L. Simmons, Xin-Yi Zhou, Marc J. Pensabene, Laura Bayne Gore and Bo Moon of O'Melveny & Myers LLP, and Melissa Richards Smith of Gillam & Smith LLP.
The case is Maxell Ltd. v. Apple Inc., case number 5:19-cv-00036, in the U.S. District Court for the Eastern District of Texas.
--Additional reporting by Dani Kass. Editing by Adam LoBelia.
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