Case of the Day: Via Vadis Controlling GmbH v. Skype, Inc.

The case of the day is Via Vadis Controlling GmbH v. Skype, Inc. (D. Del. 2013). Via Vadis is the exclusive licensee of a European patent, and it sued Skye Software S.A.R.L. for infringement in Germany. Via Vadis also applied to a Luxembourg court for an Ordonnance permitting court-appointed experts to search Skype Software’s offices in Luxembourg. The experts executed the Ordonnance but did not recover source code that Via Vadis thought important to its infringement case. Via Vadis then sued Skype Software in Luxembourg for infringement of the same patent.

In parallel US litigation, the judge in Delaware permitted Via Vadis to discovery relevant portions of Skype’s source code, subject to a protective order. Via Vadis then moved for issuance of a subpoena under § 1782 to allow it to obtain the source code for use in the foreign proceedings. Skype was a party to the foreign cases, which weighs against the application. The judge found that Via Vadis had shown that the German courts would be receptive to the evidence, which weighs for the application. They keys to the decision seem to be the judge’s views on circumvention of foreign proof-gathering restrictions and undue burden.

The judge recognized that under Intel information need not be discoverable under the foreign law in order to be discoverable under § 1782. But he went on to say:

This court declines, especially in the absence of any request from the foreign courts, to help Via Vaid overcome the rules and procedures of the foreign courts. Despite their jurisdiction over SkypeS, the foreign courts have not forced SkypeS to produce the requested materials. Discovery under § 1782 would be, in essence, a circumvention of the foreign courts’ rules and enforcement procedures.

On this point, the judge is an outlier, and despite his protestations, he clearly appears to be confusing discoverability with circumvention. There are many decisions that reach the opposite conclusion, and those decisions are better-reasoned insofar as they take into account the difference between civil law systems and our system. A German court does not decide not to order production of source code. That kind of pre-trial discovery is simply not part of what happens in Germany, for the most part.

The judge was not on stronger footing when he pointed to the burdensomeness of the production. Because the materials had already been gathered and produced in the US parallel case, there would seem to be no burden involved in producing it again. The judge noted that the US protective order specifically prohibited disclosure of the source code in connection with the foreign proceedings; but that is precisely why the § 1782 application was appropriate.

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