Case of the Day: In re King.com
Posted on August 23, 2016
The case of the day is In re King.com Ltd. (N.D. Cal. 2016). King, a Maltese company, is the developer of the Candy Crush video game. It owned the European Candy Crush trademark and related marks. It sued Storm8 Studios LLC and TeamLava LLC in the Civil Court of Malta, alleging that their Candy Blast Mania game infringed the Candy Crush mark. The Maltese court stayed the action pending EU Intellectual Property Office review of a challenge to the validity of the marks. King brought an application under § 1782 seeking leave to depose Perry Tam, Chak Ming Li, and William Siu, Storm8 and TeamLava executives, for use in the Maltese action (after the stay is lifted). At the ex parte stage, King argued that the Maltese action would necessarily continue whatever the outcome of the validity proceedings, because several of the marks at issue in the infringement lawsuit were not at issue in the validity proceeding; that the validity proceedings might take a decade to complete; and that discovery now was important because Malta imposes no obligation to preserve evidence and “Respondents had a history of changing corporate forms.” The court granted the application.
After the court granted the application, the Maltese court entered an order requiring preservation of documentary evidence but denying King’s request for discovery. The respondents then moved to quash the US subpoena.
The court quashed the subpoenas in light of the Intel factors. Some of the analysis was straightforward. The respondents were parties to the Maltese case, which weighs against § 1782 discovery. The court found the subpoenas burdensome, and it found the claim that there was a need for quick discovery undermined by the Maltese court’s order requiring preservation of evidence. The most interesting point was the court’s conclusion that in light of the stay, the § 1782 application was an attempt to circumvent Malta’s proof-gathering restrictions. This is questionable, since it is not clear that the Maltese court meant to forbid resort to § 1782, and since it’s difficult to see how a stay can preclude use of § 1782 given that the action doesn’t have to be pending to support a § 1782 application. But the court’s discretion is broad.