UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
`
`APPLE INC.,
`
`Civil Action No. ________________
`
`Petitioner,
`
`-against-
`
`Respondent.
`
`DOE,
`
`MEMORANDUM OF LAW IN
`SUPPORT OF AN EXPEDITED
`ORDER COMPELLING
`COMPLIANCE WITH APPLE INC.’S
`RULE 45 SUBPOENA
`
`

`

`Case 3:17-mc-80062-WHO Document 22 Filed 05/09/17 Page 2 of 11
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`TABLE OF CONTENTS
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`Page
`
`I.
`
`II.
`
`III.
`
`BACKGROUND ............................................................................................................... 1
`A.
`The Nature of the Action Pending in the Northern District of California. ............ 1
`B.
`Apple’s Attempts to Obtain Discovery From OEM World. .................................. 2
`C.
`Material Omitted From OEM World’s Production. ............................................... 3
`D.
`Apple’s Efforts To Meet and Confer. .................................................................... 3
`ARGUMENT ..................................................................................................................... 4
`A.
`This Court Should Grant Apple’s Motion To Compel. ......................................... 4
`B.
`OEM World Was Properly Served With The Subpoena. ...................................... 4
`C.
`The Information Requested In The Subpoena Is Relevant, Material, And
`Proportional To The Needs Of The Case. .............................................................. 5
`Any Objection To Apple’s Subpoena Is Untimely And Should Be Deemed
`Waived. .................................................................................................................. 6
`Compliance With The Subpoena Is Neither Unduly Burdensome Nor
`Likely To Create Significant Expense. .................................................................. 6
`CONCLUSION .................................................................................................................. 7
`
`D.
`
`E.
`
`-i-
`
`

`

`Case 3:17-mc-80062-WHO Document 22 Filed 05/09/17 Page 3 of 11
`
`TABLE OF AUTHORITIES
`
`
`
`Page(s)
`
`Cases
`
`Jalayer v. Stigliano,
`No. CV 10-2285 (LDH) (AKT), 2016 WL 5477600 (E.D.N.Y. Sept. 29, 2016) ......................5
`
`Nimkoff Rosenfeld & Schechter, LLP v. RKO Props., Ltd.,
`No. 07 Civ. 7983 (DAB)(HBP), 2016 WL 3042733 (S.D.N.Y. May 24, 2016) .......................6
`
`Statutes
`
`15 U.S.C. § 1114 ..............................................................................................................................1
`
`15 U.S.C. § 1117 ..............................................................................................................................5
`
`17 U.S.C. § 501 ................................................................................................................................1
`
`Other Authorities
`
`Fed. R. Civ. P. 26 .........................................................................................................................2, 5
`
`Fed. R. Civ. P. 45 .................................................................................................................2, 4, 5, 6
`
`-ii-
`
`

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`Case 3:17-mc-80062-WHO Document 22 Filed 05/09/17 Page 4 of 11
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`Apple Inc. (“Apple”) moves this Court for an Order compelling compliance with its duly
`
`issued and served subpoena to OEM World Inc. (“OEM World”) pursuant to Rule 45(d)(2)(B)(i)
`
`of the Federal Rules of Civil Procedure.
`
`I.
`
`BACKGROUND
`
`A.
`
`The Nature of the Action Pending in the Northern District of California.
`
`Apple’s action in the Northern District of California is against a New Jersey-based
`
`defendant, Mobile Star, LLC (“Mobile Star”), which sells goods bearing Apple’s registered
`
`trademarks and copies of Apple’s registered copyrighted work—either directly on the goods or
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`on the packaging in which the goods are sold. Zellerbach Decl. ¶¶ 3-4, Ex. A. Through Apple
`
`test purchases from Amazon.com and Groupon, both of which unequivocally identified Mobile
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`Star as their source of Apple-branded products sold by them to Apple, as well as through test
`
`purchases directly from Mobile Star, Apple learned that Mobile Star was selling counterfeit
`
`Apple-branded products. Zellerbach Decl. ¶ 4. The counterfeit products distributed by Mobile
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`Star include power adapters and Lightning® cables used to charge Apple’s well-known
`
`consumer products. Apple’s tests confirmed that the counterfeit power adapters were so poorly
`
`designed and constructed that they pose serious safety risks, including the possibility of fire,
`
`electric shock, and even electrocution. Zellerbach Decl. Ex. B (Pearson Decl.) ¶¶ 7-9.
`
`After Mobile Star was identified as a source of counterfeit Apple products, Apple sought
`
`Mobile Star’s cooperation in identifying its upstream vendors of the counterfeit Apple products
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`so these dangerous products could be removed from the market. After Mobile Star repeatedly
`
`refused to provide such information, Apple finally filed suit against Mobile Star and Doe
`
`defendants alleging violations of the Lanham Act, 15 U.S.C. §§ 1114(1) (Trademark
`
`Counterfeiting and Infringement), 1125(a)(1)(A) (False Designation of Origin), the Copyright
`
`Act, 17 U.S.C. § 501 (Copyright Infringement), and a claim under California state law.
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`-1-
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`

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`Case 3:17-mc-80062-WHO Document 22 Filed 05/09/17 Page 5 of 11
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`Discovery in that action enabled Apple to learn the identity of Mobile Star’s upstream suppliers
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`of Apple-branded goods. Respondent OEM World was one of the suppliers identified as a
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`source of Mobile Star’s Apple-branded products during expedited discovery.
`
`Zellerbach Decl. ¶ 7.
`
`B.
`
`Apple’s Attempts to Obtain Discovery From OEM World.
`
`After the entry of a stipulated preliminary injunction against Mobile Star and the start of
`
`the regular discovery period under Rule 26, Apple served Rule 45 subpoenas on entities
`
`identified as Mobile Star’s sources of Apple-branded products in order to determine the ultimate
`
`source of the counterfeit products sold by Mobile Star. The requests served on Mobile Star’s
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`suppliers, including Respondent OEM World, were extremely narrow, seeking only documents
`
`in the four following categories:
`
`1. Records of transactions through which the entity acquired Apple-branded
`
`products between October 17, 2013, and October 17, 2016;
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`2. Communications during the same time period regarding the genuineness or origin
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`of Apple-branded products;
`
`3. Documents and communications exchanged with Mobile Star concerning Apple-
`
`branded products; and
`
`4. Communications exchanged with Mobile Star that discuss the litigation between
`
`Apple and Mobile Star.
`
`Zellerbach Decl. ¶ 8, Ex. C.
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`OEM World was served with the subpoena at issue on February 22, 2017. Zellerbach
`
`Decl. Ex. D. OEM World failed to serve any objections to the subpoena, asking only for a short
`
`extension of the date to produce documents, which was given. Shaffer Decl. ¶ 7. On March 30,
`
`2017, OEM World delivered to Apple’s counsel’s offices 15 pages of documents consisting of
`
`-2-
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`

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`Case 3:17-mc-80062-WHO Document 22 Filed 05/09/17 Page 6 of 11
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`six invoices of sales to Mobile Star and documentation of seven purchases of Apple-branded
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`products by OEM World. Shaffer Decl. ¶ 8. OEM World’s production, however, did not
`
`include any of the communications requested in the subpoena and appears deficient as to all of
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`OEM World’s sources for Apple-branded products.
`
`C.
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`Material Omitted From OEM World’s Production.
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`Records Related to Apple-branded Products. OEM World produced invoices showing
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`sales of 21,780 units of various Apple-branded products to Mobile Star from July through
`
`August 2016. OEM World produced invoices showing the acquisition of 25,600 units of Apple-
`
`branded products during and prior to that same period. The 25,600 units only makes sense if
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`Mobile Star is virtually OEM World’s only customer of Apple-branded goods. Apple
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`understands that OEM World has other customers and so believes that the records of its
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`acquisition of Apple-branded products is incomplete. Apple requested all such records so that
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`the suppliers, including OEM World, would not be able to cherry pick invoices to produce to
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`Apple.
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`Communications. OEM World did not produce a single communication in response to
`
`Apple’s subpoena and offered no explanation as to why communications were omitted. The
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`sought after communications are, as discussed below, highly relevant to this case.
`
`D.
`
`Apple’s Efforts To Meet and Confer.
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`Subsequent to OEM World’s production of materials on March 30, 2017, Apple
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`contacted OEM World’s counsel on the same day to verify whether the produced documents
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`were designated confidential under the case protective order in the Northern District of
`
`California. Zellerbach Decl. Ex. E. Apple received no response, and followed up with a second
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`email on April 11, 2017, to which OEM World’s counsel responded and provided the
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`designations. Id. After analyzing OEM World’s production in light of documents produced by
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`-3-
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`

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`Case 3:17-mc-80062-WHO Document 22 Filed 05/09/17 Page 7 of 11
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`other entities, which included invoices and multiple communications with Mobile Star, and
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`cross-referencing it against documents produced by Mobile Star, Apple sent a letter requesting
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`an opportunity to meet and confer regarding items omitted from OEM World’s production. The
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`letter was sent via email to OEM World’s counsel on April 25, 2017, and also delivered via
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`overnight Federal Express. Shaffer Decl. ¶ 10. Apple has not received a response as of the filing
`
`of this motion, and thus has not been able to make basic inquiries as to the scope of OEM
`
`World’s search for responsive documents and the reasons documents were omitted from OEM
`
`World’s production.
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`II.
`
`ARGUMENT
`
`A.
`
`This Court Should Grant Apple’s Motion To Compel.
`
`Federal Rule of Civil Procedure 45(d)(2)(B)(i) states that “[a]t any time, on notice to the
`
`commanded person, the serving party may move the court for the district where compliance is
`
`required for an order compelling production or inspection.” Here, the Southern District of New
`
`York is the district “where compliance is required.” Id.; Zellerbach Decl. Ex. C.
`
`B.
`
`OEM World Was Properly Served With The Subpoena.
`
`The subpoena was properly served on OEM World pursuant to Rule 45(b) of the Federal
`
`Rules of Civil Procedure, which requires service by a “person who is at least 18 years old and
`
`not a party” upon “the named person.” Zellerbach Decl. Ex. D. Apple’s process server delivered
`
`a copy of the subpoena to OEM World’s business address on February 22, 2017, and left a copy
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`of the subpoena with a person who identified himself as a manager of the business. Id. OEM
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`World subsequently complied only in part with the subpoena by making its incomplete
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`production on March 30, 2017.
`
`-4-
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`

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`Case 3:17-mc-80062-WHO Document 22 Filed 05/09/17 Page 8 of 11
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`C.
`
`The Information Requested In The Subpoena Is Relevant, Material, And
`Proportional To The Needs Of The Case.
`
`“[T]he party issuing the subpoena must demonstrate that the information sought is
`
`relevant and material to the allegations and claims at issue in the proceedings.’” Jalayer v.
`
`Stigliano, No. CV 10-2285 (LDH) (AKT), 2016 WL 5477600, at *2 (E.D.N.Y. Sept. 29, 2016)
`
`(citation omitted). Rule 45 subpoenas are subject to Rule 26, which recognizes that “information
`
`is discoverable ... if it is relevant to any party’s claim or defense and is proportional to the needs
`
`of the case.” Id. (quoting the Rule 26 Advisory Committee Notes to 2015 Amendments).
`
`The information sought by Apple from OEM World is relevant to both Apple’s claims
`
`against Mobile Star and Mobile Star’s defenses. Central to Apple’s claims are allegations that
`
`Mobile Star is purchasing and distributing counterfeit versions of Apple’s well-known products,
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`many of which are dangerous power products that are not subject to the quality and safety
`
`standards of genuine Apple goods. Identifying the ultimate source of Mobile Star’s inventory is
`
`central to the inquiry about the genuineness of the Apple-branded products sold by OEM World
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`and, in turn, Mobile Star. OEM World should be compelled to produce all of its supplier
`
`information for Apple-branded products to ensure it cannot cherry pick invoices from more
`
`reputable sources and conceal goods purchased from likely counterfeiters.
`
`Another claim central to Apple’s suit against Mobile Star is that Mobile Star’s
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`infringement was willful. See 15 U.S.C. § 1117(c)(2) (authorizing enhanced statutory damages
`
`for willful counterfeiting); Zellerbach Decl. Ex. A at ¶ 44. Thus, communications between OEM
`
`World and Mobile Star are relevant and material to showing the extent of Mobile Star’s
`
`knowledge about the counterfeit nature of any of the Apple-branded products. For instance,
`
`communications from OEM World identifying the sources of its products, discussing the origin
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`of the Apple-branded products at issue, or discussing the litigation between Mobile Star and
`
`-5-
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`

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`Case 3:17-mc-80062-WHO Document 22 Filed 05/09/17 Page 9 of 11
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`Apple are all germane to establishing what Mobile Star knew and when. OEM World’s
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`communications with its upstream vendors and customers concerning the genuineness of the
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`Apple-branded products it was distributing are clearly relevant to the genuineness of the Apple-
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`branded products that OEM World and thus Mobile Star were selling.
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`Finally, Mobile Star’s consistent defense in the action pending in the Northern District of
`
`California has been that its suppliers are “long-time, reputable suppliers that acquire excess and
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`discontinued inventory from mobile phone carriers and phone warranty companies.” Zellerbach
`
`Decl. Ex. F. The nature of Mobile Star’s suppliers, such as OEM World, and where they source
`
`their Apple-branded products is thus highly relevant to establishing (or disproving) Mobile Star’s
`
`“reputable suppliers” defense.
`
`D.
`
`Any Objection To Apple’s Subpoena Is Untimely And Should Be Deemed
`Waived.
`
`If OEM World had valid objections to assert to the scope or subject of Apple’s subpoena,
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`such objections were due on March 8, 2017, 14 days after service. Fed. R. Civ. P. 45(d)(2)(B);
`
`see, e.g., Nimkoff Rosenfeld & Schechter, LLP v. RKO Props., Ltd., No. 07 Civ. 7983
`
`(DAB)(HBP), 2016 WL 3042733, at *4 (S.D.N.Y. May 24, 2016) (holding untimely objections
`
`to be waived under Rule 45 unless the objecting party shows good cause for the delay). The first
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`Apple heard from OEM World was on or around March 24, 2017, after the objection deadline
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`had passed. Even at that time, OEM World raised no objection to the subpoena itself, requesting
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`only a few extra days to produce the requested documents. Shaffer Decl. ¶ 7. On this record,
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`good cause does not exist to excuse OEM World’s failure to make timely objections, and the
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`Court should hold any late-asserted objection to be waived.
`
`E.
`
`Compliance With The Subpoena Is Neither Unduly Burdensome Nor Likely
`To Create Significant Expense.
`
`The burden of producing the requested materials on OEM World is minimal. See Fed. R.
`
`-6-
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`

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`Case 3:17-mc-80062-WHO Document 22 Filed 05/09/17 Page 10 of 11
`Case 3:17-mc-80062-WHO Document 22 Filed 05/09/17 Page 10 of 11
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`Civ. P. 45(d)(1) (a subpoena should “avoid imposing undue burden” (emphasis added»;
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`45 (d)(2)(ii) (a party should not incur “significant expense” complying with a subpoena). OEM
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`World has already shown that it is able to produce various invoices related to its acquisition of
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`some Apple-branded products, and completing its production is not unduly burdensome.
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`Searching for communications and text messages will not be burdensome because the relevant
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`email addresses are known and easily located through simple electronic searches. There is no
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`basis to find that such a search would create any significant expense.
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`III.
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`CONCLUSION
`
`For the reasons stated above, Apple requests that the Court order OEM World to show
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`cause why it should not complete its production of documents responsive to the four requests in
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`Apple’s subpoena by May 15, 2017.
`
`Dated: New York, New York
`
`May 2, 2017
`
`Respectfully submitted,
`
`Orrick, Herrington & Sutcliffe LLP
`
`By:
`
`Nicho as H.
`
`am
`
`Orrick, Herrington & Sutcliffe LLP
`51 West 52nd Street
`
`New York, NY 10019
`+1212 506 5000
`
`n1am@orrick.com
`
`Thomas H. Zellerbach (pro hac vice)
`Orrick, Herrington & Sutcliffe LLP
`1000 Marsh Road
`
`Menlo Park, CA 94025-1015
`+1 650 614 7400
`
`tzellerbach@orrick.com
`
`

`

`Case 3:17-mc-80062-WHO Document 22 Filed 05/09/17 Page 11 of 11
`
`Nathan Shaffer (pro hac vice)
`Orrick, Herrington & Sutcliffe LLP
`405 Howard Street
`San Francisco, CA 94105-2669
`+1 415 773 5440
`nshaffer@orrick.com
`Attorneys for Petitioner Apple Inc.
`
`-8-
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`