Case 1:17-cv-00868-CFC-SRF Document 109 Filed 03/26/20 Page 1 of 5 PageID #: 3549
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`March 19, 2020
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`VIA E-FILING
`The Honorable Sherry R. Fallon
`J. Caleb Boggs Federal Building
`844 N. King Street
`Room 3124, Unit 14
`Wilmington, DE 19801-3555
`
`Re: University of Massachusetts, et al. v. L’Oreal USA, Inc., 17-868-CFC-SRF
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`Dear Judge Fallon:
`
`We write in support of Plaintiffs’ motion for a discovery teleconference regarding
`Defendant’s ongoing document production deficiencies. Defendant’s inadequate document
`production to date—in response to Paragraph 6 of the Court’s scheduling order, the Court’s
`February 18 Order directing Defendant to satisfy its discovery obligations, and Plaintiffs’
`Requests for Production—and Defendant’s unwillingness to provide Plaintiffs with basic
`information about its document collection process have left Plaintiffs with serious concerns
`about the sufficiency of Defendant’s discovery efforts. Document production was to be complete
`by February 7, 2020 (D.I. 46 at 9(b)), yet it is clear that Defendant has not provided complete
`document discovery. Plaintiffs accordingly request that the Court order Defendant to promptly
`remedy the outstanding production deficiencies, certify that its collection and investigation are
`complete, and provide a witness to testify on its document collection and production.
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`I.
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`Outstanding Marketing and Product Testing Materials
`On February 18, the Court ordered Defendant to remedy certain deficiencies in its
`production and “produce all outstanding technical information for each of the Accused Products,
`including officialization documents, formulation lists, product packaging, marketing materials,
`and product testing materials, on or before February 28, 2020.”
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`Defendant produced some additional technical documents on February 28. Nevertheless,
`as Plaintiffs promptly notified Defendant, documents were still outstanding for many of the
`Accused Products. See Ex. B-2, at 1. In particular, financial information remained missing for 5
`products, officialization documents or ingredient lists were missing for 6 products, product
`packaging was missing for 7 products, and marketing materials were missing for 42 products.
`See Ex. A-2. The parties met and conferred to discuss these deficiencies on March 3 and March
`12. In accordance with the Court’s observation that Plaintiffs’ chart listing the missing
`documents was a “good start” for the process of identifying any deficiencies, see Feb. 18 Tr. 41-
`42, Plaintiffs provided Defendant with an updated list showing what they believe remains
`missing after Defendant’s additional productions, see Ex. A-2. Defendant asserted that there
`were inaccuracies in Plaintiffs’ list, and that some of the missing documents had been produced,
`but refused to identify the Bates numbers for these documents. Without these Bates numbers,
`Plaintiffs cannot meaningfully discuss with Defendant whether its production is sufficient. The
`same is true of the product testing Defendant produced after the Court’s order. Certain tests
`identify a specific product, but many other testing reports use only a generic product description
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`9 1 9 N . M A R K E T S T R E E T , 1 2 T H F L O O R , W I L M I N G T O N , D E 1 9 8 0 1
`P H O N E : ( 3 0 2 ) 7 7 7 – 0 3 0 0 · F A X : ( 3 0 2 ) 7 7 7 – 0 3 0 1 · W W W . F A R N A N L A W . C O M
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`Case 1:17-cv-00868-CFC-SRF Document 109 Filed 03/26/20 Page 2 of 5 PageID #: 3550
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`or alphanumeric product identifier. If Defendant will not identify, by Bates number, the tests that
`correspond to specific products, Plaintiffs have no way of knowing if Defendant has complied
`with the Court’s order. Plaintiffs have added a section to their outstanding document chart to
`identify products for which Defendant publicly advertises testing, but which Plaintiffs have been
`unable to match to any of Defendant’s produced testing. See Ex. A.
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` It is further apparent that, in addition to the product-specific deficiencies, several types
`of marketing and testing materials are missing. The Court’s February 18 Order directed
`Defendant to produce “all outstanding . . . marketing materials, and product testing materials” for
`the Accused Products. See also RFPs No. 31, 40, 41, 42, 44, 45, 51, 66 (requesting, among other
`things, L’Oréal’s documents related to market analyses, including competitive analyses, for the
`Accused Products; L’Oréal’s documents regarding its market share of the markets for the
`Accused Products; L’Oréal’s strategic business plans, and forecasts regarding customer demand
`for the Accused Products; consumer and clinical surveys for the Accused Products; and
`L’Oréal’s advertisements for the Accused Products). To date, despite claiming that its
`investigation and production are complete, Defendant has produced only a limited number of
`advertisements, and internal marketing guides for only certain brands. Defendant has not
`produced, for example, market analyses, business plans for several brands, product development
`plans or product lifecycle documents, sales forecasts, or documents regarding consumer demand.
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`Similarly, Defendant claims on one of its brand websites that it includes adenosine in its
`products because “studies have shown the use of adenosine for skin can be an effective method
`for
`providing
`anti-aging
`benefits.”
`https://www.lorealparisusa.com/ingredient-
`See
`library/adenosine.aspx. Defendant cites its own internal research (conducted by M.L. Abella),
`which is described to have included testing, to support this claim about adenosine’s benefits on
`its website. But, despite the Court’s clear order, it does not appear that Defendant has produced
`all such testing, or all documents regarding its testing protocols, processes, or reasons for
`conducting such tests; nor has Defendant produced any internal documents, such as
`communications or otherwise, about its decision to include adenosine in its products, or related
`to these representations on its website. See also RFPs No. 25, 27, 28, 32, 33, 34, 50.
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`This outstanding information, and Defendant’s record of belatedly producing responsive
`documents after asserting that no such documents exist,1 gives Plaintiffs significant concern
`about the completeness of Defendant’s production—which was supposed to have been finished
`by February 7, 2020. Plaintiffs raised
`these deficiencies with Defendant
`in written
`correspondence and during two meet and confers. See Ex. B. Defendant represented that, with
`limited exceptions, its investigation and production is complete. Id., at 10-11. Plaintiffs’ serious
`concerns about Defendant’s document production are further supported by Defendant’s almost
`complete failure to produce internal communications and custodial files: Defendant has produced
`only seven files from two custodians, including only two internal emails. Plaintiffs asked
`Defendant to identify the custodians whose files were searched for potentially responsive
`information, but Defendant refused to provide that information. Instead, Defendant avoided the
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`1 To provide just one example, after repeatedly stating that an officialization document
`(including the formal ingredient list) for Lancome Teint Visionnaire could not be located, and
`then that the document did not exist, Defendant produced it on March 13. See Ex. B, at 10; Ex.
`K.
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`Case 1:17-cv-00868-CFC-SRF Document 109 Filed 03/26/20 Page 3 of 5 PageID #: 3551
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`question and identified ten custodians who may have discoverable information—none of whom
`were identified in Defendant’s Initial Disclosures. See Ex. B, at 3; Ex. C, at 5. Yesterday, in a
`supplemental response to an interrogatory about Defendant’s document retention policies,
`Defendant finally identified the custodians whose files it searched. See Ex. L, at 8-9. That a
`search of 27 custodians’ files yielded only seven responsive documents is surprising, to say the
`least.
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`Because of the deficiencies in Defendants’ productions, Plaintiffs served Defendant with
`a Notice of 30(b)(6) deposition that included topics regarding document preservation, collection,
`and production on February 7, and on February 21 noticed a deposition specific to those topics
`for March 12. See D.I. 86, 95. Defendant verbally told Plaintiffs on March 3 that they would not
`provide a witness for the deposition, but did not serve objections until March 9. The parties met
`and conferred on these objections, and Defendant represented that it might provide a witness
`after all. The following week, due to the ongoing COVID-19 outbreak, Plaintiffs followed up by
`email and suggested the deposition occur telephonically or by videoconference. In response,
`Defendant refused to go forward with scheduling any depositions. Ex. D, at 2-3. Courts around
`the country have made clear, however, that the global public health crisis is not a sufficient
`reason to stay litigation or forgo scheduling depositions. See, e.g., Exs. E-H; see also Ex. I, ¶ 3.
`Plaintiffs need and are entitled to this deposition, and other depositions in this case, and are ready
`and willing to make the arrangements necessary to conduct this deposition (and subsequent
`depositions) remotely.
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`Given the clear deficiencies in Defendant’s production, its failure to comply with the
`Court’s prior order, its failure to comply with the deadlines set forth in the Scheduling Order, and
`its apparent strategy to run out the clock on the May 22, 2020 fact discovery deadline, Plaintiffs
`request that the Court: (1) order that Defendant comply with its obligations to produce
`responsive documents and this Court’s prior order to produce such documents—including the
`categories of documents above—by no later than March 30; (2) order that by March 30
`Defendant and lead counsel for Defendant certify that it has completely searched for and
`produced all relevant, non-privileged documents responsive to Plaintiffs’ Requests for
`Production, the Court’s February 18 Order, and Paragraph 6 of the Scheduling Order; (3) order
`that by April 3 Defendant produce a witness for the deposition topics noticed on February 21;
`and (4) set a status conference for April 5 or shortly thereafter to discuss any remaining issues
`with Defendant’s document production.
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`II.
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`Documents Defendant Refuses to Produce
`There are several categories of relevant documents that Defendant has refused to produce
`in part or in full. Rule 26’s applicable relevance standard “is liberally construed in favor of
`disclosure because relevance is a broader inquiry at the discovery stage than at the trial stage.”
`AgroFresh Inc. v. Essentiv LLC, 2018 WL 9578196, at *2 (D. Del. 2018) (internal quotation
`marks omitted). Defendant has not seriously contested the relevance of the documents sought,
`nor has it made any showing of burden that would justify nonproduction.
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`A.
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`Documents related to adenosine penetration testing
`Requests for Production No. 8, 25, and 50 seek “[a]ll documents concerning any analysis,
`opinion, or inquiry regarding potential infringement,” “[a]ll documents relating to any testing
`[L’Oréal has] performed regarding penetration of adenosine into the skin,” and “[a]ll documents
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`Case 1:17-cv-00868-CFC-SRF Document 109 Filed 03/26/20 Page 4 of 5 PageID #: 3552
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`that refer or relate to testing of any Accused Product.” Adenosine penetration testing of the
`Accused Products is plainly responsive to these Requests, and is also responsive to the Court’s
`February 18 Order. But Defendant has refused to produce any such testing that postdates the
`onset of this litigation on the basis of work-product privilege, and has refused even to inform
`Plaintiffs whether any such testing exists. See Ex. B, at 6. This refusal is in marked contrast to
`the position Defendant took when it was seeking Plaintiffs’ own testing. There, Defendant said
`that Plaintiffs’ agreement to produce “documents Concerning any testing or analysis of any
`Accused Product” in response to Defendant’s Requests for Production meant that Plaintiffs could
`not “shield these materials from disclosure now with claims of privilege [or] work-product.” D.I.
`71, at 3 n. 6. Defendant also asserted that documents related to skin penetration testing
`“including, for example, any testing conditions and protocols, underlying data, other results, and
`laboratory notebooks” are “basic, non-privileged factual information [that] is distinct from
`expert opinion analyzing or interpreting the testing,” and that waiting until expert discovery to
`provide the testing would “sandbag” Defendant. Id., at 3-4 (emphasis added). Defendant cannot
`now claim that its own such testing is privileged or that its production is premature, when it took
`the opposite position with regard to Plaintiffs’ testing; responsive testing documents should be
`produced accordingly.
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`B.
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`Damages reports produced in the Liqwd, Inc. v. L’Oréal USA litigation
`Request for Production No. 49 seeks “expert reports and expert deposition transcripts
`produced in the matter Liqwd, Inc. v. L’Oréal USA, Inc., No. 17-14 (JFB) (D. Del.).” As the
`Court is aware, the Liqwd case also involved Defendant’s alleged patent infringement. One of the
`disputed issues in that matter was the appropriate rate for a reasonable royalty. In this case,
`Defendant has failed to produce a single comparable license agreement to Plaintiffs, claiming
`there are none, and accordingly Plaintiffs are left guessing as to what evidence Defendant may
`rely on to establish a reasonable royalty. Plaintiffs need the damages expert reports and
`testimony Defendant relied on in the Liqwd case to gain any insight whatsoever into Defendant’s
`licensing practices and policies. In the absence of any legitimate objection, see Ex. B, at 10,
`Plaintiffs request that the Court direct production of the damages expert reports and deposition
`testimony (redacted, if necessary, to comply with the protective order in that case). See, e.g.,
`Godo Kaisha IP Bridge 1 v. TCL Commc’n Techn. Holdings Ltd., 2018 WL 6978576, at *2 (D.
`Del. 2018) (ordering production of expert reports from different patent case involving same
`plaintiff that were “tangentially relevant to [plaintiff’s] licensing and valuation practices”).
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`C.
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`Documents produced to the FTC or another agency about the Accused Products
`Request for Production No. 65 seeks “documents produced, in any litigation or
`investigation, to any government entity or agency that refer or relate to the Accused Products.”
`Plaintiffs know, from public sources, of at least one FTC investigation that involved Accused
`Products—specifically, Defendant’s Youth Code product line. The Consent Order entered in that
`matter illustrates that the investigation implicated marketing and testing materials for
`Defendant’s products, and required Defendant to maintain such materials for five years. See Ex.
`J. Any such materials that Defendant provided to the FTC regarding the Accused Products, and
`any representations Defendant made about the marketing or testing of the Accused Products, are
`highly relevant to the operation of the Accused Products and should be produced.
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`For the foregoing reasons, Plaintiffs respectfully request that the Court grant relief in
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`accordance with the attached Proposed Order.
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`Respectfully submitted,
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`/s/ Brian E. Farnan
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`Brian E. Farnan
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`cc: Counsel of Record (via E-Mail)
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