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Alifax Holding SPA v. Alcor Scientific Inc.

United States District Court, D. Rhode Island

January 11, 2019




         This is an intellectual property dispute over sophisticated devices that analyze the erythrocyte sedimentation rate (“ESR”) of human blood samples. Before the Court are cross motions to compel discovery concerning the source code for software that operates the parties' instruments as well as related testimony and documents. (See Pl.'s Mot. to Compel and Reopen Disc. (“Pl.'s Mot.”), ECF No. 201; Defs.' Mot. to Reconsider or in the Alternative to Compel (“Defs.' Mot.”), ECF No. 202). The parties have quarreled about their reciprocal source code productions for the better part of a year. Attempts to amicably resolve these issues, including a Court-requested meet and confer between counsel and their experts, have failed.

         As further stated herein, Plaintiff Alifax Holding, SpA's Motion to Compel Inspection of Alcor Source Code and Bitbucket Repository and Motion to Reopen Discovery Relating to the Declaration of Defendant Frappa Dated May 8, 2018 (ECF No. 201) is GRANTED IN PART. Alcor shall make its source code and Bitbucket repository available for one additional inspection by Alifax's expert within fifteen days. Frappa's deposition will not be reopened, but the Court will permit Alifax to request production of Alcor's build files for eleven specific iSED instruments.

         Although the Court declines to reconsider its October 16, 2018 ruling denying the request of Defendants Alcor Scientific, Inc. and Francesco Frappa for sanctions against Alifax (ECF No. 195), it GRANTS the Defendants' request to compel Alifax to produce its “complete source code, ” including the tools comprising its code environment that are necessary to recreate its source code for any point during the relevant time period.

         I. Background

         Only a digest of this dispute's history is required here. Frappa was employed by a former subsidiary of Alifax for nearly a decade before departing the company to work with Alcor in late 2011. Both parties manufacture competing ESR analyzers that deliver rapid test results in about 20 seconds. (See Second Am. & Suppl. Compl. ¶ 8, ECF No. 68.) Among other claims, Alifax has accused the Defendants of misappropriating a proprietary conversion algorithm that it uses in its analyzers' software. More particularly, Alifax contends that Alcor incorporated the conversion parameters from its algorithm into an early version of the software code for its iSED analyzer. (See generally id.) Alifax alleges that this software, known as version 1.04A, was installed on a No. of iSED units at the time Alcor sold them to customers in early 2013. (See, e.g., Pl.'s Mot. 3-4.)

         The Defendants dispute Alifax's claims. Their defenses include that Alifax's conversion parameters could not have been misappropriated because such parameters are device-specific and therefore have no independent value. (Mem. In Supp. of Defs.' Mot. 2, ECF No. 203.) Alcor also argues that Alifax introduced ESR analyzers that do not use the allegedly misappropriated code and adjusted its code to accommodate device design changes after Frappa's departure. (Id.) Thus, as Magistrate Judge Almond's ruling on the Defendants' first motion to compel made clear, a thorough understanding of the development of the source code for each device is fundamental to the parties' claims and defenses. (See Mem. & Order 3-4, ECF No. 127.)

         II. Discussion

         A. Access to the Bitbucket Repository

         Alifax seeks further access to Alcor's source code and Bit-bucket repository, which the Court understands is a version control tool that tracks and manages changes to a file system. Alcor has declined, however, to presently provide further access to this data because (1) it remains unsatisfied with Alifax's reciprocal source code production, and (2) Alifax's expert has already had several opportunities to view these materials.

         Whatever shortcomings may exist in Alifax's source code production, the Court will not condone measure-for-measure reprisals. Each party has an independent obligation to produce relevant, discoverable information. Alcor's obligations are not contingent on an Alifax's performance. See, e.g., Fed.R.Civ.P. 26(d)(2) (“[D]iscovery by one party does not require any other party to delay its discovery”); Fresenius Med. Care Holding Inc. v. Baxter Int'l, Inc., 224 F.R.D. 644, 653 (N.D. Cal. 2004) (finding party may not “condition its compliance with its discovery obligations on receiving discovery from its opponent.”); Pulsecard, Inc. v. Discover Card Servs., Inc., 168 F.R.D. 295, 308 (D. Kan. 1996) (“A party may not withhold discovery solely because it has not obtained to its satisfaction other discovery.”).

         Alcor has repeatedly stated that it will provide Alifax's expert with an additional opportunity to view the repository “prior to trial.” (See, e.g., Craig M. Scott Decl. ¶ 7, ECF No. 204-4.) It has not argued that permitting an inspection now, rather than even closer to trial, would be unduly burdensome. On the contrary, it has represented that it “remain[s] prepared” to make its source code and its Bitbucket repository available. (Id.)

         Accordingly, Alcor shall permit Alifax's expert one additional opportunity to inspect its source code and Bitbucket repository within fifteen days of the issuance of this order. Ali-fax's expert shall inspect the Bitbucket repository in accordance with the terms of the Stipulated Protective Order (ECF No. 41) and may do so for at least eight (8) ...

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