4:22-mc-80238
N.D. Cal.Mar 7, 2023Background
- TrueLake Culture Development Ltd., a Chinese publisher, owns copyrights to comedian Sanli Ma's audiobooks and alleges widespread unauthorized access to those works on NetEase platforms.
- TrueLake sued Hangzhou NetEase Cloud Music Technology Co. Ltd. and Hangzhou Ledu in China; it seeks additional discovery from NetEase, Inc. (parent with a California subsidiary) for use in that Chinese litigation.
- TrueLake filed an ex parte application under 28 U.S.C. § 1782 asking the Northern District of California to authorize service of a document subpoena on NetEase, targeting access logs, user information, communications about rights, and revenue information for a five-year period.
- NetEase has a subsidiary located in Brisbane, California, placing it within the district for § 1782 purposes.
- The court evaluated the statutory criteria and the Intel discretionary factors (participation, receptivity, circumvention, and burden).
- The court granted the § 1782 application, authorized service of the proposed subpoena, and allowed NetEase 21 days after notice to move to contest the subpoena.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Statutory requirements under § 1782 (residence, use in foreign proceeding, interested person) | NetEase has a California subsidiary (resides); discovery is for use in pending China action; TrueLake is an interested person | (Implicit) NetEase not party to China suit; parent-subsidiary status undermines § 1782 use | Court: Statutory requirements satisfied; § 1782 available |
| Whether the target is a participant in the foreign proceeding (Intel factor 1) | Parent NetEase is not a party and cannot be compelled in China; documents not obtainable via Chinese proceeding | Parent-subsidiary relationship may counsel against § 1782 discovery | Court: Factor favors discovery because material is not obtainable in China |
| Receptivity of the foreign tribunal to U.S. judicial assistance (Intel factor 2) | Beijing Internet Court would accept evidence obtained via § 1782; no evidence of objection | (Implicit) foreign court might prefer to control discovery itself | Court: Factor favors discovery—no evidence China would object |
| Whether request circumvents foreign proof-gathering rules (Intel factor 3) | No known Chinese procedural restriction bars use of requested evidence | (Implicit) Request might sidestep foreign procedures | Court: Factor favors discovery—no indication of circumvention |
| Whether discovery is unduly intrusive or burdensome (Intel factor 4) | Requests are relevant and time-limited (five years) to quantify infringement | NetEase could face large volume and burden; parent may assert overbreadth | Court: Factor narrowly favors authorization; potential burden not dispositive and NetEase may move to quash/limit |
Key Cases Cited
- Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241 (2004) (establishes § 1782 statutory requirements and discretionary Intel factors)
- Schmitz v. Bernstein Liebhard & Lifshitz LLP, 376 F.3d 79 (2d Cir. 2004) (district court may deny § 1782 where foreign government or tribunal objects)
- In re Letters Rogatory from Tokyo Dist. Prosecutor’s Office, Tokyo, Japan, 16 F.3d 1016 (9th Cir. 1994) (discovery under § 1782 must comply with Federal Rules of Civil Procedure unless court orders otherwise)
- IPCom GmbH & Co. KG v. Apple, Inc., 61 F. Supp. 3d 919 (N.D. Cal. 2014) (§ 1782 applications commonly decided ex parte because targets can later move to quash)
- In re Ex Parte Application of Qualcomm Inc., 162 F. Supp. 3d 1029 (N.D. Cal. 2016) (receptivity factor weighs against discovery when foreign agency expressly disclaims need for U.S. discovery)
- Med. Inc. Ass’n Smile Create v. [unnamed], 547 F. Supp. 3d 894 (N.D. Cal. 2021) (access logs and user-activity records can be appropriate § 1782 discovery and not unduly burdensome)