Paramount Pictures Corporation v. ReplayTV, Inc., Joint Stipulation ...

12345678910111213141516171819202122232425262728in whole or in part on marketing of the ReplayTV 4000 or similar products(Document Request Nos. 16 & 27-28 and Disney Interrogatory Nos.11-12).The relevance of these materials is straightforward. Under settled law,“ financial benefit” is one of the two prongs of vicarious liability for copyrightinfringement, 54/ a claim made by each of the Plaintiffs in these consolidated cases.A defendant enjoys a financial benefit from infringing conduct if, for example, theconduct “ enhance[s] the attractiveness” of the defendant’ s product or service,Fonovisa, 76 F.3d at 263-64, or if the infringing conduct helps the defendant toraise funds from investors. See Napster, 114 F. Supp. 2d at 921 (relying ondefendants’ internal documents about its revenue raising plans to show requisitefinancial benefit for vicarious infringement claim), aff’d in relevant part, 239 F.3dat 1023.Similarly, statements by Defendants to actual or potential licensees andinvestors about the product at the heart of the case -- and communications backfrom the potential licensees or investors -- are plainly relevant. Indeed,Defendants’ statements to potential investors are particularly probative because thesecurities laws require Defendants to be truthful and accurate in suchcommunications.Although the materials sought here are unquestionably relevant, Defendantshave made only a paltry offer in response. With regard to financial benefit,Defendants have offered to provide only sales figures, while refusing to provide anydocuments or information about any other source of financial benefit to them fromthe ReplayTV 4000. 55/ With regard to licensing opportunities, Defendants have54/55/See, e.g., Napster, 239 F.3d at 1022-23; Fonovisa, 76 F.3d 263-64.In addition to offering sales figures, Defendants have also made ameaningless “ compromise” offer to produce documents that reflect plans to raisemoney specifically tied to one of the particular features at issue here -- whileacknowledging that this is almost certainly an empty set.73