Simon and Simon, PC v. Align Technology, Inc.

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4 UNITED STATES DISTRICT COURT

5 NORTHERN DISTRICT OF CALIFORNIA

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7 SIMON AND SIMON, PC, et al., Case No. 20-cv-03754-VC (TSH)

8 Plaintiffs,

ORDER GRANTING MOTIONS FOR

9 v. ISSUANCE OF A LETTER OF

REQUEST

10 ALIGN TECHNOLOGY, INC.,

Re: Dkt. No. 150, 154

11 Defendant.

12

13 I. INTRODUCTION

14 Plaintiffs Simon and Simon, PC d/b/a City Smiles and VIP Dental Spas (“Plaintiffs”)

15 request the Court sign and issue three Letters of Request for International Judicial Assistance

16 pursuant to the Convention of 18 March 1970 on the Taking of Evidence Abroad in Civil or

17 Commercial Matters (“Hague Evidence Convention”), under which the Court will request that the

18 relevant judicial authority in England compel the deposition of Raphael Pascaud (ECF No. 150),

19 the relevant judicial authority in Denmark compel the deposition of Allan Hyldal (ECF No. 154),

20 and the relevant judicial authority in Sweden compel the deposition of Nikolaj Deichmann (ECF

21 No. 154). Defendant Align Technology, Inc. does not oppose the requests. ECF Nos. 152, 155.

22 The Court finds these matters suitable for disposition without oral argument. See Civ. L.R. 7-1(b).

23 Having considered Plaintiffs’ requests, the Court GRANTS the motions for the following reasons.

24 II. BACKGROUND

25 A. Factual Background

26 A detailed factual background of this case can be found in Judge Chhabria’s April 8, 2021

27 order denying Align’s motion to dismiss. ECF No. 91; Simon & Simon, PC v. Align Tech., Inc.,

1 Invisalign, a dental aligner that dentists sell patients to straighten their teeth. Plaintiffs are dental

2 practices that use iTero scanners to offer Invisalign to their patients. According to Plaintiffs,

3 Align has a monopoly in the aligner market as well as the market for scanners that are used to

4 produce aligners. They allege Align engaged in a multifaceted scheme to stifle competition in

5 these markets, including designing its iTero scanner so that it can only be used to order Invisalign.

6 Thus, if a dental practice wishes to offer Invisalign to patients, it is allegedly limited as a practical

7 matter to using the iTero scanner to generate those orders. Meanwhile, the only other scanner that

8 is aligner-specific— 3Shape’s Trios—cannot be used to order Invisalign because Align will not

9 accept scans from Trios. That was not always the case, as in December 2015, Align and 3Shape

10 entered an “interoperability agreement” and built an interface that allowed dentists to use Trios

11 scans to order Invisalign. However, Align announced in December 2017 that it would terminate

12 the interoperability agreement with 3Shape, which Plaintiffs allege was calculated to help Align

13 achieve the entrenchment of Invisalign’s monopoly power in the aligner market.

14 B. Letters of Request

15 1. ECF No. 150 (Raphael Pascaud)

16 Raphael Pascaud is a resident of Woodlesford, England, and was a former executive for

17 Align from October 2010 through September 2019. Radice Decl. ¶¶ 5-6, 11 & Ex. C (Pascaud’s

18 Linkedin.com page), ECF No. 150-1. From 2015 through 2019, he held multiple titles: VP and

19 GM for Align’s iTero business unit, and chief marketing officer for the company, and in 2019 he

20 was appointed SVP of business development and strategy. Id., Ex. C. Pascaud’s Linkedin.com

21 page states he had “[g]lobal operational responsibilities for iTero Scanning & Services business

22 unit” and was “[r]esponsible for global growth strategy, customer experience, brand equity,

23 professional marketing and consumer demand, portfolio innovation and business development.”

24 Id.

25 Plaintiffs maintain that “[i]t is clear from the documents produced by Align in this case

26 that Mr. Pascaud was involved in the negotiation of the interoperability agreement with 3Shape,

27 its implementation, and its termination. Mr. Pascaud was involved in decisions to allow or deny

1 significant role in the creation, execution, and analysis of discount programs and in the negotiation

2 and approval of contracts with dental support organizations (DSOs).” ECF No. 150 at 2; Radice

3 Decl. ¶ 7.

4 Plaintiffs’ U.S. counsel retained an English lawyer to assist with drafting the Letter of

5 Request. ECF No. 150 at 2; Radice Decl. ¶ 8. They argue Pascaud’s background makes his

6 testimony directly relevant in this case. They also note that he as he has authored numerous

7 documents surrounding the key events in this case, and it is therefore important that they examine

8 him on these documents. Plaintiffs seek to question Pascaud on the following topics:

9 I. Align’s interoperability agreement with 3Shape, including:

10 • Align’s motivation to enter into the agreement;

• The negotiation of the agreement;

11 • Align’s requests for 3Shape to make its Scanner exclusive to

only order Invisalign;

12 • Align’s decision to terminate the agreement.

13 II. Align’s interoperability or non-interoperability with other Scanner

and Aligner manufacturers, including:

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• The design of Align’s Scanners.

15 • Why Align would have considered interoperability with

certain Scanners and not others.

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III. Business and financial topics relating to Scanners and Aligners.

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• Marketing and sales of, and financial results for, iTero

18 Scanners.

• Marketing and sales of, and financial results for, Invisalign

19 Aligners.

20 IV. Align’s contractual programs and policies relating to sales and

pricing of Aligners and Scanners, including:

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• Fusion program;

22 • Advantage program;

• Other discount programs;

23 • Dental support organization (“DSO”) contracts; and

• Align’s general policies and strategies with discount programs

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25 ECF No. 150, Ex. A (Letter of Request).

26 As noted above, Align does not oppose the request. Align also states Pascaud has

27 authorized it to respond on his behalf that he would waive any objections to the issuance of the

1 place of the deposition, (2) questioning be limited to the subject matters identified the letter, and

2 (3) the deposition is limited to seven hours, which would include questioning by the plaintiffs in a

3 related case, Snow v. Align Technology, Inc., Case No. 3:21-cv-03269-VC.1 Id. It also states it

4 has secured authority from Pascaud to

5 (i) waive any objections to the issuance of the proposed Letter of

Request by a Court in the United Kingdom, and (ii) accept service of

6 the Letter of Request, once issued, directed to Mr. Pascaud on the

condition that: (a) the deposition will be held at a time and place of

7 his choosing in advance of the discovery cut-off dates in these cases,

(b) questioning at the deposition be limited to the subject matters

8 identified in Exhibit A to the Letter of Request (Dkt. No. 150-2) and

(c) would be subject to the conditions set forth in the following

9 paragraph (i.e., that absent further consent by Mr. Pascaud, the

deposition is limited to 7 hours of questioning which would include

10 questioning by both the Simon & Simon and the Snow Plaintiffs (and

appropriate questioning by Align’s attorneys as permitted by law).

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12 Statement of Non-Opposition, ECF No. 152 at 2-3. Align argues these requirements are

13 reasonable as Plaintiffs’ motion represents that if the requested relief were granted, “[t]he burden

14 and expense for Mr. Pascaud would be minimal. He would have to appear at a deposition for one

15 day, for a maximum of seven hours of questioning.” Id. at 2 (quoting ECF No. 150 at 12). Align

16 also argues such requirements would be consistent with the past representations of the Snow

17 Plaintiffs that they agree to coordinate depositions in their matter with this case. Id. (citing 21-cv-

18 03269, ECF No. 31 (“The parties intend to coordinate depositions with the plaintiffs in the Simon

19 and Simon, PC v. Align Technology, Inc. No. 3:20-cv- 03754-VC (N.D. Cal.) matter. A deponent

20 will not be subject to duplicative depositions in this action and the Simon and Simon action absent

21 agreement of the parties and the deponent or good cause.”). Align states it would oppose a request

22 for multiple days of deposition testimony from Pascaud without good cause as inconsistent with

23 the Plaintiffs’ prior representations. Id. at 3.

24 2. ECF No. 154 (Allan Hyldal and Nikolaj Deichmann)

25 Hyldal is a resident of Copenhagen, Denmark and former Senior Vice President,

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1 As Judge Chhabria previously noted, the allegations in Snow v. Align Technology, Inc., mirror

1 Orthodontics of 3Shape. ECF No. 154 at 1; Lacomb Decl. ¶ 6, ECF No. 154-1. Deichmann is a

2 resident of Malmo, Sweden and Co-Founder and Co-Vice Chairman of 3Shape. Id. (both).

3 Plaintiffs state that both Hyldal and Deichmann can provide relevant testimony for this action as

4 they were involved in the negotiation, implementation, operation, and termination of the

5 interoperability agreement in the United States, as well as the continued use of the interoperability

6 agreement outside the United States. They are also knowledgeable about the intraoral scanner

7 market and the use of 3Shape scanners to scan for non-Invisalign branded clear aligners. ECF No.

8 154 at 1-2. Plaintiffs maintain they can provide relevant testimony concerning:

9 (i) the inception of the relationship between Align and 3Shape,

including creation of the interoperability agreement; (ii) the change in

10 philosophy at Align concerning interoperability, which went from

exclaiming the benefits of interoperability to eliminating it; (iii)

11 whether Align terminated a profitable course of dealing when

terminating the interoperability agreement; (iv) actions and

12 negotiations surrounding termination of the interoperability

agreement; (v) sales efforts by Align of 3Shape customers following

13 termination of interoperability; (vi) output effects at 3Shape caused

by termination of interoperability; and (vii) the validity of patent

14 infringement claims by Align against 3Shape.

15 ECF No. 154 at 3.

16 Plaintiffs’ counsel has retained counsel experienced in civil antitrust litigation in Denmark

17 and Sweden to ensure the depositions of Hyldal and Deichmann will be conducted in a manner

18 that conforms to applicable local law. Id. Local counsel requested the voluntary appearance for

19 deposition of Hyldal and Deichmann, sending each a letter on September 28, 2022 requesting a

20 response within five days of receipt. Id. Delivery of the letter to Hyldal occurred on September

21 29, 2022, to which no response has been received. ECF No. 154 at 3-4; Lacomb Decl. ¶ 10.

22 Delivery to Deichmann occurred on October 6, 2022, but, according to Plaintiffs, counsel for

23 3Shape has informed their counsel that 3Shape does not oppose this motion, but it would not be

24 making him available for a voluntary deposition. ECF No. 154 at 4; Lacomb Decl. ¶ 10.

25 Plaintiffs seek to question Hyldal and Deichmann on the following topics:

26 I. Align’s interoperability agreement with 3Shape, including:

27 • Align’s stated motivation to enter into the interoperability

• The economic success of the interoperability agreement for

1 3Shape and Align;

• Align’s requests to make 3Shape’s Scanner exclusive so that

2 it could only order Invisalign;

• Align’s decision to terminate the interoperability agreement;

3 • Align’s change of attitude toward interoperability in general;

• Align’s communications with 3Shape customers following

4 termination of the interoperability agreement;

• The economic impact of termination of the interoperability

5 agreement for 3Shape and Align; and

• Align’s patent suit against 3Shape.

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II. Interoperability between Align and 3Shape outside of the US,

7 including the sales and output effects resulting from that

agreement.

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III. Intraoral scanner and aligner markets, including the use of

9 3Shape scanners to scan for non-Invisalign branded clear

aligners.

10

11 Lacomb Decl., Exs. A & B.

12 On October 7, 2022, Plaintiffs and Align filed a stipulation requesting an order shortening

13 the time for a hearing on Plaintiffs’ motion, stating that Align does not oppose the motion and the

14 parties do not anticipate any additional briefing. ECF No. 155.

15 III. LEGAL STANDARD

16 Under Federal Rule of Civil Procedure 28(b)(1)(B), parties my take depositions in a

17 foreign country upon the issuance of a letter of request from the federal court. See also Intel Corp.

18 v. Advanced Micro Devices, Inc., 542 U.S. 241, 247 n.1 (2004) (A letter of request or letter

19 rogatory “is the request by a domestic court to a foreign court to take evidence from a certain

20 witness.”). “Judges in this district have held that motions requesting issuance of a letter of request

21 or letter rogatory should generally be granted and that ‘[t]he opposing party must show good

22 reason for a court to deny an application for a letter rogatory.’” Successor Agency to Former

23 Emeryville Redevelopment Agency v. Swagelok Co., 2020 WL 7042860, at *2 (N.D. Cal. Dec. 1,

24 2020) (quoting S.E.C. v. Leslie, 2009 WL 688836, at *2 (N.D. Cal. Mar. 16, 2009)); In re Cathode

25 Ray Tube (CRT) Antitrust Litig., 2014 WL 4954634, at *2 (N.D. Cal. Oct. 1, 2014). Like all

26 discovery, motions for letters of request are subject to the standards of Rule 26(b), which provides

27 that “[p]arties may obtain discovery regarding any nonprivileged matter that is relevant to any

1 Redevelopment Agency, 2020 WL 7042860, at *2. “Relevant information need not be admissible

2 at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible

3 evidence.” Fed. R. Civ. P. 26(b).

4 The United States, the United Kingdom, Denmark, and Sweden are all signatories to the

5 Hague Evidence Convention, which permits “the transmittal of a letter rogatory or request directly

6 from a tribunal in the United States to the foreign or international tribunal, officer, or agency to

7 whom it is addressed and its return in the same manner.”2 28 U.S.C. § 1781(b)(2); see also 23

8 U.S.T. 2555; Life Bliss Found. v. Sun TV Network Ltd., 2014 WL 12598859, at *4 (C.D. Cal. May

9 8, 2014). Under the Hague Evidence Convention, a request for discovery is sent by a court to the

10 “Central Authority.” See Hague Evidence Convention, art. 2. The Central Authority for England

11 and Wales is the Senior Master for the attention of the Foreign Process Section of the Royal

12 Courts of Justice, Room E16, Royal Courts of Justice Strand, LONDON WC2A 2LL.3 The

13 central authority for Denmark is the Ministry of Justice, Procedural Law Division, Slotsholmsgade

14 10, 1216 Copenhagen, Denmark.4 The central authority for Sweden is the Senior Master for the

15 attention of the Division for Criminal Cases and International Judicial Co-operation, Ministry of

16 Justice, S-103 33 Stockholm, Sweden.5

17 IV. DISCUSSION

18 Given the liberal standard for issuance of letters of request, the Court finds Plaintiffs have

19 met their burden of showing the letters should be issued. Plaintiffs have shown that Pascaud,

20 Hyldal and Deichmann were involved with the creation, operation, and termination of the

21 interoperability agreement and its continued operation outside of the United States, as well as

22 relevant actions by Align before and after the interoperability agreement was in place. Their

23 testimony is, therefore, relevant to this action. See, e.g., Zoho Corp. Pvt. Ltd v. Freshworks, Inc.,

24 2021 WL 2769009, at *3 (N.D. Cal. July 2, 2021) (granting motion for letter of request despite

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2 See Hague Evidence Convention, Status Table - 20: Convention of 18 March 1970 on the Taking

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of Evidence Abroad in Civil or Commercial Matters (last updated June 17, 2021),

https://www.hcch.net/en/instruments/conventions/status-table/?cid=82.

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3 See https://www.hcch.net/en/states/authorities/details3/?aid=526

1 defendant’s objections that plaintiff was not diligent in pursuing the discovery and that it was

2 duplicative of other discovery from defendant, citing “the liberal standard for issuance of letters of

3 request” and the relevance of the information sought); Successor Agency to Former Emeryville

4 Redevelopment Agency, 2020 WL 7042860, at *2 (issuing letter of request over several objections,

5 citing that the “requested discovery is highly relevant to the central issue” in the case and that

6 “plaintiffs’ proposed deponents appear likely, by virtue of their former positions and

7 responsibilities, to have personal knowledge regarding various relevant issues”).

8 The Court also notes that any burden and expense would be minimal. The deponents

9 would have to appear at a deposition for one day, for a maximum of seven hours of questioning.

10 Plaintiffs also state they will comply with “considerations of comity,” noting they have retained

11 local counsel to ensure the proceedings comply fully with the relevant country’s laws. As to

12 Pascaud, Align has indicated he will waive any objection subject to the conditions listed above,

13 and Plaintiffs did not file any objection to those conditions.6 As to Hyldal and Deichmann, Align

14 does not oppose Plaintiffs’ request and has requested no additional conditions.

15 Finally, the Court notes that these depositions would allow Plaintiffs the opportunity to

16 question percipient witnesses and to test the veracity of the defendants’ representations. Thus, it

17 does not appear that the discovery sought from these third parties would be duplicative of any

18 previous production. See Zoho Corp. Pvt. Ltd, 2021 WL 2769009, at *4 (granting motion for

19 letter of request, despite defendant’s objection that third party discovery would be duplicative,

20 because “[t]here is no guarantee that the third parties do not have relevant information, and Zoho

21 should not have to take Freshworks’ word for it.”); Successor Agency to Former Emeryville

22 Redevelopment Agency, 2020 WL 7042860, at *3 (rejecting argument that granting letters of

23 requests would result in duplicative discovery, noting: “The proposed foreign deponents . . . will

24 likely have a different perspective on the relationship . . . and different personal knowledge

25 regarding these companies’ corporate activities and involvement in the . . . acquisition and

26 restructuring.”); Fisher & Paykel Healthcare Ltd. v. Flexicare Inc., 2020 WL 5900155, at *2

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1 (C.D. Cal. Aug. 17, 2020) (“There is no guarantee that FPH’s existing production or its Rule

2 || 30(b)(6) testimony is a perfect replacement for the inventors’ own testimony and discovery)

3 (citing Dyson, Inc. v. SharkNinja Operating LLC, 2016 WL 5720702, at *2 (N.D. IIL. Sept. 30,

4 || 2016), objections overruled, 2017 WL 446042 (N.D. IIL. Feb. 2, 2017) (rejecting argument that

5 || testimony would be cumulative because “[t]here is no guarantee that the remaining co-inventors

6 will have the same memory of the invention process, and [defendant] should not have to take

7 [plaintiff's] word for it”)). Regardless, “there is no requirement that a third party must be able to

8 || provide unique information in order to depose them.” Zoho Corp. Pyt. Ltd, 2021 WL 2769009, at

9 *4 (citing In re Cathode Ray Tube (CRT) Antitrust Litig., 2014 WL 4954634, at *4 (finding letter

10 || of request would not result in duplicative discovery because “the ordinary rules of relevance in

11 discovery, and Rule 30’s grant of authority for a deposition of ‘any person, including a party’”

12 || show that a party does not have to provide “unique information.”)).

13 V. CONCLUSION

14 For the reasons stated above, the Court GRANTS Plaintiffs’ motions. The Court adopts

3 15 the Letters of Request attached as Exhibit A to the Declaration of John Radice and Exhibits A and

a 16 || B to the Declaration of Timothy Lacomb. The Clerk of Court shall file the executed letter as an

3 17 attachment to this Order.

18 IT IS SO ORDERED.

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20 Dated: October 28, 2022

21 7 \- Lj-~—

THOMAS S. HIXSON

22 United States Magistrate Judge

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