The opinion of the court was delivered by: James B. Moran, Senior Judge, United States District Court
MEMORANDUM OPINION AND ORDER
Plaintiff Medical Billing Consultants, Inc. (MBC) filed suit against defendants Intelligent Medical Objects, Inc., (IMO) and Frank Naeymi-Rad alleging numerous claims, including copyright infringement, arising from IMO's development and licensing of computer software and a website for MBC. Plaintiff filed a motion to compel production of documents, a motion to compel Inspection of IMO's computer records and a motion for sanctions pursuant to Federal Rule of Civil Procedure 37. For the following reasons, plaintiff's motion to compel the production of documents is denied for now and its motions to compel inspection of computer records and for sanctions are denied,
In September 1999, MBC contacted IMO about the possibility of entering into a relationship to create the website "Medbillz.com." On January 17, 2000, the two parties executed a signed consulting agreement pursuant to which IMO would review MBC's business plan and begin the process of launching the website. Because the relationship involved the necessary disclosure of confidential information, the contract dealt extensively with the allocation of intellectual property between the parties.
Sometime In 2000, the relationship between the parties broke down. MBC alleges that IMO's CEO Frank Naeymi-Rad began requesting an equity interest in MBC, despite contractual provisions to the contrary. MBC further alleges that the website failed to function properly and that NO failed to complete the website in the form required by contract. Finally, MBC alleges that IMO and Naeymi-rad, after the failure of this project, used copyrighted and proprietary material belonging to MBC In future business dealings, breaching the contract and infringing the copyright owned by MBC.
Plaintiff now asks us to compel defendants to produce all documents relating to the distribution of plaintiff's intellectual property to third parties. Additionally, plaintiff seeks an order compelling IMO to allow on-site inspection of its computer records.
Rule 26 of the Federal Rules of Civil Procedure allows parties to obtain discovery of any relevant evidence. This discovery encompasses any matter that affects or could affect anything at Issue in the litigation. See Oppenheimer Fund. Inc. v. Sanders, 437 U.S.340, 351 (1978). Any party objecting to a discovery request bears the burden of showing why such discovery is improper. Chicago Dist. Council of Carpenters Pension Fund v. D.P. Builders, Inc., 1997 WL 685021, *3 (N.D. Ill. 1997).
I. Motion to Compel Production of Evidence
In its first motion plaintiff seeks to discover documents belonging to defendants that relate to communications with third parties involving the use or sale of plaintiff's intellectual property. MBC argues that this evidence is related to its claims against plaintiff, as well as its defenses to defendants' counterclaims and pending motion for summary judgment on the copyright claims of December 3, 2002. Defendants have refused to produce many of the requested documents, arguing that the copyright claims are issues solely of contract law, and therefore the requested discovery is unnecessary. Defendants also argue that plaintiff's requests are so vague as to be unduly burdensome, and that the discovery would result in disclosure of trade secrets and other secret information.
Defendants cannot restrict discovery to what they believe are the relevant issues in the lawsuit. See Meyer v. Southern Pacific Lines, 199 F.R.D. 610, 612 (N.D. Ill. 2002). Instead, they must reasonably respond to discovery requests relating to all potentially relevant evidence. Defendants claim that summary judgment on the contract claims can be granted by looking at the written agreements, making this additional discovery unnecessary. The documents requested by defendants would then become irrelevant to this lawsuit.
The information requested by plaintiff may contain sensitive business information and trade secrets belonging to the defendants. While a protective order may ensure the secrecy of the disclosed information, It will not alleviate all concerns related to the disclosure of the evidence. Moreover, IMO does not dispute using the software components in work that it performs for other parties. The documents included in plaintiff's requests involve how the defendants have used the components at issue in the lawsuit and their dealings with third parties (price paid for the components, descriptions of the components by IMO, etc.), not whether they do so. Discovery of these documents at this point in the litigation is not necessary as defendants are willing to concede the most important issue.
A decision on defendants' summary judgment motion will serve to define the scope of further necessary discovery. If defendants are correct and the copyright infringement claims can be decided solely by looking at the parties' agreements, such discovery may be irrelevant. Likewise, if plaintiff prevails, such a decision will help determine what documents are necessary to prove damages, among other issues. To the extent that the evidence at issue In this motion is necessary to decide the issues in the case, summary judgment will of ...