Computer Programs and Systems inc et al v. Wazu Holdings ltd et al
Court Docket Sheet

Northern District of Alabama

2:2017-mc-00297 (alnd)

MOTION to Quash Subpoena Duces Tecum Served on C. Brandon Browning and for Protective Order by Computer Programs and Systems Inc, Evident LLC.

Case 2:17-mc-00297-RDP Document 1 Filed 02/23/17 Page 1 of 9 FILED 2017 Feb-24 AM 09:14 U.S. DISTRICT COURT N.D. OF ALABAMA UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF ALABAMA COMPUTER PROGRAMS AND) SYSTEMS, INC. AND EVIDENT LLC)) Plaintiffs,)) v.) Miscellaneous Action No. ________________) WAZU HOLDINGS, LTD. AND) EVIDENT, INC.)) Civil Action No. 1:15-cv-00405-KD-M, Defendants.) Pending in the United States District Court,) Southern District of Alabama) EVIDENT, INC.,)) Counterclaimant,)) v.)) COMPUTER PROGRAMS AND) SYSTEMS, INC. AND EVIDENT LLC,)) Counterdefendants.)))) COMPUTER PROGRAMS AND SYSTEMS, INC. AND EVIDENT, LLC'S MOTION TO QUASH SUBPOENA DUCES TECUM SERVED ON C. BRANDON BROWNING AND FOR PROTECTIVE ORDER Computer Programs and Systems, Inc. ("CPSI") and Evident, LLC (collectively, the "Plaintiffs"), by and through their undersigned counsel, hereby move this Honorable Court,1 pursuant to Rules 45 and 26 of the Federal Rules of Civil Procedure, to (a) quash the subpoena 1 Civil Action No. 1:15-cv-00405-KD-M is currently pending in the United States District Court for the Southern District of Alabama (the "Southern District"). The subpoena duces tecum served on C. Brandon Browning ("Browning"), the notice of which is attached hereto as Exhibit A, specifies that the location for his March 16, 2017 deposition is Birmingham, Alabama. As a result, this Court is the proper court for Plaintiffs to file this Motion. See FED. R. CIV. P. 45(d)(3)(A) ("On timely motion, the court for the district where compliance is required must quash or modify a subpoena that...."). However, as provided later in this Motion, Browning consents to the transfer of this Motion to the Southern District. See FED. R. CIV. P. 45(f) ("When the court where compliance is required did not issue the subpoena, it may transfer a motion under this rule to the issuing court if the person subject to the subpoena consents or if the court finds exceptional circumstances."). However, if this Court does not decide to transfer this Motion to the Southern District, Plaintiffs request this Court to enter an order granting the relief described herein. {03941117.1} Case 2:17-mc-00297-RDP Document 1 Filed 02/23/17 Page 2 of 9 duces tecum served by Defendant, Wazu Holdings, Ltd. ("Wazu") and Defendant/Counterclaimant Evident, Inc. (collectively, the "Defendants") on Browning in the above-styled Civil Action pending in Southern District, and (b) enter a protective order forbidding the deposition of Browning and the corresponding production of the requested documents consistent with the conditions set forth herein. As grounds therefore, Plaintiffs state as follows: I. Factual Background, Procedural History, and Certification 1. On October 14, 2014, CPSI filed trademark application serial no. 86/423,651 for the EVIDENT mark for use as set forth in the application.2 2. On October 15, 2014, CPSI acquired CAP Digisoft Solutions, Inc.’s right, title and interest in the mark EVIDENT for on-line non-downloadable software for use on a computer network used to access, search, sort, group, produce, print and review information and documents through the internet used in the field of healthcare, which was subject to U.S. Federal Trademark Registration No. 3,830,441 (the "‘411 Registration").3 3. Evident, LLC, a wholly owned subsidiary of CPSI, thereafter began to market its EHR solutions and services under the EVIDENT mark. 2 "Electronic database management, namely, capturing and managing medical and health records in electronic format; Medical claims management services, namely, receiving and data entry of transactions that are originated by physicians, hospitals, and ancillary medical care providers; Managed care services, namely, electronic processing of health care information; Management and compilation of computerized databases; Medical billing support services" and "Application service provider, namely, hosting, managing, developing, analyzing, and maintaining applications and software in the field of Internet-based electronic health record (EHR) management software to automate, enter, access, and transmit clinical data; Providing an interactive web site featuring technology that enables users to enter, access, track, monitor and generate health and medical information and reports; Software as a service (SAAS) services featuring software for managing electronic health records." 3 The'411 Registration registered on May 25, 2010 for the mark EVIDENT for "[O]n-line non-downloadable software for use on a computer network used to access, search, sort, group, produce, print and review information and documents through the internet used in the fields of law, healthcare, government, insurance and corporations." The'411 Registration issued from Application Ser. No. 77/772,394, filed on July 1, 2009 and claiming a date of first use of March 1, 2009. {03941117.1} 2 Case 2:17-mc-00297-RDP Document 1 Filed 02/23/17 Page 3 of 9 4. Evident, LLC offers its EHR solutions and services to rural and community healthcare organizations under the EVIDENT trademark and THRIVE and LIKEMIND marks. The THRIVE EHR solution is a complete information and patient care system combined with comprehensive implementation and training services. The THRIVE EHR solution ties together all of a hospital’s key departments with a single database resulting in up-to-the-moment information available to a hospital’s caregivers and support staff. LIKEMIND is a collaborative implementation and support model for the THRIVE EHR solution that delivers proactive service from Evident, LLC’s staff of healthcare and business professionals. THRIVE EHR solution and LIKEMIND are offered under the EVIDENT brand. 5. On August 5, 2015, Evident, LLC received a letter from counsel for Wazu representing that Wazu recently acquired Evident, Inc., a proprietor of dental lab management software branded under the mark EVIDENT and alleging that Evident, LLC’s use of the EVIDENT mark for EHR software infringed Wazu’s use of the EVIDENT mark for dental lab management software. Wazu’s counsel demanded that Evident, LLC abandon its trademark application for the EVIDENT mark, assign its www.evident.com domain name to Wazu, and cease its alleged infringement of Wazu’s EVIDENT mark. Wazu’s counsel represented that if these demands were not met by August 10, 2015, Wazu would consider all legal action, including but not limited to, filing a petition to cancel CPSI’s EVIDENT trademark registration once it issues. 6. On August 10, 2015, Plaintiffs filed the above-styled declaratory judgment action against Defendants in the Southern District seeking, inter alia, a judgment declaring that Plaintiffs have not infringed and do not infringe or violate any purported right of Defendants in their EVIDENT mark. (See Doc. 1). {03941117.1} 3 Case 2:17-mc-00297-RDP Document 1 Filed 02/23/17 Page 4 of 9 7. Defendants subsequently answered Plaintiffs’ complaint and filed counterclaims against Evident, LLC for false designation of origin, dilution, cybersquatting, and common law unfair competition.4 (See Docs. 8 & 17). Defendants, inter alia, also seek a judgment enjoining Plaintiffs’ use of the EVIDENT mark, awarding Defendants any and all profits derived by Plaintiffs from the sale of their goods and services in conjunction with the EVIDENT mark, and for all damages sustained by Defendant Evident by reason of infringement. (See id.). 8. On January 26, 2016, CPSI was granted U.S. Federal Trademark Registration No. 4,893,569 for the EVIDENT mark. 9. On February 3, 2017, Defendants noticed the depositions of the following individuals: J. Boyd Douglas ("Douglas"), President and Chief Executive Officer of CPSI and Evident, LLC; A. Robert Outlaw, Jr. ("Outlaw") and Charles P. Huffman ("Huffman"), board members of CPSI; and Browning, counsel for Plaintiffs. (See Ex. A for Browning deposition notice). Defendants subsequently served these individuals with subpoenas. All four (4) depositions are scheduled to occur during the week of March 13-17, 2017. 10. In the subpoena duces tecum served on Browning, Defendants request Browning to produce, one week before the March 16, 2017 deposition, various documents and communications relating to his advice that CPSI could use the EVIDENT mark or that the EVIDENT mark was available for use from around 2014 to present. (See Ex. A at 3). 4 Counsel for Plaintiffs have asked Defendants’ counsel to voluntarily dismiss their causes of action for dilution, cybersquatting, and common law unfair competition so that the Parties and the Court can focus on the remaining infringement cause of action, false designation of origin. Specifically, Plaintiffs do not believe the Defendants’ allegations or the evidence support Defendants’ dilution or cybersquatting causes of action as the EVIDENT mark is not "famous" which is the entire basis for a dilution claim, and Plaintiffs purchased the evident.com domain as part of a rebranding effort and are using said domain name as well as the evidenthealth.ca domain name in Canada. Further, there is no "Common Law Unfair Competition" cause of action under Alabama or federal law. See Alfa Corp. v. Alfa Mortg., Inc., 560 F. Supp. 2d 1166, 1175 (M.D. Ala. 2008) ("Alabama law does not recognize a common-law tort of unfair competition."); Investacorp, Inc. v. Arabian Inv. Bankring Corp. (Investcorp) E.C., 722 F. Supp. 719, 721 (S.D. Fla. 1989) ("In sum, federal common law does not serve as a basis for service mark protection."). Counsel for Plaintiffs are waiting on Defendants’ counsel’s response regarding these causes of action, which Plaintiffs’ counsel understands is forthcoming. {03941117.1} 4 Case 2:17-mc-00297-RDP Document 1 Filed 02/23/17 Page 5 of 9 11. On February 15, 2017, Plaintiffs filed a motion requesting the Southern District to issue an order, pursuant to Rule 42(b) of the Federal Rules of Civil Procedure, (a) bifurcating this matter into two trials, one to determine whether Plaintiffs are infringing on any purported rights of Defendants in their EVIDENT mark and another, if infringement is found, to determine whether Plaintiffs’ infringement is willful and to what relief Defendants are entitled, and (b) staying further discovery as to issues other than infringement pending the outcome of the trial on infringement. (See Motion to Bifurcate Trial and Stay Further Discovery on Issues Other Than Infringement (the "Motion to Bifurcate"), attached hereto as Exhibit B). The Motion to Bifurcate is currently pending before the Southern District. 12. As explained in more detail herein, Plaintiffs request that the Court, pursuant to FED. R. CIV. P. 45 and 26, quash the subpoena duces tecum served on Browning and enter a protective order forbidding his deposition and the corresponding production of the requested documents until after the Southern District rules on the Motion to Bifurcate and, if it is granted, until after the conclusion of initial trial on infringement.5 13. As previously mentioned, Browning hereby consents to the transfer of this Motion to Southern District due to its interrelatedness with the relief Plaintiffs seek in the Motion to Bifurcate currently pending before the Southern District. See FED. R. CIV. P. 45(f) ("When the court where compliance is required did not issue the subpoena, it may transfer a motion under this rule to the issuing court if the person subject to the subpoena consents or if the court finds exceptional circumstances."). 5 Contemporaneous with this Motion, Plaintiffs are moving to quash the subpoenas served on Douglas, Outlaw and Huffman, and for the entry of a corresponding protective order, in the Southern District as those subpoenas provide that those depositions are to occur in Mobile, Alabama. See FED. R. CIV. P. 45(d)(3)(A) ("On timely motion, the court for the district where compliance is required must quash or modify a subpoena that...."). {03941117.1} 5 Case 2:17-mc-00297-RDP Document 1 Filed 02/23/17 Page 6 of 9 14. The undersigned hereby certifies that Plaintiffs’ counsel has in good faith conferred with Counsel for the Defendants in an effort to resolve the dispute described in this Motion without Court action, however, such attempt was unsuccessful. Specifically, both sides participated in two telephone conferences: One on January 18, 2017 at 4:00 p.m. attended by J. Walton Jackson and Evan N. Parrott on behalf of Plaintiffs and Marvin Gelfand, Jacob Gonzales, and Julian Motes on behalf of Defendants and the other on February 17, 2017 at 10:30 a.m. attended by J. Walton Jackson, Evan N. Parrott, and H. Finn Cox, Jr. on behalf of Plaintiffs and Marvin Gelfand, Jacob Gonzales, and Julian Motes on behalf of Defendants. II. Argument Rule 45(d)(3)(A)(iii)-(iv) of the Federal Rules of Civil Procedure provides that "upon timely motion, the court for the district where compliance is required must quash or modify a subpoena that... requires disclosure of privileged or other protected matter, if no exception or waiver applies; or subjects a person to undue burden." Additionally, Rule 26(c) of the Federal Rules of Civil Procedure provides that on matters relating to a deposition, the court for the district where the deposition will be taken "may, for good cause, issue an order to protect a party or person from annoyance, oppression, or undue burden or expense, including[, inter alia,] forbidding the disclosure or discovery [or] forbidding inquiry into certain matters, or limiting the scope of disclosure or discovery to certain matters." FED. R. CIV. P. 26(c)(1)(A) & (D). Defendants seek to depose Browning, counsel for Plaintiffs, regarding his communications and advice to CPSI about its ability to use the EVIDENT mark from 2014 to present. One of the primary reasons Plaintiffs filed the Motion to Bifurcate is because without bifurcation and a stay of non-infringement discovery, Plaintiffs will be prejudiced by having to provide Defendants their legal opinions supporting their defense against willful infringement. {03941117.1} 6 Case 2:17-mc-00297-RDP Document 1 Filed 02/23/17 Page 7 of 9 This issue, known as the "Quantum dilemma" in analogous patent cases, exists when a party must choose between asserting an advice-of-counsel defense to a claim of willful infringement, which may result in a waiver of the attorney-client privilege, and not asserting the defense and the risking a finding of willfulness. See Brown v. Toscano, 630 F. Supp. 2d 1342, 1349 (S.D. Fla. 2008) (quoting Quantum Corp. v. Tandon Corp., 940 F.2d 642, 643-44 (Fed. Cir. 1991) ("An accused infringer, therefore, should not, without the trial court’s careful consideration, be forced to choose between waiving the privilege in order to protect itself from a willfulness finding, in which case it may risk prejudicing itself on the question of liability, and maintaining the privilege, in which case it may risk being found to be a willful infringer if liability is found."). Here, Plaintiffs are faced with this exact issue regarding communications between Browning, counsel for Plaintiffs, and representatives of CPSI and Evident, LLC related to the issue of willful infringement, specifically, Browning’s advice regarding the availability and use of the EVIDENT mark since 2014. For this reason, Plaintiffs requested that the Southern District to bifurcate the litigation to try the infringement issue first, along with a corresponding stay of further discovery regarding non-infringement issues. If this request is granted, it will lessen the prejudice to Plaintiffs by not requiring them to disclose their attorney-client communications relevant to willfulness (through document production or deposition testimony of Browning) until after the trial on infringement. Consistent with Plaintiffs’ position and reasoning in the Motion to Bifurcate, which Plaintiffs hereby fully incorporate herein, the deposition of Browning at this time is unnecessary and will prejudice Plaintiffs in this litigation by making them choose between asserting an advice-of-counsel defense to a claim of willful infringement, which may result in a waiver of the attorney-client privilege, and not asserting the defense and the risking a finding of willfulness. {03941117.1} 7 Case 2:17-mc-00297-RDP Document 1 Filed 02/23/17 Page 8 of 9 For this reason, good cause exists to quash the subpoena duces tecum served on Browning and enter a protective order forbidding Browning’s deposition and the production of the requested documents until after the Southern District rules on the Motion to Bifurcate and, if it is granted, until after the conclusion of initial trial on infringement. Therefore, Plaintiffs respectfully request that the Court quash the subpoena duces tecum served on Browning and enter a protective order forbidding his deposition and the corresponding production of the requested documents at this time. III. Conclusion For the reasons provided above, namely the Plaintiffs’ prejudice by having to provide Defendants their legal opinions supporting their defense against willful infringement, good cause exists to quash the subpoena duces tecum served on Browning and enter a protective order forbidding Browning’s deposition and the corresponding production of the requested documents until after the Southern District rules on the Motion to Bifurcate and, if it is granted, until after the conclusion of initial trial on infringement. Consequently, Plaintiffs request that this Court quash the subpoena duces tecum served by Defendants on Browning, enter a protective order forbidding his deposition and corresponding production of requested documents, and grant such other and further relief as the Court deems appropriate. DATED this 23rd day of February, 2017. Respectfully submitted,/s/J. Walton Jackson J. Walton Jackson (JACKJ1045) wjackson@maynardcooper.com C. Brandon Browning (ASB-8933-W78C) bbrowning@maynardcooper.com Scott S. Brown (ASB-7762-B65S) scottbrown@maynardcooper.com {03941117.1} 8 Case 2:17-mc-00297-RDP Document 1 Filed 02/23/17 Page 9 of 9 Evan N. Parrott (ASB-1950O65A) eparrott@maynardcooper.com Maynard, Cooper & Gale, P.C. 11 North Water Street, Suite 24290 Mobile, AL 36602 Attorneys for Plaintiffs/Counterdefendants Computer Programs and Systems, Inc. and Evident, LLC OF COUNSEL: Maynard, Cooper & Gale, P.C. 11 North Water Street, Suite 24290 Mobile, AL 36602 Phone: 251.432.0001 Fax: 251.432.0007 CERTIFICATE OF SERVICE I do hereby certify that I have served a copy of the foregoing document upon the following via electronic filing notification and/or by mailing a copy of same by First Class United States Mail, properly addressed and postage prepaid, on this the 23rd day of February, 2017, as follows: T. Julian Motes Attorney for Defendants, Wazu Holdings Ltd. and Evident, Inc. and Counterclaimant Evident, Inc. Sirote & Permutt, PC One St. Louis Centre, Suite 1000 P. O. Drawer 2025 Mobile, Alabama 36652-2025 Marvin Gelfand Josh H. Escovedo Jacob C. Gonzales Attorneys for Defendants, Wazu Holdings Ltd. and Evident, Inc. and Counterclaimant Evident, Inc. Weintraub Tobin Chediak Coleman Grodin Law Corporation 10250 Constellation Boulevard, Suite 2900 Los Angeles, California 90067/s/J. Walton Jackson OF COUNSEL {03941117.1} 9

ORDER-re: Motion to Quash Subpoena Decus Tecum Served on C. Brandon Browning and for Protective Order {{1}}. The Motion is GRANTED IN PART. To the extent Pltfs' Motion seeks transfer of the Motion it is granted. The court defers ruling on the remaining portion of the Motion (which seeks to quash the subpoena and entry of a protective order) and that portion of the Motion is also transferred to the United District Court for the Southern District of Alabama. Signed by Judge R David Proctor on 2/27/2017.

FILED 2017 Feb-27 AM 10:18 U.S. DISTRICT COURT N.D. OF ALABAMA UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ALABAMA SOUTHERN DIVISION COMPUTER PROGRAMS AND} SYSTEMS, INC, et al.,}} Plaintiffs,}} Case No.: 2:17-mc-00297-RDP v.}} WAZU HOLDINGS, LTD, et al.,}} Defendants. ORDER This matter is before the court on Plaintiffs’ Motion to Quash Subpoena Duces Tecum Served on C. Brandon Browning and for Protective Order. (Doc. # 1). Plaintiffs request that the court (1) quash the subpoena duces tecum served by Defendants on C. Brandon Browning, and (2) enter a protective order forbidding the deposition of Browning. The underlying civil action for this matter--1:15-cv-00405-KD-M--is currently pending in the United States District Court for the Southern District of Alabama. Because the subpoena specifies that the relevant deposition is to take place in Birmingham, Alabama, this court is the proper court for the Plaintiffs to file their current Motion. Fed. R. Civ. P. 45(d)(3)(A) ("On timely motion, the court for the district where compliance is required must quash or modify a subpoena…"). However, "[w]hen the court where compliance is required did not issue the subpoena, it may transfer a motion under this rule to the issuing court if the person subject to the subpoena consents or if the court finds exceptional circumstances." Fed. R. Civ. P. 45(f). In the pending Motion, Browning (the person subject to the subpoena) consents to the transfer of the Motion to the Southern District of Alabama (the issuing court). Because the pending Motion incorporates issues before the issuing court, and because the Browning has expressed his consent, the Motion (Doc. # 1) is GRANTED IN PART. To the extent Plaintiffs’ Motion (Doc. # 1) seeks transfer of the Motion it is granted. The court defers ruling on the remaining portion of the Motion (which seeks to quash the subpoena and entry of a protective order) and that portion of the Motion is also transferred to the United States District Court for the Southern District of Alabama, the issuing court. DONE and ORDERED this February 27, 2017. _________________________________ R. DAVID PROCTOR UNITED STATES DISTRICT JUDGE 2

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Description
1
02/23/2017
MOTION to Quash Subpoena Duces Tecum Served on C. Brandon Browning and for Protective Order by Computer Programs and Systems Inc, Evident LLC.
1
Exhibit A
2
Exhibit B)(AVC
2 Attachments
2
02/27/2017
ORDER-re: Motion to Quash Subpoena Decus Tecum Served on C. Brandon Browning and for Protective Order 1. The Motion is GRANTED IN PART. To the extent Pltfs' Motion seeks transfer of the Motion it is granted. The court defers ruling on the remaining portion of the Motion (which seeks to quash the subpoena and entry of a protective order) and that portion of the Motion is also transferred to the United District Court for the Southern District of Alabama. Signed by Judge R David Proctor on 2/27/2017.
02/27/2017
Filing Fee Received: $47.00, Receipt# B4601075216. (Text entry; no document attached.)
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