Case 3:23-cv-03223-AMO Document 434 Filed 04/03/25 Page 1 of 6 1 ORRICK, HERRINGTON & SUTCLIFF LLP Annette L. Hurst 2 The Orrick Building, 405 Howard Street San Francisco, CA 94105-2669 3 Telephone: (415) 773-5700 Facsimile: (415) 773-5759 4 ahurst@orrick.com 5 FAEGRE DRINKER BIDDLE & REATH LLP Jared B. Briant (admitted pro hac vice) 6 1144 Fifteenth Street, Suite 3400 Denver, CO 80202 7 Telephone: (303) 607-3500 Facsimile: (303) 607-3600 8 jared.briant@faegredrinker.com 9 Attorneys for non-party Microsoft Corporation 10 UNITED STATES DISTRICT COURT 11 NORTHERN DISTRICT OF CALIFORNIA FOR THE COUNTY OF SAN FRANCISCO 12 13 IN RE OPENAI CHATGPT LITIGATION Master File No. 3:23-cv-03223-AMO 14 This document relates to: NON-PARTY MICROSOFT CORPORATION’S OPPOSITION TO 15 Case No. 3:23-cv-03416-AMO PLAINTIFFS’ MOTION FOR RELIEF FROM NON-DISPOSITIVE PRETRIAL 16 Case No. 3:23-cv-04625-AMO ORDER OF MAGISTRATE JUDGE [DKT. 383] 17 18 19 20 21 22 23 24 25 26 27 28 NON-PARTY MICROSOFT CORPORATION’S OPPOSITION TO PLAINTIFFS’ MOTION FOR RELIEF FROM NON-DISPOSITIVE PRETRIAL ORDER OF MAGISTRATE JUDGE [DKT. 383] Master File No. 3:23-cv-03223-AMO Case 3:23-cv-03223-AMO Document 434 Filed 04/03/25 Page 2 of 6 1 Magistrate Judge Illman was correct in all aspects of his rulings related to Plaintiffs’ 2 document subpoena to Microsoft: (1) Microsoft is not a party in this case and is therefore 3 afforded the same protections as any other non-party under Rule 45; (2) most of the documents 4 Plaintiffs seek are undisputedly in OpenAI’s possession; and (3) the remaining material at issue is 5 not relevant to claims and defenses in this case. Plaintiffs have failed to show that Magistrate 6 Judge Illman’s Order was either “clearly erroneous or contrary to law” as required under Federal 7 Rule of Civil Procedure 72(a). Microsoft respectfully requests the Court overrule Plaintiffs’ 8 Objection and decline to modify Magistrate Judge Illman’s Order. 9 Magistrate Judge Illman Correctly Applied the Standard Under Rules 16 and 45 to 10 Microsoft. 11 While Microsoft has invested in and collaborated with OpenAI, Microsoft and OpenAI 12 have always been and remain separate companies, each with their own generative AI product 13 offerings that, at times, compete with one another. Magistrate Judge Illman recognized this fact 14 in correctly ruling that Plaintiffs had not met their burden under Rule 26(b) and Rule 45(d) and 15 denying Plaintiffs’ motion other than as to the documents that Microsoft agreed to produce. 16 “[T]he Ninth Circuit has long held that nonparties subject to discovery requests deserve 17 extra protection from the courts.” High Tech. Med. Instrumentation, Inc. v. New Image Indus., 18 Inc., 161 F.R.D. 86, 88 (N.D. Cal. 1995). “Underlying [those protections] is the recognition that 19 the term ‘non-party’ serves as a constant reminder of the reasons for the limitations that 20 characterize third-party discovery.” Airwair Int’l Ltd. v. Zoetop Bus. Co., 2021 WL 6091263, at 21 *2 (N.D. Cal. Dec. 23, 2021). Thus, in determining whether to enforce a subpoena, courts must 22 look both to: (i) Rule 26(b) permitting a court to limit discovery if it “is obtainable from some 23 other source that is more convenient, less burdensome, or less expensive” or “if the burden or 24 expense of the proposed discovery outweighs its likely benefit”; and (ii) Rule 45(d) protecting a 25 non-party from “undue burden or expense.” See, e.g., LegalZoom.Com v. Rocket Law. Inc., 2015 26 WL 12832823, at *2 (N.D. Cal. Mar. 23, 2015); Nidec Corp. v. Victor Co. of Japan, 249 F.R.D. 27 575, 577 (N.D. Cal. 2007). Magistrate Judge Illman did just that in denying Plaintiffs’ motion. 28 NON-PARTY MICROSOFT CORPORATION’S OPPOSITION TO PLAINTIFFS’ MOTION FOR RELIEF FROM NON-DISPOSITIVE PRETRIAL ORDER OF MAGISTRATE JUDGE [DKT. 383] Master File No. 3:23-cv-03223-AMO Case 3:23-cv-03223-AMO Document 434 Filed 04/03/25 Page 3 of 6 1 Plaintiffs’ allegation that Microsoft is not entitled to the protections of Rules 26 and 45 2 based on unsupported accusations of a conspiracy are untimely and unfounded. As an initial 3 matter, this is an entirely new argument that was not presented to Magistrate Judge Illman in the 4 letter brief, at the hearing, or in the joint status report. “Although this Court has discretion to 5 consider new legal arguments that were not presented to the magistrate judge, the ordinary 6 attitude should be to refuse to entertain objections based on legal arguments that were not 7 presented to the magistrate judge.” Shenzhenshi Haitiecheng Sci. & Tech. Co. v. Rearden LLC, 8 2016 WL 5930289, at *13 (N.D. Cal. Oct. 11, 2016) (internal quotations omitted). Even if this 9 argument is considered, it should be rejected. Plaintiffs provide absolutely no evidence 10 supporting their unfounded contentions of a conspiracy, nor do they provide any precedent stating 11 that such an allegation alleviates Plaintiffs’ burden under Rules 26 and 45. 12 Magistrate Judge Illman Correctly Found That Nearly All of the Documents Sought Are 13 Properly Obtained From OpenAI. 14 Most of the documents Plaintiffs seek are undisputedly in OpenAI’s possession. See Dkt. 15 409-8, Requests 1-3, 7, 9, 11-13 (expressly requesting documents between or exchanged with 16 OpenAI), 4-6, 8, 14 (requesting documents on topics that also likely exist with OpenAI). “There 17 is simply no reason to burden nonparties when the documents sought are in possession of the 18 party defendant.” Nidec, 249 F.R.D. at 577. Magistrate Judge Illman properly applied this 19 standard in ruling during the hearing that Plaintiffs had not met the burden of showing that they 20 were entitled to discovery from Microsoft for documents that OpenAI should have. Dkt. 409-9, 21 28:17-25, 30:18-31:2. Magistrate Judge Illman recognized that Plaintiffs were “trying to tie 22 [Microsoft and OpenAI] into this intimate relationship . . . to sort of get around” making the 23 requisite showing that the documents are not equally available from OpenAI, but he recognized 24 “Microsoft is not a party to this action” and determined that he was “not going to let [Plaintiffs] 25 stretch through the rules related to non-parties as it relates to that.” Id., 30:18-31:2. 26 27 28 2 NON-PARTY MICROSOFT CORPORATION’S OPPOSITION TO PLAINTIFFS’ MOTION FOR RELIEF FROM NON-DISPOSITIVE PRETRIAL ORDER OF MAGISTRATE JUDGE [DKT. 383] Master File No. 3:23-cv-03223-AMO Case 3:23-cv-03223-AMO Document 434 Filed 04/03/25 Page 4 of 6 1 Plaintiffs’ Objection does not even engage with this point, instead repeating the false 2 narrative1 from the letter brief that Microsoft’s relationship with OpenAI creates an “exception” 3 to this requirement. Dkt. 410 at 5 (citing Soto v. Castlerock Farming & Transp., Inc., 282 F.R.D. 4 492, 505 (E.D. Cal. 2012)).2 However, consistent with Magistrate Judge Illman’s ruling during 5 the hearing, the Soto court found that “when an opposing party and a non-party both possess 6 documents, the documents should be sought from the party to the case” and only granted the 7 motion once the requesting party showed that the opposing party refused to provide the 8 documents. 282 F.R.D. at 505. Plaintiffs have not made that showing here. Plaintiffs’ footnote 9 alleging that OpenAI’s refusal to add Katie Mayer a custodian justifies its requests to Microsoft 10 falls short given that Magistrate Judge Illman found that Plaintiffs had not shown that there were 11 any documents unique to Ms. Mayer. Dkt. 358 at 2. Plaintiffs have likewise not presented any 12 such evidence here, let alone evidence that Microsoft would possess any such unique documents. 13 Thus, Plaintiffs have not shown that Magistrate Judge Illman erred in denying their motion as to 14 the requests seeking documents that are in OpenAI’s possession. 15 Magistrate Judge Illman Correctly Found That Many of the Requests Seek Irrelevant 16 Information or Are Improper Under the Substantial Need Test or Rules 26 and 45. 17 As to the remaining documents, Magistrate Judge Illman agreed with Microsoft’s 18 objection that they largely seek material that is not relevant to any claim or defense in the case. 19 Sacks Holdings, Inc. v. Vaidya, 2024 WL 4730424, at *3 (N.D. Cal. Nov. 7, 2024) (“The party 20 seeking to compel compliance with a subpoena bears the burden of establishing that its request 21 seeks relevant information and thus falls within the appropriate scope of discovery.”). Magistrate 22 Judge Illman specifically rejected Plaintiffs’ assertion that any documents that only exist 23 1 LegalZoom.com, 2015 WL 12832823, at *2 (finding that requesting party’s “obligation to be 24 reasonable is not excused by its allegations of connections between” the non-party and the opposing party). 25 2 In an attempt to illustrate the relationship between Microsoft and OpenAI, Plaintiffs attach four 26 documents, none of which were submitted for Magistrate Judge Illman’s consideration. “[A] district court is not required to consider new evidence in reviewing a magistrate judge’s 27 recommendation.” United States v. Howell, 231 F.3d 615, 622 (9th Cir. 2000) (citing United States v. Raddatz, 447 U.S. 667 (1980)). 28 3 NON-PARTY MICROSOFT CORPORATION’S OPPOSITION TO PLAINTIFFS’ MOTION FOR RELIEF FROM NON-DISPOSITIVE PRETRIAL ORDER OF MAGISTRATE JUDGE [DKT. 383] Master File No. 3:23-cv-03223-AMO Case 3:23-cv-03223-AMO Document 434 Filed 04/03/25 Page 5 of 6 1 internally at Microsoft could be relevant to willfulness allegations against OpenAI, and that 2 Plaintiffs’ belief that Microsoft may be in possession of relevant documents beyond those in 3 possession of OpenAI is speculative. Dkt. 383 at 2. 4 Plaintiffs’ criticism of Magistrate Judge Illman’s discussion of the “substantial need” 5 standard is unfounded. Magistrate Judge Illman was within his discretion to refer to the 6 “substantial need” test. As discussed above, the universe of documents that could be sought from 7 Microsoft must be limited to internal Microsoft documents that are not in OpenAI’s possession. 8 Any documents that potentially fall into that category are necessarily proprietary documents 9 related to Microsoft’s work in the generative AI space and, as such, constitute trade secret or 10 commercially sensitive information requiring the “substantial need showing” or are otherwise 11 irrelevant to Plaintiffs’ claims against OpenAI. The only example Plaintiffs provide of any 12 documents that are uniquely in Microsoft’s possession, custody, or control are those discussing 13 “Microsoft’s assessment of the risks or benefits resulting from OpenAI’s unlawful downloading 14 of pirated works.” Dkt. 410 at 5. However, Plaintiffs once again fail to provide any rationale for 15 why such documents that focus solely on Microsoft’s assessment of any risks are at all relevant to 16 their claims against OpenAI. In any event, Magistrate Judge Illman also found that Plaintiffs had 17 not met their burden under Rules 26 and 45. 18 Plaintiffs also incorrectly assert that Magistrate Juge Illman rejected “without explanation 19 or analysis” Plaintiffs’ argument that documents related to “when, how, and why OpenAI 20 informed Microsoft” of its activities were “highly relevant to the willfulness element of Plaintiffs’ 21 infringement claim.” Id. As discussed above, during the hearing, Magistrate Judge Illman 22 correctly ruled that Plaintiffs had not met their burden of showing that discovery from Microsoft 23 was proper as to any documents that were also in OpenAI’s possession. In his Order, Magistrate 24 Judge Illman then properly “agree[d] with Microsoft’s contention that ‘Plaintiffs’ allegation that 25 Microsoft’s internal documents could somehow be relevant to a willfulness claim against OpenAI 26 also rings hollow.’” Dkt. 383 at 2 (citing Dkt. 334 at 5). Thus, Magistrate Judge Illman 27 specifically addressed this issue and correctly rejected Plaintiffs’ argument. 28 4 NON-PARTY MICROSOFT CORPORATION’S OPPOSITION TO PLAINTIFFS’ MOTION FOR RELIEF FROM NON-DISPOSITIVE PRETRIAL ORDER OF MAGISTRATE JUDGE [DKT. 383] Master File No. 3:23-cv-03223-AMO Case 3:23-cv-03223-AMO Document 434 Filed 04/03/25 Page 6 of 6 1 Plaintiffs’ Objection is nothing more than a thinly veiled attempt by Plaintiffs to hold 2 Microsoft to the same standard as a party to this case and obtain full blown discovery of 3 documents that are either in OpenAI’s possession or are not relevant to the claims and defenses in 4 this case. This Court should find just as Magistrate Judge Illman did that this is improper and 5 overrule Plaintiffs’ Objection. 6 7 8 Dated: April 3, 2025 FAEGRE DRINKER BIDDLE & REATH LLP 9 10 By: /s/ Jared B. Briant Jared B. Briant 11 Attorneys for Non-Party Microsoft Corporation 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5 NON-PARTY MICROSOFT CORPORATION’S OPPOSITION TO PLAINTIFFS’ MOTION FOR RELIEF FROM NON-DISPOSITIVE PRETRIAL ORDER OF MAGISTRATE JUDGE [DKT. 383] Master File No. 3:23-cv-03223-AMO