Unreported / Non-Citable
Background
Netgear, Inc. sued Choice Electronics Inc. in the U.S. District Court for the Northern District of California, Case No. 25-cv-02601-RS, alleging trademark infringement. Choice asserted a first-sale affirmative defense, contending that the Netgear products it sold were genuine and lawfully acquired. In response, Netgear served discovery seeking documentation about the origin and sourcing of the products at issue, including 139 EAX15 units and 19 CM2050V units identified in Choice's sales data.
After the parties met and conferred about Netgear's discovery requests, Netgear filed a motion to compel (Dkt. No. 106) on the last day for filing fact-discovery joint statements. The motion sought an order requiring Choice to produce invoices and underlying purchase documentation, emails transmitting invoices from two suppliers, payment records, and WhatsApp messages between Choice and its suppliers concerning the acquisition, sourcing, or condition of Netgear products.
In a two-page discovery order dated October 15, 2026, Magistrate Judge Alex G. Tse resolved the motion on the papers, setting an October 30, 2026 production deadline and addressing Choice's burden, timeliness, and duplication objections.
The Court’s Holding
Magistrate Judge Alex G. Tse granted Netgear's motion to compel. The court ordered Choice to produce by October 30, 2026: (1) all invoices and underlying purchase documentation supporting its acquisition of the identified units, or a verified response confirming no such documentation exists and explaining the basis for that representation; (2) emails by which Supplier1 and Supplier2 transmitted invoices to Choice for Netgear products; (3) credit card statements, bank or account statements, and other payment records evidencing amounts paid to the suppliers; and (4) all WhatsApp messages between Choice and the suppliers concerning the acquisition, sourcing, or condition of Netgear products.
The court found the discovery relevant under Rule 26(b)(1) because it relates to the origin and genuineness of the products sold by Choice, issues central to Choice's first-sale affirmative defense to trademark infringement. The court cited authority holding that asserting the first-sale doctrine places supplier information within the scope of discovery, and that a plaintiff rebutting a first-sale defense may need to trace the source of the defendant's products to determine their origin and genuineness. The court also rejected Choice's objections, finding no undue burden and no untimeliness, noting that Netgear was not required to seek court intervention when the parties first met and conferred and that the motion was timely filed on the last day for fact-discovery joint statements.
The court addressed potential overlap with a related New Jersey subpoena matter in a footnote, explaining that the compelled discovery was not unnecessarily duplicative because Choice has an independent obligation to search for and produce responsive communications, and its production may capture communications that a supplier no longer possesses.
Key Takeaways
- Asserting a first-sale defense in a trademark case opens the door to discovery about the defendant's supply chain, including invoices, payment records, and supplier communications.
- A party need not file a motion to compel immediately after meeting and conferring; filing on the last day for fact-discovery joint statements can be timely.
- Discovery obligations are independent for each party, so compelling production from a defendant is not duplicative of subpoena discovery from a third-party supplier.
- Courts will order production of modern communication channels like WhatsApp when they concern the acquisition, sourcing, or condition of products relevant to a defense.
- A verified response explaining the absence of documentation may be required when a party claims no responsive records exist.
Why It Matters
This order reinforces that the first-sale doctrine, while a defense to trademark infringement, comes with a discovery cost: defendants who invoke it must be prepared to substantiate the genuineness and lawful acquisition of the products they sold. The decision aligns with authority from other districts treating supplier information as squarely within the scope of Rule 26(b)(1) when first sale is raised.
The ruling also provides practical guidance on timing and duplication objections in discovery disputes. By rejecting the untimeliness argument and emphasizing independent production obligations, the court signals that procedural defenses to motions to compel will face close scrutiny when the underlying discovery is clearly relevant to an asserted affirmative defense.