United States District Court, S.D. Indiana, Evansville Division
ENTRY ON DEFENDANT'S MOTION TO COMPEL PRODUCTION OF DOCUMENTS
WILLIAM G. HUSSMANN, Jr., District Judge.
This matter is before the Magistrate Judge on Defendant Intertape Polymer Corporation's Motion to Compel Production of Documents (Filing No. 180) and Chief Judge Young's Order of Reference of December 12, 2013. The motion is fully briefed. (Filing No. 181; Filing No. 189; Filing No. 191.) The Magistrate Judge, having considered the motion, the parties' filings, and relevant law, and being duly advised, hereby GRANTS the motion in part and DENIES it in part.
Berry and Intertape compete against one another in the manufacture and sale of adhesive tapes. (Filing No. 24 at ¶¶ 6-7.) To prepare the adhesive for its tapes, Berry employs a machine using rotating spindles manufactured by Entex Rust & Mitschke GmbH ("Entex"). ( Id. at ¶¶ 10-12.) In 2009, the United States Patent Office assigned Intertape U.S. Patent No. 7, 476, 416 ("the '416 patent"), which recognized several of Intertape's employees as inventors of a process for using spindle technology to prepare adhesives. ( Id. at ¶¶ 5, 18, 25.) In 2010, Berry initiated this lawsuit, seeking a judgment declaring that Intertape's patent is unenforceable and that Berry is entitled to continue to use Entex's spindle technology to prepare its adhesives. (Filing No. 1 at ECF pp. 9-10.) Intertape has defended the validity and enforceability of its patent and brought a counterclaim against Berry for directly infringing upon its patent rights. (Filing No. 24.) Although Berry and Intertape are the only parties to this litigation, Entex and its American sales agent, Triad Sales, LLC, also are subjects of Intertape's motion and have been involved from the beginning of the controversy.
According to Berry, Entex touted its spindle technology-and the technology's utility in preparing adhesives-at the 2003 National Plastics Expo. (Filing No. 1 at ¶¶ 16-17.) It gave a presentation, staffed an exhibitor's booth, displayed equipment, and distributed literature describing the technology. ( Id. at ¶¶ 16-17, 19.) Intertape employees David Kovach and Thomas Lombardo attended the Expo and visited Entex's booth. (Filing No. 24 at ¶¶ 18-19.) According to Berry, Kovach and Lombardo spoke with Entex representatives about the potential of using Entex's spindle technology to prepare adhesives. (Filing No. 1 at ¶¶ 19-20.) A subsequent string of e-mails from Entex to Intertape describing the details of the spindle technology suggests Entex sought to sell spindle machines to Intertape for that purpose. ( See Filing No. 189-3.)
In 2005, Intertape sought a patent for the process of using spindle technology to prepare adhesives. (Filing No. 24 at ¶ 25.) Entex learned of Intertape's application and confronted Intertape, accusing Intertape of seeking a patent based on the information Entex had shared at and following the 2003 Expo. (Filing No. 189-11 at ECF p. 3.) Intertape denied any misappropriation and stated that, although it wished to maintain a positive business relationship with Entex, Intertape would seek to prevent any of its competitors from using spindle technology to prepare adhesives. ( Id. at ECF p. 2.)
In 2007, Berry sought to purchase spindle machines from Entex-and through Triad-to use in preparing adhesives. ( See Filing No. 182-17.) Berry (then called Covalence) knew of Intertape's patent application and perceived that its use of Entex's machines to prepare adhesives would constitute the exact process Intertape had applied to patent. ( Id. at ECF p. 3.) Berry, Entex, and Triad discussed the potential of patent infringement liability ( id. ), but Entex reassured Berry with documents suggesting Intertape's patent application was a misappropriation of Entex's intellectual property ( see Filing No. 182-5). Apparently satisfied that any patent rights Intertape might gain would be unenforceable, the three companies consummated their transaction. ( See Filing No. 1 at ¶ 10.)
In September of 2009, Berry issued a press release announcing upgrades to its plant in Franklin, Kentucky. ( See Filing No. 1-1 at ECF p. 2.) That November, Intertape's attorneys notified Berry of the '416 patent-which had issued in January of 2009-and demanded that Berry provide assurances that it would not use spindle technology to prepare adhesives. ( Id. ) Intertape's letter initiated a torrent of correspondence among Berry, Entex, and Triad concerning the validity of Intertape's patent. Berry again requested information about Intertape's patented process from Entex (Filing No. 182-1), and Entex again responded with assurances that Intertape had based the patent application on the information and artwork Entex shared with Intertape at and following the 2003 Expo (Filing No. 182-2). Entex offered strategies for defeating the '416 patent and agreed that, although it could not afford to initiate litigation in the United States, it would support Berry in patent litigation with Intertape. (Filing No. 182-7; Filing No. 182-9.) Triad again served as an intermediary, facilitating communications between Entex and Berry. ( See Filing No. 182-2; Filing No. 182-7; Filing No. 182-9.)
In December of 2009, a month after Intertape issued its demand, Entex again accused Intertape of misappropriating Entex's manufacturing process as the basis for its patent application. (Filing No. 189-13.) In January of 2010, Berry's attorneys responded to Intertape's demand, referencing Entex's letter and reiterating its allegations that Intertape stole its patented process from Entex. (Filing No. 1-2 at ECF pp. 2-3.) Berry's attorneys threatened to initiate a declaratory judgment action unless Entex entered a covenant not to sue Berry or any of its "direct or indirect importers, suppliers, manufacturers, distributors, ... or any other parties for the importation, export, manufacture, use, sale, or offer for sale" of Entex's spindle technology or for using that technology to prepare adhesives. ( Id. at ECF pp. 3-4; Filing No. 1-3 at ECF p. 3.)
In March of 2010, Intertape's attorneys responded to Berry's letter. (Filing No. 1-4.) They denied Berry's allegations of misappropriation and declined to enter the covenant. ( Id. ) Intertape offered to license Berry's production of tape using its patented method and indicated it otherwise would welcome a lawsuit to test the validity of its patent. ( Id. ) This lawsuit followed. Intertape now asks the Court to compel Berry and Triad to produce certain documents they have withheld as privileged.
II. Legal Standard
A party to litigation is entitled to discover from his adversary "any nonprivileged matter that is relevant to any party's claim or defense." Fed.R.Civ.P. 26(b)(1). A party who resists a discovery request must support any assertion of privilege with enough information to allow the requestor to assess whether the evidence withheld is in fact subject to a privilege. Fed.R.Civ.P. 26(b)(5)(A)(ii). Where federal law decides the case, federal common law also determines the existence and applicability of any evidentiary privilege. Fed.R.Evid. 501; see also United States v. BDO Seidman, LLP, 492 F.3d 806, 814 (7th Cir. 2007).
Intertape asserts numerous reasons why Berry's and Triad's claims of privilege must fail. The parties have done an exceptionally good job of streamlining the issues, and the Magistrate Judge will address each issue as the parties have presented it.
A. Appendices 1 and 2: Have Berry, Entex, and Triad cooperated to advance a common legal interest?
Berry and Triad have asserted the common interest exception as a basis for withholding nearly every document in question. In Appendix 1 to its motion, Intertape identifies documents for which Berry and Triad have raised the common interest exception as a sole source of privilege. ( See Filing No. 181-1.) In Appendix 2, Intertape has identified documents for which Berry and Triad have raised the common interest exception and an additional source of privilege. ( See Filing No. 181-2.) Intertape asks the Court to compel Berry and Triad to produce the documents listed in Appendix 1 on grounds that the common interest exception is not an independent source of privilege. Intertape asks the Court to compel Berry and Triad to produce the documents listed in Appendix 2 on grounds that the parties to the communications do not share a common legal interest necessary to trigger the exception.
The Magistrate Judge will first determine whether Berry, Entex, and Triad shared a common legal interest that would qualify for the exception. Then, the Magistrate Judge will turn his attention to ...