United States District Court, S.D. Indiana, Evansville Division
ENTRY ON BERRY PLASTICS CORPORATION'S MOTION TO COMPEL PRODUCTION OF DOCUMENTS AND TESTIMONY and BERRY'S MOTION FOR ORAL ARGUMENT
RICHARD L. YOUNG, Chief District Judge.
The court held a jury trial in this patent infringement lawsuit between Intertape Polymer Corporation, the owner of United States Patent No. 7, 476, 416 ("416 patent"), and its competitor in the adhesives industry, Berry Plastics Corporation, from November 3, 2014, to November 17, 2014. The jury found that Intertape failed to prove that Berry infringed its patent, and that Berry failed to prove that Intertape's 416 patent was invalid. ( See generally Filing No. 378, Verdict Form). Berry's inequitable conduct claim against Intertape remains for the court's resolution. In the present motion,  Berry argues that Intertape waived the attorney-client privilege as to certain evidence bearing on the inequitable conduct claim and asks the court to compel Intertape to produce that evidence. The court, having read and reviewed the parties' submissions, the designated evidence and the applicable law, now DENIES Berry's Motion to Compel and DENIES Berry's Motion for Oral Argument.
In Therasense, Inc. v. Becton, Dickinson & Co., the Federal Circuit "tighten[ed] the standards" for proving inequitable conduct "in order to redirect a doctrine that has been overused to the detriment of the public." 649 F.3d 1276, 1290 (Fed. Cir. 2011) (en banc). The accused infringer must now prove "by clear and convincing evidence that the applicant knew of the reference, knew that it was material, and made a deliberate decision to withhold it." Id. As Magistrate Judge Lynch observed, "the heightened standards of Therasense make inquiry into counsel's and client's patent prosecution decisions - and the knowledge base underlying them - a natural avenue of discovery." In re Method of Processing Ethanol Byproducts and Related Subsystems (858) Patent Litigation, Master Case Nos. 1:10-ML-02181-LJM, 1:13-mc-00058-LJM-DML, 2013 WL 3820593, at *8 (S.D. Ind. July 23, 2013).
Berry has traveled down this avenue several times before. On July 18, 2014, the Magistrate Judge denied Berry's motion to compel based on much of the same deposition testimony at issue here. (Filing No. 289, Entry on Berry's Motion to Compel Production of Documents and Testimony). The Magistrate Judge determined that Intertape had not asserted prosecution counsel's advice, nor prosecution counsel's good faith, as a defense to Berry's charges of inequitable conduct. As is relevant to the present motion, the Magistrate Judge specifically rejected the line of cases cited by Berry that found the privilege waived based on a patentee's responses to its opponent's deposition questions. ( Id. at 9). Berry filed an objection to the Magistrate Judge's ruling, which the court overruled. (Filing No. 313, Order on Berry's Objections to the Magistrate's Order Denying its Motion to Compel).
In addition, prior to trial, the parties argued over the deposition designations of numerous witnesses, including Mr. Levy. Berry moved to strike Intertape's counter-designations or, in the alternative, moved to compel the production of documents based on waiver of attorney-client privilege. (Filing No. 325, Berry's Motion to Strike Intertape's Deposition Designations). Intertape asserted that its counter-designations related only to its inequitable conduct claim, and that the court had already determined that Intertape had not waived privilege with respect to Mr. Levy's responses. (Filing No. 344, Intertape's Memorandum in Opposition to Berry's Motion to Strike). Intertape also moved to bifurcate the inequitable conduct claim from the invalidity and infringement claims for purposes of trial.
At the Final Pre-Trial Conference, the court granted Intertape's motion to bifurcate, but ordered Mr. Levy to be "on call" as a witness. (Filing No. 349, Transcript of Final Pretrial Conference and Motions Hearing at 58). Over Intertape's objection, the court allowed Berry to call Mr. Levy to testify at trial, but limited his testimony to issues related to Berry's invalidity defense, thus mooting the dispute over the deposition designations of Mr. Levy. (Filing No. 380, Order on Pending Motions at 2-3). Berry now argues that Intertape's "voluntary introduction" of Mr. Levy's pre-trial deposition testimony and trial testimony placed Mr. Levy's "knowledge and actions at-issue in an attempt to negate Berry's invalidity and inequitable conduct claims constitutes waiver." (Filing No. 467, Berry's Reply in Support of Motion to Compel at 2).
II. The Attorney-Client Privilege
"In patent cases, regional circuit law governs non-patent issues, while Federal Circuit law governs issues of substantive patent law." Medicines Co. v. Mylan, Inc., 936 F.Supp.2d 894, 899 (N.D. Ill. 2013) (citing In re Spalding Sports Worldwide, Inc., 203 F.3d 800, 803 (Fed. Cir. 2000)). Whether Intertape has waived privilege by defending against Berry's allegations of inequitable conduct is an issue of substantive patent law, and thus, Federal Circuit law applies. Id. at 900.
Waiver may be express or implied. Wi-LAN, Inc. v. Kilpatrick Townsend & Stockton LLP, 684 F.3d 1364, 1370 (Fed. Cir. 2012) (distinguishing between an express and implied waiver). A party expressly waives privilege by disclosing privileged information to the opposing party. Id. at 1367. A party does not expressly waive privilege by merely "indicating the fact or topic of a confidential communication with an attorney." Chicago Bd. Options Exch., Inc. v. Int'l Secs. Exch., LLC, No. 07 C 623, 2008 U.S. Dist. LEXIS 60457, at *9 (N.D. Ill. Aug. 8, 2008); see also Brigham and Women's Hosp., Inc. v. Teva Pharm. USA, Inc., 707 F.Supp.2d 463, 470 (D. Del. 2010) ("Generally, disclosure of the substance of a privileged communication will result in waiver, whereas disclosure of the mere fact that such communication took place will not.").
A party may impliedly waive privilege when the party "makes assertions, the truth of which can only be assessed by examination of privileged communications." Blue Lake Forest Products, Inc. v. United States, 85 Fed.Cl. 779, 783 (2007); see also Murata Mfg. Co. v. Bel Fuse, Inc., No. 03 C 2934, 2007 U.S. Dist. LEXIS 17224, at *19 (N.D. Ill. Mar. 8, 2007) ("The at issue' waiver of the attorney-client privilege is implied when a party voluntarily injects a new factual or legal issue into a case, the truthful resolution of which will require examining confidential communications." (citing Lorenz v. Valley Forge Ins. Co., 815 F.2d 1095, 1097 (7th Cir. 1987))). A party does not impliedly waive privilege merely by raising a particular claim or defense that makes privileged communications relevant. Chamberlain Grp. v. Interlogix, Inc., No. 01 C 6157, 2002 U.S. Dist. LEXIS 5468, at *8 (N.D. Ill. Mar. 26, 2002) ("Relevancy is not the test for an implicit waiver of attorney-client privilege."). "A party must affirmatively use privileged communications to defend itself or attack its opponent in the action before the implicit waiver rule is applicable." Id. at **8-9.
Finally, a party may waive privilege by announcing that it will rely on advice of counsel to establish a defense. In re Echostar Commc'ns Corp., 448 F.3d 1294, 1299, 1301 (Fed. Cir. 2006). Under the Magistrate Judge's Order, "[a] party should not be found to have waived privilege through this doctrine unless it has represented that it would have disclosed material references but for counsel's advice to do otherwise." (Entry on Berry's Motion to Compel at 6).
Berry' motion invokes both express and implied waiver, and waiver based on the advice-of-counsel defense. The court will begin with the argument pertaining to implied waiver.
A. Implied Waiver
Berry contends Intertape placed Mr. Levy's beliefs, opinions, and intentions at issue on two topics: (1) his alleged belief that the evidence in his possession of the Beiersdorf PRE mastication properties were inconclusive such that he did not need to disclose that evidence to the USPTO; and (2) his alleged intent that certain portions of the "Detailed Description of the Invention" section of the 416 patent be considered disclosures to the USPTO of the prior art status of PRE systems incorporating the claimed spindle.
1. Good Faith Defense
Part of Berry's inequitable conduct claim is that Intertape had evidence that the PRE process claimed in United States Patent No. 6, 506, 447 (the "Beiersdorf patent"), actually did masticate rubber but intentionally withheld that evidence from the patent examiner. To understand this argument, it must be put in context.
During prosecution of the 416 patent application, a significant piece of prior art was the Beiersdorf patent, which claimed that the patented PRE process was "mastication-free." The issue before the patent examiner was whether it would have been obvious to modify the Beiersdorf process by selecting the particular back-cut spindle recited in Intertape's process given the other teachings of the Beiersdorf patent. Intertape argued that the Beiersdorf patent "taught away" from mastication, whereas Intertape's process purposefully sought to increase mastication using back-cut spindles. (ITX-1 at 488-90; Filing No. 401, Levy Trial Test. at 21-22).
At the November 2014 trial, Berry argues that Intertape asserted a good faith defense to Berry's inequitable conduct claim by voluntarily asking Mr. Levy, "Now, did you have any concrete information that the result the Beiersdorf process might produce was different from what the Beiersdorf process actually taught?" Mr. Levy answered, "No." (Levy Trial Test. at 88).
The court finds this simple question and answer insufficient to establish waiver for several reasons. First, there is nothing about the question and answer which suggests that Intertape will rely on Mr. Levy's testimony to show that it had a good faith basis for withholding the information. It was a simple "yes/no" question.
Second, Berry, not Intertape, called Mr. Levy as a witness, and asked him questions regarding his personal understanding and beliefs with respect to the mastication properties of Beiersdorf's prior art process. Those questions included:
Q: Now, at the time you were making the statement to the Patent Office, you understood that the Beiersdorf process, the 447 process, to actually exclude mastication ...