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Judge Andrews grants-in-part motion to compel; denies motion for leave to add willfulness allegations

In a series of related actions brought by the Plaintiffs, Judge Richard G. Andrews considered Defendants’ motion to compel compliance with subpoenas issued to a third party and former owner of the patents, and Plaintiffs’ motion to amend the complaint to add willfulness allegations. E.g., Delaware Display Group LLC, et al. v. Lenovo Group Ltd., et al., C.A. No. 13-2108-RGA (D. Del. Feb. 23, 2016).

As to the motion to compel, Defendants sought “discovery of teardown reports [i.e., “technical analysis on products supplied by” one party to another” created by [the former owner of the patents] after a March 25, 2013 consulting agreement, unredacted royalty reports . . . and email communications [between Plaintiffs and other third parties regarding the teardown work ].’”  Id. at 3-4. Plaintiffs and the non-party opposed the motion, but the Court had previously concluded that all the documents were in the possession of Plaintiffs, and thus the only issue was whether Plaintiffs were obligated to produce the documents. Id. at 4.

The Court granted the motion to compel in part, after running through a number of questions as to the potentially privileged or protected nature of the documents. As to the “teardown reports,” prepared by the former owner pursuant to an agreement with another non-party, they were neither attorney work product nor protected as non-testifying expert discovery, as the reports were prepared by and for non-parties. See id. at 6-9. They were also not protected by a common interest privilege, as the Court found no common interest between the parties to the agreement, noting that “Plaintiffs argue that [those parties] share the same interest in obtaining strong and enforceable patents,” but “Plaintiffs’ logic would find that any seller with rights to royalty payments is engaged in a common legal cause with its buyer. Id. at 11-12 (citations and quotations omitted). Accordingly, the Court granted the motion to compel as to the teardown reports. Similarly, the email communications regarding the teardown work were also not privileged. Id. at 15-16. However, the Court did not order production of the teardown emails, as Defendants had failed to comply with a prior discovery order. Therefore the motion to compel was denied to the extent it sought to compel production of the teardown emails “without complying with the procedures outlined” in that discovery order. Id. at 16.

As to the unredacted royalty reports, the Court rejected Plaintiffs’ argument that these documents contained information about their non-testifying experts. Further, Plaintiffs tried to argue the documents’ disclosure of “attorney’s fees paid in conjunction with licensing and litigating the patents-in-suit against other companies,” while not privileged, was irrelevant and highly sensitive. Id. at 13-14. While the Court was “skeptical” as to the relevance of these documents and recognized their sensitivity, it ordered production, noting that the case’s protective order only allowed withholding of production based on a privilege or immunity and that “in the absence of such an assertion of protection . . . a party may not redact information it unilaterally deems sensitive, embarrassing, or irrelevant. If Plaintiffs feel the Protective Order was inadequate, they could have moved to modify it.” Id. at 14-15.

Finally, as to Plaintiffs’ motion for leave to amend, the Court denied it as unduly delayed, where it was filed on the last day of fact discovery and two years after filing the Complaint. The Court rejected Plaintiffs’ argument that the motion was timely because the parties had previously agreed to a deadline for filing motions to amend to plead willfulness, explaining that while timeliness under a scheduling order is “certainly relevant,” it is not dispositive, citing Third Circuit law on the definition of undue delay as placing an unwarranted burden on the court or when plaintiff has had previous opportunities to amend. Here, “Plaintiffs have already amended the complaint once in [several of the related] actions. Plaintiffs provide no explanation for why they did not seek leave earlier or why the allegations of willfulness were not included in earlier amendments. Plaintiffs’ only ‘reason[] for not amending sooner’ appears to be that the scheduling order’s deadline had not yet elapsed. Given that this motion was filed on the last possible day, which was also the date that fact discovery was scheduled to close, and the delay in filing appears to have been an intentional effort to wait until the last moment, that does not suffice,” and the motion was denied. Id. at 20.

 

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