Allen v. Howmedica Leibinger

190 F.R.D. 518, 1999 U.S. Dist. LEXIS 19265, 1999 WL 1133727
CourtDistrict Court, W.D. Tennessee
DecidedNovember 22, 1999
DocketNo. 99-MC-0058-GV
StatusPublished
Cited by10 cases

This text of 190 F.R.D. 518 (Allen v. Howmedica Leibinger) is published on Counsel Stack Legal Research, covering District Court, W.D. Tennessee primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Allen v. Howmedica Leibinger, 190 F.R.D. 518, 1999 U.S. Dist. LEXIS 19265, 1999 WL 1133727 (W.D. Tenn. 1999).

Opinion

ORDER DENYING PLAINTIFF’S MOTION TO COMPEL

VESCOVO, United States Magistrate Judge.

Before the court is the September 1, 1999 motion of the plaintiff, George S. Allen, to compel compliance with a subpoena duces tecum1 issued June 15, 1999, for production of financial, marketing, and licensing information from a nonparty, Medtronic Sofamor Danek (“Danek”). The motion was referred to the United States Magistrate Judge for a determination. For the reasons that follow, the motion is denied.2

I. Factual and Procedural Background

The underlying lawsuit for which plaintiff seeks documents is currently pending in the United States District Court for the District of Delaware.3 ***7It involves claims under Ohio law of tortious interference with business relations and of deceptive trade practices [520]*520concerning a surgical navigation system4 known as ACUSTAR developed and patented in the late 1980’s and early 1990’s by the plaintiff, George Allen, a medical doctor, along with others. ACUSTAR utilizes fiducial marker technology.5 At issue in the case is a patent license agreement for ACUSTAR. To commercialize his product, Dr. Allen entered into an exclusive patent license agreement in September 1997 with Picker International, Inc., transferring all the ACUSTAR assets to Picker in exchange for “monetary payments.”6 (Nonparty Danek’s Opp’n to the Mot. to Compel, Ex. F “Complaint” 1115.) Dr. Allen alleges in the complaint in the Delaware action that the defendants interfered with the Picker license of his patent and that the defendants’ tortious conduct resulted in his receiving a “substantially depressed” contract price from Picker than he otherwise could have obtained. (Id. K!47, 49.) In particular, Dr. Allen claims that the defendants obtained an invalid patent for fiducial markers and used that patent to interfere with Dr. Allen’s attempt to commercialize his entire surgical navigation system, which includes but is not limited to fiducial markers. He now asserts that he would have “attained a large or dominant share of [the surgical navigation] market, but for [defendants’ tortious conduct that largely prevented him from entering the market.” (Def.’s Mem. of Facts and Law in Supp. of Mot. to Compel at 1.)

The nonparty Danek holds the patent for and manufactures, sells, and licenses a surgical navigational system known as StealthStation. Danek acquired the technology for StealthStation when it purchased Surgical Navigation Technologies, Inc. in 1995. Because of the success of StealthStation technology, Danek holds a dominant position in the surgical navigation market. The major difference between Allen’s ACUSTAR and Danek’s StealthStation is that the ACUS-TAR involves subcutaneous implanted fidu-cial markers and Danek uses adhesive surface fiducial markers.

In the subpoena, Dr. Allen seeks three general categories of information from Da-nek: (1) Danek’s financial information concerning StealthStation, any other similar surgical navigation system, and fiducial markers used with the systems, including actual sales data, past and present sales projections, costs, profits, and marketing plans; (2) information about Danek’s licenses of StealthStation fiducial markers and patents of Dr. Richard D. Bueholz, including both applications for licenses and finalized licenses; and (3) details about the features and operation of StealthStation and fiducial markers used with it.7

[521]*521 II. Analysis

In support of the motion to compel, Dr. Allen asserts that Danek’s market position is an excellent measure of the damages due him by the defendants. He alleges that absent defendants’ tortious interference he would have become the market leader for the type of products that Danek now markets. He also believes that Danek’s license agreements would be evidence of the value he should have received for license of his technology. Additionally, he asserts that he needs limited information about the features and operations of StealthStation to validate the comparison of ACUSTAR to StealthStation for damages purposes.

In response, as an initial matter, Danek notes that it is a nonparty to the Delaware action and argues that this factor weighs heavily against producing the documents. Next, Danek raises three primary objections to the subpoena. First, Danek objects to the relevancy and necessity of the information to the Delaware action. Second, Danek urges that the discovery requested would impose significant burden and expense on it. Finally, Danek argues that its trade secrets and financial information would be compromised by disclosing the information that plaintiff seeks, and a protective order would not adequately shield any of Danek’s trade secrets from public disclosure.

There is no general prohibition on discovery from non-parties to a lawsuit. See Truswal Sys. Corp. v. Hydro-Air Eng’g, Inc., 813 F.2d 1207, 1210 (Fed.Cir.1987) (holding that “[t]he administration of justice would not be aided ... by a rule relieving all persons from giving particular evidence on the sole ground that they are not parties to the suit.”).8 However, some courts have considered nonparty status as one factor when weighing the burdens that discovery may impose. See, e.g., Katz v. Batavia Marine, 984 F.2d 422, 424 (Fed.Cir.1993) and cases cited therein; see also Truswal, 813 F.2d at 1210. In the present case, Danek is not a party to the underlying Delaware lawsuit and thus is entitled to consideration of its nonparty status as one factor in the analysis of the burdens imposed upon it by compliance with Dr. Allen’s subpoena.

A. Relevancy

The Federal Rules of Civil Procedure permit discovery “regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action .... ” Fed.R.Civ.P. 26(b)(1). Relevance for purposes of discovery is, of course, defined very broadly. See, e.g., Andritz-Sprout-Bauer, Inc. v. Beazer East, Inc., 174 F.R.D. 609, 631 (M.D.Pa.1997). The information sought need not be admissible in court in order to be relevant. Rather, the relevance burden is met if the party can show that the [522]*522information sought “appears reasonably calculated to lead to the discovery of admissible evidence.” Fed.R.Civ.P. 26(b)(1). Nevertheless, the right to discovery is not unlimited, and does have “ultimate and necessary boundaries.” Hickman v. Taylor, 329 U.S. 495, 497, 67 S.Ct. 385, 91 L.Ed. 451 (1947). Discovery may be denied “where, in the court’s judgment, the inquiry lies in a speculative area.” Micro Motion, Inc. v. Kane Steel Co., Inc., 894 F.2d 1318

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Cite This Page — Counsel Stack

Bluebook (online)
190 F.R.D. 518, 1999 U.S. Dist. LEXIS 19265, 1999 WL 1133727, Counsel Stack Legal Research, https://law.counselstack.com/opinion/allen-v-howmedica-leibinger-tnwd-1999.