Chubb Integrated Systems Ltd. v. National Bank

103 F.R.D. 52, 39 Fed. R. Serv. 2d 1262, 224 U.S.P.Q. (BNA) 1002, 1984 U.S. Dist. LEXIS 15098
CourtDistrict Court, District of Columbia
DecidedJuly 9, 1984
DocketCiv. A. No. 82-3478
StatusPublished
Cited by110 cases

This text of 103 F.R.D. 52 (Chubb Integrated Systems Ltd. v. National Bank) is published on Counsel Stack Legal Research, covering District Court, District of Columbia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Chubb Integrated Systems Ltd. v. National Bank, 103 F.R.D. 52, 39 Fed. R. Serv. 2d 1262, 224 U.S.P.Q. (BNA) 1002, 1984 U.S. Dist. LEXIS 15098 (D.D.C. 1984).

Opinion

[56]*56MEMORANDUM OPINION

JEAN F. DWYER, United States Magistrate.

The parties are before the Court to resolve certain discovery disputes; specifically, defendants’ motion to compel production of documents and answers to interrogatories, and plaintiff’s response and objections thereto. The production of documents issue involves a question of privilege. This Court will deal with that issue separately after an in camera inspection of the documents in question. Accordingly, we consider only the outstanding interrogatories.

Defendants have conditionally withdrawn their request to compel answers to interrogatories nos. 88, 90, 91; 135, 137, 138; 31, 33, 34; 9(b-c), ll(b-c), 12(b-c), and 126(a), 128(a), and 129(a), based on plaintiff’s conditional withdrawal of patent infringement complaints on patent nos. 3,629,834 (’834); 3,575,271 (’271); and 3,657,521 (’521). Remaining at issue are interrogatories nos. 87 and 89, 115 and 116, 134, 136 and 139, 30 and 32, 125(a) and 127(a), 8(b-c) and 10(b-c).

This case arises out of a complaint for alleged infringement of several patents held by plaintiff, Chubb Integrated Systems Limited (Chubb). For their part, defendants, National Bank of Washington and Docutel/Olivetti Corp. (NBW/Olivetti), maintain that for a variety of reasons, there has been no patent infringement. For example, they argue the patents are invalid, and accordingly there was no infringement. Alternatively, they contend that any recovery is barred by laches or estoppel. In this regard, defendants seek to compel discovery in three broad categories: (1) sales information relevant to the commercial success of plaintiff’s patented inventions; (2) use, sales and publication information relevant to the requirements of patentability under Title 35 of the United States Code; and (3) the basis for plaintiff’s belief that the patents had been infringed and when that conclusion was first reached.

I

A. Sales Information1

Defendants’ interrogatories nos. 87(a-i) and 89(a-i) seek information about the sales of machines embodying the inventions of the patents in suit. Plaintiff refuses to supply any information of its sales in the United States. Plaintiff contends it will not rely on its U.S. sales as an element of proof of the non-obviousness of the inventions claimed in the patents. Plaintiff further observes that if it chooses to use its European sales figures in support of non-obviousness, it will provide answers only to certain subparts (a, g, h, and i). Chubb maintains that the remaining sub-parts (b-f) are not properly discoverable. Plaintiff’s objection is based on two grounds. Initially, plaintiff argues that information such as identification of customers, and sales to each customer, are not relevant to establishing commercial success. Plaintiff also contends that such information is highly proprietary.

The U.S. sales figures are clearly discoverable. The fact that plaintiff does not plan to use them to support its case does not prevent defendants from obtaining discovery of those figures, so long as they are relevant to any part of the litigation. Fed. R.Civ.P. 26(b)(1) provides in pertinent part “parties may obtain discovery regarding any matter ... relevant to the subject matter involved in the pending action, whether it relates to a claim or defense of the party seeking discovery or the claim or defense or defense of any other party____” In the instant case, plaintiff’s United States sales figures may be relevant to one of the defenses asserted by defendants.

NBW/Olivetti raise the affirmative defense of patent invalidity. They allege the invention was obvious. Case law [57]*57and statutes make it clear that “obviousness” of patent claims is relevant to patent invalidity. See 35 U.S.C. § 103 (1982); Graham v. John Deere Co., 383 U.S. 1, 12, 86 S.Ct. 684, 691, 15 L.Ed.2d 545 (1966); Continental Oil Co. v. Cole, 634 F.2d 188, 196 (5th Cir.), cert. denied, 454 U.S. 830, 102 S.Ct. 124, 70 L.Ed.2d 106 (1981). It is equally well settled that commercial success of an alleged invention is an indicium of “obviousness” or “non-obviousness”, albeit a secondary consideration. Graham v. John Deere Co., 383 U.S. at 17, 86 S.Ct. at 694; see also Shackelton v. J. Kaufman Iron Works, Inc., 689 F.2d 334, 338 (2d Cir.1982), cert. denied, 460 U.S. 1052, 103 S.Ct. 1500, 75 L.Ed.2d 931 (1983), and Whitley v. Road Cory., 624 F.2d 698, 701 (5th Cir.1980). Sales information is a relevant factor in a determination of commercial success or a lack thereof. See Kansas Jack, Inc. v. Kuhn, 719 F.2d 1144, 1151 (Fed.Cir.1983) (Markey, C.J.) (the court noted that the number of units sold is some evidence of commercial success, as well as market share and market growth); and In re Sernaker, 702 F.2d 989, 996 (Fed.Cir. 1983) (in an appeal from a patent rejection the court found sales to be an element of commercial success and evidence of non-obviousness). Accordingly, Chubb’s sales are relevant to its commercial success and therefore relevant to defendants’ claim of obviousness.

Determining that sales information is generally relevant to “obviousness” does not end our inquiry. We must consider whether the specific information sought in the various subparts is relevant to commercial success. Courts have indicated that the following areas of inquiry are probative of commercial success: volume of sales, evidence of share in the market place, growth in market share, replacing earlier units sold by others, dollar amounts, nexus between sales and the merits of the invention, evidence that the applicant has been able to license the invention and evidence that the licensees have been able to sell the product. Kansas Jack, 719 F.2d at 1151; In re Sernaker, 702 F.2d at 996. With this in mind, we consider the subparts in question.

Only subpart (a), which seeks volume of sales, falls squarely within the type of information discussed in Kansas Jack and In re Sernaker. Accordingly, that information should be provided. Subpart (b) seeks to determine without description or limitation, “each customer”. The request is ambiguous at best. However, to the extent that it seeks the number of customers, but not the names, it is an appropriate inquiry. On the other hand, sub-parts (c), (d), and (e) (which seek yearly sales broken down by customer, yearly profit from sales, and all contracts relating to sales), are not likely to lead to evidence of market share, growth in the market place, etc., and therefore they are not probative of commercial success. We will not require Chubb to answer subparts (c), (d) and (e) at this time.

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Bluebook (online)
103 F.R.D. 52, 39 Fed. R. Serv. 2d 1262, 224 U.S.P.Q. (BNA) 1002, 1984 U.S. Dist. LEXIS 15098, Counsel Stack Legal Research, https://law.counselstack.com/opinion/chubb-integrated-systems-ltd-v-national-bank-dcd-1984.