Rowe International Corp. v. Ecast, Inc.

241 F.R.D. 296, 2007 U.S. Dist. LEXIS 22006, 2007 WL 831772
CourtDistrict Court, N.D. Illinois
DecidedMarch 19, 2007
DocketNo. 06 C 2703
StatusPublished
Cited by6 cases

This text of 241 F.R.D. 296 (Rowe International Corp. v. Ecast, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rowe International Corp. v. Ecast, Inc., 241 F.R.D. 296, 2007 U.S. Dist. LEXIS 22006, 2007 WL 831772 (N.D. Ill. 2007).

Opinion

MEMORANDUM OPINION AND ORDER

KENNELLY, District Judge.

Arachnid, Inc. has filed a motion seeking the return of three allegedly privileged documents that it inadvertently produced during discovery. Defendants have filed a cross-motion to compel, claiming that Arachnid waived privilege with regard to the three documents and that the crime-fraud exception abrogates the privilege. Defendants also contend that Arachnid’s waiver and fraud allow them to seek the discovery of all otherwise-privileged information regarding the patentability of the patents-in-suit. For the following reasons, the Court grants defendants’ motion in part and denies it in part, and grants Arachnid’s motion in part and denies it in part.

Background

Though the present motions concern only discovery, resolution of the parties’ motions requires a brief familiarity with the lengthy history of the patents-in-suit. Each of the patents-in-suit concerns a computer jukebox or computer jukebox system. Unlike a conventional jukebox, which requires routemen to visit each jukebox location to change records or compact disks and record usage data, a computer jukebox system distributes digital music and retrieves jukebox usage data over a computer network. Arachnid first obtained in 1994 a patent titled “system for managing a plurality of computer jukeboxes” (the '302 patent). The '302 patent identified Arachnid employees John Martin, Michael Tillery, and Samuel Zammuto as the inventors. Jean Kuelper and John Held of McAndrews, Held & Malloy acted as Arachnid’s patent counsel. The other patents-in-suit are continuations or continuations-in-part of the '302 patent, and each names Tillery, Martin, and Zammuto as inventors.

During the prosecution of the '302 patent, the Patent and Trademark Office (PTO) examiner raised a prior art objection with regard to a previously issued patent known as Sidi. In summary, the Sidi patent claimed a server that could transmit digital music to various outlets. The PTO examiner contended that Sidi essentially was a computer jukebox and therefore found Arachnid’s invention [299]*299obvious and initially declined to issue a patent. Arachnid’s patent attorney, Jean Kuelper, argued in response that certain features of the '302 patent distinguished it from Sidi. She told the examiner that claims 1 through 5 of the application contained “storage space data” that distinguished Arachnid’s invention from Sidi. Figure 2 of the '302 patent illustrates the data structure of an individual song record stored in a master library catalog. Arachnid overcame the examiner’s objections, and the PTO eventually issued the '302 patent on October 11,1994.

Rowe International Corp. and Arachnid brought this patent infringement action against defendants, claiming that they have infringed seven patents held by Arachnid, the '302, '889, '398, '189, '575, '834, and '230 patents. Defendants have counterclaimed, contending that the patents-in-suit are invalid.

On December 11, 2006, Arachnid produced approximately 11,000 documents in electronic form to defendants. Arachnid inadvertently produced three documents that it claims are protected by the attorney-client privilege. These documents, titled “patent reports,” concerned the company’s inventions.' They were prepared in 1997 by an Arachnid employee and were sent to John Held. Among other things, the patent reports attribute to Held certain legal opinions regarding the scope of the Sidi patent. Defendants agree that these documents are privileged, that they were inadvertently produced, and that Arachnid promptly sought their return upon learning of their production. A protective order agreed to by the parties and entered by the Court provides that

[i]nadvertent production of documents subject to work product immunity or the attorney-client privilege ... shall not constitute a waiver of the immunity or privilege, provided that the Disclosing Party notifies the Litigant in writing via facsimile, with confirmation by first-class mail, of such inadvertent production immediately upon learning of same. Such inadvertently produced documents, and all copies thereof, shall be returned to the Disclosing Party upon request immediately. Nothing in this Protective Order shall prevent any Litigant from requesting that the Court order the production of any such inadvertently produced documents.

Order of Oct. 25,2006.

In 1999, Michael Tillery, a former Arachnid employee, was deposed in a prior lawsuit. Tillery was not employed by Arachnid at the time of the deposition, but John Held represented both Tillery and Arachnid at the deposition. At the deposition, Tillery testified as follows regarding certain features of the '302 patent:

Q: Okay. In your conversations with that, second attorney, did you provide him with information about song size data?
A: Ño.
Q: Why do you suppose he included that or she included that?
[Objection; question rephrased].
Q: [ ] Can you tell us why the information we see in figure 2 was added to the patent application in 1992?
A: I mean, it is information I learned, from our attorneys that—okay, what I—what I was led to believe was the only way we would receive the patent was if we included that information.
Q: Included more details?
A: More—this particular information about song size and some of the specific things shown right here.

Def. Ex. 4 at 76:8-77:7 (emphasis added). Held did not assert Arachnid’s attorney-client privilege nor move to strike the testimony.

In the years after the deposition, Arachnid made no efforts to prevent disclosure of Tillery’s testimony. To the contrary, Arachnid provided a copy of Tillery’s deposition transcript to the PTO during prosecution of the '575 and '834 patents, which were continuations of the application that became the '302 patent. During the depositions of Held and Kuelper in this case, Arachnid’s counsel did not object to questions about Tillery’s testimony. Moreover, Arachnid produced the Tillery transcript to defendants in this case. Arachnid does not claim that any of these disclosures were inadvertent.

[300]*300Based on these facts, defendants contend that Arachnid waived its attorney-client privilege and seek the production of “all privileged communications (including the ‘patent reports’) concerning the patentability of the inventions claimed in the patents-in-suit, the Sidi Patent, communications relating to the preparation and prosecution of the applications of the patents-in-suit, and communications concerning inventorship.” Def. Resp. at 15.

Defendants also contend that Arachnid and its attorneys engaged in a fraud on the PTO to secure the '302 patent and the continuation patents. Defendants claim that the fraud took two forms. First, they argue that Held made false statements to the PTO regarding the scope of the Sidi patent. They contend that although Held told the PTO that the Sidi patent was only “superficially similar” to the teachings of the '889 patent, the patent reports show that Held actually believed that Sidi blocked, patents for inventions such as computer jukebox systems. Second, defendants argue that the McAndrews firm engaged in “inventorship fraud” by including features in the '302 patent that were not conceived by the named inventors.

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Cite This Page — Counsel Stack

Bluebook (online)
241 F.R.D. 296, 2007 U.S. Dist. LEXIS 22006, 2007 WL 831772, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rowe-international-corp-v-ecast-inc-ilnd-2007.