Square D Co. v. E.I. Electronics, Inc.

264 F.R.D. 385, 2009 U.S. Dist. LEXIS 92780, 2009 WL 3213638
CourtDistrict Court, N.D. Illinois
DecidedSeptember 30, 2009
DocketNo. 06 C 5079
StatusPublished
Cited by12 cases

This text of 264 F.R.D. 385 (Square D Co. v. E.I. Electronics, 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
Square D Co. v. E.I. Electronics, Inc., 264 F.R.D. 385, 2009 U.S. Dist. LEXIS 92780, 2009 WL 3213638 (N.D. Ill. 2009).

Opinion

MEMORANDUM OPINION AND ORDER

ARLANDER KEYS, United States Magistrate Judge.

Plaintiff Square D filed this lawsuit on September 20, 2006, claiming infringement of 11 different patents: U.S. Patent No. 7,006,-934 (the '934 Patent); U.S. Patent No. 6,983,211 (the '211 Patent); U.S. Patent No. 6,792,364 (the '364 Patent); U.S. Patent No. 6,792,337 (the '337 Patent); U.S. Patent No. 6,751,562 (the '562 Patent); U.S. Patent No. 6,745,138 (the '138 Patent); U.S. Patent No. 6.737,855 (the '855 Patent); U.S. Patent No. [388]*3886,611,922 (the '922 Patent); U.S. Patent No. 6,186,842 (the '842 Patent); U.S. Patent No. 6,185,508 (the '508 Patent); and U.S. Patent No. 5,831,428 (the '428 Patent) — all of which have to do with electrical power meters and revenue meters. Defendant El answered the complaint and filed a counterclaim, alleging infringement of two of its own patents, U.S. Patent No. 6,751,563 and U.S. Patent No. 6,636,030. Two years later, on September 19, 2008, Square D amended its complaint to add one more claim of infringement, of United States Patent No. 7,415,368 (the '368 Patent). El quickly amended its counterclaim to add another claim of infringement as well (U.S. Patent No. 7,305,310), and to allege Walker Process claims. See Walker Process Equipment, Inc. v. Food Machinery & Chemical Corp., 382 U.S. 172, 174, 86 S.Ct. 347, 15 L.Ed.2d 247 (1965). Square D moved to sever and stay the amended counterclaim, and, after holding a hearing on the motion and after allowing the parties to brief the issue, the Court granted the motion. Thereafter, the parties continued to comply with the scheduling order, conducting discovery without any real issue. In fact, the parties appear to have worked well together, using discovery (as it is intended) to winnow the issues for trial. That cooperative process hit a few snags recently, however, and the case is currently before the Court on a number of motions, each of which is considered below.

A. Square D’s Motion to Bifurcate

First, Square D has moved to bifurcate and stay its claims arising out of the '337 and '368 patents, so that they can be tried instead with El’s stayed counterclaims. In making this motion, Square D represents that it had an informal, yet mutually-understood agreement that it would be dropping its claims involving the '337 and '368 patents based upon assurances and information obtained during discovery that El had changed its designs such that its products no longer infringed those patents. Accordingly, discovery was not obtained on issues concerning those products or those patents. And, on June 2, 2009, Square D formally moved to drop the '337 and '368 patents (along with two other patents) from the lawsuit. One day later, on June 3, 2009, El notified Square D that it planned to revert back to its original — and, in Square D’s view, infringing— designs. Square D then notified El that, if that was the case, it would continue to assert the dropped patents in this lawsuit. But because discovery on these patents and issues was not taken, as a practical matter, bringing these claims back into the case now would stall the rest of the case. Seeking to avoid that result, Square D has asked the Court to bifurcate and stay claims arising out of those patents. El does not object. Accordingly, the Court grants the motion to bifurcate [# 157]; this makes particularly good sense in light of the Court’s earlier decision to bifurcate El’s counterclaims.

B. Square D’s Motion for Leave to Amend [# 15b, 165 ]

Next, Square D seeks leave to amend its complaint to add a claim of willful infringement. The substance of this claim is based upon El’s decision, referenced above, that, in light of Square D’s decision to drop the '337 and '368 Patents from the lawsuit, it would “revert to its product designs as implemented at the time [Plaintiffs] filed this lawsuit.”

Federal Rule of Civil Procedure 15(a) provides that leave to amend should be freely given “when justice so requires.” El has indicated that it does not object to Square D’s motion to amend its complaint, and the Court will, therefore, grant Square D leave to do so. El does, however, object to any attempt on Square D’s part to force its hand with respect to any potential reliance on an advice-of-counsel defense. El argues that it should not be required to make this election — or to disclose its election to Square D — unless and until Square D makes out a prima facie case of willful infringement.

The Federal Circuit has recognized the dilemma faced by a party wishing to defend against a willful infringement claim with an advice-of-counsel defense: once the defense is invoked, the attorney-client privilege is waived; but up until that time, the opinions of counsel are protected from disclosure and no negative inference may be drawn from the refusal to disclose them. In re EchoStar [389]*389Communications Corp., 448 F.3d 1294, 1299 (Fed.Cir.2006); Knorr-Bremse Systeme Fuer Nutzfahrzeuge GmbH v. Dana Corp., 383 F.3d 1337, 1341 (Fed.Cir.2004); Quantum Corp. v. Tandon Corp., 940 F.2d 642, 643-44 (Fed.Cir.1991). El has not yet indicated whether it will rely on an advice-of-counsel defense; indeed, Square D has not yet even alleged a willful infringement claim (as explained above, the Court has now granted Square D leave to do so, however).

To the extent El is suggesting that it need not make its election concerning the advice-of-counsel defense until after Square D has put on its case-in-ehief at trial, that is absurd. Of course Square D has the right to conduct discovery on the issue, just as El has the right to conduct discovery before making its election. The election is therefore appropriately made — El’s hand is appropriately forced — during the discovery phase of the case.

Given the posture of the ease, however— given that discovery is closed at this point, given that the Court has already bifurcated and stayed certain claims and defenses, and given that the parties have already filed claim construction briefs and are anxious to proceed with that phase of the proceedings— the Court is not inclined to open this can of worms at this time. Rather, it makes sense to table the issue until after the Court construes the relevant claims; at that point, the parties should have a better idea of where things stand concerning infringement, invalidity, etc., and, if necessary, they can then take up the issue of willfulness (and the attendant issues concerning advice-of-counsel) at that time. See In re Seagate Technology LLC, 497 F.3d 1360, 1368 (Fed.Cir.2007) (“Because patent infringement is a strict liability offense, the nature of the offense is only relevant in determining whether enhanced damages are warranted.”). This makes particularly good sense, given that discovery will be reopened anyway for the bifurcated claims and defenses.

C.

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264 F.R.D. 385, 2009 U.S. Dist. LEXIS 92780, 2009 WL 3213638, Counsel Stack Legal Research, https://law.counselstack.com/opinion/square-d-co-v-ei-electronics-inc-ilnd-2009.