Uraseal, Inc. v. Elec. Motion Co.

• Court: District Court, D. New Hampshire
• Decided: December 12, 1996
• Docket: CV-95-517-SD
• Status: Published

Opinion

Uraseal, Inc. v. Elec. Motion Co. CV-95-517-SD 12/12/96

UNITED STATES DISTRICT COURT FOR THE

DISTRICT OF NEW HAMPSHIRE

Uraseal, Inc.

v. Civil No. 95-517-SD

Electric Motion Company, Inc.

O R D E R

Before the court are the issues raised by certain pending

motions.

1. Background

In this patent litigation, plaintiff Uraseal, Inc. (Uraseal)

claims that defendant Electric Motion Company, Inc. (EMC) has

infringed United States Letters Patent No. 4,842,530 (the '530

patent). The invention described in the '530 patent is entitled

"Electrical Floating Bond Assembly".

EMC has denied plaintiff's claims of infringement and

contends that the '530 patent is invalid and unenforceable. The

dual motions at issue include (1) the motion of EMC for

separation of issues and stay of discovery and (2) Uraseal's motion for extension of deadlines for disclosure of experts and

their reports on matters other than damages.

2. Discussion

a. Defendant's Motion for Separation of Issues and Stay of

Discovery (document 17)

Invoking Rule 42(b), Fed. R. Civ. P.,1 EMC moves for

separation for trial of the substantive liability issues from the

damages and willful infringement issues. Its motion also seeks

stay of discovery on the damages and willfulness issues until the

jury has resolved the issues of liability. The plaintiff

objects. Document 21.

Defendant argues that the issues as to both liability and

damages are complex and distinct and that a favorable finding for

it on the liability issues will abrogate the need for further

discovery or litigation. EMC also alleges that it has

^-Rule 42(b), Fed. R. Civ. P., provides:

The court, in furtherance of convenience or to avoid prejudice, or when separate trials will be conducive to expedition and economy, may order a separate trial of any claim, cross-claim, counterclaim, or third-party claim, or of any separate issue or of any number of claims, cross­ claims, counterclaims, third-party claims, or issues, always preserving inviolate their right of trial by jury as declared by the Seventh Amendment to the Constitution or as given by a statute of the United States.

2 substantial defenses to plaintiff's claims of liability, that a

separate trial of the willfulness issue is necessary to protect

its attorney-client privilege,2 and that a second separate trial

of damages will reduce the likelihood of confusion on the part of

the jurors.

Plaintiff responds that the delays inherent in defendant's

suggestions would be extremely prejudicial to it, that any stay

of discovery on the issues of damages and willfulness will serve

only to prevent meaningful settlement negotiations, and that

defendant's objections can be addressed by trying the case in

phases before a simple jury. As hereinafter appears, the court

finds merit in certain of these latter suggestions.

It is the general rule that "the piecemeal trial of separate

issues in a single lawsuit or the repetitive trial of the same

issue in severed claims is not to be the usual course. Thus,

Rule 4 2 (b) should be resorted to only in the exercise of informed

discretion when the court believes that separation will achieve

the purposes of the rule." 9 W right & M il l e r, Federal Practice and

P r o c e d u r e : C ivil Se c on d § 2388, at 474 (West 1995) .

While there is historical authority for holding separate

defendant's trial counsel. Attorney Yale, apparently furnished defendant, on different occasions, with both written and oral opinions concerning the infringement allegations here made. See Exhibit C at 8, 9 (attached to defendant's memorandum in support of its motion).

3 trials on liability and damages issues in patent cases, Johns

Hopkins Univ. v. CellPro, 160 F.R.D. 30, 35 (D. Del. 1995)

(collecting cases), such opinions apparently find the benefits

derived therefrom to outweigh the cost of delay in resolution of

the case, even where such delay can result in lengthy deferral of

a final resolution in favor of the patent owner. Id. And such

prejudice is "perhaps the most important consideration for a

court ruling on a motion to bifurcate." Willemijn

Houdstermaatschaapij BV v. Apollo Computer, 707 F. Supp. 1429,

1435 (D. Del. 1989). See also Laitram Corp. v. Hewlett-Packard

C o ., 791 F. Supp. 113, 115 (E.D. La. 1992) (same).

Turning to the arguments of EMC, the court first considers

its claim that it can successfully defend on the issues of

liability. While review of the record indicates there is some

merit to this argument, the court finds it falls far short of the

defendant's claim of a prima facie presumption.

As regards the claims that damage evidence would be

nonoverlapping and complex, the court is similarly unpersuaded.

Moreover, the court finds that discovery on damages will assist

counsel in "evaluating essential elements of the matters in issue

and in assessing the risks associated with an adverse decision in

the action [and thus] facilitate settlement discussions."

CellPro, supra, 160 F.R.D. at 35.

4 Further, while the court recognizes that even favorable

written opinions of counsel concerning noninfringement are not

the only relevant factor in determining the issue of willfulness.

Electric Medical System, S.A. v. Cooper Life Sciences, 34 F.3d

1048, 1056 (Fed. Cir. 1994), there is merit to plaintiff's

suggestion that its attorney-client privilege may be prejudiced

if the issue of willfulness is put before the fact finder prior

to a ruling on the issue of liability. Id. at 1056-57; CellPro,

supra, 160 F.R.D. at 36.

But stay of discovery, with its "difficult delays and

complications" and its "stop-and-start" approach, not only

"precludes the possibility of granting a summary judgment on the

willfulness claim prior to the trial," but undermines the goal of

"a just, speedy and inexpensive resolution of every action. See

Fed. R. Civ. P. 1." CellPro, supra, 160 F.R.D. at 36.

Accordingly, the court will deny the defendant's motion.

However, the trial will be held in seguence, with liability and

damages issues to be first tried. If liability is found, the

parties will immediately proceed to present evidence to the same

jury on the alleged willful infringement, including evidence on

the advice of counsel. Id.

5 b. Plaintiff's Motion for Extension of Time for Disclosure

of Liability Experts (document 19)

This motion seeks the relief of extension from December 1,

1996, to December 31, 1996, of the dates by which plaintiff must

disclose its experts and their reports on issues other than

damages. The motion also seeks the courtesy of a like extension

to March 17, 1997, to permit defendant to make such disclosures.3

The motion is grounded on the representation that, although

plaintiff has retained experts, more time is reguired for

completion of their reports. Plaintiff also alleges that the

granting of the motion will not reguire the extension of any time

scheduled for hearing, conference, or trial.

Accordingly, the motion is granted.

3. Conclusion

The court has denied the motion of defendant EMC which seeks

separation of issues and stay of discovery. Document 17. Trial

will proceed on one discovery track and before a single jury.

Trial will be held, however, in phases, the jury to first

consider the issues of liability and damages. In the event of a

3Although the motion recites that defendant does not concur with the relief sought, no written objection was filed by the defendant within the time limitations reguired under the Local Rules.

6 finding of liability, the parties will go immediately to present

evidence with respect to the issue of willfulness.

The motion of the plaintiff for extension of time for

disclosure of experts and their reports on issues other than

liability has been granted. Document 19.

SO ORDERED.

Shane Devine, Senior Judge United States District Court

December 12, 1996

cc: Paul C. Remus, Esg. Richard C. Nelson, Esg. Guy D. Yale, Esg.