United States District Court, N.D. Illinois, Eastern Division
September 24, 2004.
WILLIAM REBER, LLC Plaintiff,
SONY ERICSSON MOBILE, COMMUNICATIONS (USA INC.) and SONY ERICSSON MOBILE COMMUNICATIONS AB, Defendants.
The opinion of the court was delivered by: MORTON DENLOW, Magistrate Judge
MEMORANDUM OPINION AND ORDER
Plaintiff William Reber, LLC ("Plaintiff" or "Reber") moves
this Court to vacate the portion of its March 12, 2004 order
bifurcating the issue of liability from the issue of damages.
Plaintiff's claim is that the bifurcation order granted by this
Court was based, almost solely, on the number of defendants and
the relationship between them. Therefore, due to the reduction in
the number of defendants from six competing defendant groups to
one competing defendant group ("Sony"), the reasons for
bifurcation no longer exist. For the reasons stated herein,
Plaintiff's motion is granted.
II. FACTUAL BACKGROUND
Plaintiff is the owner of two United States patents, Nos.
5,584,070 and 5,701,258 (collectively the "Reber patents") that
it claimed had been infringed by twelve defendants (collectively "original Defendants") located in Asia, the United
States, and Europe. Plaintiff sued the original Defendants for
patent infringement arising out of camera phones manufactured and
sold by them. Plaintiff asserted one patent against all original
Defendants and one patent against two of the original Defendants,
and joined all original Defendants in one suit. Original
Defendants filed a motion to bifurcate pursuant to Rule 42(b) of
the Federal Rules of Civil Procedure, seeking to bifurcate the
issue of liability from the issue of damages and willfulness for
both discovery and trial.
In its motion to bifurcate, the original Defendants argued that
discovery involved thousands of documents written in various
languages other than English, witnesses who speak other
languages, and that many of these documents and witnesses were
located outside of the United States. William Reber, LLC v.
Samsung Elec. America, Inc., 220 F.R.D. 533, 535 (N.D. Ill
2004). Due to these circumstances, bifurcation served the
interests of judicial economy, efficiency, and simplicity without
prejudice to Plaintiff's right to a jury trial. Further, the
original Defendants claimed that denying the motion to bifurcate
would be prejudicial because the original Defendants were direct
competitors in the wireless telephone market and there was
potential for inadvertent disclosure of financial information.
Plaintiff contended that bifurcation would make discovery and
trial more expensive and delay the ultimate disposition of the
This Court granted bifurcation in its March 12, 2004 order,
reasoning that the volume of documents and witnesses and the
complexity of the damages calculation both gave rise to extenuating circumstances that warranted bifurcation. Id at
539. Further, the original Defendants' direct competition in the
wireless telephone market meant that any inadvertent disclosure
of confidential business information in discovery regarding
damages would be greatly prejudicial. Id. at 536.
However, from the time of filing the suit until now, Reber
settled with all but one defendant group, Sony. Due to this, the
complexity and difficulty that the Court cited as voluminous
enough to call for bifurcation has evaporated, as has any risk of
prejudice due to the release of sensitive information to
competing companies. Plaintiff therefore moved to vacate this
Court's March 12, 2004 bifurcation order.
First, Plaintiff claims the discovery in the case against Sony
is not as complex as originally expected. Production of documents
from the Plaintiff revealed only 5,500 pages of documents and
Sony has produced 7,800 pages of documents most of which are in
English. Plaintiff claims that any outstanding documents should
not add substantial complexity to the dispute.
Sony responds that this case is still complex though only one
of the original Defendants remains; there are still six claims of
two patents against at least fifteen different phones
manufactured by Sony. Sony asserts that significant time will
have to be spent on discovery with each carrier to determine the
significance and usage of the feature allegedly covered by the
patents-in-suit. Sony believes that it can demonstrate Plaintiff
is without standing in bringing this suit, and therefore it would serve
judicial economy to decide the issue of liability prior to
commencing discovery on the issue of damages.
The issue in this case is whether this Court's decision to
grant the original Defendants' motion to bifurcate should be
vacated because the potential prejudice to original Defendants is
no longer a concern and the extenuating circumstances at the time
of the March 12, 2004 decision are no longer present. The
decision to bifurcate pursuant to Rule 42(b) is made on a case by
case basis and is reserved for the sole discretion of the Court.
Real v. Bunn-O-Matic Corp., 195 F.R.D. 618, 619 (N.D. Ill.
2000). In those cases in which motions to bifurcate have been
granted, the facts and circumstances were such that bifurcation
lent itself to judicial economy while not unduly prejudicing any
party. Such circumstances include but are not limited to the
following: a) a need for voluminous documents to resolve damage
issues; b) complex infringement issues; c) multiple patents,
infringing products, claims, counterclaims or parties; or d) the
probability that the defendant would prevail on the infringement
issue, thereby eliminating the need to address the issue of
damages. Id. at 621.
In a March 12, 2004 opinion, this Court held that bifurcation
was appropriate because the case involved two patents, thirteen
claims, six competing defendant groups, sixteen product lines,
and several affirmative defenses. Reber, 220 F.R.D. at 538.
Discovery would involve thousands of pages of documents and
hundreds of witnesses from around the world. Id. Although this
Court normally disfavors bifurcation, the volume of documents and witnesses, as well as the potential prejudice due to the fact
that the original Defendants were competitors in the wireless
phone industry, gave rise to the extenuating circumstances in
this case. The original Defendants' motion to bifurcate the issue
of liability from the issue of damages was granted. Id. at 542.
However, this Court has observed that bifurcation in patent
cases is the exception, not the rule. Real, 195 F.R.D. at 620.
Since the March 12, 2004 opinion, this case has been
significantly simplified, and the reasons the Court cited as
sufficient for bifurcation are no longer at issue. While Sony's
claim that allowing the bifurcation order to remain will serve
judicial economy, that fact alone is not enough to support a
bifurcation order. "Courts should not order separate trials when
bifurcation would result in unnecessary delay, additional
expense, or some other form of prejudice. Essentially, . . .
courts must balance the equities in ruling on a motion to
bifurcate." Reber, 220 F.R.D. at 536 (quoting Laitram Corp. v.
Hewlett-Packard Co., 791 F. Supp. 113, 115) (E.D. La. 1992).
In Real, this Court rejected a motion for bifurcation
claiming that the case involved "one patent, one claim, and one
allegedly infringing product." Real, 195 F.R.D. at 622. Real
involved the owner of a patent for a beverage dispensing machine
who filed a patent infringement suit against Bunn-O-Matic
Corporation. Id. at 619. The Defendant filed a motion to
bifurcate for discovery and trial the issue of liability from the
issue of damages, claiming that bifurcation would serve the
interest of economy, efficiency and simplicity. Id. at 620.
This Court ruled that there was no reason to bifurcate, as the
separate trials would not further any interest expressed in Rule 42(b). Id. In Real
this Court pointed out that when weighing the competing equities
under Rule 42(b), prejudice is the most important consideration.
Id. at 621. This Court ruled there was not any danger of
prejudice that could not be remedied, nor were any of the
extenuating circumstances that warrant separate trials present.
Id. at 622.
While Sony asserts that Reber's claim is dissimilar to the
claim in Real, this Court is not convinced. First, this Court
strongly considered the fact that the potential detrimental
effects of inadvertent disclosure of sensitive financial
information outweighed any prejudice to the Plaintiff in its
March 12, 2004 opinion. Reber, 220 F.R.D. at 539. The previous
concern of this Court regarding sensitivity and confidentiality
has been lifted due to the fact that there is only one defendant
Second, Sony does not convince this Court that there exist
extenuating circumstances to continue the bifurcation order. Sony
asserts that this case is complex enough to warrant bifurcation
based solely on the fact that several wireless phone carriers
will need to be included in discovery. The type of discovery and
computation remaining in this case are the same types that are
regularly performed in patent litigation. IV. CONCLUSION
Bifurcation is to be ordered only when clearly necessary.
Bifurcation is the exception, not the rule. This case is no
longer an exception because of the settlements reached with all
of the original Defendants, except Sony. For the foregoing
reasons, Plaintiff's motion to vacate the March 12, 2004
bifurcation order is granted with respect to the issues of
liability and damages. In all other respects, this Court's March
12, 2004 order shall remain in full force and effect.
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