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Medline Industries, Inc. v. C.R. Bard, Inc.

United States District Court, N.D. Illinois, Eastern Division

August 2, 2019

C.R. BARD, INC., Defendant.

          Sharon Johnson Coleman District Judge



         Before us is a motion to compel by Plaintiff, Medline Industries, Inc., ("Plaintiff or "Medline"), asking that the Court order Defendant C.R. Bard, Inc. ("Defendant" or "Bard") to produce opinions of counsel Bard obtained regarding whether certain of its products infringe Medline patents. (D.E. 209). The matter is now fully briefed, and for the reasons stated herein, we deny Plaintiffs motion to compel.

         I. Background

         We set forth only those background facts that are relevant to our decision. Medline has filed three lawsuits[2] against Bard accusing it of infringing various Medline patents for its medical catheters and related items; included in each complaint is a claim for willful infringement, which carries with it the possibility of enhanced damages pursuant to 35 U.S.C. § 284. (D.E. 1: Complaint). As part of its response to the claim of willful infringement, Bard has asserted the "advice of counsel" defense, stating that it relied on the opinion of counsel that its products do not infringe Medline's patents. (D.E. 218: Def. Resp. to Mot. at 4). To date, Bard has produced eight opinions that concern each of the patents asserted as being infringed in all three lawsuits Medline has filed against Bard (the "Asserted Patents"). The instant case alleges infringement of three of the Asserted Patents: the '352 patent, the '452 patent, and the '753 patent. (D.E. 91: Amended Complaint ¶¶ 36, 57, 85).

         Medline contends that it is entitled to additional opinions of counsel obtained by Bard, beyond the eight opinions Bard has produced concerning the Asserted Patents. These additional opinions sought by Medline concern "closely related patents that are identical in the content of their disclosures" to the Asserted Patents, Medline argues. (PI. Mot. to Compel at 1). Elsewhere in its briefs, Medline explains that the additional opinions it seeks, on unasserted patents, are in the same "patent family" as the Asserted Patents. Medline gives examples of some of these patents, variously describing them as being a "continuation" or "continuation-in-part" of the Asserted Patents; a "division" of the unasserted patents; or as sharing the "same specifications, and similar claim limitations" as the Asserted Patents. (PL Mot. to Compel at 2.) Medline states that, accordingly, "the text and drawings of these patents are identical." (Id.)[3]Bard does not deny Medline's characterizations of the asserted and unasserted patents, although it disputes any implication that patents in the same family are subject to particular legal rights or obligations.

         In its initial memorandum in support of its motion to compel, Medline contends that Bard has refused to acknowledge whether it has received additional opinion letters on the unasserted patents and has refused to produce any additional opinion letters beyond the ones it already has produced regarding the Asserted Patents. (PI. Mot. to Compel at 3.) In its response, Bard indicates it did receive opinions on unasserted patents but does not identify how many other opinions it may have obtained or what patents these other opinions concern. (D.E. 218: Def. Resp. to Mot. at 1). Bard objects to producing opinions regarding unasserted patents on the grounds that such opinions are protected by the attorney-client and work-product privilege and that its having produced the eight opinions on the Asserted Patents did not waive any privileges applicable to opinions it received concerning unasserted patents. Whether any privilege waiver has occurred depends largely on whether the opinions Bard seeks to protect are part of the "same subject matter" as the opinions it already produced - thus admittedly waiving privilege - concerning the Asserted Patents.

         II. Legal Issues

         "Federal Circuit law applies when deciding whether particular written or other materials are discoverable in a patent case, if those materials relate to an issue of substantive patent law." In re EchoStar Communications Corp., 448 F.3d 1294, 1298 (Fed. Cir. 2006), citing Advanced Cardiovascular Sys. v. Medtronic, Inc., 265 F.3d 1294, 1307 (Fed. Cir. 2001). A remedy for willful patent infringement is specifically provided for in the Patent Act, see 35 U.S.C. §§ 284-285; therefore, questions of privilege and discoverability that arise from assertion of the advice-of-counsel defense necessarily involve issues of substantive patent law. See In re Spalding Sports Worldwide, Inc., 203 F.3d 800, 803-04 (Fed. Cir. 2000) (applying Federal Circuit law to question of attorney-client privilege between patent attorney and patentee).

         A. Willfulness

         The standard for finding willful infringement of another's patent was recently revised by the Supreme Court in Halo Electronics, Inc. v. Pulse Electronics, Inc., ___U.S.___, 136 S.Ct.1923 (2016). In abrogating the previous two-part test for assessing enhanced willfulness damages set forth in In re Seagate Technology, LLC, 497, F.3d 1360 (Fed. Cir. 2007), [4] the Court stated that "[t]he sort of conduct warranting enhanced damages has been variously described in our cases as willful, wanton, malicious, bad-faith, deliberate, consciously wrongful, flagrant, or-indeed- characteristic of a pirate." Halo, 136 S.Ct. at 1932. While district courts have discretion to decide whether an infringer's behavior rises to that standard, such findings "are generally reserved for egregious cases of culpable behavior." Id. A patentee need only show by a preponderance of the evidence that the facts support a finding of willful infringement. Id. at 1934. See also SRI Int'l Inc. v. Cisco Systems, Inc., 2017-2223, 2019 WL 3162421 (Fed. Cir., July 12, 2019).

         It is well-settled that an important factor in determining if willful infringement has been shown is whether the alleged infringer obtained an opinion of counsel. Comark Communications, Inc. v. Harris Corp., 156 F.3d 1182, 1191 (Fed. Cir. 1998). Whether the accused infringer obtained an opinion of counsel bears upon a court's determination of "whether the infringer, acting in good faith and upon due inquiry, had sound reason to believe that it had the right to act in the manner that was found to be infringing." SRI Int'l Inc. v. Advanced Tech. Laboratories, Inc., 127 F.3d 1462. 1464 (Fed. Cir. 1997). The receipt of legal advice alone does not per se absolve an alleged infringer of the charge of willfulness; the legal opinion must be competent before a finding of reasonable reliance on that opinion may be made. Comark, 156 F.3d at 1191. Factors that bear on the competence of a legal opinion include the nature of the advice, the thoroughness and competence of the legal opinion, and its objectivity. SRI Int'l Inc. 127 F.3d at 1465. A court will determine whether the advice of noninfringement, invalidity or unenforceability could have reasonably been relied on, and whether, on the totality of the circumstances, exculpatory factors avert a finding of willful infringement. The totality of the circumstances may include not only such aspects as the closeness or complexity of the legal and factual questions presented, but also commercial factors that may have affected the infringer's action. Id.

         B. Waiver of Attorney-Client Privilege

         The attorney-client privilege serves the important policy of fostering "full and frank communication between attorneys and their clients and thereby promote[s] broader public interest in the observance of law and administration of justice." Upjohn Co. v. United States, 449 U.S. 383, 389 (1981); see also United States v. Frederick,182 F.3d 496, 500 (7th Cir. 1999) ("the attorney-client privilege is intended to encourage people who find themselves ...

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