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RTC Industries, Inc. v. Fasteners For Retail, Inc.

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

January 14, 2020

RTC INDUSTRIES, INC., Plaintiff,
v.
FASTENERS FOR RETAIL, INC., Defendant.

          PACOLD JUDGE

          MEMORANDUM OPINION AND ORDER

          SIDNEY L. SCHENKIER UNITED STATES MAGISTRATE JUDGE

         On December 26 and 27, 2019, defendant Fasteners for Retail, Inc. ("FFR") filed four motions to compel discovery from plaintiff RTC Industries, Inc. ("RTC"). This Opinion and Order resolves three of these motions:

1. FFR's motion to compel RTC to produce a report from its ERP financial system showing data for all merchandise display system sales from June 1998 to May 2001 (doc. # 345: FFR Mot. #1);
2. FFR's motion to compel RTC to prepare and produce a knowledgeable witness for a continued Rule 30(b)(6) deposition of RTC and for fees (doc. # 349: FFR Mot. # 2); and
3. FFR's motion to compel RTC to produce or make available for inspection competitive products (doc. # 354: FFR Mot. # 3).

         For the following reasons, we grant each motion in part.[1]

         I.

         We first address FFR's motion to compel RTC to produce a report from RTC's ERP financial system showing all sales data for all of RTC's merchandise display systems from June 1998 to May 2001 (FFR Mot. # 1 at 1; doc. # 346, at 2-12: FFR Ltr. # 1, at 1). Such a report would include, but not be limited to, sales data for RTC's ProfitPusher line of products.[2]

         FFR's motion arises out of RTC's production of documents relating to RTC's sale of ProfitPusher 2 products. RTC produced documentation indicating that it sold ProfitPusher 2 in 1999 (FFR Ltr. # 1 at 4-6; FFR Ltr. # 1, Exs. 3-5). But RTC also produced a spreadsheet that identified the first ProfitPusher 2 sale as occurring in November 2000 (FFR Ltr. # 1 at 7). Later, RTC replaced that spreadsheet with another spreadsheet that identified the earliest sale of ProfitPusher 2 as occurring in February 2002 (Id. at 7-8). RTC relies upon the February 2002 date and disclaims the 1999 and November 2000 dates (doc. # 346-1, at 2-13: RTC Resp. # 1, at 3-6). Given these inconsistencies, however, FFR wants to independently review all of RTC's merchandise display system sales from June 1998 through May 2001 so that it can determine for itself the dates of first sale for both ProfitPusher 2 and ProfitPusher 1 (see FFR Ltr. # 1 at 8).

         FFR's request is much too broad. First, it would require RTC to provide financial information about products-namely, all non-ProfitPusher merchandise display systems-that have no relation to the case. Indeed, FFR does not argue that this information is relevant. Rather, the breadth of FFR's request appears to be driven by FFR's lack of trust in RTC's ability or willingness to search for and produce pre-May 2001 financial information about the relevant ProfitPusher products.

         Allowing FFR's lack of trust to justify its overly broad request is a slippery slope. In federal litigation, litigants generally search and review their own documents to determine which documents must be produced as relevant and responsive, and courts presume that they do so in accordance with their legal obligations. To depart from this approach would require a strong showing suggesting that a litigant and its attorneys have not complied, or will not comply, with these obligations. Otherwise, a litigant could gain access to documents it has no right to see by merely professing a distrust in its opponent. FFR has not established that RTC's prior document review and production have been so lacking or inadequate that we should allow FFR to view financial information that has no bearing on this case so it can decide for itself what information it deems relevant.

         Second, we are not persuaded by FFR's assertion that pre-May 2001 sales information about ProfitPusher 1 is potentially relevant to the validity of RTC's patent claims based on an on-sale bar argument (FFR Ltr. # 1 at 8-9). RTC's first sale of ProfitPusher 1 is potentially relevant to an on-sale bar invalidity argument only to the extent ProfitPusher 1 embodies or otherwise discloses an asserted patent claim. See Atlanta Attachment Co. v. Leggett & Piatt, Inc., 516 F.3d 1361, 1365 (Fed. Cir. 2008) ("When the asserted basis of invalidity is an on-sale bar, the court should determine whether the subject of the barring activity met each of the limitations of the claim, and thus was an embodiment of the claimed invention"). Here, as FFR admits, RTC has not expressly asserted that its ProfitPusher 1 product embodies any of its asserted patent claims (FFR Ltr. # 1 at 9). True, RTC has marketed its ProfitPusher 2 product as "ProfitPusher®," and it has also, for marking purposes, identified patents it contends are embodied by ProfitPusher 2 as protecting "ProfitPusher®" (Id; FFR Ltr. # 1, Exs. 7, 16-17). But it is not clear from the parties' submissions that "ProfitPusher®" refers solely to ProfitPusher 1, if at all. In any event, this evidence is not compelling enough to suggest that ProfitPusher 1 potentially embodies any particular claim of RTC's asserted patents. Thus, on this record, we are not convinced that RTC should be made to produce sales information about ProfitPusher 1.

         At the same time, RTC should produce documentation showing the earliest sale of ProfitPusher 2. Because RTC asserts that ProfitPusher 2 embodies certain of its patent claims (see FFR Ltr. # 1, Ex. 7), its first sale of that product-if made too early-could potentially invalidate those claims under 35 U.S.C. § 102. Although RTC produced a document indicating that ProfitPusher 2 was not sold until February 2002, the fact is that RTC also produced documents (created outside the context of this litigation) indicating that ProfitPusher 2 was sold much earlier, in 1999. Yet RTC did not search its financial database for ProfitPusher 2 sales information from 1999 (RTC Resp. # 1, Ex. 28 ("11/19/19 Bloom Dep.") at 168-69, 208-09). FFR is entitled to test RTC's asserted February 2002 first-sale date by seeing whether RTC's financial information shows pre-February 2002 (and, specifically, 1999) sales of ProfitPusher 2.

         To that end, we order RTC to search and review its accounting and financial information for the time period sought by FFR (June 1998 to May 2001) to determine whether it sold or offered for sale any ProfitPusher 2 products during that time period. If there is any information or documentation showing such sales or offers for sale, RTC shall produce it to FFR within 21 days of this order. If there is no such information or documentation, RTC shall confirm as much to FFR within 21 days of this order.[3]

         II.

         Next, we take up FFR's motion to compel RTC to prepare and produce a knowledgeable Rule 30(b)(6) witness to testify for another 5 hours and 9 minutes (FFR Mot. # 2 at 1). FFR's motion also seeks payment of its reasonable attorneys' fees incurred ...


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