Minnesota Patent Litigation Wrap-Up – July 2020

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This post continues our monthly summary of substantive orders in patent litigation in the District of Minnesota.

Protégé Biomedical LLC v. Z-Medica, LLC, No. 18-3227 (JRT/HB) ((D. Minn., Jul. 6, 2020)

Chief Judge Tunheim affirmed the magistrate judge’s order denying a motion to compel and imposing sanctions.

Relying on the crime-fraud exception, Protégé filed a motion to compel e-mails allegedly related to trade secret misappropriation. Id. at 2. The magistrate judge denied the motion, finding that the communications did not meet the initial threshold showing required to apply the exception and sanctioned Protégé for bringing an unjustified discovery motion. Id. at 3.

Chief Judge Tunheim upheld the Order. Id. at 5. He agreed that Protégé’s reliance on the allegations in its pleading was not enough to make the threshold requirement to apply the exception. Id. at 6 (citing In re BankAmerica Corp. Sec. Litig., 270 F.3d at 642 (“A moving party does not satisfy this threshold burden merely by alleging that a fraud occurred and asserting that disclosure of any privileged communications may help prove the fraud.”). Id. He also held that the magistrate judge did not clearly err in imposing sanctions because Protégé was notified of said sanctions and given the opportunity to be heard. Id. at 7. He agreed with the magistrate judge’s conclusion that both the opposing memorandum and the hearing on sanctions satisfied the notice and opportunity to be heard requirement under Rule 37. Id.

Niazi Licensing Corp. St. Jude Medical, No. 17-cv-5096 (WMW/BRT) (D. Minn., Jul. 6, 2020)

Judge Wright affirmed an order imposing sanctions on Niazi Licensing Corporation (“NLC”) for willful violation of a previous discovery order, which struck untimely disclosures.

NLC provided St. Jude with an expert report from Dr. Martin Burke containing untimely-disclosed facts, such as a discussion of Dr. Burke’s own infringing use, in support of his direct infringement finding. Id. St. Jude moved to strike facts and testimony related to the untimely-disclosures. Id. On December 2, 2019, the magistrate judge granted St. Jude’s motion to strike these portions of Dr. Burke’s expert report, finding the untimely-disclosures inexcusable and unfairly prejudicial; NLC appealed. Id. While the appeal was pending, NLC filed a motion for summary judgment including a declaration from Dr. Burke that contained subject matter stricken by the December 2, 2019 Order. Id. St. Jude moved to enforce the order and requested sanctions. Id. at 3. The magistrate judge granted the motion in part, found the violation willful, struck all untimely-disclosed facts, and awarded St. Jude fees. NLC appealed and disputed the finding of willfulness. Id.

Judge Wright found that willfulness was not required to enforce the sanctions because they were non-dispositive. Id. at 5. Even if the enforcement required a showing of willfulness, Judge Wright stated that NLC would “fare no better.” Id. Willful disobedience of a court order requires that the litigant acted intentionally as opposed to “accidentally or voluntarily.” Id. The Court concluded that NLC acted willfully because it conferred with St. Jude about the declaration, St. Jude objected to the portions in dispute, and it still refused to remove the portions that violated the Order. Id.

Further contending that the violation could not be willful, NLC also argued that the December 2, 2019 Order was “unclear and ambiguous” because the Order did not specify which portions should be struck. Id. at 4. The Court disagreed, finding the Order clearly and unambiguously struck facts and testimony by Dr. Burke not disclosed before the fact discovery deadline.  Id. at 7.

Grupo Petrotemex v. Polymetrix, No. 16-cv-2401 (SRN/HB), 2020 WL 4218804 (D. Minn. Jul. 23, 2020)

Judge Nelson affirmed the magistrate judge’s order granting defendant’s motion to compel, where defendant sought to conduct remote depositions for Swiss-based deponents.

Plaintiffs opposed the motion, suggesting that the depositions be held in-person, specifically in St. Maarten. Id. at 1. Plaintiffs articulated several factors, including the low rate of COVID-19 in St. Maarten as well as potential on-site precautions, which would mitigate risks associated with in-person depositions. Id. at 2.

In affirming the order, Judge Nelson dismissed plaintiff’s reasoning, finding that the “indisputable health risks” have made remote depositions the “new normal.” Id. Further, in-person depositions require participants share an enclosed space for several hours, making the environment unsafe for attending persons. Id. at 2-3. The judge affirmed the order of remote-depositions because the health risks outweighed the potential prejudice to the parties. Id. at 3.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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