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Zen Design Group, Ltd. v. Scholastic, Inc.

United States District Court, E.D. Michigan, Southern Division

June 22, 2018

ZEN DESIGN GROUP LIMITED, Plaintiff,
v.
SCHOLASTIC, INC., Defendant.

          OPINION AND ORDER GRANTING PLAINTIFF'S MOTION TO COMPEL

          ROBERT H. CLELAND UNITED STATES DISTRICT JUDGE.

         Plaintiff Zen Design Group Limited (“Zen Design”) has accused Defendant Scholastic Inc. (“Scholastic”) of willfully infringing on U.S. Patent No. 6, 860, 616 (“the ‘616 Patent”). Defendant has indicated its intention to rely on an opinion of counsel as a defense to willfulness. Plaintiff contends that Defendant's assertion of this defense waives Defendant's attorney-client privilege with respect to certain documents. Plaintiff seeks disclosure of those documents, but Defendant disagrees with Plaintiff's assessment and has refused to disclose the pertinent documents. Consequently, Plaintiff filed the present Motion to Compel. (Dkt. # 45.) Defendant filed a response (Dkt. # 47) and Plaintiff filed a reply (Dkt. # 49). Having reviewed the parties' thorough briefing, the court concludes a hearing is unnecessary, E.D. Mich. L. R. 7.1(f)(2), and will grant Plaintiff's motion.

         I. BACKGROUND

         Plaintiff is the owner of the ‘616 Patent entitled “Ultraviolet Light Writing System.” The patent purports to describe a pen capable of writing with a type of ink invisible under normal conditions, but with a tendency to fluoresce when exposed to ultraviolet light. To this end, the pen also includes a bulb that emits light of the requisite wavelengths to reveal the writing otherwise not visible.

         In September 2009, Plaintiff informed Defendant of the ‘616 Patent and accused one of Defendant's subsidiaries of producing and selling an infringing device (“Accused Device #1”). In June 2010, Defendant sought advice from attorney Brian Siff regarding Plaintiff's enforcement of the ‘616 Patent and Accused Device #1.

         In August 2011, the parties reached a settlement agreement addressing past sales and current inventory of Accused Device #1, but the agreement did not provide a license for any future sales because Defendant intended to discontinue production of Accused Device #1. Throughout the June 2010-August 2011 period, Siff served as outside counsel to Defendant and provided legal advice regarding the parties' disputes and negotiations.

         Thereafter, Defendant began selling a product allegedly very similar to Accused Device #1. Plaintiff alleges that Defendant had plans to sell this device (“Accused Device #2”) at the time of the 2011 settlement and concealed these plans from Plaintiff. (Dkt. # 45, Pg. ID 994.) Defendant contends that no one involved in the 2011 settlement was aware of Accused Device #2. (Dkt. # 47, Pg. ID 1269.)

         In May 2015, Plaintiff informed Defendant that it believed Accused Device #2 infringed on its ‘616 Patent. Defendant again retained Siff as outside counsel to represent it in discussions with Plaintiff. In September 2015, Defendant retained attorney Scott Stimpson to provide an independent opinion of counsel on whether Accused Device #2 infringed on the ‘616 Patent.

         In October 2015, Stimpson provided an opinion concluding that Accused Device #2 did not infringe on the ‘616 Patent and therefore, Defendant could continue to sell the device in good faith.

         In August 2016, Plaintiff filed the present suit. (Dkt. # 1, 6.) Through Siff as counsel, Defendant filed an answer to the complaint as well as counterclaims requesting a declaration of non-infringement and invalidity of the ‘616 Patent. (Dkt. # 9.) Plaintiff's complaint alleges that Defendant has willfully infringed on the ‘616 Patent since May 2015-when Plaintiff first made Defendant aware of its infringement allegations concerning Accused Device #2.

         In June 2017, Defendant indicated its intention to rely on an opinion of counsel to rebut Plaintiff's allegation of willfulness. To this end, Defendant submitted Stimpson's opinion as well as all documents and communications concerning his opinion.

         Plaintiff, however, sought further discovery and requested

all communications, written or verbal, between Scholastic and any of its counsel, including both in-house and outside counsel, that concern: a) the scope and/or meaning of any claims of the Asserted Patent and b) the infringement of the Asserted Patent by Scholastic, and for each communication identify the individuals that were present and the substance of each communication.

(Dkt. # 45, Pg. ID 995.) Defendant responded to Plaintiff's request by asserting attorney-client privilege and work product confidentiality for those documents containing Siff's impressions and communications. Accordingly, Plaintiff filed the present motion to compel and seeks production of:

(1) all communications between Scholastic and any attorney, including in-house counsel and Mr. Siff's firm, concerning the subject matter of the Stimpson opinion; and (2) all documents that discuss a communication between Scholastic and any attorney, concerning the subject matter of the Stimpson opinion, but that are not to or from Scholastic.

(Dkt. # 45, Pg. ID 993.) Plaintiff contends that Defendant's reliance on an opinion of counsel defense waives its right to claim privilege as to all attorney-client communications on the same subject matter as the opinion, except post-lawsuit communications with trial counsel.

         II. STANDARD

         The scope of discovery available to parties in a civil action is outlined in Federal Rule of Civil Procedure 26. As a general matter, “[p]arties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case. . . .” Fed.R.Civ.P. 26(b)(1). The attorney-client privilege and work product confidentiality are governed by the common law. See Fed. R. Ev. 501.

         “The attorney-client privilege protects the confidentiality of communications between attorney and client made for the purpose of obtaining legal advice.” 01 Communique Lab., Inc. v. Citrix Sys., Inc., No. 06-00253, 2015 WL 13649574, at *2 (N.D. Ohio Apr. 17, 2015) (quoting Genentech, Inc. v. United States ITC, 122 F.3d 1409, 1415 (Fed. Cir. 1997)); see also Ross v. City of Memphis, 423 F.3d 596, 600 (6th Cir. 2005) (“The attorney-client privilege protects from disclosure confidential communications between a lawyer and his client in matters that relate to the legal interests of society and the client.”) (quoting In re Grand Jury Subpoena, 886 F.2d 135, 137 (6th Cir.1989)). While the attorney-client privilege is narrowly construed to avoid overly restricting discovery, its scope is determined in light of its purpose-to increase full and frank communication between an attorney and his client. Id. The privilege “protects only those communications necessary to obtain legal advice.” Id. (quoting In re Columbia/HCA Healthcare Corp. Billing Practices Litig., 293 F.3d 289, 294 (6th Cir. 2002)). The burden of establishing that the attorney-client privilege is applicable to particular communications rests with the party asserting the privilege. United States v. Krug, 379 Fed.Appx. 473, 478 (6th Cir. 2010); see also Fed. R. Civ. P. 26(b)(5).

         Federal Rule of Civil Procedure 26(b)(3) prohibits a party from seeking discovery of “documents and tangible things that are prepared in anticipation of litigation or for trial by or for another party or its representative.” This is known as the work product confidentiality doctrine and it extends to nontangible discovery as well. See Hickman v. Taylor, 329 U.S. 495 (1947). The work product confidentiality doctrine is “broader than the attorney-client privilege.” In re Antitrust Grand Jury, 805 F.2d 155, 163 (6th Cir. 1986) (quoting United States v. Nobles, 422 U.S. 225, 238, n.11 (1975)). “While the attorney-client privilege protects only confidential communications, the work product doctrine generally protects from disclosure documents prepared by or for an attorney in anticipation of litigation.” Reg'l Airport Auth. of Louisville v. LFG, LLC, 460 F.3d 697, 713 (6th Cir. 2006) (citing In re Antitrust Grand Jury, 805 F.2d 155, 163 (6th Cir. 1986)).

         The work product confidentiality doctrine allows an attorney to “assemble information, sift what he considers to be the relevant from the irrelevant facts, prepare his legal theories and plan his strategy without undue and needless interference.” Hickman, 329 U.S. at 510. However, upon a showing of substantial need and inability to otherwise obtain the discovery without material hardship, the “written or oral information transmitted to the attorney and recorded as conveyed by the client”-known as fact work product-is discoverable. See In re Columbia, 293 F.3d at 294. But, absent waiver, a party may not obtain “any material reflecting the attorney's mental impressions, opinions, conclusions, judgments, or legal theories”-known as opinion work product. Id. “‘The work-product [doctrine] protects the attorney's thought processes and legal recommendations' made in anticipation of litigation.” Communique Lab, 2015 WL 13649574, at *3 (quoting Genentech, 122 F.3d at 1415).

         Federal Rule of Civil Procedure 37 concerns a party's failure to make a disclosure or to cooperate in discovery. The Rule allows a party to “move for an order compelling disclosure or discovery” generally and also specifically allows a party to compel disclosure by another party who has failed “to make a disclosure required by Rule 26(a).” Fed.R.Civ.P. 37(a)(1) & (3)(B). “The scope of discovery is, of course, within the broad discretion of the trial court. An order denying further discovery will be grounds for reversal only if it was an abuse of discretion resulting in substantial ...


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