Tuesday, January 13, 2015

Defendant’s False Representation as to Use of Source Code Triggers Crime-Fraud Exception Requiring Production of Privileged Communications

The court granted in part plaintiff's motion to compel the production of privileged documents under the crime-fraud exception to determine whether source code asserted as a defense to plaintiff's infringement claims was fabricated. "[Plaintiff] seeks discovery of a wide variety of documents and communications in an effort to determine if [defendant] fabricated [the source code] and falsely represented that it was created in the normal course of product development. . . . The Court has already found by a preponderance of the evidence that [defendant] falsely claimed that (1) [certain source code] was the current operating source code for [defendant's] commercially sold products; (2) [the source code] provided a complete defense to [plaintiff's] infringement challenges; and (3) [defendant] had produced all the source code. This is just the type of fraud that opens up all communications related to [that source code] to discovery. . . . [Defendant] claimed that it created that source code in the normal course of product development. But that claim is naturally called into question by the fraudulent way that [defendant] portrayed [the source code] as a complete defense. . . . [T]he Court will compel [defendant] to produce all communications and documents that mention or relate to [that source code]. This includes not only communications between [defendant] and its counsel, but also material that counsel prepared, as . . . even work product is discoverable under this exception."

Fleming v. Escort, Inc., et al, 1-12-cv-00066 (IDD January 9, 2015, Order) (Winmill, J.)

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