Tuesday, August 11, 2015

Plaintiff's Discovery Misconduct and Late Waiver of Privilege Warrant Adverse Inference and Possible Finding of Inequitable Conduct

The Court imposed an adverse inference sanction on plaintiff in light of (i) plaintiff's waiver of privilege in declarations filed in connection with a bench trial (in lieu of live testimony) on inequitable conduct, which privilege had been asserted as a basis for withholding documents during discovery, and (ii) other discovery abuses identified in the court's in camera review of withheld documents. "[B]y making affirmative statements in his declaration that during patent prosecution he viewed certain prior art or claim scope in a particular manner, [counsel] was using his statements as a sword. . . . This classic sword/shield issue injected a serious fairness concern into the trial at the very outset. . . .The parties had been working towards trial for a significant period of time; clients had flown in from overseas, witnesses were ready to be called, the courtroom was loaded with boxes upon boxes of trial exhibits. . . . [The court's in camera] sampling appeared not only to confirm [defendant's] concerns but also to reveal additional serious discovery issues: a number of non-privileged documents related to topics at issue throughout the litigation had been withheld on the basis of privilege. . . . The production failure is undoubtedly larger than the few exemplars revealed by the Court’s own review. Given the many thousands of documents on [plaintiff's] privilege log, the Court cannot know the full extent of the problem. . . . Merely striking the declarations and precluding testimony treats the most recent issues as isolated and remediable – when they are yet another step in a long pattern of litigation choices that have caused delay, inefficient use of resources, and diversion from the merits. . . . [I]t is appropriate to preclude the testimony of [an inventor and an attorney]. It is additionally appropriate to make an adverse inference as to the intent of [an inventor and an attorney]. Only this inference . . . is sufficient to remedy the array of issues discussed above and to place [defendant] in a position as near as possible to that which it would occupy in the absence of the misconduct."

Regeneron Pharmaceuticals, Inc. v. Merus BV, 1-14-cv-01650 (NYSD August 6, 2015, Order) (Forrest, J.)

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