Clearvalue, Inc. et al v. Pearl River Polymers, Inc. et al, Case Number: 6:06-cv-197 (March 29, 2007)
Judge: Leonard Davis
I was able to get some additional information this morning regarding the dramatic conclusion of this patent trial in Judge Davis' court yesterday. What appears to have happened (subject to revision, of course, as the orders and perhaps transcripts of the last two days' proceedings come out) is this story of the consequences of either not knowing or not following the discovery rules, and the worst sanction ever meted out by a Eastern District judge in any of the over 200 cases I've been involved in out here. (Get out your federal rulebook right now - you'll want to take it to bed with you for the next week after reading this). As Judge Ward is fond of saying - there are two ways to lose a case in the Eastern District - on the merits, or by not playing by the rules. This will be the definitive example of the latter.
This is a patent case involving a method for combining chemicals for water purification purposes. A key limitation of the patent was that the chemicals at issue had to have a certain characteristic - let's say they had to be blue. Defendant says their testing shows that they're red, but plaintiff points to some marketing materials from defendant showing they're blue. (Defendant says what, you trust us? Just kidding - back to the story). During the second day of trial, the plaintiff/inventor was being crossexamined and it came out he'd seen some testing that had not been produced. Plaintiff claims it is work product - Court agrees, and case resumes.
The next day, the plaintiff's technical expert is on the stand, and is asked if he's seen any other testing. Plaintiff objects that the testing is work product. Not so fast, defendant (who is, incidentally, represented by my fellow Baylor Law alum Andy Tindel of Tyler) and the Court say - you've shown it to a testifying expert, so it's now discoverable. Plaintiff is ordered to produce by 8pm tonight, and Court will entertain motion for sanctions the next morning at 8:45. That night, documents are produced which I understand indicate that the plaintiff tested the chemical, and got test results showing it is red (again, red means no infringement). Again, only one of plaintiff's counsel was aware of these results - none of the other lawyers representing the plaintiff knew of them, and the test results had not been disclosed previously. (Let me emphasize this point a little more - Plaintiff's counsel from Texarkana Nick Patton and Geoff Culbertson on Nick's firm, and Patty Peden had nothing to do with the misconduct and were not even named by the defendant in the sanctions motions filed the next day).
The next morning, in an all day hearing the Court considers the defendant's motion for sanctions against the plaintiff and the single attorney from Houston who knew of the tests for nondisclosure of the tests. My understanding is that the plaintiff's counsel from Houston who addressed this issue claimed that he didn't realize that the tests were discoverable just because they were shown to a testifying expert, the expert said he thought they had been disclosed to the other side (I believe he said that he'd designed and conducted the testing at issue, but I am not certain about that), and the plaintiff blamed his lawyer. Judge Davis concluded the hearing by saying that this was the worst case of discovery abuse he had ever seen, and that drastic sanctions were appropriate. He struck the plaintiff's pleadings, granted the defendant's motion to declare the patent invalid, and awarded costs and attorney's fees up to $2.5 million (upon a proper showing) to the defendant. Documentation is to follow in fifteen days, and any response ten days later. Once again, sanctions were sought only as to the plaintiff and the one attorney, since the test results at issue were hidden from the plaintiff's cocounsel as well as the other side.
I expect an order out from the Court at some point summarizing all of this, but as this is likely of interest to many weblog followers, I thought I'd post some updated information.
See what I mean about that rulebook?