Princeton Digital Image Corporation v. Office Depot Inc.

Filing 219

MEMORANDUM ORDER re (182 in 1:13-cv-00326-LPS, 184 in 1:13-cv-00331-LPS, 184 in 1:13-cv-00289-LPS, 185 in 1:13-cv-00239-LPS, 183 in 1:13-cv-00404-LPS, 185 in 1:13-cv-00287-LPS, 198 in 1:13-cv-00408-LPS, 185 in 1:13-cv-00288-LPS, 182 in 1:13-cv-00330-LPS) MOTION to Compel filed by Adobe Systems Incorporated is GRANTED. Signed by Judge Leonard P. Stark on 8/1/2017. Associated Cases: 1:13-cv-00239-LPS et al.(etg)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
PRINCETON DIGITAL IMAGE
CORPORATION,
Plaintiff,
C.A. No. 13-239-LPS

V.

OFFICE DEPOT INC.,
Defendant.
PRINCETON DIGITAL IMAGE
CORPORATION,
Plaintiff,
C.A. No. 13-287-LPS

V.

J.C. PENNEY COMPANY, INC.,
Defendant.
PRINCETON DIGITAL IMAGE
CORPORATION,
Plaintiff,

v.

C.A. No. 13-288-LPS

QVC INC.,
Defendant.
PRINCETON DIGITAL IMAGE
CORPORATION,
Plaintiff,
C.A. No. 13-289-LPS

V.

SEARS HOLDINGS COMP ANY,
Defendant.

PRINCETON DIGIT AL IMAGE
CORPORATION,
Plaintiff,
C.A. No. 13-326-LPS

v.
LIMITED BRANDS, INC.,
Defendant.
PRINCETON DIGITAL IMAGE
CORPORATION,
Plaintiff,

v.

C.A. No. 13-330-LPS

GAP INC.,
Defendant.
PRINCETON DIGIT AL IMAGE
CORPORATION,
Plaintiff,
v.

C.A. No. 13-331-LPS

WILLIAMS-SONOMA INC.,
Defendant.
PRINCETON DIGITAL IMAGE
CORPORATION,
Plaintiff,
C.A. No. 13-404-LPS

v.

COSTCO WHOLESALE CORP.,
Defendant.

PRINCETON DIGITAL IMAGE
CORPORATION,
Plaintiff,
C.A. No. 13-408-LPS

v.
NORDSTROM.COM LLC,
NORDSTROM.COM INC., and NORDSTROM
INC.
Defendants.

MEMORANDUM ORDER
Presently before the Court is Adobe's motion to compel discovery. (See, e.g., C.A. No.
13-239-LPS D.I. 185) For the reasons stated below, the Court will grant the motion.
1.

PDIC's corporate representative, Thomas Meagher, did not answer certain

questions during his deposition, asserting attorney-client privilege and work-product protection;
PDIC also withheld discovery on privilege grounds. Adobe now requests that PDIC be
compelled to produce a corporate witness to respond to those topics not discussed by Meagher
and to supplement its document production and interrogatory responses, contending that PDIC
has waived privilege in two ways. (D.I. 186 at 3) First, Adobe argues that PDIC has put at issue
its state of mind at the time it filed the underlying infringement suits, making attorney-client
communications about pre- or post-filing investigation, litigation conduct, and the reasons for
dismissing the infringement claims discoverable. Second, Adobe contends that PDIC has
selectively disclosed some attorney-client communications and documents prepared in
anticipation oflitigation, thereby waiving privilege with respect to communications and
documents related to the same subject matter.

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2.

The Court is persuaded that this combination- PDIC's contention that it brought

and litigated the infringement actions in good faith, along with PDIC' s selective use of privileged
materials to support that assertion - waives privilege to the documents and testimony Adobe
seeks.
3.

"[A] party can waive the attorney client privilege by asserting claims or defenses

that put his or her attorney's advice in issue in the litigation." Rhone-Poulenc Rorer Inc. v.
Home Indem. Co., 32 F.3d 851, 863 (3d Cir. 1994). "The advice of counsel is placed in issue

where the client asserts a claim or defense, and attempts to prove that claim or defense by
disclosing or describing an attorney client communication." Id. "However, the advice of the
infringer's counsel is not placed in issue, and the privilege is not waived, unless the infringer
seeks to limit its liability by describing that advice and by asserting that he relied on that advice."
Id. "Advice is not in issue merely because it is relevant, and does not necessarily become in

issue merely because the attorney's advice might affect the client's state of mind in a relevant
manner." Id.
4.

Further, Federal Rule of Evidence 502(a) provides that a waiver resulting from the

disclosure of privileged or protected information in a federal proceeding extends to undisclosed
information only if "(1) the waiver [was] intentional; (2) the disclosed and undisclosed
communications or information concern the same subject matter; and (3) they ought in fairness to
be considered together." Fairness requires that a court prevent a party from invoking privilege
"as to communications whose confidentiality he has already compromised for his own benefit."
In re Intel Corp. Microprocessor Litig., 258 F.R.D. 280, 289-90 (D. Del. 2008).

5.

The Court agrees with PDIC that the fact that its good faith in bringing the
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underlying infringement suits has been put at issue is not enough, in itself, to waive privilege.
See Rhone-Poulenc, 32 F.3d at 864. Adobe has demonstrated, however, that PDIC has also put
advice of counsel at issue, as "PDIC has produced and described certain privileged
communications regarding its pre-suit investigation" and PDIC relies on those materials as
evidence of its good faith. (D.I. 186 at 11) In particular, Adobe points to emails between
Thomas Meagher and William Meagher describing pre-suit investigations and spreadsheets prepared in anticipation of litigation - of companies that used JPEG images on their websites,
and a claim chart prepared by counsel, both of which have been produced. (D.I. 186 at 13-14)
Adobe also cites PDIC's response to interrogatories stating that, before dismissing the
infringement suits, "PDIC consulted with an expert to confirm that the statements in each
defendant's declarations were true." (D.I. 125 Ex. 2 at 19) In his deposition, Thomas Meagher
described his communications with counsel concerning a cost/benefit analysis assessing the
impact of dismissing the suits against defendants. (See D.I. 190 Ex. 2 at 240-41) He also
discussed "the algorithm that PDIC used to determine what settlement amounts to demand from
the defendants, which he and PDIC's counsel worked together to create." (D.I. 190 at 5) Hence,
PDIC is supporting its claim that it brought and litigated the infringement suits in good faith with
privileged information.
6.

PDIC has inconsistently asserted privilege over some of these communications.

For example, despite Thomas Meagher's deposition testimony describing the settlement
algorithm, PDIC refused to produce the document containing the algorithm on privilege and
work-product grounds. (See D.I. 190 Ex. 2 at 265) Similarly, PDIC contends that the claim chart
is not privileged, yet Thomas Meagher invoked privilege to avoid answering questions about the

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chart in his deposition. (See D.I. 181 Ex. 1 at 259)
7.

In these circumstances, the Court is persuaded that PDIC has put privileged

communications at issue in this litigation by selectively relying on documents or communications
that are privileged attorney-client communications or attorney work product, in an effort to show
that it acted in good faith in bringing and litigating the underlying patent infringement suits.
PDIC "cannot 'use the privilege as a sword rather than a shield,' and thereby 'divulge whatever
information is favorable to [the client's] position and assert the privilege to preclude disclosure
of the detrimental facts."' In re Grand Jury Subpoena Issued to Galasso, 913 A.2d 78, 87 (NJ.
Super. Ct. App. Div. 2006). Here, "fairness [among other things] requires examination of
protected communications." Synalloy Corp. v. Gray, 142 F.R.D. 266, 269 (D. Del. 1992).
Accordingly, IT IS HEREBY ORDERED that Intervenor Adobe's motion to compel
(D.I. 185) is GRANTED.
IT IS FURTHER ORDERED that the parties shall meet and confer and, no later than
August 3, provide a joint status report indicating how and when PDIC will comply with this
Order.

August 1, 2017
Wilmington DE

UNITED STATES DISTRICT JUDGE

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