Exmark Manufacturing Company Inc. v. Briggs & Stratton Power Product Group

Filing 102

ORDER - The plaintiff's Motion for Protective Order to Preclude Deposition of Attorney Dennis Thomte 76 is denied. Any objection to this Order shall be filed with the Clerk of the Court within fourteen (14) days after being served with a copy of this Order. Ordered by Magistrate Judge Thomas D. Thalken. (KBJ)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
EXMARK MANUFACTURING
COMPANY, INC.,
Plaintiff,
vs.
BRIGGS & STRATTON POWER
PRODUCTS GROUP, LLC, and
SCHILLER GROUNDS CARE, INC.,
Defendants.

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8:10CV187
ORDER

This matter comes before the court on the plaintiff’s Motion for Protective Order to
Preclude Deposition of Attorney Dennis Thomte (Filing No. 76). Specifically, the plaintiff
seeks to prevent Schiller Grounds Care, Inc. (Schiller), from taking the deposition of Dennis
L. Thomte (Mr. Thomte). The plaintiff filed a brief (Filing No. 77), a reply brief (Filing No.
88), and an index of evidence (Filing No. 78) in support of the motion. Schiller filed a brief
(Filing No. 82) and an index of evidence (Filing No. 83) in opposition to the motion.

BACKGROUND
Mr. Thomte represented the plaintiff during the prosecution of the patent-incontroversy, U.S. Patent No. 5,987,863 (’863 patent), entitled “Lawn Mower Having Flow
Baffles and Removable Mulching Baffles.” Filing No. 78, Ex. 1 - Patent. Mr. Thomte does
not represent the plaintiff in the instant matter, however, on at least one previous occasion,
he represented the plaintiff in litigation related to the ’863 patent. See id. Ex. 9 - Toro
Order. In the instant matter, the plaintiff alleges Schiller is liable for infringing the ’863
patent. Filing No. 14 - Amended Complaint. Schiller denies all allegations of infringement
and argues the ’863 patent is invalid and unenforceable due to inequitable conduct by the
plaintiff during prosecution of the ’863 patent. Filing No. 57 - Amended Answer.
On December 23, 1998, pursuant to 37 C.F.R. § 1.102(d), Mr. Thomte submitted
a Petition to Make Special (PTMS) and a Statement Accompanying Petition to Make
Special (SAPTMS) to the U.S. Patent and Trademark Office (PTO). Filing No. 78, Ex. 8 -

Petition & Statement. The PTMS requested the ’863 patent application “be taken out of
turn for immediate action.” Id. - Petition p. 1. The PTMS states the “applicants’ claims are
being infringed” and “applicants require a patent in order to terminate such infringement.”
Id. The SAPTMS filed by Mr. Thomte states “there is an infringing product actually on the
market” and “I have made a rigid comparison of the alleged infringing product with the
claims of this application, and, in my opinion, some of the claims are unquestionably
infringed.” Id. - Statement p. 1. Subsequently, on March 18, 1999, the PTO granted the
PTMS. Filing No. 83, Ex. A - Petition Decision. Ultimately, on November 23, 1999, the
PTO issued the ’863 patent. Filing No. 78, Ex. 1 - Patent. Thereafter, on May 16, 2001,
the plaintiff brought suit against Scag Power Equipment, Inc. (Scag) alleging infringement
of the ’863 patent. Filing No. 83, Ex. B - Scag Complaint.
Schiller now wishes to depose Mr. Thomte regarding the prosecution of the ’863
patent, specifically, in regard to the content of the PTMS and SAPTMS. Filing No. 82 Response p. 1. The plaintiff seeks a protective order prohibiting Schiller from deposing Mr.
Thomte because Schiller failed to make the required showing to depose opposing counsel
under the Eighth Circuit’s Shelton rule. Filing No. 77 - Brief p. 1 (citing Shelton v.
American Motors Corp., 805 F.2d 1323 (8th Cir. 1986)). First, the plaintiff argues the
information sought is irrelevant because there is a pending motion to dismiss (Filing No.
40) regarding Schiller’s inequitable conduct defense. Filing No. 77 - Brief p. 6, 11, 12, 17.
Second, the plaintiff contends the information sought by Schiller is available from other
sources and privileged. Id. at 6-17. Schiller counters by arguing first that the Shelton rule
does not apply because Mr. Thomte does not represent the plaintiff in the instant matter.
Filing No. 82 - Response p. 7. In the alternative, Schiller contends it has made the
required showing to depose Mr. Thomte under Shelton. Id. at 9-13. Specifically, Schiller
argues the PTMS and SAPTMS are central to its inequitable conduct defense and
counterclaim and Mr. Thomte prepared, signed, and submitted these documents. Id. at 10.
As such, Mr. Thomte “is the most significant, and possibly the only source for the
information Schiller seeks,” and the information sought is relevant, non-privileged, and
crucial. Id.

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ANALYSIS
The Federal Rules of Civil Procedure provide for a broad scope of discovery in
federal civil actions. See Fed. R. Civ. P. 26(b)(1) (“Parties may obtain discovery regarding
any matter, not privileged, that is relevant to the claim or defense of any party . . . Relevant
information need not be admissible at the trial if the discovery appears reasonably
calculated to lead to the discovery of admissible evidence”). The scope of discovery,
however, is subject to certain limitations.

Specifically, a court may issue an order

protecting disclosure or discovery. See Fed. R. Civ. P. 26(c). The party moving for the
protective order must show good cause before a court will issue the order. Misc. Docket
Matter No. 1 v. Misc. Docket Matter No. 2, 197 F.3d 922, 926 (8th Cir. 1999). As such,
the burden is upon the movant to show the need for the order, which contemplates a
specific showing of fact, as opposed to merely conclusory statements. Gulf Oil Co. v.
Bernard, 452 U.S. 89, 102 n.16 (1981).
District courts have broad discretion to limit discovery and decide discovery motions
under Rule 26(c). Pavlik v. Cargill, Inc., 9 F.3d 710, 714 (8th Cir. 1993). The district
court’s discretion to limit the scope of discovery exists so long as it has a good reason to
do so. Credit Lyonnais v. SGC Int'l, Inc., 160 F.3d 428, 431 (8th Cir. 1998). As the
Eighth Circuit stated, “because discovery rules should be construed to secure the just,
speedy, and inexpensive determination of every action . . . judges should not hesitate to
exercise appropriate control over the discovery process.” Misc. Docket Matter No. 1, 197
F.3d at 927 (internal quotations omitted).
Although the Federal Rules of Civil Procedure do not themselves exempt an
attorney from being a source of discoverable facts, “[g]enerally, federal courts have
disfavored the practice of taking the deposition of a party’s attorney; instead, the practice
should be employed only in limited circumstances.” Theriot v. Parish of Jefferson, 185
F.3d 477, 491 (5th Cir. 1999). Within the Eighth Circuit, the leading case on such
depositions is Shelton. Under Shelton, a party seeking to take the deposition of an
adverse party’s attorney must show that “(1) no other means exist to obtain the information
than to depose opposing counsel; (2) the information sought is relevant and nonprivileged;
and (3) the information is crucial to the preparation of the case.” Shelton, 805 F.2d at
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1327. “This difficult burden imposed by Shelton was intended to guard against the
‘harassing practice of deposing opposing counsel . . . that does nothing for the
administration of justice but rather prolongs and increases the costs of litigation, demeans
the profession, and constitutes an abuse of the discovery process.’” Pamida, Inc. v. E.S.
Originals, Inc., 281 F.3d 726, 729-30 (8th Cir. 2002) (quoting Shelton, 805 F.2d at 1330).
The Eighth Circuit has explained that the Shelton test was erected as a barrier “to protect
against the ills of deposing opposing counsel in a pending case which could potentially
lead to the disclosure of the attorney’s litigation strategy.” Pamida, Inc., 281 F.3d at 730.
Schiller argues the Shelton rule does not apply to the instant matter because Mr.
Thomte is not the plaintiff’s trial counsel in the current litigation, nor is there any evidence
he is assisting trial counsel for the plaintiff in the current litigation. In the past, however,
Mr. Thomte represented the plaintiff in litigation involving the ’863 patent. Accordingly,
although litigation strategy can vary considerably from case to case, it stands to reason
that deposing Mr. Thomte could potentially lead to the disclosure of the plaintiff’s litigation
strategy in the instant case. This is the exact danger the Shelton test was erected to
protect against. See Pamida, 281 F.3d at 730. As such, the court finds Shelton controls
in this matter and the court will only allow Schiller to depose Mr. Thomte if it can show (A)
no other means exist to obtain the information than to depose Mr. Thomte, (B) the
information sought is relevant and nonprivileged, and (C) the information is crucial to the
preparation of the case. For the reasons stated below, the court finds Schiller has made
such a showing.

A.

No other means exist to obtain the information.
Schiller seeks to depose Mr. Thomte, the attorney who prosecuted the ’863 patent

for the plaintiff, regarding its inequitable conduct claim. Inequitable conduct renders a
patent unenforceable if “the applicant withheld material information from the PTO during
examination of the patent or submitted material false information, and that the applicant
acted with the intent to deceive or mislead the examiner into granting the patent.” Fiskars,
Inc. v. Hunt Mfg. Co., 221 F.3d 1318, 1326 (Fed. Cir. 2000). When inequitable conduct
is alleged, “[a]n equitable judgment must be made that, in light of all the particular
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circumstances, the conduct of the patentee is so culpable that its patent should not be
enforced.” LaBounty Mfg., Inc. v. U.S. Int’l Trade Comm’n, 958 F.2d 1066, 1070 (Fed.
Cir. 1992). The knowledge and actions of a patent applicant’s representatives, including
its attorney, are imputed to the applicant when determining whether inequitable conduct
has occurred. See Novo Nordisk Pharm., Inc. v. Bio-Tech. Gen. Corp., 424 F.3d 1347,
1361 (Fed. Cir. 2005); see also 37 C.F.R. § 1.56 (stating the duty to disclose material
information extends to the attorney who prosecutes a patent application). Schiller argues
that because Mr. Thomte prepared, signed, and submitted the PTMS and SAPTMS, which
are central to its inequitable conduct defense and counterclaim, Mr. Thomte “is the most
significant, and possibly the only source for the information Schiller seeks.” Filing No. 82 Response p. 10.
In contrast, the plaintiff argues the information Schiller seeks is available from
sources other than Mr. Thomte, such as the ’863 patent inventors. Filing No. 77 - Brief p.
9-10. In making this argument the plaintiff relies exclusively on this court’s decision to
issue a protective order preventing the deposition of Mr. Thomte in Toro v. Scag Power
Equipment,1 a wholly separate matter involving the ’863 patent. See Filing No. 77 - Brief
p. 9-10 (“This case is controlled by the Court’s decision in Toro v. Scag Power Equipment
. . .”). Such reliance is misplaced. In Toro, the plaintiffs brought an infringement action
against the defendants alleging infringement of three patents, including the ’863 patent.
See Filing No. 78, Ex. 9 - Toro Order p. 1-3. The defendants argued the three patents
were each invalid and unenforceable because of the plaintiff’s inequitable conduct before
the PTO and sought to depose Mr. Thomte “concerning his knowledge, intent, and actions”
in the prosecution of the patents-in-controversy. See id. at 7.
In regard to the ’863 patent, the thrust of the defendants’ inequitable conduct claim
was that the plaintiff failed to disclose prior art in the prosecution of the ’863 patent.
Id. at 3. Specifically, the defendants alleged bad faith in that the plaintiffs, by and through
Mr. Thomte, had failed to disclose a 1995 Walker Manufacturing Co. (Walker) brochure,
1

Toro v. Scag Power Equipment, Case No. 8:01CV279 (D. Neb. Mar. 8, 2002). In Toro, Exm ark

Manufacturing Com pany, Inc. and The Toro Com pany were the plaintiffs; Scag Power Equipm ent, Inc. and
Metalcraft of Mayville, Inc. were the defendants. See Filing No. 78, Ex. 9 - Toro Order
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which constituted prior art. Id. While the ’863 patent cited to a 1996 Walker brochure as
prior art, the defendants argued the referral was to different prior art than the 1995 Walker
brochure and such difference demonstrated bad faith in the prosecution of the ’863 patent.
Id. In other words, in Toro, the defendants’ inequitable conduct defense centered on
whether the 1995 Walker brochure constituted prior art, and if so, whether the 1995
brochure represented prior art different from the disclosed 1996 brochure. Answering each
of these questions required examining the substantive content of both the 1995 and 1996
Walker brochures and the ’863 application. Because the defendants’ inequitable conduct
claim turned on the similarities and differences between the Walker brochures and the ’863
application, this court reasoned that any information discoverable from Mr. Thomte was
also likely to be discoverable from the inventors. Id. at 8-10.
Conversely, in the instant matter, the thrust of Schiller’s inequitable conduct claim
centers on the veracity of Mr. Thomte’s statements to the PTO that “there [was] an
infringing product actually on the market[,]” he had made “a rigid comparison of the alleged
infringing product with the claims” found in the ’863 patent application, and in his opinion,
“some of the claims [were] unquestionably infringed.” See Filing No. 78, Ex. 8 - Petition
p. 1 & Statement p. 1. Thus, the underlying factual issue centers on whether Mr. Thomte
actually undertook the actions and reached the conclusions asserted in the PTMS and
SAPTMS. As such, the court finds it is unlikely that either the inventors, or any other
employee of the plaintiff would be a viable source of the information sought by Schiller.
Furthermore, the plaintiff has failed to produce any evidence to show otherwise.
Therefore, the court finds Schiller satisfies the first Shelton factor.

B.

The information sought is relevant and nonprivileged.
When a defendant accused of infringement asserts the patent-in-controversy is

invalid and unenforceable because of inequitable conduct, there is no doubt the mental
impressions of the attorney who prosecuted the allegedly invalid patent are relevant. See
aaiPharma, Inc. v. Kremers Urban Dev. Co., 361 F. Supp. 2d 770, 774 n.3 (N.D. Ill.
2005) (finding discovery from attorneys involved in prosecution of patent-in-controversy is
directly relevant to claim of inequitable conduct). Accordingly, the court’s analysis will
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focus on whether the information sought by Schiller is nonprivileged. Because Schiller
seeks information that is both factual in nature and previously disclosed, the court finds the
information sought is nonprivileged.
Although contrary authority exists, in the view of this court, the attorney-client
privilege does apply to pre-litigation aspects of a patent attorney’s practice, including the
patent application process. See In re Spalding Sports Worldwide, Inc., 203 F.3d 800,
806 (Fed. Cir. 2000) (holding attorney-client privilege applied to a document provided to
a patent attorney for the purpose of making patentability determination), and In re
Regents of Univ. of Cal., 101 F.3d 1386, 1391 (Fed. Cir. 1996) (holding attorney-client
privilege applied to pre-litigation communication between client and patent attorney ); but
see Genal Strap, Inc. v. Dar., Case No. CV2004-1691, 2006 WL 525794, at *2 (E.D.N.Y.
Mar. 3, 2006) (“[W]ork performed by an attorney to prepare and prosecute a patent
application does not fall within the parameters of the work-product protection because it
is not created in anticipation of litigation.”)
Nevertheless, the information sought by Schiller is factual in nature and it is well
established law that the attorney-client privilege cannot act to shield the discovery of
relevant facts.

See Upjohn Co. v. United States, 449 U.S. 383, 395-96 (1981)

(underlying facts transmitted between a client and attorney do not become privileged); see
also Resolution Trust Corp. v. Dabney, 73 F.3d 262, 266 (10th Cir. 1995) (“Because the
work product doctrine is intended only to guard against divulging the attorney’s strategies
and legal impressions, it does not protect facts concerning the creation of work product or
facts contained within the work product.”). Moreover, because the PTMS and SAPTMS
disclosed the actions or knowledge underlying Schiller’s inequitable conduct claim, any
privilege attached to the actions or knowledge in question has been destroyed. Therefore,
the court finds the information sought by Schiller is both relevant and nonprivileged.

C.

The information is crucial to the preparation of the case.
The court finds little difficulty concluding the information sought by Schiller is crucial

to the preparation of the case. See Alcon Labs. Inc. v. Pharmacia Corp., 225 F. Supp.
2d 340, 344 (S.D.N.Y. 2002) (finding mental impressions of patent prosecution counsel are
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“crucial” to any claim of inequitable conduct). The plaintiff argues “Mr. Thomte’s testimony
cannot be found to be crucial, for Shelton purposes, because it does not support any
defense that has been properly pled.” Filing No. 77 - Brief p. 17 (citing Exergen v.
Walmart Stores, Inc., 575 F.3d 1312 (Fed. Cir. 2009)). The crux of this argument is that
the plaintiff’s motion to dismiss Schiller’s inequitable conduct claim (Filing No. 40) will
inevitably be granted because Schiller has not pled sufficient underlying facts from which
a court may reasonably infer Mr. Thomte’s actions in the prosecution of the ’863 patent
constituted inequitable conduct.
The court finds the plaintiff’s argument unpersuasive for two reasons. First,
although the plaintiff’s motion to dismiss (Filing No. 40) is still pending, this fact does not
provide sufficient grounds for the court to conclude that Schiller’s inequitable conduct
defense will ultimately be dismissed. The fact is, Schiller’s inequitable conduct defense
is properly before the court at this time. Second, Schiller’s Amended Answer (Filing No.
57), which was filed after the plaintiff’s motion to dismiss, has likely remedied any
deficiencies that may have been present in its original Answer (Filing No. 29). In its
Amended Answer, Schiller has identified with particularity who committed the inequitable
conduct (Mr. Thomte), what claims are tainted by the inequitable conduct (the ’863 patent),
when the inequitable conduct occurred (December 23, 1998), where the misrepresentation
can be found (in the PTMS and SAPTMS), why the misstatement is material (because it
led to an accelerated issuance of the ’863 patent), and how the PTO used the
misrepresented information (led PTO to grant PTMS) as required under Exergen. See
Filing No. 57 - Amended Answer ¶ 21.
Under Shelton the practice of deposing opposing counsel should only be permitted
under limited circumstances. The court’s decision today comports with the decisions of
other courts who have permitted depositions of patent prosecution counsel when the
mental impressions and knowledge of such counsel was relevant to a claim of inequitable
conduct. See, e.g., Paragon Podiatry Lab. Inc. v. KLM Labs., Inc., 984 F.2d 1182, 1193
(Fed. Cir. 1993) (citing patent attorney’s deposition in affirming district court’s decision that
patent was invalid and therefore unenforceable); Plymouth Indus., LLC v. Sioux Steel
Co., Case No. 8:05CV469, 2006 WL 695458 (D. Neb. Mar. 17, 2006) (granting the
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defendant’s motion to compel deposition of patent prosecution counsel); Amicus Comms.
v. Hewlett-Packard Co., Inc., Case No. 99-0284, 1999 WL 33117227, at *2 (D. D.C. Dec.
3, 1999) (same); Environ Prods. Inc. v. Total Containment Inc., 41 U.S.P.Q.2d 1302,
1306 (E.D. Pa. 1996) (same); United Phosphorus, Ltd. v. Midland Fumigant, Inc., 164
F.R.D. 245, 249 (D. Kan. 1995) (refusing to limit scope of deposition of patent prosecution
counsel). Moreover, the court’s decision to deny the plaintiff’s request to issue a protective
order in no way precludes Mr. Thomte from asserting the attorney-client privilege during
his deposition, if appropriate. Upon consideration,

IT IS ORDERED:
The plaintiff’s Motion for Protective Order to Preclude Deposition of Attorney Dennis
Thomte (Filing No. 76) is denied.

ADMONITION
Pursuant to NECivR 72.2 any objection to this Order shall be filed with the Clerk of
the Court within fourteen (14) days after being served with a copy of this Order. Failure to
timely object may constitute a waiver of any objection. The brief in support of any objection
shall be filed at the time of filing such objection. Failure to file a brief in support of any
objection may be deemed an abandonment of the objection.

DATED this 18th day of April, 2011.
BY THE COURT:
s/ Thomas D. Thalken
United States Magistrate Judge

*This opinion m ay contain hyperlinks to other docum ents or W eb sites. The U.S. District Court for
the District of Nebraska does not endorse, recom m end, approve, or guarantee any third parties or the services
or products they provide on their W eb sites. Likewise, the court has no agreem ents with any of these third
parties or their W eb sites. The court accepts no responsibility for the availability or functionality of any
hyperlink. Thus, the fact that a hyperlink ceases to work or directs the user to som e other site does not affect
the opinion of the court.
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