NIPPON STEEL CORPORATION v. POSCO et al
Filing
185
OPINION AND ORDER denying 137 Appeal Magistrate Judge Decision to District Court; affirming the decision of the Special Master signed in 8/22/2013. Signed by Judge Stanley R. Chesler on 3/26/2014. (nr, )
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
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Plaintiff,
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v.
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POSCO et al.,
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Defendants.
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NIPPON STEEL & SUMITOMO METAL
CORPORATION,
Civil Action No. 12-2429 (SRC)
OPINION & ORDER
CHESLER, District Judge
This matter comes before the Court on the appeal by Defendants POSCO and POSCO
America Corporation (collectively, “POSCO”) of the Special Master’s Order of August 22, 2013,
which, inter alia, denied a number of POSCO’s discovery requests. For the reasons stated
below, the Special Master’s Order will be affirmed.
The Court’s appointment of a Special Master, and its review of a Special Master’s
decisions, are governed by Federal Rule of Civil Procedure 53. Under Rule 53(f), the Court
reviews findings of fact and conclusions of law de novo, while “the court may set aside a
master’s ruling on a procedural matter only for an abuse of discretion.” Fed. R. Civ. P. 53(f)(5).
The rulings on discovery matters contained in the Order of August 22, 2013 are procedural
matters, and they will be reviewed under an abuse of discretion standard.
POSCO appeals the Special Master’s decisions denying discovery of: 1) the prior art
manufacturing process of Plaintiff Nippon Steel & Sumitomo Metal Corporation (“Nippon”);
and 2) the measures Nippon took to protect allegedly proprietary information. While this Court
does not have in the record before it any Opinion which explains the reasoning underlying the
Special Master’s decisions, the parties do not substantially disagree in their reporting of the
rationales. The Special Master denied POSCO’s request for discovery of Nippon’s prior art
manufacturing process because POSCO had failed to disclose an Invalidity Contention based on
that prior art. POSCO concedes that L. Pat. R. 3.3(a) requires the disclosure of all prior art to be
asserted as invalidating a patent at issue in the Invalidity Contentions, and that POSCO did not
include the prior art they now seek discovery of.
Absent from POSCO’s brief is any persuasive argument even suggesting that the Special
Master abused his discretion in denying POSCO’s discovery request on the basis of L. Pat. R.
3.3(a). Based on the Invalidity Contentions POSCO disclosed, there was no assertion that the
prior high temperature manufacturing process used by Nippon constituted prior art which might
invalidate a patent at issue. POSCO’s application to amend the Invalidity Contentions has been
denied, and, since one is only entitled to discovery related to claims and defenses in the case, and
potential prior art involving the high temperature process is not in the case, it is not
discoverable.1 As to the first ground for appeal, this Court finds that the Special Master did not
abuse his discretion in denying POSCO’s discovery request, and his decision denying the request
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POSCO’s contention that its Invalidity Contentions could not have included this prior
art because it was unaware of it appear to be unsupported by the record, as the Special Master has
previously indicated. Certainly POSCO was well aware early in the case of this potential and
nevertheless never sought to assert any contentions, detailed or not, regarding what they now
allege is prior art. If our Local Patent Rules are to have any impact, they cannot create an
incentive for parties to evade disclosure of their positions until deadlines have expired.
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will be affirmed.
The next issue for appeal is puzzling. POSCO begins its argument with the heading, “If
Nippon is Permitted to Pursue Its Claims of Misappropriation and Copying, Discovery Directed
to Nippon’s Former Employees and the Allegedly Confidential and Proprietary Nature of
Nippon’s Technology is Relevant. . .” (Defs.’ Br. 16.) The Amended Complaint, however,
asserts seven claims, none of which assert as a primary cause of action misappropriation of
proprietary information. It has four claims for patent infringement, one for false advertising in
violation of the Lanham Act, one for misrepresentation as common law unfair competition, and
one for misrepresentation in violation of the New Jersey Fair Trade Act. Nippon has stated that
“it is irrelevant whether the ‘copied Nippon technology’ was confidential.” (Pl.’s Opp. Br. 11.)
Thus, to the extent that the Amended Complaint could potentially be understood to imply any
claim for misappropriation of confidential information, Nippon has abandoned such claims.
The Court concludes that the Special Master’s decision to foreclose discovery into
Nippon’s efforts to maintain the confidentiality of its processes is correct. Nippon has
unequivocally disavowed any contention that their non-patent claims are predicated on any claim
for misappropriation of confidential or proprietary information. Rather, Nippon has expressly
stated that the non-patent claims are based on the contention that POSCO falsely advertised that
the processes used by it in making GOES steel were its own when, according to Nippon, those
processes were Plaintiff’s. Such claims do not require a demonstration of the proprietary nature
of the information, nor of misappropriation. Discovery of this area is not relevant to any claims
or defenses in this case, and the Special Master did not abuse his discretion in denying these
requests.
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For these reasons,
IT IS on this 26th day of March, 2014
ORDERED that the Special Master did not abuse his discretion in denying POSCO’s
discovery requests in the Order signed on August 22, 2013, and POSCO’s appeal (Docket Entry
No. 137) of this Order is hereby DENIED; and it is further
ORDERED that the Order of the Special Master signed on August 22, 2013 is hereby
AFFIRMED.
s/ Stanley R. Chesler
Stanley R. Chesler, U.S.D.J.
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