523 F.2d 509 (2nd Cir. 1975), 222, Shattuck v. Hoegl

Docket Nº:222, Docket 74-1767.
Citation:523 F.2d 509
Party Name:187 U.S.P.Q. 1 Meredith D. SHATTUCK and Ulo Vahtra (IBM), Movants-Appellees, v. Helmut HOEGL and Giacomo Barchietto (Xerox), Respondents-Appellants.
Case Date:July 16, 1975
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit

Page 509

523 F.2d 509 (2nd Cir. 1975)

187 U.S.P.Q. 1

Meredith D. SHATTUCK and Ulo Vahtra (IBM), Movants-Appellees,


Helmut HOEGL and Giacomo Barchietto (Xerox), Respondents-Appellants.

No. 222, Docket 74-1767.

United States Court of Appeals, Second Circuit

July 16, 1975

Argued Nov. 25, 1974.

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Francis J. Hone, New York City (Brumbaugh, Graves, Donohue & Raymond, New York City, on the brief), for respondents-appellants.

Joseph G. Walsh, San Jose, Cal. (Clyde C. Metzger, Robert J. Kadel, Sidney R. Bresnick, and Pennie & Edmonds, New York City, on the brief), for movants-appellees.

Before CLARK, Associate Justice, [*] and MOORE and TIMBERS, Circuit Judges.

TIMBERS, Circuit Judge:

On this appeal from an order entered May 7, 1974 in the Western District of New York, Harold P. Burke, District Judge, pursuant to 35 U.S.C. § 24 (1970), 1 directing a deposition witness, Dr. John W. Weigl, to produce certain documents and to testify with respect thereto in connection with a Patent Office interference proceeding, we find decisive the threshold question whether the order is appealable as a final decision within the meaning of 28 U.S.C. § 1291 (1970). 2

We hold that the order is not appealable and therefore we dismiss the appeal for lack of appellate jurisdiction.

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The instant discovery proceedings in the district court are ancillary to a patent interference proceeding (Interference No. 98,047), 3 which presently is pending in the United States Patent Office between Meredith D. Shattuck and Ulo Vahtra (Shattuck) and Helmut Hoegl and Giacomo Barchietto (Hoegl).

The real parties in interest are International Business Machines Corporation (IBM), assignee of Shattuck U. S. Patent No. 3,484,237, and Xerox Corporation (Xerox), assignee of Hoegl application Serial No. 108,548, filed January 29, 1971. The latter is a continuation-in-part of Hoegl application Serial No. 519,081, filed January 6, 1966. In this opinion, we shall refer to the real parties in interest: IBM (Shattuck) and Xerox (Hoegl).

The patent interference involves IBM's production of copier machines which began in April 1970. In January 1966, Hoegl filed a parent patent application relating in part to a photoconductive composition involved in the copying process. In December 1969, the disputed Shattuck patent also relating to this composition issued to IBM. In January 1971, after learning of the issuance of the Shattuck patent, Xerox filed a continuation-in-part (CIP) application which was accompanied by a declaration of inventorship in which Hoegl and Barchietto claimed to be the first inventors. After institution by the Patent Office on August 16, 1972 of patent interference No. 98,047 between the Shattuck patent and the Hoegl CIP application, Hoegl and Barchietto in November 1972 swore in their preliminary statement in this interference proceeding that they were the first inventors.

IBM initially sought discovery in the Patent Office on various issues relating to the interference, including the possibility of fraud on the Patent Office in connection with Xerox's CIP application and its preliminary statement. The gravamen of IBM's charge was that Xerox attorneys were aware of relevant prior art work by members (Mammino and Salasny) of a technical group directed by Dr. John W. Weigl, an employee of Xerox, when the Xerox attorneys caused Hoegl and Barchietto to make (1) the declaration of inventorship in the CIP application in which they declared that they believed themselves to be the "original, first and joint inventors" of the subject matter thereof, and (2) the preliminary statement in the interference in which they swore that they were the inventors of the subject matter of the interference. If Xerox's attorneys had improperly withheld from the Patent Office evidence of the Weigl group's work, this could constitute fraud and could provide grounds for striking Xerox's preliminary statement. Priority of invention in that event would be awarded to IBM.

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Xerox's position is that the work of the Weigl group was abandoned and therefore did not constitute prior art under 35 U.S.C. § 102(g) (1970), there being no duty to disclose to the Patent Office abandoned work which is not prior art.

IBM's motion for discovery under Patent Office Rule 287(c) 4 was essentially denied on December 20, 1973 by the Board of Patent Interferences. In so ruling, the Board stated:

"Turning to the question of possible fraud by Hoegl et al., we do not consider that the showing by Shattuck et al. in support of their motion establishes that the interest of justice requires the ordering of the additional discovery requested. Where, as here, a broad allegation of fraud has been leveled by one of the parties no order for broad discovery will be issued merely to investigate the possibility of the existence of fraud . . . ."

The Board considered the possibility of fraud in the CIP application to be irrelevant to the question of priority of invention at issue in the interference. It did grant discovery to IBM, however, on the question of fraud in the preliminary statement but only to the extent that Xerox did not oppose answering three interrogatories. The Board then added somewhat cryptically:

"It should be further noted in connection with the Shattuck et al. request for the production of witnesses that this Board has no authority to order or force a person to testify on an interference proceeding. Shattuck et al. can, however, call the persons involved as their own witnesses which apparently is what they intend to do."

On February 11, 1974, by a subpoena duces tecum issued pursuant to 35 U.S.C. § 24, IBM sought to obtain certain documents from Dr. Weigl (among others) relating to work done before August 1, 1964 which involved the subject matter of the interference and to take his testimony with respect thereto. Dr. Weigl appeared for his deposition. On the advice of the Xerox attorneys, however, he refused to answer any questions of substance propounded by IBM or to produce the subpoenaed documents.

IBM then moved in the district court for an order to compel Dr. Weigl to produce the documents and to testify about them. Xerox opposed the motion on the ground that the district court was without authority to order the relief sought in view of the Patent Office's denial of discovery and on the further ground that the documents sought were not relevant to the interference because any work done by the Weigl group was unrelated to the issue of priority as between Shattuck and Hoegl.

On March 26, 1974, after oral argument and submission of written memoranda, the district court granted IBM's motion. It held that the subpoenaed documents and testimony had a direct bearing on the allegations of fraudulent misconduct on Xerox's part in filing the preliminary statement. The court held that the discovery sought was relevant to the interference because alleged fraud was ancillary to priority of invention and, if established, would provide a basis for striking the preliminary statement. Viewing its order as complementing "patent office jurisdiction in search for the truth", the court stated:

"The movants are entitled to unrestricted access to sources of information bearing on the question of fraud. Weigl is not a party to the interference proceeding. He has no standing to refuse to answer questions asked at

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the deposition on the ground that they are irrelevant to the interference proceeding."

Xerox did not appeal from this order. The deposition of Weigl was resumed on April 5, 1974. On the advice of the Xerox attorneys, however, Weigl continued to withhold three documents within the scope of the subpoena, claiming that they were attorney-client privileged communications or the work-product of attorneys.

IBM moved in the district court to compel compliance with the court's order of March 26. On May 7, after further oral argument and submission of additional written memoranda, the court overruled Xerox's claim of attorney-client privilege, and directed Weigl to produce the three documents and to answer all questions about them. After quoting from its previous order, the court stated:

"It is essential that Shattuck, et al., have access to the documents to be able to present the facts to the Patent Office regarding the issue of fraud."

Xerox took the instant appeal from the order entered May 7, 1974.


In ordering disclosure pursuant to Rules 30 and 37, Fed.R.Civ.P., the district court exercised its jurisdiction under 35 U.S.C. § 24 which gives ancillary jurisdiction to the district courts to compel attendance of witnesses and production of documents in patent interference proceedings. Babcock & Wilcox Co. v. Combustion Engineering, Inc., 314 F.Supp. 235, 237 (D.Conn.), Aff'd on district court's opinion, 430 F.2d 1177 (2 Cir. 1968).

Before we may reach the merits of the district court's order, however, we first must determine the threshold question whether we have appellate jurisdiction to review it. Xerox has taken the instant appeal pursuant to 28 U.S.C. § 1291 (1970), asserting that the district court's order is a final decision within the meaning of § 1291. 5 We disagree.

It is axiomatic that consideration of the finality of disclosure orders of a district court involves a balancing process. On the one hand, there is the deeply rooted federal policy against piecemeal review and the obstruction of an ongoing judicial proceeding through such review. If the person against whom such an order is directed insists upon interlocutory review, he may be required to risk a contempt citation and subsequent review of the contempt order rather than to be permitted to appeal the disclosure order itself. See United States v. Fried, 386 F.2d 691, 695 (2 Cir. 1967). On the other hand, interlocutory review of a disclosure order may be proper where denial of such review would effectively preclude any review...

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