Ideal Toy Corp. v. Tyco Industries, Inc.

• Decision Date: 30 October 1979
• Docket Number: Civ. A. No. 78-388.
• Citation: 478 F. Supp. 1191
• Parties: IDEAL TOY CORPORATION, Plaintiff, v. TYCO INDUSTRIES, INC., Defendant.
• Court: U.S. District Court — District of Delaware

478 F. Supp. 1191

IDEAL TOY CORPORATION, Plaintiff, v. TYCO INDUSTRIES, INC., Defendant.

Civ. A. No. 78-388.

United States District Court, D. Delaware.

October 30, 1979.

Walter L. Pepperman, II, of Morris, Nichols, Arsht & Tunnell, Wilmington, Del., for plaintiff; Lewis H. Eslinger, of Curtis, Morris & Safford, P. C., New York City, of counsel.

Nathan Bakalar and James S. Green, of Connolly, Bove & Lodge, Wilmington, Del., for defendant; and Ronald L. Panitch and Roberta L. Jacobs, of Seidel, Gonda, Goldhammer & Panitch, P. C., Philadelphia, Pa., of counsel.

OPINION

MURRAY M. SCHWARTZ, District Judge:

Tyco Industries, Inc., the defendant in a patent infringement action brought by the Ideal Toy Corporation, has moved for reconsideration of a ruling from the bench denying portions of Tyco's motion to compel discovery. Tyco's original motion to compel concerned, among other things, a demand in its interrogatories that Ideal produce the file wrappers of two abandoned and one pending patent application.¹

In support of its motion for reconsideration, Tyco asserts a need to inspect the file wrappers to determine if they contain prior art that would reflect adversely on the validity of the patents in suit, and further, to search them for admissions made in the prosecution of these applications that now could be used to attack the validity and scope of the claims of the patents in suit and ultimately their validity. Further, Tyco alleges that the applications sought to be discovered, the first of which was filed over a year before the application date of at least one of the patents in suit, contains claims identical to those in the patents originally in this litigation.²

Tyco correctly argues that although the Patent and Trademark Office is required to keep applications for patents confidential and is allowed to divulge no information concerning the same except under limited circumstances not applicable here, 35 U.S.C. § 122 (1976), that prohibition is not applicable to the United States District Court. The matter is not so straight-forward as Tyco suggests, for the absence of a statutory prohibition does not mean there is an automatic entitlement to abandoned and pending file wrappers. Rather, the question of whether disclosure should be ordered requires a balancing of competing policy and litigation interests. Disclosure of file wrappers of pending and abandoned applications should be ordered when the necessity for disclosure outweighs the desirability of maintaining the secrecy of data in the file wrapper, especially if protective measures can be fashioned to minimize the intrusion or to prevent excessive dissemination of the revealed material. Conversely, if the need to examine the file wrapper is less than the interest served in protecting secrecy, or if confidentiality could not be effectively protected by other means, disclosure should not be ordered. An exegesis of the relevant authority demonstrates how courts have applied this standard.³

In Carrier Manufacturing Co. v. Rex Chainbelt, Inc. 281 F.Supp. 717 (E.D.Wisc. 1968), the plaintiff sought to discover whether the defendant had filed any patent applications on the disputed subject matter, and if so, on what dates. The plaintiff did not, however, seek to discover the contents of these applications or the applications themselves. The Court held that this information was "relevant" and should be disclosed. Id. at 718-19.

In a similar vein, though it deferred action on the request for a protective order, the Court in Deering Milliken Research Corp. v. Tex-Elastic Corp., 320 F.Supp. 806 (D.S.C.1970), suggested that it would not "require a party to answer whether it has filed or abandoned a patent application ... unless it is clear that such information is materially connected with the instant litigation." Id. at 810.

The discovery request in Scovill Manufacturing Co. v. Sunbeam Corp., 61 F.R.D. 598 (D.Del.1973), was whether Scovill had conducted any patentability studies or filed any patent applications regarding the matter in question, and if so, to identify the studies and applications. This Court, applying a standard of "relevancy," ordered disclosure of this information, stating that relevancy was construed extremely liberally in the context of pretrial discovery, and that "the documents sought were within permissible limits" of relevancy. The Court did, however, afford extra protection to Scovill's interest in the secrecy of its applications by limiting disclosure to Sunbeam's trial counsel only, "to prevent its improper use by Sunbeam." Id. at 602.

This Court has also countenanced a more serious breach of secrecy when balanced by a protective order. In Celanese Corp. v. E. I. duPont de Nemours & Co., 58 F.R.D. 606 (D.Del.1973), the Court required compliance with a request for the production of "any abandoned U.S. patent applications" filed during a certain period with respect to specified subject matter, but imposed a protective order limiting review of the documents to petitioners' counsel.

The existence of a protective order coupled with a prior voluntary waiver of secrecy led one Court to require production of patent applications. In Crown Machine & Tool Co. v. KVP-Sutherland Paper Co., 244 F.Supp. 543 (N.D.Cal.1965), the plaintiffs had already allowed the defendant's counsel to inspect the documents in question. The Court granted the defendant's request for production of these items for copying and use as evidence at trial, but imposed two conditions on disclosure: that the documents be produced to the Court in camera for a determination of their relevancy, and that the defendant's counsel receive the information as officers of the court and not reveal it to the defendant or anyone else. Id. at 544.

When secrecy had been voluntarily breached but revealing of the content of a defendant's file wrapper would not have materially aided the determination whether the defendant had infringed the plaintiff's process patent, disclosure was not compelled. In Great Lakes Carbon Corp. v. Continental Oil Co., 23 F.R.D. 33 (W.D.La. 1958), the defendant had voluntarily opened its plant to inspection by the plaintiff's engineers and attorneys, who consequently had the opportunity to observe firsthand the allegedly infringing process. Plaintiff nonetheless sought defendant's pending patent applications which showed improvements presumably embodied in the plant under surveillance by the plaintiff's personnel. Declining to order production, the Court stated:

While the defendant has a legitimate interest in the protection of its patent application, that interest must be balanced with the right of the plaintiff to discover the full truth. Disclosure should be ordered where the issues cannot be fairly adjudicated without it. Here, the information contained in the application might be helpful to plaintiff, but it is certainly doubtful as to whether the probative value of that information is strong enough to justify an invasion of Continental's right to secrecy.

Id. at 35.

Similarly, in Zenith Radio Corp. v. Dictograph Products Co., Inc., 6 F.R.D. 597, 598 (D.Del.1947), the defendant sought to obtain copies of plaintiff's rejected patent applications or permission to obtain them from the Patent Office. The defendant wanted to inspect these applications in the hope that plaintiff had taken a contrary position as to validity or had admitted validity of defendant's patent during the prosecution of the rejected applications. This Court held that such...