Quantum Corp. v. Tandon Corp.

• Decision Date: 31 July 1991
• Docket Number: No. 91-1296,91-1296
• Citation: 940 F.2d 642
• Parties: QUANTUM CORPORATION and Plus Development Corporation, Plaintiffs-Appellees, v. TANDON CORPORATION, Defendant-Appellant.
• Court: U.S. Court of Appeals — Federal Circuit

Page 642

940 F.2d 642

QUANTUM CORPORATION and Plus Development Corporation Plaintiffs-Appellees, v. TANDON CORPORATION, Defendant-Appellant.

No. 91-1296.

United States Court of Appeals Federal Circuit.

July 31, 1991.

James W. Geriak of Lyon and Lyon, Los Angeles, Cal., for plaintiffs-appellees; Thomas J. Morgan, of counsel.

John B. Pegram of Davis, Hoxie, Faithfull & Hapgood, New York City, for defendant-appellant; Andrew T. D'Amico, Jr., of counsel.

ON MOTION

Before MICHEL and LOURIE, Circuit Judges, and COWEN, Senior Circuit Judge.

MICHEL, Circuit Judge.

ORDER

Tandon Corporation seeks to appeal the April 19, 1991 order of the United States District Court for the Northern District of California, No. C89-1812, denying its motion for separate trials on the issue of willfulness and denying its motion to certify an earlier order compelling discovery of

certain opinion letters of counsel. Quantum Corporation moves to dismiss the appeal. Because the order sought to be appealed is not yet final, we grant Quantum's motion and dismiss the appeal.

BACKGROUND

This matter arises from the pre-trial stages of a patent infringement suit brought by Quantum Corporation and Plus Development Corporation (Quantum) against Tandon Corporation (Tandon) in the United States District Court for the Northern District of California. In July, 1990, Quantum moved to compel Tandon to produce documents relating to prelitigation opinion letters of counsel regarding the patents in suit or, in the alternative, to preclude all reference to or reliance upon such communications by Tandon. Tandon countermoved for separate trials on the issues of willfulness and reissue intervening rights, if necessary, after the conclusion of the trial on liability and damages, and for deferral of discovery of the attorney opinion letters until after the trial on liability and damages.

At a July 1990 hearing, the district court considered the motions. It ruled from the bench that liability and damages would be tried together, but deferred ruling on whether willfulness would be tried separately and whether, after in camera review, production of the documents would be compelled.

After in camera review, on March 13, 1991, the district court granted Quantum's motion to compel Tandon to produce the attorney-client documents. Tandon moved for "amendment" of the March 13 order, requesting a ruling on the issue of a separate trial on willfulness, and for certification pursuant to 28 U.S.C. Sec. 1292(b), (c)(1) of the March 13 order and of any adverse ruling denying severance of the willfulness issue. The issue of a separate trial on intervening rights was not pursued after the March 1991 proceeding.

On April 18, 1991, the district court denied Tandon's motion to defer the trial on willfulness and denied Tandon's motion for certification of the bifurcation and document production issues. Tandon noticed an appeal.

Quantum moves to dismiss the appeal of Tandon and for attorney fees and costs. Tandon opposes the motions. Quantum moves for leave to file a reply, with reply attached. Tandon responds with a surreply.

DISCUSSION

Quantum argues that Tandon's appeal must be dismissed as the orders appealed from are interlocutory and hence not appealable. Tandon argues, however, that this case is one of a small class of decisions too important to be denied review and too independent of the cause itself to require that appellate consideration be deferred until the whole case is adjudicated, and therefore that the Cohen collateral order doctrine applies. Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 546, 69 S.Ct. 1221, 1225-26, 93 L.Ed. 1528 (1949). ¹ Tandon states that this case "presents an opportunity for this Court to show how the attorney-client privilege of an accused party can be, and should be, preserved in most patent cases, while also preserving the patentee's right of pre-trial discovery relating to alleged willful infringement and to reissue intervening rights." Tandon's Response at 1.

Proper resolution of the dilemma of an accused infringer who must choose between the lawful assertion of the attorney-client privilege and avoidance of a willfulness finding if infringement is found, is of great importance not only to the parties but to the fundamental values sought to be preserved by the attorney-client privilege. An accused infringer, therefore, should not, without the trial court's careful consideration, be forced to choose between waiving the privilege in order to protect itself from a willfulness finding, in which case it may risk prejudicing itself on the question of liability, and maintaining the privilege, in which case it may risk being found to be a willful infringer if liability is found. Trial courts thus should give serious consideration to a separate trial on willfulness whenever the particular attorney-client communications, once inspected by the court in camera, reveal that the defendant is indeed confronted with this dilemma. While our court has recognized that refusal of a separate trial will not require reversal in every case involving attorney client communications bearing on willfulness, we have suggested the advisability of separate trials in appropriate cases. See Fromson v. Western Litho Plate & Supply Co., 853 F.2d 1568, 1572, 7 USPQ2d 1606, 1611 (Fed.Cir.1988) ("That approach may be useful in meeting the attorney-client privilege problem.").

However, we agree with Quantum that these two orders, which involve immediate discovery and a refusal to defer the willfulness issue are not now appealable. They do not satisfy the third requirement of the Cohen doctrine, because they are effectively reviewable on appeal from a final judgment. Thus, in Jeannette Sheet Glass Corp. v. United States, 803 F.2d 1576, 1581 (...