This is part of a series of articles discussing recent orders of interest issued in patent cases by the United States District Court for the District of Massachusetts.
In Insulet Corporation v. EOFlow, Inc., No. 1:23-cv-11780, Magistrate Judge Hedges resolved multiple discovery issues.
First, emphasizing that the motions were filed months after the close of fact discovery and weeks away from trial, the Court disposed of cross motions to compel and a Motion for Protective Order by Plaintiff seeking to limit the scope of a Rule 30(b)(6) deposition. The Court had previously allowed limited discovery into certain Computer-Aided Design or CAD files held by Defendant EOFlow as well as the scope of Plaintiff Insulet's engagement of a third-party consultant regarding protection of Insulet's trade secrets.
Both parties sought documents not previously produced and that were recently discovered to exist. The Court granted Plaintiff's Motion to Compel the production of CAD files, along with metadata pursuant to the parties' ESI protocol and prior agreement.
The Court granted-in-part Defendants' Motion to Compel, ordering the production of certain documents regarding Plaintiff Insulet's third-party consultant's engagement, including emails between the third party consultant and Insulet employees other than Insulet's in-house counsel. The Court also required production of a privilege log. The Court denied Defendants' request to subpoena the third-party consultant.
The Court also granted-in-part Plaintiff's Motion for Protective Order on Defendants' Rule 30(b)(6) deposition topics related to engagement of its third-party consultant, noting that it was not ordering the Rule 30(b)(6) designee to testify about privileged communications with Insulet's in-house counsel.
Second, the Court resolved letter briefing concerning documents withheld and redacted on the basis of privilege, ordering Plaintiff to submit the challenged documents for in camera review later that same day. The disputed documents included those related to Plaintiff Insulet's engagement of the third-party consultant regarding protection of its trade secrets.
After conducting in camera review of the disputed documents, the Court found that the vast majority of the documents withheld or redacted were consistent with the Court's prior order. The Court clarified that a document need not list in-house counsel as a recipient or custodian to be considered privileged, provided the document "reflect[ed] or convey[ed] privileged legal advice or analysis." The Court reserved ruling on five documents that were inadvertently produced to the Court in native format without any proposed redactions. These five documents were re-produced with proposed redactions for in camera review. The Court ultimately found the proposed redactions to be proper.
In view of the approaching trial date, the Court stated that "the parties are strongly encouraged to cooperate among themselves to resolve any future discovery disputes."
Also in Insulet Corporation v. EOFlow, Inc., No. 1:23-cv-11780, Chief Judge Saylor ruled on both Parties' cross-motions for partial summary judgment. The case involved the alleged misappropriation of trade secrets for the design and manufacture of a medical device. Plaintiff brought claims, among others, under the Defend Trade Secrets Act ("DTSA"); unfair competition under Mass. Gen. Laws. ch. 93A; and civil conspiracy. Defendants sought summary judgment that (1) the DTSA claim is time-barred; (2) the asserted trade secrets lack sufficient specificity; (3) the alleged misconduct did not occur "primarily and substantially" in Massachusetts as required by Chapter 93A; and (4) the intra-corporate conspiracy doctrine bars the civil conspiracy claim. Plaintiff sought summary judgment as to the statute of limitations defense. The Court granted in part and denied in part Defendants' motions and denied Plaintiff's motion.
Statute of Limitations
The Parties disputed when the statute of limitations began running. Defendants, relying on decisions from other jurisdictions, argued for an "inquiry notice" standard, where the statute of limitations begins running when a party has cause for concern of a DTSA violation and would inquire into a possible injury. Plaintiff argued that the clock begins when a party actually discovers, or through reasonable diligence should have discovered, the misappropriation, relying on Supreme Court precedent interpreting analogous statutory language in the securities fraud context.
The Court relied on the statutory language and the reasoning of the Supreme Court precedent in the securities fraud context to find that the statute of limitations begins to run when a plaintiff receives actual or constructive knowledge of trade secret misappropriation. The Court denied both parties' motions for summary judgment on the issue of statute of limitations because a dispute of material fact existed as to when a reasonably diligent company should have discovered the alleged misappropriation.
Specificity of Trade Secrets
Defendants contended that two of Plaintiff's asserted trade secrets lacked sufficient specificity to maintain a DTSA claim.
The first asserted trade secret was directed to Computer-Aided Design files for Plaintiff's medical device. The Court found that such files were sufficiently specific, identifying precedent holding that detailed design drawings are prima facie trade secrets and rejecting the assertion that a trade secret plaintiff must, in the context of CAD files, identify any portions of the protected material that may be public.
The second asserted trade secret related to the design history file ("DHF") for Plaintiff's medical device. Plaintiff contended that DHF is a term of art in the medical-device industry and functions as a "playbook" for manufacturing a medical device. Plaintiff noted that the DHF contained valuable non-public information that would provide the holder with a "distinct economic advantage." While the Court recognized that the DHF likely contained a large amount of information, this was not enough to render the asserted trade secret insufficiently specific.
For both asserted trade secrets, the Court rejected Plaintiff's attempt to use non-limiting language at this stage of the case and limited them to specific documents previously disclosed.
Location of Alleged Misconduct
Defendants sought summary judgment on Plaintiff's Chapter 93A claim on the grounds that the alleged acts did not "primarily and substantially" occur in Massachusetts. The Court granted Defendants' motion for summary judgment, finding no reasonable jury could find that the alleged misconduct occurred "primarily and substantially" in Massachusetts. The Court explained that misappropriation that is potentially actionable under chapter 93A "occurred when [P]laintiff's former employees allegedly disclosed—and EOFlow allegedly acquired and used—the confidential information." In this case, the Court found that the center of gravity of the alleged misconduct occurred outside of Massachusetts where Defendant allegedly used Plaintiff's trade secrets to develop its medical develop and where Defendant sold its product.
Civil Conspiracy
Defendants sought summary judgment of no civil conspiracy under the "intra-corporate conspiracy doctrine," which states that "an agreement between agents of the same legal entity, when the agents act in their official capacities, is not an unlawful conspiracy." As to two former employees of Plaintiff, the Court found that they were acting in their official capacities as officers of EOFLow to carry out the alleged misappropriation, rather than in a solely personal capacity. The Court thus granted summary judgment, finding the intra-corporate conspiracy doctrine bars a civil-conspiracy claim. The Court also granted summary judgment as to a third individual who was an officer of EOFlow during the entirety of the alleged tortious conduct. The Court denied summary judgment as to a former employee of Plaintiff who was an independent consultant to EOFlow, finding that a material dispute existed regarding whether they acted independently or under EOFlow's control. Last, the Court granted summary judgment as to the civil-conspiracy claim as to a corporate affiliate of EOFlow.
In Chr. Hansen HMO GmBH v. Glycosyn, LLC, No. 22-cv-11090, Magistrate Judge Cabell resolved two Motions to Compel.
First, Glycosyn sought to compel Hansen to supplement its responses to two interrogatories regarding (i) its decision to use certain strains of E. Coli for commercial production of an accused product and (ii) its laboratory notebook recordkeeping policies. The Court granted in part and denied in part the motion with respect to the decision to use certain strains of E. Coli, finding certain of the information sought to be relevant to patent damages. The Court also granted the motion with respect to the laboratory notebook recordkeeping policies but imposed a temporal constraint.
Second, the Court granted-in-part Hansen's Motion to Compel non-party Newburg & Co., LLP to comply with Hansen's document subpoena seeking emails of a Newburg employee, finding that the necessary infrastructure exists as demonstrated by the fact that searches had already been run for employees of other Newburg entities. The Court observed that running the search would likely cost $10,000, and apportioned one third of the cost to Glycosyn and Newburg and the remaining two thirds of the cost to Hansen.
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