A Blog About Intellectual Property Litigation and the District of Delaware


Entries for date: August 2020

Court Unseals Transcript of "Whistleblower" Letter that Derailed Xcoal Trial

Andrew E. Russell, Aug. 31, 2020
Sealing Litigation

Last week I wrote about the Xcoal breach-of-contract bench trial, which was adjourned after opening statements due to an "anonymous letter" discussed at a sidebar.

The Court has now unsealed the transcript of that sidebar, which includes the contents of the "anonymous letter" (as read into the record).

It turns out that the letter, signed "Xcoal whistleblower" and sent to defendants' counsel, alleges that plaintiff Xcoal's founder had planned to "cause a default" on the contract at issue, so that the company could collect on a $10 million guarantee that was part of the contract.

It alleges that he planned "to cause default by delayed coal shipments, withhold payments, and extract penalties from [defendant] Bluestone."

The contract involved lab …

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Judge Burke Sets Forth Views on Impermissible Discovery in Trade Secret Actions

Andrew E. Russell, Aug. 28, 2020
Discovery

Restricted Data Notice
"Restricted Data" stamp, RestrictedData, CC BY 2.0

In another part of the opinion mentioned earlier today, Judge Burke set forth his views on the scope of discovery in a trade secret action—an issue that comes up a lot, along with the related issue of the disclosure of the alleged trade secrets:

As to what is not relevant trade secret discovery: what [Plaintiff] is not entitled to do is to set out a claim in Count IX for trade secret misappropriation—i.e., a claim involving a certain set of alleged facts, occurring in a certain alleged time frame, involving a certain referenced set of persons and a certain type of purported misconduct—and then say to [Defendant], “Now that we have …
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The Court: Broad, General Interrogatories Merit Only Broad, General Answers

Andrew E. Russell, Aug. 28, 2020
Interrogatories Discovery

Judge Burke yesterday unsealed a lengthy opinion addressing a range of discovery disputes in a pending trade secret litigation.

In one instance, plaintiff sought to force a further response to a broad interrogatory, and complained that Defendant's broad answer omitted important time periods. The interrogatory asked:

[D]escribe in detail the stage of R&D, design, documentation, clinical work, marketing and/or sales of the [relevant product] at the time [Defendant] or anyone on behalf of [Defendant] was in first contact with any Former [Plaintiff] Employee . . . .

Judge Burke denied the request, noting that the time periods Plaintiff complained about were from before the alleged trade secret theft, and therefore it was not clear why they were relevant. He also …

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Eleven Terms Enter, Ten Terms Leave

Nathan R. Hoeschen, Aug. 27, 2020
10 Terms Claim Narrowing

Claim Construction Meet and Confer Ends in the Usual Way
Claim Construction Meet and Confer Ends in the Usual Way Ein Gedenkbuch an das glorreiche Jahr 1866 in Wort und Bild, British Library, Unsplash

Last Friday, Judge Noreika ordered the parties in two separate actions to submit revised joint claim charts "identifying no more than a total of ten (10) terms to be argued at the [claim construction] hearing."

The Ongoing Struggle to Limit Terms

This represents a bit of an escalation in the Court's struggle to reduce the number of terms it construes, largely led by our newest Judges, Noreika and Connolly. Last year, Judge Noreika begin issuing her "now-standard post-briefing order directing the parties to meet and confer in an attempt to narrow issues prior to the …

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Xcoal Trial Derailed by "Anonymous Letter," like "Something Out of a John Grisham Novel"

Andrew E. Russell, Aug. 26, 2020
Trial Litigation

Artist's rendering of the
Brando Makes Branding, Unsplash

The trial in Xcoal Energy & Resources v. Bluestone Energy Sales Corp., C.A No. 18-819-LPS (D. Del.) was adjourned this morning following receipt by the parties of an "anonymous letter." The trial had started yesterday, after the Court previously overruled Xcoal's due process objections to a remote trial.

All of the discussion of the letter was at sidebar, so its contents are not yet public. But it must be something interesting!

The parties had asked for a sidebar immediately after opening statements yesterday. Counsel mentioned that the situation is like "something out of a John Grisham novel."

At the sidebar, they read the "anonymous letter" into the record, and both parties …

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Excluded, Again

Jeff Castellano, Aug. 25, 2020
Expert Discovery Motion to Strike

Although it requires some reading between the redacted lines, Judge Stark's recent ruling in H. Lundbeck A/S v. Apotex, Inc., C.A. No. 18-88-LPS is worth the effort. It shows that while sometimes exclusion orders leave the door open a crack to introduce the excluded evidence in some other fashion, that is not always the case.

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Chief Judge Stark Posts Public Zoom Link for Trial Starting Tuesday [Updated]

Andrew E. Russell, Aug. 24, 2020
Litigation COVID-19

Today, Chief Judge Stark posted a public Zoom link for a bench trial starting Tuesday morning:

The bench trial is available to the public by telephone, using dial in: 1−703−552−8058 Code: 944408, or by video, using the following link: https://trialgraphix.zoom.us/j/93843275500, Meeting ID: 938 4327 5500 and Passcode: 974842. Audio or video reproduction of the proceeding is strictly prohibited.

This is a competitor case involving a contract for the delivery of coal—it's the one where the defendant attempted to delay the trial using due process arguments. Trial is scheduled to start Tuesday and run through Friday:

  • Tuesday, August 25: 9 am to 5 pm
  • Wednesday, August 26: 9 am to 5 pm
  • Thursday, August 27: 8:30 am to 10 …
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Judge Andrews Cites Size of Latham & Watkins in Denying Schedule Extension After Change in Counsel

Andrew E. Russell, Aug. 21, 2020
Litigation Scheduling

Stopwatch
Stopwatch Veri Ivanova, Unsplash

In First Quality Tissue, LLC v. Irving Consumer Products Ltd., C.A. No. 19-428-RGA (D. Del.), defendant swapped its previous counsel, Michael Best, for Latham and Watkins, and sought a twelve-week extension of the schedule.

The parties agreed that some kind of extension was needed regardless of the change in counsel, with numerous pending disputes, 24 noticed depositions, and only 3 days left in discovery. Plaintiff proposed a 4-week extension. Even with four weeks, the parties would likely have to dual-track the depos to get them done in time.

Judge Andrews, however, did not buy the idea that a change in counsel warrants a large schedule extension, and held that the responsibility for …

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Always Be Supplementing

Nathan R. Hoeschen, Aug. 20, 2020
Expert Discovery Deposition

Unusually Spry Expert Rushes to Supplement Report
Unusually Spry Expert Rushes to Supplement Report Man Holding Handbag, Andy Beales, Unsplash

Judge Andrews recently granted a motion in limine precluding a party from presenting expert opinions that were not disclosed until the expert's deposition -- without analyzing the Pennypack factors.

The correct procedure for challenging a late disclosure of theories or evidence has long been a matter of some debate in Delaware. There are cases suggesting that the party seeking to update its contentions should move for leave to do.

More commonly, a party will simply serve updated contentions or expert reports that the opposing party moves to strike. Regardless, the motions are generally analyzed under the demanding Pennypack factors, with the usual result that the …

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Judge Burke Rejects Attempt to Probe Communications with Prosecution Counsel

David M. Fry, Aug. 19, 2020
Privilege

You can't gain access to privileged communications by claiming your discovery request seeks "just the facts."

In a lengthy oral order yesterday, Judge Burke denied a motion to compel responses to interrogatories seeking plaintiffs' communications with their prosecution counsel.

For the first interrogatory, the decision was "not a difficult one." It sought "all facts" provided to prosecution counsel "regarding certain subject matter relevant to Defendants' inequitable conduct defenses and counterclaims." There's no way to respond to an interrogatory like this without revealing the substance of attorney-client communications.

The second was "a bit less sweeping[,]" but not by much. It asked the plaintiffs to identify all prior art and FDA correspondence provided to their prosecution counsel, including details like the day …

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