This is another one where I saw a potentially useful order about an issue that comes up from time to time, and thought "I should write a blog post about that, so I can find it later." I hope this will be helpful for others as well.
Last week in Nexus Pharmaceuticals, Inc. v. Exela Pharma Sciences, LLC, C.A. No. 22-1233-GBW (D. Del.), the Court addressed the question of whether a plaintiff in a "competitor-competitor" patent case could compel production of the defendant's corporate-level financials. It held that no, it could not, because they are simply not relevant enough:
Nexus seeks to compel production of Exela's corporate-level financials. Nexus contends that Exela's corporate-level financials are relevant to damages, to willfulness, and to the question of whether Nexus can receive an injunction (if Exela cannot pay the damages). Courts regularly deny discovery into corporate-level financial information not tied to the infringing products absent a compelling justification. . . . Nexus admits that its claims for damages are measures of what Nexus lost and thus Exela's profitability is not relevant to its measures of damages. . . . Nexus' most specific justification to receive corporate-level financials is to determine if Exela will be able to pay the sought damages and thus whether Nexus should seek a permanent injunction. Any such request is, "[a]t this juncture... so marginal and speculative, it is outweighed by the potential harm occasioned by production. . . . Accordingly, Nexus' request for corporate-level financials is DENIED WITHOUT PREJUDICE. ORDERED by Judge Gregory B. Williams on 9/3/24.
Nexus Pharmaceuticals, Inc. v. Exela Pharma Sciences, LLC, C.A. No. 22-1233-GBW, D.I. 122 (D. Del. Sept. 3, 2024).
In one sense that's not a surprising result. Corporate-level damages information is often precluded at trial as prejudicial. It usually has no relevance to a patent damages analysis.
But it's interesting that the Court weighed the relevance against the "potential harm occasioned by the production" rather than the burden of production.
The order doesn't delve into the potential harms, but cites Kimberly-Clark Worldwide v. First Quality Baby Prods., C.A. No. 09-1685, 2011 U.S. Dist. LEXIS 170806 (M.D. Pa. Dec. 21, 2011). That case seemed concerned with the sensitive nature of the data. It held that a defendant "should not be compelled to produce sensitive, confidential financial records" in a similar instance where they had limited relevance. Id., at *13.
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