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May 19, 2005.

HU-FRIEDY MFG. CO., INC., Defendant.

The opinion of the court was delivered by: CHRISTOPHER CONNER, District Judge


Presently before the court in this patent infringement case is a motion by plaintiffs, Dentsply International Inc. and Dentsply Research and Development Corp. (collectively "Dentsply"), for sanctions against defendant, Hu-Friedy Manufacturing Company, Inc. ("Hu-Friedy"), for failure to supplement prior discovery responses as required by the Federal Rules of Civil Procedure. At issue is an application to the United States Patent Office in which Hu-Friedy requests issuance of a patent for the same process that is the subject of the infringement claims sub judice, relating to the method of manufacturing a "tip" used in dental cleaning.*fn1 The application concededly falls within a request for production of documents served by Dentsply on Hu-Friedy last year, but it was not produced until last Friday, more than five months after the close of fact discovery and less than ten days before commencement of trial. Oral argument on the motion was held earlier today.*fn2 Dentsply asserts that the patent application contained an admission that the "separate" tip of the Dentsply design is interchangeable with the "integral" tip of the Hu-Friedy design, and that the failure to disclose the application precluded Dentsply from investigating this issue prior to trial. It asks the court to find, as a discovery sanction for the late disclosure, that these components of the Dentsply and Hu-Friedy products are equivalent as a matter of law for purposes of infringement analysis.*fn3 Hu-Friedy admits error in failing to disclose the document, but argues that the mistake was inadvertent — the result of miscommunications between patent and trial counsel — and that the patent application has been in the public record and available to Dentsply since December 2004. It also contends that the application does not contain the express admission suggested by Dentsply and that a partial finding of equivalence would represent an unwarranted penalty. The court took the matter under advisement with the promises that an opinion would issue today and that the ruling would not please either party. These results have been achieved.

Federal Rule of Civil Procedure 37(c) provides for the imposition of sanctions upon a party that, "without substantial justification," fails to supplement a prior response to discovery. See FED. R. CIV. P. 37(c). Hu-Friedy concedes that the patent application falls within a request for production of documents served by Dentsply last year, and that it had a duty to disclose the application to Dentsply by December 2004 at the latest.*fn4 It also concedes that these documents were not in fact disclosed to Dentsply until last week, more than a year after the application was first submitted to the United States Patent Office.

  The excuses offered by Hu-Friedy — that the failure to disclose was inadvertent and that the material was publicly available as of December 2004 — do not constitute "substantial justification" for the error. A discovery violation may be justified on grounds of mistake when the omission occurred despite due diligence on the part of counsel and client. See, e.g., Tolerico v. Home Depot, 205 F.R.D. 169, 175-76 (M.D. Pa. 2002). This is not such a situation. The patent application was prosecuted on behalf of Hu-Friedy by the same law firm that represents the company in this litigation. The subject of the patent application is the same as the subject of the infringement claims in this case. The patent attorney who prepared the application is the same attorney who prepared a legal opinion letter in support of Hu-Friedy's defense against Dentsply's claims. And, indeed, litigation counsel for Hu-Friedy noted the pendency of the application on privilege logs submitted in this case. The patent application, and its potential relevance to the claims in this case, should have been easily recognized. The failure to disclose the application — even if inadvertent — was not substantially justified.

  The other excuse offered by Hu-Friedy — that the application was available publicly after December 2004 — is simply immaterial. The duty to supplement does not abate when documents become part of the public record. To the contrary, the federal discovery rules are designed to require disclosure of information generally without consideration of alternative means of access available to the requesting party. See, e.g., 8 CHARLES ALAN WRIGHT ET AL., FEDERAL PRACTICE AND PROCEDURE § 2014 (3d ed. 2002). That the patent application was in the public record after December 2004 does not provide justification for Hu-Friedy's failure to disclose after that time.

  While sanctions are clearly appropriate in this case, the nature of those sanctions is a more difficult question. Several factors are relevant to this issue, including harm to the opposing party and the willfulness of the violation. The ultimate goal of sanctions — and the ultimate limitation on their scope — is placement of the prejudiced party in approximately the same litigation position that it would have occupied absent the discovery violation. See, e.g., Quinn v. Consol. Freightways of Del., 283 F.3d 572, 576 (3d Cir. 2002).*fn5

  Clearly, Dentsply has been prejudiced by the late disclosure. The patent application includes statements by representatives of Hu-Friedy that are arguably inconsistent with positions taken by the company in this litigation. Had this information been disclosed earlier, counsel for Dentsply could have deposed Hu-Friedy employees and witnesses about these inconsistencies, garnered additional testimony regarding the equivalence of the designs, and pursued further investigation into these facts. These avenues are now closed, and counsel for plaintiff will be required to question these witnesses at trial without the benefit of prior deposition exchanges.

  It is also clear that Hu-Friedy's conduct approaches, if not reaches, the level of willfulness. Notwithstanding defense counsel's representations that these mistakes were unintentional — and the court credits defense counsel's candid explanation for these errors — they should have been avoided, and the responsibility for the late disclosure lies entirely on Hu-Friedy. The attorneys involved in this case should have been aware of the pending patent application and should have disclosed it in a timely manner. That they did not intend to "hide" the document does not excuse the lack of oversight that underlies the mistake. Nevertheless, the court does not believe that the sanction requested by Dentsply, a finding of partial equivalence as a matter of law, is appropriate. The patent application does not contain an express admission that the tip regions of the Dentsply and Hu-Friedy designs are equivalent. Rather, it contains language (in the claims and specifications sections) that arguably suggests by negative inference that these components are interchangeable. This inference is not necessarily justified and, even if it may be drawn, its effect is unclear. Assuming arguendo that the patent application equates the concepts of "separate" and "integral" tip regions, this fact does not mandate a finding of equivalence between the Dentsply and Hu-Friedy products. To hold that the patent application establishes partial equivalence as a matter of law would offer a windfall for Dentsply and would likely overcompensate for the effects of the discovery violation.

  A lesser, but related, sanction is appropriate. The prejudice to Dentsply may be effectively and fairly remedied by accepting the discovery violation as prima facie evidence of willfulness for purposes of judicial estoppel. This doctrine prevents a party from advancing a position if (1) the position is inconsistent with an admission made in a prior judicial or administrative proceeding and (2) the inconsistency is attributable to willful or bad faith conduct.*fn6 By construing the discovery violation as proof of willfulness, the court recognizes the seriousness of the violation and Hu-Friedy's culpability, but allows the company to explain and counter the relevance of any alleged admissions in the patent application. It also gives Dentsply the benefit of evidence of willfulness that might have been developed through depositions and assures that, to the extent that the patent application includes an admission contrary to one made by Hu-Friedy in this case, that admission will be binding upon Hu-Friedy. This sanction strikes the appropriate balance between the interests of the litigants and adequately protects the integrity of the discovery process.

  The court will also direct Hu-Friedy to compensate Dentsply for reasonable expenses, including attorney's fees, caused by the failure to disclose. See FED. R. CIV. P. 37(c). These expenses clearly include preparation of the motion for sanctions and supporting briefs, and may also encompass other costs causally linked to the late disclosure. See id. Dentsply will be directed to file an affidavit detailing expenses for which it claims compensation, and Hu-Friedy will be permitted to raise objections to those expenses if appropriate. The court will finally resolve the expenses to be assessed in a subsequent order. An appropriate order will issue. ORDER

  AND NOW, this 19th day of May, 2005, upon consideration of plaintiff's motion for sanctions (Doc. 108), and for the reasons set forth in the accompanying memorandum, it is hereby ORDERED that the motion (Doc. 108) is GRANTED as follows:
1. Plaintiffs shall be deemed, for purposes of trial in the above-captioned case, to have offered prima facie evidence that defendant acted willfully with respect to any inconsistency between positions taken in this case and admissions in applications to the United States Patent Office.
2. Assessment of expenses to be imposed against defendant will be deferred pending supplementation of the record.
a. Plaintiffs shall file an affidavit providing an itemized list of attorney's fees and expenses for which plaintiffs seek recovery on or before May 25, 2005. b. Defendant ...

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