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Medical Technology, Inc. v. Breg

September 21, 2010

MEDICAL TECHNOLOGY, INC. D/B/A BLEDSOE BRACE SYSTEMS, PLAINTIFF/COUNTERCLAIM DEFENDANT,
v.
BREG, INC., DEFENDANT/COUNTERCLAIM PLAINTIFF,
PRO (MEDEAST) AND PROFESSIONAL RECONSTRUCTIVE ORTHOPEDICS, INC. D/B/A MEDEAST POST-OP SURGICAL, MOVANTS.



The opinion of the court was delivered by: Henry S. Perkin United States Magistrate Judge

Principal Case Currently Pending in the U.S. District Court for the Northern District of Texas, Dallas Division, No. 3:09-cv-01328B

MEMORANDUM

Before the Court are two Motions by non-parties Professional Reconstructive Orthopedics, Inc. d/b/a MedEast Post-Op Surgical ("MedEast Post-Op") and Pro (Medeast) (collectively "MedEast") to Quash Third-Party Subpoenas issued by Breg, Inc. ("Breg")(Dkt. Nos. 1 & 2), and Breg's Responses (Dkt. Nos. 5 & 6).*fn1 The subject subpoenas arise from a patent infringement case pending in the District Court for the Northern District of Texas. MedEast Post-Op and Pro (MedEast) are not parties to that litigation. For the reasons that follow, the Motions to Quash will be denied.

I. BACKGROUND

On July 15, 2009, Medical Technology, Inc. d/b/a Bledsoe Brace Systems ("Bledsoe") initiated a patent infringement case in the District Court for the Northern District of Texas against Defendant Breg. See, Medical Technology, Inc. d/b/a Bledsoe Brace Systems v. Breg, Inc., No. 3:09-cv-01328-B (N.D. Tex.), D.I. 8 ("the Texas litigation"). Bledsoe and Breg manufacture orthopedic, post-operative, reconstructive and rehabilitative products for hospital and orthopedic offices worldwide. Bledsoe is a Texas corporation and Breg is a California corporation. Numerous products from each company compete directly in the marketplace, including three groups of products at issue in the Texas litigation: (1) cold therapy devices that circulate a cool fluid through a pad applied to the knee or other body part; (2) post-operative braces incorporating an adjustable hinge; and (3) functional braces for treating unicompartmental osteoarthritis.

In selling its products, Breg, in part, associates itself with other companies that act as distributors or sales representatives. In turn, these distributors and sales representatives facilitate the sale of the products by forming relationships with doctors and other users, providing technical information about the products and acting as conduits and facilitators for the sale of the products and reimbursement from insurance providers. The distributors and sales representatives retain a portion of the revenue in the form of profit or commission. MedEast formerly distributed Breg products. To the best of Breg's knowledge, MedEast are now distributors or sales representatives of the Bledsoe products at issue in the Texas litigation, which products allegedly infringe Breg's patents. Breg's counterclaims in the Texas litigation allege that Bledsoe infringes Breg's patents by its supply of infringing products to MedEast, but Bledsoe denies this allegation.

Discovery commenced in the Texas litigation on March 18, 2010. On and since that day, Breg has served numerous interrogatories and document requests on Bledsoe. Breg contends that it has only received a handful of documents responsive to the requests, none of which would be responsive to the subject subpoenas. On May 12, 2010, Breg served MedEast with the subpoenas duces tecum requesting information on sixteen substantive topics on or before May 25, 2010. The subpoenas addressed to MedEast Post-Op and Pro (MedEast) are identical. Breg believes that MedEast may not only have evidence of Bledsoe's direct infringement of Breg's patents, but also Bledsoe's indirect infringement of Breg's patents and of the willfulness of Bledsoe's infringement of Breg's patents. MedEast has not denied having such evidence or argued that it would be difficult to locate and produce related documents. MedEast states that it does not "sell Bledsoe products" but rather that it "services individuals who use orthopedic products." MedEast responded to the subpoenas by filing the instant Motions to Quash.

II. DISCUSSION

MedEast moves to quash the subpoenas pursuant to Federal Rule of Civil Procedure 45(c)(3)(A)(iii) and (iv) because it claims that the subpoenas require disclosure of privileged or other protected matter and subject it to undue burden. In support of these Motions, MedEast claims that: (1) the subpoenas are unduly burdensome because they seek information that is allegedly not relevant to Breg's defenses or claims in the Texas litigation, and they are unreasonably cumulative of information better obtained from parties in the Texas litigation; (2) the subpoenas improperly seek production of highly confidential information; and (3) the apparent purpose of the subpoenas is to harass MedEast and gain business intelligence.

Until recently, MedEast was a distributor of the Breg patents at issue in the Texas litigation. Now, to the best of Breg's knowledge, MedEast is a distributor of the Bledsoe products at issue in the Texas litigation which allegedly infringe Breg's patents. Breg's counterclaims in the Texas litigation allege that Bledsoe infringes Breg's patents by virtue of Bledsoe's supply of allegedly infringing products to MedEast, but Bledsoe denies this allegation. Thus, Breg's subpoenas are intended to explore these disputed issues. Each of MedEast's contentions are examined seriatim.

A. Whether the Subpoenas are Unduly Burdensome

In order to establish "undue burden" under Rule 45 (c)(3)(A)(iv), MedEast must show a "clearly defined and serious injury." City of Petersburg v. Total Containment, Inc., Misc. No. 07-191, 2008 WL 1995298, at *2 (E.D. Pa. May 5, 2008)(Stengel, J.)(quoting Transcor, Inc. v. Furney Charters, Inc., 212 F.R.D. 588, 592-93 (D. Kans. 2003)(general assertions of competitive disadvantage insufficient to show undue burden for purpose of a motion to quash)). MedEast broadly states that does not believe it has any documents that may be relevant to this litigation and it is not involved in the day-to-day operations of Bledsoe. Breg notes that MedEast has not denied having responsive evidence or argued that it would be difficult to locate and produce related documents. "Not being involved in the day-to-day operations of Bledsoe" allows, according to Breg, that Bledsoe may be involved in MedEast's operations as one would expect in a supplier-distributor relationship. Moreover, MedEast is represented by Bledsoe's trial counsel.

1. Whether the Subpoenas Seek Irrelevant Information

MedEast contends that the subpoenas are unduly burdensome because they seek information regarding MedEast's business relationships that is unlikely to lead to any admissible evidence supporting Breg's defenses and counterclaims, and MedEast's analysis of competitor products is not relevant to any of the claims at issue, but is ...


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