Willis Electric Co., Ltd. v. Polygroup Limited

Background

Willis alleges that it owns patents covering innovations in pre-lit artificial trees and that Polygroup infringed those patents by selling its own artificial trees. Willis also alleges federal and Minnesota anticompetition violations. This order addresses three nondispositive motions by the defendants, which the court collectively calls “Polygroup”: a motion to compel discovery, a motion to amend a prior-art statement, and a motion to amend the answer to add an inequitable-conduct counterclaim.

Motion to Compel Discovery

Polygroup sought discovery concerning an April 12, 2012 email from W.K. Wei to Johnny Chen, photographs and videos attached to that email, related deposition testimony, other evidence concerning a Polygroup prototype connector, financial statements, and the deposition of Sun Lin. The court had already granted the request for Sun Lin’s deposition on the record during a January 13, 2021 hearing, subject to scheduling it without affecting the previously scheduled claim-construction hearing.

The court held that the April 12 email was protected by the attorney-client privilege. Although the email was not sent directly to or from an attorney, the court found that it was most likely a draft prepared for Willis’s patent counsel in connection with a request for legal advice, was not widely distributed, and was supported by other emails reviewed privately by the court. Willis therefore properly clawed back the email, and Polygroup’s request to compel production of the email was denied.

The court treated the attached photographs and videos differently. The underlying images and videos were pre-existing evidence of a competitor’s prototype and were independently discoverable; attaching them to a privileged communication did not make their contents privileged. The court required Willis to conduct a reasonable search for other versions of the files and to produce any such versions. If no other versions were found after a reasonably diligent search, Willis was required to produce the photographs and videos at issue. The parties also had to discuss a production method that would avoid revealing Willis’s request for legal advice. Willis was additionally required to search for the physical prototype connector and, if found, produce it or allow Polygroup to examine it.

The court also held that Willis properly asserted privilege over portions of Chen’s deposition testimony because the questions and answers were closely tied to the substance of the privileged email. Polygroup’s request to invalidate that privilege claim was denied. The court denied Polygroup’s request for company-wide and group-level financial statements because they were not relevant to Willis’s lost-profits claim involving particular artificial trees. The court alternatively found that any relevance would be only tangential and that the requested discovery was not proportional to the needs of the case.

Motions to Amend

Polygroup sought to add the Mount Washington Pine to its prior-art statement concerning U.S. Patent No. 9,066,617. Polygroup also sought to add a counterclaim alleging inequitable conduct based on Willis’s alleged failure to disclose the tree to the United States Patent and Trademark Office during the patent application process.

The deadlines for both amendments had passed. The deadline to amend pleadings was November 27, 2019, and Polygroup filed its motion to add the counterclaim 13 months later. The supplemental prior-art statement was due May 29, 2019. The court required Polygroup to show good cause, including diligence in discovering the basis for the amendments and in seeking amendment.

The court found that Polygroup failed to act diligently. Polygroup’s counsel had possessed a Mount Washington tree since 2009, and a Polygroup affiliate had previously sued Willis concerning that tree. The court also found that Polygroup waited several months after identifying the tree as potentially significant before filing the motions. The court further observed that Polygroup had argued the Mount Washington tree did not disclose more than another prior-art reference, supporting the conclusion that the proposed addition could be cumulative. Both motions to amend were denied.

Disposition

The court ordered that Polygroup’s motion to compel discovery was denied in part and granted in part as described in the order. Polygroup’s motions to amend its prior-art statement and to amend its answer to assert an inequitable-conduct counterclaim were denied. Judge Menendez signed the order.