Free Redacted Document - District Court of Delaware - Delaware

Case 1 :06-cv—00028-SLR-LPS Document 212 Filed 11/29/2007 Page 1 of 3
MORRIS, NICHOLS, ARSHT gt TUNNELL LLP
1201. Noirrn MARKET Srunnr
P.O. Box 1347
WILMINGTON, DELAWAIIE 19899-1347
302 658 9200
hm Hmm 302 658 3989 FAX
FAX November 27, 2007
_·[email protected]
BY E-1-7IL1Nc and BY HAND PUBLIC VERSION
November 29, 2007
The Honorable Mary Pat Thynge
United States Magistrate Judge
United States District Court
844 King Street
Wilmington, DE 19801
Re: McKesson Automation, Inc. v. Swisslog Italia S.P.A. and l
T ranslogic Corgoration, C.A. No. 06-28 {1***)
Dear Magistrate Judge Thynge:
In connection with the teleconference scheduled for November 29, we are writing to
address several issues that have recently arisen, concerning discovery relating to McKesson’s claim
of willful infringement.
McKesson’s Claim of Willful Infringement
McKesson is actively seeking discovery on its willful infringement claim.
Defendants submit that after In re Seagate Tech., LLC, 497 F.3d 1360 (Fed. Cir., Aug. 20, 2007),
and in light of the discovery that has taken place to date, it is apparent that Mcliesson can no longer
allege willfulness in good faith. Seagate imposes a higher standard for a plaintiff to prove
willfulness, namely that the accused infringer acted despite an objectively high likelihood that its
actions constituted infringement of a valid patent and that this objectively defined risk was either
known or should have been known to the accused infringer. Id at 1371. Shortly after Seagate was
decided, Defendants asked Mcliesson to withdraw its willful infringement claim but Mcliesson
refused, and would not clarify what conduct it contends to be objectively reckless. Defendants plan
to file a motion to dismiss the willfulness claim within approximately one week. The discovery
matters between the parties will be rendered moot if either this motion or the pending motion to
dismiss for lack of standing (D.l. 165) is granted.
The Schedule Should be Modified to Permit Additional Time for
Defendants to Decide Whether to Rely on Advice of Counsel
Under the Second Amended Scheduling Order, Defendants were required to elect by
February 28, 2007 whether they would rely on advice of counsel as a defense to willfulness.
Defendants complied with that deadline and disclosed non-infringement opinions of counsel,
together with related privileged communications.

Case 1:06-cv—00028-SLR-LPS Document 212 Filed 11/29/2007 Page 2 of 3
Honorable Mary Pat Thynge
November 27, 2007
Page 2
In light of the significant change in the law resulting from Seagate, Defendants
should be granted leave to withdraw that election and the Scheduling Order should be modified to
permit Defendants to elect whether to rely on the advice of counsel defense after the motion to
dismiss McKesson’s willfulness allegations is decided. Defendants also seek retum of all
privileged documents (including opinions of counsel) relating to the willfulness issue under
paragraph 21(a) of the Revised Protective Order until such time that Defendants elect to rely on
such a defense. Rule l6(b) permits modifications to the Scheduling Order for good cause, and
district courts have recognized the need to reconsider discovery orders in light of Seagate. See, e. g.,
Comp. Assoc. Int’l, Inc. v. Simp/e.c0rn, Inc., 2007 U.S. Dist. LEXIS 7l072, at *1 (E.D.N.Y. Sept.
2007). lf Seagate had been decided before the Scheduling Order was entered, Defendants would not
have agreed to disclose the opinions and related documents when they did and would have simply
filed their motion to dismiss the willfulness claim after the depositions of Defendants’ employees.
McKesson is now in the process of serving deposition subpoenas on five attomeys it
believes participated in rendering the opinions. If Defendants are forced to submit to McKesson’s
demands for discovery before the motion to dismiss McKesson’s willfulness claim is decided,
Defendants will have to continue to divulge privileged communications when they very likely will
not be necessary to defeat McKesson’s willfulness allegations, and Defendants will likely have to
seek a protective order} The Federal Circuit has discouraged Courts from forcing early elections
precisely for this reason. See Quantum Corp. v. T andon Corp., 940 F.2d 642, 643-44 (Fed. Cir.
1991); L. G. Phi/ips LCD C0., Ltd. v. Tatung C0., 243 F.R.D. 133, 136 (D. Del. 2007) ("An accused
infiinger . . . should not . . . be forced to choose between waiving the privilege . . . and maintaining
the privilege, in which case it may risk being found to be a willful infringer if liability is found.").
McKesson, on the other hand, would suffer virtually no prejudice if Defendants were
permitted to elect whether to rely on advice of counsel after the motion to dismiss the willfulness
claim is decided. McKesson has already received all opinions of counsel and has completed
depositions of defendants’ fact witnesses on the willfulness issue. Postponing the election would
delay onbz the depositions of the attomeys who authored the opinions. Such depositions, if any are
needed at all, may be taken at a later date without causing any delay since a trial judge has yet to be
assigned and there are no scheduled dates for Mar/anan or trial.
The Privilegcd Documents
REDACTED
1 Defendants’ motion to dismiss is based entirely on the inadequacy of McKesson’s
willfulness allegations post-Seagate, irrespective of the opinions of counsel or any legal
advice obtained by Defendants in this case. Ftuther discovery relating to these opinions and
communications with counsel are, therefore, not required for the Court to rule on the motion
to dismiss the willfulness claim.

Case 1:06-cv—00028-SLR-LPS Document 212 Filed 11/29/2007 Page 3 of 3
Honorable Mary Pat Thynge
November 27, 2007
Page 3
REDACTED
McKesson’s Motion to Disgualify Dickstein Shapiro _
Postponing the election would obviate the need for the Court to rule on another
looming dispute. On November 12, l\/IcKesson advised that it intends to move to disqualify
‘ Dickstein Shapiro on the grounds that Defendants’ trial counsel, Messrs. Fabricant and Drucker,
purportedly prepared the non-infringement opinions rendered by Dickstein Shapiro. Mr. Fabricant
and Mr. Drucker, who participated in the call, stated unequivocally that neither of them prepared the
opinions and that they had no substantive input at all. Such a motion would be premature in light of
the pending motion and soon to be filed motion to dismiss and because any resulting
disqualification would only relate to the actual trial itself not to the preparation for trial. Because
trial of this action has not been scheduled and no trial Judge has yet been assigned, there is simply
no need for such a motion at this time. Vlfhile the motion appears to lack any substance whatsoever
and to be a purely tactical move on McKesson’s part in response to Defendants’ motion to dismiss,
it will nevertheless require briefing and force Defendants and the Court to incur time and expense.
Discovery Concerning Willfulness Should be Stayed
Defendants believe that it would be most efficient to stay further discovery on the
defenses to l\/[cKesson’s willfulness claim until the motions to dismiss are decided. Defendants’
counsel has proposed this to McKesson’s counsel, who has refused to consent. l\/IcKesson’s push
for discovery on this issue, both documents and depositions, raises a host of issues that need not be
decided at this time and which ultimately may be moot. A stay of discovery as to willfulness will
obviate the need for the Court to rule on many of these issues. For these reasons, the Scheduling
Order should be amended to set a new deadline for Defendants to elect whether to rely on advice of
counsel and discovery on the question of Defendants’ willfulness defenses should be stayed until
after the motions to dismiss are decided.
Respectfully,
Clulia
JI·I:ncf
cc: Dr. Peter Dalleo, Clerk (By e-filing)
Dale Dubé (By e-mail)
Blair M. Jacobs (By e-mail)
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