In Re MSTG, Inc.
675 F.3d 1337
Fed. Cir.2012Background
- MSTG sued AT&T Mobility and others for infringement of patents related to 3G technology; settlements produced licenses to MSTG patents.
- AT&T sought discovery into negotiations of settlement agreements to gauge potential royalties for damages.
- Magistrate judge denied discovery; later MSTG served a damages expert whose report relied on negotiations but did not itself access negotiation docs.
- Reconsideration order concluded negotiation documents could reveal grounds for the expert's conclusions; MSTG was ordered to produce negotiations with six companies.
- District court affirmed the production order, citing fairness to testing the expert's opinions and MSTG's reliance on executive testimony about business reasons.
- MSTG petitioned for mandamus; this court stayed and then denied the petition, holding no privilege and no clear abuse of discretion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether settlement negotiations are privileged | MSTG argues a settlement negotiation privilege should apply under Rule 501. | AT&T argues no privilege exists; negotiations may be discoverable. | Settlement negotiations related to royalties are not privileged. |
| Whether the district court abused its discretion in ordering production | MSTG contends the district court abused by ordering production of negotiation docs underlying licenses. | AT&T contends production is appropriate to test the expert's conclusions. | No clear abuse; district court's order to produce was proper. |
Key Cases Cited
- In re Seagate Technology, 497 F.3d 1360 (Fed. Cir. 2007) (discovery in patent cases implicating substantive law follows Federal Circuit rules)
- In re Spalding Sports Worldwide, Inc., 203 F.3d 800 (Fed. Cir. 2000) (privilege determinations related to invention records implicate patent law)
- Advanced Cardiovascular Sys., Inc. v. Medtronic, Inc., 265 F.3d 1294 (Fed. Cir. 2001) (apply own law to determine discovery privileges when implicating patent issues)
- In re EchoStar Commc'ns Corp., 448 F.3d 1294 (Fed. Cir. 2006) (patent damages issues influence privilege determinations)
- In re Roche Molecular Sys., Inc., 516 F.3d 1003 (Fed. Cir. 2008) (mandamus available for extraordinary discovery challenges)
- In re Princo Corp., 478 F.3d 1345 (Fed. Cir. 2007) (jurisdiction to hear mandamus regarding discovery orders)
- University of Pennsylvania v. EEOC, 493 U.S. 182 (U.S. 1990) (Congress did not create a privilege for peer review materials; consider public policy)
- Jaffee v. Redmond, 518 U.S. 1 (U.S. 1996) (Rule 501 evolution of privileges; confidential communications not lightly created)