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V. Mane Fils S.A. v. International Flavors and Fragrances

March 3, 2008

V. MANE FILS S.A., PLAINTIFF,
v.
INTERNATIONAL FLAVORS AND FRAGRANCES, INC., DEFENDANT.



The opinion of the court was delivered by: Hughes, U.S.M.J.

MEMORANDUM OPINION

I. INTRODUCTION

This matter has come before the Court by Motion of Plaintiff V. Mane Fils S.A. ("Plaintiff") to Compel Production of all responsive communication and documents currently being withheld as privileged related to Plaintiff's patents and Defendant International Flavors and Fragrances, Inc. ("Defendant") pre-suit opinions of counsel [dkt. entry no. 23], returnable February 19, 2008. Defendant filed opposition to Plaintiff's motion as well as a cross-motion seeking to have Plaintiff return the Morgan and Finnegan ("M&F") opinion and related documents. Plaintiff filed a reply brief and opposition to Defendant's cross-motion on December 20, 2007. The Court heard oral argument on this matter on February 6, 2008. For the reasons stated herein, Plaintiff's motion to compel is granted and Defendant's cross-motion is denied.

II. BACKGROUND AND PROCEDURAL HISTORY

This litigation arises from an alleged patent infringement involving U.S. Patent Nos. 5,725,865 and 5,843,466 relating to the coolant composition monomenthyl succinate ("MMS"), which is used as an additive in foods, beverages, and other products. Plaintiff alleges that Defendant has willfully infringed these patents.

Around 1998, Plaintiff sold MMS to Procter & Gamble ("P&G") for use in a toothpaste flavoring formulation. (Pl.s Br. at 2.) P&G then outsourced its internal manufacturing of the flavoring formulation for this toothpaste to Defendant. Id. Shortly thereafter, P&G requested that Plaintiff ship MMS directly to Defendant so that Defendant could include Plaintiff's MMS in the P&G toothpaste formula. Id. at 2-3. At that time, Plaintiff received repeated assurances that Defendant would respect Plaintiff's patent rights and not attempt to substitute its own MMS for that purchased from Plaintiff. Id. at 3.

From February 1998 to April 1998, Defendant allegedly solicited and received three opinions from outside patent counsel concerning Plaintiff's patents ("the Weilacher Opinions"). Id. Around July 1998, Defendant approached P&G and offered to include its own MMS instead of using the MMS that Plaintiff supplied. Id. In an effort to allegedly persuade P&G that Defendant's actions were legally permissible, Defendant disclosed its opinion of counsel to P&G. Id. P&G apparently rejected the merits of Defendant's opinion and elected to require Defendant to continue purchasing MMS from Plaintiff. Id.

In January 1999, Defendant again solicited and received another opinion from the same outside patent counsel, Weilacher, concerning Plaintiff's MMS patents. Id. This opinion stated, much like the first opinion, that Plaintiff's patents are invalid on the ground of obviousness. Id. The last paragraph of this opinion stated that it would be protected by the attorney-client privilege and that there should be no distribution of this opinion to anyone other than employees or officers of [defendant's] firm who will need to be aware of its contents. Id. at 4. Somewhere between May 2001 and July 2001, Defendant sent those opinion letters to at least two other companies, Firmenich and Sensient, advising that Defendant had an opinion of counsel that concluded that Plaintiff's patents were invalid and thus not impede said companies from purchasing MMS from Defendant. Id. Both of these companies apparently also rejected Defendant's opinion letter. Id.

In January of 2002, Defendant asked a second law firm, Morgan & Finnegan, to conduct a literature search relating to the use of MMS as a flavor additive. See id. and Morgan & Finnegan 0016. In this letter, Defendant attorney asks someone at the law firm to call him. To date, no documents have been produced explaining what prompted the letter or the substance of any follow-up phone calls. Id. On July 3, 2002, this second law firm issued an opinion which was limited to the issue of obviousness, similar to the previous opinions. Id. To date, it is unknown why Defendant decided to get this second opinion. Id. Further, Defendant has not produced any internal correspondence related to its decision to obtain this second opinion. Id.

Around April 2006, Defendant disclosed its opinion of counsel to Wrigley apparently to convince Wrigley to purchase Defendant's MMS. Id. At the same time, Plaintiff was selling MMS to Wrigley. Id. Like P&G, Firmenich, and Sensient before them, Wrigley rejected Defendant's opinion stating that Defendant's validity opinion "has not shown prior art or substance, only a belief that Mane has an invalid patent." Id. at 4-5; IFF001810.

In addition to disclosing opinion letters to P&G, Firmenich, Sensient and Wrigley, Defendant was supplying MMS to the Coca Cola Company for certain products that were sold in China in late 2005. Id. at 5. Plaintiff confronted both Defendant and Coca Cola. On March 30, 2006, Defendant's counsel sent Plaintiff a copy of Defendant's opinion of counsel (Morgan & Finnegan) concerning Plaintiff's MMS patents. Id. On March 31, 2006, Defendant sent the same opinion letter to Coca Cola. Id. Coca Cola then demanded indemnification from Defendant for any potential infringement liability related to Defendant's sales of MMS. Id. Coca Cola further ordered Defendant to remove all MMS from flavoring agents sold by Defendant to Coca Cola. Id. On June 16, 2006, in response to Plaintiff's demand to cease and desist, Defendant's vice president Christopher Gibson sent a letter to Plaintiff stating that "IFF believes it has a very solid defense to infringement, including a comprehensive opinion from a well recognized outside patent counsel." Id. at 6.

Plaintiff seeks production of all of Defendant's opinions and communications related to infringement, validity, and enforceability of MMS patents. Further, Plaintiff also subpoenaed documents in possession of Defendant's outside counsel, Morgan & Finnegan. The legal basis for Plaintiff's argument is that Defendant has waived the attorney-client privilege and cannot use the privilege as both a "sword and a shield". Id. at 6, 9. Plaintiff seeks production surrounding Defendant's solicitation and direction regarding the opinions. Id. at 7. Plaintiff also seeks any and all statements of Defendant's in-house patent counsel and other internal communications. Id. Plaintiff alleges that Defendant has yet to provide a privilege log despite asserting that the pre-suit documents that have yet to be turned over are privileged. Id. at 6-7. They also state that Defendant has not produced any opinions on infringement or any other analysis of Defendant's potential liability. Id. at 7.

Defendant argues that the Weilacher Opinions and the correspondence Defendant produced related to those opinions should not be discoverable before a finding that Defendant acted despite an objectively high likelihood that its actions constituted infringement of a valid patent. (See Def.'s Opp. Br. at 3; and In re Seagate Technology, LLC, 497 F.3d 1360 (Fed. Cir. 2007)). With respect to the Morgan & Finnegan opinion, Defendant asserts that it did not waive the attorney-client privilege. Defendant states that it objects to Plaintiff's discovery requests because three weeks after Defendant produced the Weilacher Opinion, the Morgan and Finnegan Opinion and related correspondence, the Federal Circuit issued its decision in Seagate, which raised the bar for establishing willful infringement and abandoned the rule that a party on notice of a patent has a duty to obtain an opinion ...


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