Case of the Day: Andover Healthcare v. 3M

The case of the day is Andover Healthcare, Inc. v. 3M Co. (D. Minn. 2014). Andover and 3M were both in the business of manufacturing and selling bandages in the US and Germany. Andover sued 3M in Delaware for infringement of a US patent, and in Germany for infringement of a European patent.

One of the claims of the patents covered:

A cohesive product comprising a substrate and a synthetic water-based cohesive …, wherein the synthetic water-based cohesive comprises an inherently crystalline elastomer and at least one tackifying agent in an amount effective to disrupt the crystalline structure of the elastomer and maintain the elastomer in a partial polycrystalline state.

In the German case, 3M submitted an expert report showing its product was not crystalline, and thus that it did not infringe the claim. Andover wanted to do its own testing, but 3M refused to disclose the materials used in its product in the German litigation (it had disclosed the information in the Delaware case, but under the protective order, Andover couldn’t use the information in the German case). The Delaware court refused to modify the protective order to allow Andover to use the material. Nor would the German court order 3M to disclose the information. So Andover brought a § 1782 case in Minnesota.

The magistrate judge denied the application, and Andover sought review. The first question was the standard of review to be applied—this is one of my favorite issues, which I’ve covered before. Here is the issue: is a decision on a § 1782 application a dispositive matter, in which case the magistrate judge has to make a report and recommendation to the court, which the judge reviews de novo? Or is it a non-dispositive matter, in which case the magistrate judge has the power to decide it, subject to review for clear error? While the judge noted the split of authority on that question, she unfortunately refused to decide it, since even under a de novo standard of review 3M prevailed.

The judge held that the Intel factors did not favor the application. For one thing, 3M was a party to the German case, and thus the German court can grant the discovery if appropriate. Indeed, the German court indicated that it would consider allowing discovery at a later stage of the case. Second, although the unrebutted evidence was that the evidence obtained in the US would be admissible in the German proceeding, the judge found an issue about circumvention of German proof-gathering restrictions in light of the fact that the German court had (so far) refused to allow the discovery. The most interesting point is the last—it’s a puzzle that I’ve encountered in practice, too. 3M argued that the German courts could not provide adequate protection against the irreparable harm it would suffer if the identity of the material became known, because there was no mechanism in Germany to absolutely guarantee that the documents containing the information could not be viewed by persons with a “legitimate legal interest in the matter,” which, 3M argued, could include competitors if Andover threatened to sue them for infringement.

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