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Duhn Oil Tool, Inc. v. Cooper Cameron Corp.

October 15, 2009

DUHN OIL TOOL, INC., PLAINTIFF,
v.
COOPER CAMERON CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Gary S. Austin United States Magistrate Judge

ORDER REGARDING PLAINTIFF DUHN OIL TOOL, INC.'S MOTION TO QUASH THIRD PARTY WRITTEN DEPOSITIONS (Doc. 307)

AND RELATED CROSS-CLAIMS.

INTRODUCTION

Pending before the Court is Plaintiff Duhn Oil Tool, Inc.'s ("Duhn") Motion to Quash Third Party Written Depositions, filed on June 26, 2009. The parties filed a Joint Statement regarding the motion on August 4, 2009. (See Doc. 325.)

Plaintiff Duhn seeks an ordering quashing Defendant Cooper Cameron Corporation's ("Cameron") Notice of Deposition on Written Questions and Subpoena Duces Tecum served, on or about June 30, 2009, upon the following parties: (1) Seaboard Holding, Inc.; (2) Seaboard International, Inc.; (3) The Felters Company; (4) The TASI Group; (5) O'Brien Corporation; (6) Xaloy Incorporation; (7) Atlas Material Testing Technology, LLC; (8) API Heat Transfer, Inc.; and (9) IGP Industries, LLC. Specifically, Plaintiff asserts Defendant did not seek leave of court pursuant to Rule 31 of the Federal Rules of Civil Procedure, and that it did not stipulate to the third party depositions. Duhn also contends the notices were not timely, nor did Cameron take reasonable steps to avoid undue burden and expense to the entities involved pursuant to Rule 45 of the Federal Rules of Civil Procedure. Plaintiff further contends that the requests are overbroad and unduly burdensome and seek neither relevant information, nor information reasonably calculated to lead to discovery of admissible evidence. Lastly, Duhn contends that Cameron has noticed a total of twelve depositions for the same date, including the aforementioned nine (9) third-party depositions, and that the discovery is meant to harass Plaintiff and the third party entities. (See Doc. 307.)

RELEVANT PROCEDURAL BACKGROUND

Duhn filed its complaint on November 9, 2005, alleging infringement of its United States Patent number 6,920,925 ("'925 patent"). (Doc. 1.) On March 15, 2006, Cameron filed its answer and counterclaim. (Doc. 15.) On April 12, 2006, Duhn filed its answer to the counterclaim. (Doc. 18.)

On July 20, 2007, Duhn moved to amend its complaint to assert a claim that Cameron's acts of patent infringement were willful. (Doc. 101.) The motion was withdrawn on August 22, 2007. (Doc. 108.) On November 10, 2008, Duhn filed a Motion for Preliminary Injunction and Request for Leave to Amend Complaint. (Doc. 240.) Cameron opposed on November 24, 2008. (Doc. 247.) On January 13, 2009, Duhn moved to amend its complaint. (Doc. 268.) On January 21, 2009, Cameron moved to amend its answer and counterclaim. (Doc. 274.) On February 6 and 9, 2009, the parties filed oppositions to the motions. (Docs. 277-278.) Replies were filed on February 13 and 17, 2009. (Docs. 281-282.)

On March 4, 2009, District Judge Oliver W. Wanger granted Duhn's motion to amend the complaint. That same date, the Court denied in part and granted in part Cameron's motion. (Doc. 286 [counterclaims of unenforceability regarding U.S. Patent Nos. 7,322,407 & 7,416,020 will not be tried with determination of validity of '925 patent].)

On March 12, 2009, Duhn filed its First Amended Complaint. (Doc. 291.) On March 24, 2009, Cameron filed its First Amended Counterclaim. (Doc. 292.) Duhn filed its answer to the counterclaim on March 26, 2009. (Doc. 293.)

On March 31, 2009, Cameron filed a Motion to Strike the First Amended Complaint. (Doc. 294.) Duhn filed its opposition on May 22, 2009. (Doc. 300.) Cameron replied on June 1, 2009. (Doc. 302.) On June 9, 2009, Cameron's motion to strike was denied. (Doc. 304.) On June 23, 2009, Cameron filed its answer to the amended complaint. (Doc. 306.)

The instant motion followed. (Doc. 307.) A joint statement concerning the discovery dispute was filed August 4, 2009. (Doc. 325.) The matter was taken under submission, without oral argument, by this Court on August 25, 2009, pursuant to Local Rule 78-230(h). (Doc. 341.)

JOINT STATEMENT REGARDING DISCOVERY DISPUTE

Defendant Cameron noticed the depositions of a number of third party entities for the purpose of determining whether Duhn's payment of patent fees was proper given its classification as a "small entity" rather than a "large entity." The information is relevant to Cameron's assertion that Duhn's patent is unenforceable as a result of Duhn's underpayment of maintenance fees for the '925 patent.

A. Plaintiff Duhn's Statement

Plaintiff contends the nine third party entities that are the subject of Defendant's deposition notices have absolutely no relevance to the lawsuit, that the information Defendant seeks can be obtained from Plaintiff, and that Defendant's actions are "simply intended to harass Duhn and these related companies."

During discovery, Duhn indicated that its first maintenance fee payment on the '925 patent was made as a small entity. (Doc. 325 at 2.) Subsequently however, it made a supplemental payment as a large entity. Duhn admitted in responses to Defendant's fourth set of interrogatories that it currently employed more than 500 persons, thus it attained large entity status. Therefore, Plaintiff contends "[t]here is absolutely no justification to take these depositions merely to confirm something that Duhn has already confirmed." (Doc. 325 at 2.)

B. Defendant Cameron's Statement

Defendant responds that Plaintiff has committed inequitable conduct by improperly claiming small entity status regarding its maintenance fees on the '925 patent, and thus its inequitable conduct renders the '925 patent unenforceable. Further, Defendant contends that, during the course of the instant litigation, Duhn has continued to "improperly pay[] small entity fees in connection with related patent applications . . .." (Doc. 325 at 3.) Of the nine patent applications related to the '925 patent filed by Duhn, five patents applications have issued as patents to date. (Doc. 325 at 3.) Defendant asserts that when "Duhn was acquired by Seaboard . . . [it] has been underpaying filing fees, issue fees, and maintenance fees for several of its patents and patent applications related to the '925 patent." (Doc. 325 at 3.)*fn1

Defendant seeks to quantify the amount of Duhn's purported underpayment in patent fees. In order to do so, Defendant claims the first step is to identify each of Duhn's affiliates and confirm its status. Plaintiff Duhn has refused to disclose the identity of its affiliates, and thus, the "nine nonparty subpoenas . . . were served on nine entities which Cameron suspects are at least some of Duhn's affiliates," in light of research performed. Defendant ...


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