Orthopediatrics Corp. v. Wishbone Med.

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ORTHOPEDIATRICS CORP., et al., Plaintiffs, v. WISHBONE MEDICAL, INC., et al., Defendants.

No. 3:20-CV-929-JD-MGG

United States District Court, N.D. Indiana, South Bend Division

July 31, 2023

OPINION AND ORDER

Michael G. Gotsch, Sr. United States Magistrate Judge

Ripe before the Court is Plaintiffs Orthex, LLC, Orthopediatrics Corp., and Vilex LLC (“Plaintiffs'”) Motion to Compel Document Production from Defendants WishBone Medical, Inc. (“WishBone”) and Nick A. Deeter (collectively “Defendants”), filed on December 2 2022, in this patent infringement case. For the reasons discussed below, Plaintiffs' Motion to Compel is granted in part and denied in part.

I. FACTUAL BACKGROUND

Orthopedic professionals use devices called external fixators to treat patients suffering from broken bones or other bone abnormalities. An external fixator fits around an individual's limb and often has a certain number of struts that run into the limb and attach to the bone to ensure the bone is positioned for proper healing. In the past, orthopedic professionals had to rely on their own estimations and experience to determine exactly how to position the external fixator and accompanying struts on a limb. With the advent of new technology, patented on April 16, 2019, under patent number 10,258,377 (“the ‘377 Patent”^[1]), orthopedic professionals can now look at an X-ray, or other photographic image of a patient's bone, and the fixator apparatus on a computer screen, use a mouse or other device to inscribe lines and points on the images as needed, and then generate calculations showing the optimal way to position the bones using the external fixator.

Plaintiff Orthex LLC, a wholly owned subsidiary of Plaintiff OrthoPediatrics Corp., is the assignee of the ‘377 Patent, and Plaintiff Vilex, a medical device company, is an exclusive licensee. Plaintiffs initiated this patent infringement case on October 30, 2020, alleging that WishBone is-or imminently will be-infringing the ‘377 Patent through the sale, use, and promotion of its Smart Correction External Fixation System (“Smart Correction” or “Accused System”). According to Plaintiffs, Smart Correction copies the process described in the ‘377 Patent.^[2]

II. PROCEDURAL POSTURE

The parties are currently engaged in discovery related to Plaintiffs' patent infringement claims^[3] following the Court's claim construction, or Markman, order entered on October 4, 2022 [DE 118]. A stipulated protective order governs the production, exchange, and designation of confidential and highly-confidential, attorneys' eyes only materials throughout this action. [DE 108].

Since September 16, 2021, when Plaintiffs served their first 30 requests for production upon Defendants, production of responsive materials has been the source of significant contention among the parties. On November 16, 2021, Defendants served responses to Plaintiffs' first requests asserting blanket objections to multiple requests on grounds of relevance, overbreadth, lack of specificity, or undue burden. Plaintiffs served their second requests for production on January 21, 2022, with a letter outlining deficiencies in Defendants' responses to date and 15 additional requests for production. On February 22, 2022, Defendants responded to Plaintiffs' second requests raising objections to each request.

As discovery continued, the parties jointly sought extension of the discovery deadlines by motion on October 24, 2022. In that motion, the parties reported that Defendants expected to complete their discovery productions before the middle of November 2022. After the middle of November passed, Plaintiffs still found Defendants' production incomplete leading them to file the instant Motion to Compel on December 2, 2022, after attempts to resolve the dispute themselves. Alleging superfluous production and technical deficiencies, Plaintiffs contend that Defendants have stonewalled discovery by withholding or otherwise failing to locate and produce information responsive to their requests for production. Plaintiffs argue that Defendants' outstanding discovery responses include information critical to their infringement claims, damages theories, and secondary considerations of non-obviousness^[4].

Defendants, however, argue that the breadth of Plaintiffs' requests has caused the discovery delays. Defendants contend that Plaintiffs are asking for wholly irrelevant information and have “regularly expanded the breadth of their requests in email exchanges between counsel ....” [DE 125 at 5-6]. Defendants also assert that they have been unable to satisfy Plaintiffs' demands, despite working diligently to do so with at least five supplemental productions in November and December 2022. Without withdrawing their relevance and overbreadth objections, Defendants also request bifurcation of discovery to avoid potentially unnecessary and burdensome damages-related discovery because they perceive a high probability of prevailing on the infringement claims. Plaintiffs oppose bifurcation and reiterate the continued deficiencies in Defendants' discovery production. Bifurcation will be addressed first.

III. BIFURCATION

Bifurcation may be ordered “[f]or convenience, to avoid prejudice, or to expedite and economize.” Fed.R.Civ.P. 42(b). Bifurcation is the exception, rather than the rule, in patent cases. “A single trial generally tends to lessen the delay, expense, and inconvenience to all concerned.” THK Am., Inc. v. NSK Co., 151 F.R.D. 625, 631 (N.D. Ill. 1993). In deciding whether to grant bifurcation, the Court must consider whether separate trials would prevent prejudice to a party or promote judicial economy. Chlopek v. Fed. Ins. Co., 499 F.3d 692, 700 (7th Cir. 2007); see also, e.g., Saunders v. Metro. Prop. Mgmt., Inc., 561 F.Supp.3d 629, 631 (W.D. Va. 2021) (emphasizing the importance of prejudice toward the non-moving party in deciding bifurcation). The moving party has the burden of demonstrating that bifurcation is appropriate based on the circumstances of the case. CDX Liquidating Tr. ex rel. CDX Liquidating Tr. v. Venrock Assocs., 389 B.R. 76, 81 (N.D. Ill. 2008). Ultimately, the Court retains discretion to decide whether to grant or deny bifurcation. Rodriguez v. City of Chicago, 429 F.Supp.3d 537, 540 (N.D. Ill. 2019) (citing Volkman v. Ryker, 736 F.3d 1084, 1089 (7th Cir. 2013)).

Here, Defendants have failed to demonstrate that bifurcation will promote judicial economy or prevent prejudice to the parties in this case, as required by Rule 42(b). Defendants primarily rely on their conclusion that they have a “high probability of prevailing on the infringement issue” in support of their bifurcation argument. The probability of prevailing on infringement is indeed relevant to the bifurcation analysis since defeating the infringement claims would obviate the need for damages discovery. And if damages discovery can be avoided, the burden on the parties and the Court would be reduced while also expediting the adjudication of the infringement claims. See Real v. Bunn-O-Matic Corp., 195 F.R.D. 618, 622 (N.D. Ill. 2000).

To show a high probability of prevailing on infringement, Defendants direct the Court's attention to their invalidity defense, which they contend is supported by recently uncovered dispositive evidence revealing public use of Smart Correction. Defendants cite 2011 advertisements for Smart Correction in an orthopedic trade journal; a 2009 PowerPoint, modified in 2011, showing step-by-step use of Smart Correction; a 2012 PowerPoint showing steps of Smart Correction; and a video of a 2012 correction using Smart Correction.

Public use of a claimed invention before its effective filing dates precludes patentability. 35 U.S.C. § 102(a)(1). Therefore, if Defendants establish public use of Smart Correction before September 29, 2014, when the application for the ‘377 Patent was filed, their invalidity defense would succeed thereby overcoming Plaintiffs' infringement claims and mooting any need for the damages discovery at issue in the instant Motion to Compel. Defendants' burden of proof, however, is high.

Patents are presumed valid. 35 U.S.C. § 282. As such, the party asserting invalidity bears the burden of proving a patent's invalidity claim by clear and convincing evidence. Id.; see also Microsoft Corp. v. I4I Ltd. Partnership, 564 U.S. 91, 95, 9798 (2011). Any reliance on the accused infringer's prior use to defeat an infringement claim, also called a “practicing the prior art” defense, amounts to an invalidity defense subject to the clear and convincing evidence standard. See 01 Communique Lab'y, Inc. v. Citrix Sys., Inc., 889 F.3d 735, 741-42 (Fed. Cir. 2018) (citing Tate Access Floors, Inc. v. Interface Architectural Res., Inc., 279 F.3d 1357, 1365 (Fed. Cir. 2002)).

Defendants argue that Smart Correction does not infringe the ‘377 Patent because it practices prior art and invalidates the Patent based on its previous public use. To prevail, Defendants must prove the public use by clear and convincing evidence. As a result, whether the requested bifurcation would promote judicial economy is dependent whether Defendants' cited evidence-ads, PowerPoints, and video-suggests a high probability of establishing invalidity by public use by clear and convincing evidence.

The analysis of a prior public use claim is highly fact-specific and includes considerations such as, “the nature of the activity that occurred in public; public access to the use; confidentiality obligations imposed on members of the public who observed the use; and commercial exploitation.” Invitrogen Corp. v. Biocrest Mfg., L.P., 424 F.3d 1374, 1380 (Fed. Cir. 2005). Public use must be “by a person other than the inventor who is ‘under no limitation, restriction,...