Pre-Filing Investigation at ITC Protected from Discovery as Work Product and Work Product Privilege Was Not Waived

April 8, 2013

In this ITC investigation, Respondents Yantai Zhenghai Magnetic Material Co., Ltd., Anhui Earth-Panda Advance Magnetic Material Co., Ltd., and Ningbo Jinji Strong Magnetic Material Co., Ltd. (collectively, "Manufacturing Respondents") moved to compel discovery responses from Complainants Hitachi Metals, Ltd., and Hitachi Metals North Carolina, Ltd. (Collectively, "Hitachi Metals").

The motion was based on the Manufacturing Respondents argument that Hitachi was improperly asserting privilege regarding the pre-filing investigation conducted by Kroll Advisory Solutions.

In particular, the Manufacturing Respondents asserted that Hitachi Metals' assertion of privilege regarding certain interrogatories was improper because the interrogatories sought the identity of individuals who had knowledge of the pre-filing investigation. With respect to the document requests, "the Manufacturing Respondents contend that Hitachi Metals waived any privilege with respect to the Kageyama Declaration and the Kroll investigation when it relied on the information to support its infringement allegations in the Complaint. (Id. at 4, -10 ('complainants' use of the Kageyama Declaration as a 'sword' waives the privilege they are using as a 'shield' to cover the underlying documents and information detailing how the Kroll investigation took placed and what else the Kroll investigation found.')"

In opposing, the motion Hitachi argued that the declaration was not being used as a sword: "Specifically, Hitachi Metals contends that the Kageyama Declaration "is not being used and will not be used as a sword" because it has not been cited in Hitachi Metals' infringement claim charts and will not be relied upon by its experts. (Id. at 2, 5.) Hitachi Metals further contends that the Manufacturing Respondents have not met the high burden of showing that the disclosure of attorney work product is necessary for their unclean hands defense. (Id. at 6-8.) According to Hitachi Metals, even if improper means were used during the pre-filing investigation of the accused manufacturing processes, the act complained of bears no relation to the equity sought in this Investigation. (Id. at 8.)"

In ruling on the motion, the ALJ first addressed the commission rules and related decisions. "The Commission Rules allow a party to obtain broad discovery regarding any matter, not privileged, that is relevant to the claim or defense or any party. See 19 C.F.R. ยง 210.27(b). The attorney work-product privilege protects from discovery documents and other tangible thing prepared by or for another party or its representative in anticipation of litigation. See Fed. R. Civ. P. 26(b)(3). The work product privilege may be overcome if the requesting party "shows that it has substantial need for the materials to prepare its case and cannot, without undue hardship, obtain their substantial equivalent by other means." Id. In addition, work product protection may be waived if the party asserting privilege discloses favorable privileged information as a sword, in support of its position. Certain Network Controllers and Prods. Containing Same, Inv. No. 337-TA-531, Order No. 15 at 4 (July 19, 2005). Because factual information is not subject to the protections of work product immunity, the disclosure of factual information does not generally operate as a waiver of this privilege. See Certain Gemcitabine and Prods. Containing Same, Inv. No. 337-TA-766, Order No. 7 at 8-10 (May 18, 2011) (finding no waiver of privilege because factual information, rather than work product information, was disclosed)."

Applying these standards, the Administrative Law Judge concluded that there was no waiver of the work product privilege. "The undersigned finds that work product privilege was not waived when Hitachi Metals used the Kageyama Declaration to support its filing of the Complaint. Unlike the situation in Certain Network Controllers where the complainants waived privilege by relying on reverse engineering reports in contention interrogatories and expert reports, here Hitachi Metals insists that the Kageyama Declaration has not and will not be used to prove infringement. See Certain Network Controllers and Prods. Containing Same, Inv. No. 337-TA-531, Order No. 15 at 5-6 (July 19, 2005); Certain Ceramic Capacitors & Prods. Containing Same, Inv. No. 337-TA-692, Order No. 16 at 7 (Apr. 19, 2010) (finding waiver of work product privilege when an expert's declaration regarding pre-filing testing was used to support the complaint and contention interrogatories); see also Opp. At 2 (Hitachi Metals submitting that the Kageyama Declaration was not cited in response to Respondents' contention interrogatories and will not be relied upon by Hitachi Metals' experts). In light of Hitachi Metals assurances that the Kageyama Declaration will not be relied upon to prove infringement, the undersigned declines to find a waiver of work product privilege. "

In the Matter of Certain Sintered Rare Earth Magnets, Methods of Making Same and Products Containing Same, Inv. No. 337-TA-855 (Administrative Law Judge Charles Bullock, March 11, 2013)

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