On September 26, 2016, ALJ David P. Shaw issued Order No. 15 granting Complainants Fujifilm Corporation and Fujifilm Recording Media U.S.A.’s (collectively, “Fujifilm”) motion to exclude and disqualify Respondents Sony Corporation, Sony Corporation of America, and Sony Electronics Inc.’s (collectively, “Sony”) economic expert in Certain Magnetic Data Storage Tapes and Cartridges Containing the Same (Inv. No. 337-TA-1012).

By way of background, this investigation is based on a complaint filed by FujiFilm alleging violation of Section 337 by way of unlawful importation into the U.S., selling for importation, and/or selling within the U.S. after importation certain magnetic data storage tapes and cartridges containing the same that infringe one or more claims of U.S. Patent Nos. 6,641,891; 6,703,106; 6,703,101; 6,767,612; 8,236,434; and 7,355,805. See our May 31, 2016 and July 8, 2016 posts for more details on the complaint and Notice of Investigation, respectively.

According to Order No. 15, Fujifilm argued that Sony's economic expert (Ms. Carla Mulhern) ("Sony's Expert") should be disqualified from providing expert testimony on behalf of Sony because she testified on behalf of Fujifilm last year in Inv. No. 337-TA-931 involving products and issues relevant to the current investigation. Fujifilm asserted that Sony's Expert "gained access not just to Fujifilm confidential information in the prior investigation but also to Fujifilm’s work product and litigation strategies, which would no doubt inform her views in this Investigation.” In particular, Fujifilm argued that if Sony's Expert "is allowed to serve as an expert for Sony and testify in this Investigation, she would necessarily be testifying on (1) the same issues (domestic industry and public interest); (2) involving the same products (tapes for LTO/Enterprise Tape Storage systems); and (3) manufactured by the same company (Fujifilm) as in the 931-Investigation.” According to Fujifilm, “[t]he only difference is that [Sony's Expert's] testimony in this Investigation would utilize the confidential inside knowledge she learned from Fujifilm in the prior investigation against Fujifilm in this
Investigation.” Fujifilm added that although it “does not question [Sony's Expert's] integrity and trusts that she will not intentionally utilize inside knowledge gained during the prior investigation, there is nonetheless a clear and present danger of improper use and undue prejudice to Fujifilm, resulting from her being equipped with Fujifilm’s confidential work product and strategic thinking about relevant subject matter.”

Sony countered that “(a) Fujifilm’s bare allegation that it shared unspecified litigation strategy and defenses with [Sony's Expert] in a prior investigation is not sufficient to justify a disqualification and, in any event, [Sony's Expert] has no recollection or memory of the purported information; and (b) the limited Fujifilm confidential information she received in that investigation is of little or no relevance here, and will be disclosed in the present investigation anyway.” The Commission Investigative Staff agreed with Fujifilm that the motion should be granted.

Referring to the first prong of the two-part test set forth in Wang Labs., Inc. v. Toshiba Corp., 762 F. Supp. 1246, 1248 (E.D. Va. 1991), ALJ Shaw determined that it was objectively reasonable for Fujifilm to conclude that it had a prior confidential relationship with Sony's Expert. Turning to the second prong of the Wang test, the ALJ determined that “[i]nasmuch as the issues considered by [Sony's Expert] in the 931 Investigation overlap with the issues she would likely be asked to address in this investigation, Fujifilm has shown that it previously disclosed confidential or privileged information to [Sony's Expert] that is relevant to the current litigation.” ALJ Shaw further determined that “policy objectives weigh in favor of disqualification” because “Sony will suffer little prejudice if it is required to engage a new expert with qualifications similar to those of Ms. Mulhern at this time” due to “the relatively early stage of this investigation.” Accordingly, the ALJ found that “any prejudice to Sony or Ms. Mulhern is outweighed by the potential prejudice to Fujifilm should Ms. Mulhern be allowed to testify against Fujifilm after working on Fujifilm’s behalf on substantially similar matters in the 931 Investigation.” Thus, the motion was granted.