Practitioners are aware that the Federal Rules of Civil Procedure were amended effective December 1, 2015, including to specifically remove the “reasonably calculated to lead to the discovery of admissible evidence” standard for discoverability under Rule 26(a), replacing it with language stating that the proper scope of discovery in a case is dependent on relevance and proportionality. Recently, one of the first rulings applying the new discoverability standard was issued in the District of Minnesota in an opinion that will likely be of interest to patent litigators.
In M-I Drilling Fluids UK Ltd. and M-I LLC v. Dynamic Air Inc., M-I has accused DAI of infringing U.S. Patents allegedly covering pneumatic conveyance systems used on oil rigs and ships transporting oil. The allegations cover two types of accused systems: ones located entirely on U.S.-flagged ships and ones that have components on Brazilian-flagged oil rigs as well as U.S.-flagged ships. DAI had been resisting producing discovery related to the components and operations of the accused systems located on the oil rigs on relevancy grounds.
The Court recently rejected DAI’s position. First, Magistrate Judge Bowbeer noted the amended Rule 26 standard: that discoverability is governed by relevance and proportionality—and that simply because “information is not located in the United States [that] does not bar it from being discoverable.” The judge went on to decide that M-I must be allowed to pursue discovery that would confirm or disprove its direct infringement contentions under § 271(a) that DAI’s systems were “controlled and operated for the benefit of someone within the United States on the ship or oil rig.” Additionally, the Court held that M-I should be permitted to take discovery relating to its indirect infringement contentions under § 271(f) that assembly of the accused systems on the Brazilian rigs “would infringe the patent if it occurred in the U.S.”
A silver lining for DAI? Magistrate Judge Bowbeer narrowed M-I’s discovery requests to cover only the accused systems, rather than “every pneumatic system for the conveyance of drill cuttings, including the Accused Systems, which had been the original scope of M-I’s discovery requests. Read the full opinion here.