Federal Circuit Grants Mandamus Disallowing Use of U.S. Discovery in Foreign Proceedings

The Federal Circuit has granted mandamus vacating a New Jersey district court’s order that allowed plaintiff  Nippon to use defendant’s proprietary information produced in a US patent case in trade secret theft litigation pending in Japan and Korea. Nippon sued defendant in 2012, alleging patent infringement. Following the entry of the district court’s protective order, which prohibited the cross­use of confidential materials, defendant produced several million pages of documents containing confidential information. Nippon later sued defendant in Japan for trade secret misappropriation and defendant filed its own declaratory judgment action in Korea. Nippon moved the New Jersey district court to modify its protective order to allow foreign counsel in the Japanese and Korean actions access to defendant’s confidential manufacturing documents. The district, finding the documents relevant to the foreign actions, and citing third circuit precedent, allowed the modification. On writ of mandamus, the Federal Circuit found review appropriate because the case raised an important issue of first impression. The appellate court held that 28 U.S.C. § 1782 and the Supreme Court’s 2004 decision in Intel Corp. v. Advanced Micro Devices, Inc. applied to the issue at hand. Section 1782 provides that a district court “may order” production of documents for use in a proceeding in a foreign or international tribunal, and Intel sets forth specific factors to be considered in deciding whether to provide evidence for use in foreign proceedings, including “whether the request conceals an attempt to circumvent foreign proof­gathering restrictions.” Here, the court noted that our federal court system is more generous than in Japan and Korea, and Nippon was attempting to obtain and use documents that perhaps it would not otherwise be able to obtain and use in those foreign courts. The court therefore granted mandamus, directing the district court to conduct the proper assessment in light of the Intel factors. Judge Hughes concurred in the outcome but wrote separately, faulting the district court for imposing restrictions on the foreign court’s use of documents which he believed violated principles of comity. He did not agree that § 1782 applied in this case.

In re POSCO (Fed. Cir. July 22, 2015) (Newman, Dyk (author), Hughes).