Opinion
Case No. 1:00-CV-751
August 13, 2002
ORDER
In accordance with an Opinion issued this day,
IT IS HEREBY ORDERED that Plaintiff Donnelly Corporation's Motion to Dismiss Defendants' Michigan Common Law Unfair Competition Counterclaim Pursuant to Rule 12(b)(6) and for Separate Trials and Stay of Certain Discovery Pursuant to Fed.R.Civ.P. 42(b) (Dkt. No. 153) is GRANTED in part and DENIED in part. IT IS FURTHER ORDERED that Donnelly's Motion to Dismiss R S USA LP's Michigan common law unfair competition counterclaim is DENIED. IT IS FURTHER ORDERED that Donnelly's request for separate trials is GRANTED. Two separate trials will be held in this matter. The first will determine the patent infringement claim. The second will determine all antitrust and unfair competition counterclaims and the patent misuse defense.
IT IS FURTHER ORDERED that Donnelly's request for a stay of discovery is DENIED.
IT IS FURTHER ORDERED that the parties are to contact Magistrate Judge Ellen S. Carmody within 4 days of the date of this Order to schedule a status conference in this matter.
OPINION
This matter is before the Court on Plaintiff Donnelly Corporation's Motion to Dismiss Defendants' Michigan Common Law Unfair Competition Counterclaim Pursuant to Rule 12(b)(6) and for Separate Trials and Stay of Certain Discovery Pursuant to Fed.R.Civ.P. 42(b). The Court will deny Plaintiff's Motion to Dismiss Defendant Reitter Schefenacker USA Limited Partnership's ("R S USA LP") Michigan common law unfair competition counterclaim. The Court will grant Plaintiff's request to bifurcate the trial of R S USA LP's antitrust and unfair competition counterclaims and the patent misuse defense from the current patent infringement case. The Court will not, however, stay any discovery in this matter.
The Amended Answer and Counterclaims were filed on February 1, 2002 by Defendant R S USA LP only and were not joined by Defendant Reitter Schefenacker GmbH Co. KG ("R S GmbH"). ( See Amended Answer and Counterclaims, Dkt. No. 147.)
I. Standard of Review A. Motions to Dismiss
Under Federal Rule of Civil Procedure 12(b)(6), a court may dismiss a claim only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations. Hishon v. King Spalding, 467 U.S. 69, 73 (1984); Conley v. Gibson, 355 U.S. 41, 45-46 (1957). The allegations must be construed in the light most favorable to the plaintiff. Gregory v. Shelby County, Tenn., 220 F.3d 433, 446 (6th Cir. 2000) (citations omitted). The rules generally require only a "short and plain statement of the claim" and not detailed allegations. Leatherman v. Tarrant County Narcotics Intelligence Coordination Unit, 507 U.S. 163, 168 (1993). The complaint, however, "must contain either direct or inferential allegations respecting all the material elements to sustain a recovery under some viable legal theory." Scheid v. Fanny Farmer Candy Shops, Inc., 859 F.2d 434, 436 (6th Cir, 1988) (quotations omitted) (emphasis in original).
B. Motions For Separate Trials
The Court may order a separate trial for any number of claims to promote convenience, expediency, economy, or to prevent prejudice. Fed.R.Civ.P. 42(b). In order for a court to grant bifurcation, the party seeking bifurcation has the burden of demonstrating that judicial economy would be served and that no party would be prejudiced by separate trials, based on the circumstances of the individual case. Real v. Bunn-O-Matic Corp., 195 F.R.D. 618, 620 (N.D.Ill. 2000); Novopharm Ltd. v. Torpharm, Inc., 181 F.R.D. 308, 310 (E.D.N.C. 1998).
II. Facts
On October 5, 2000, Plaintiff Donnelly Corporation ("Donnelly") filed its Complaint for patent infringement against R S GmbH and R S USA LP ("Defendants" collectively), alleging that Defendants' manufacture, use, sale, and offering for sale to customers of lighted interior rearview mirrors infringed three Donnelly patents. In their original Answer submitted on January 8, 2001, Defendants denied the infringement claim.
These patents are U.S. Patent Nos. 4,733,336 ("the '336 patent"); 5,671,996 ("the '996 patent"); and 5,938,321 ("the '321 patent").
On February 1, 2002, R S USA LP filed an Amended Answer and Counterclaims, alleging that Donnelly is: (1) guilty of patent misuse; (2) in violation of the Sherman Act § 2 due to Walker Process fraud; (3) in violation of the Sherman Act § 2 due to Donnelly's alleged filing of "sham litigation"; and (4) in violation of Michigan's unfair competition common law. First, Donnelly requests dismissal of R S USA LP's Michigan common law unfair competition counterclaim for failure to state a claim. Second, Donnelly asks for bifurcation of the trial of the Sherman Act antitrust counterclaims, the unfair competition counterclaim in the event that the Court denies the motion to dismiss it, and the patent misuse defense. Finally, Donnelly requests a stay of any litigation concerning these issues pending the resolution of the on-going patent infringement case that Donnelly originally brought against Defendants.
When a patent infringement suit is used for the purpose of stifling competition with the patent holder's sale of an unpatented product, the defendants in the patent infringement suit are entitled to the patent misuse defense. Kolene Corp. v. Motor City Metal Treating, Inc., 440 F.2d 77, 84 (6th Cir. 1971). This defense has been subsequently limited by other case law. See, e.g., Virginia Panel Corp. v. MAC Panel Co., 133 F.3d 860, 868-871 (Fed. Cir. 1997).
Walker Process fraud is the enforcement of a patent procured by fraud on the patent office and may constitute a violation of the Sherman Act § 2, provided the other elements necessary to a Sherman Act case are present. See Walker Process Equip., Inc. v. Food Mach. Chem. Corp., 382 U.S. 172, 174 (1965).
R S USA LP's "sham litigation" claim made under § 2 of the Sherman Act seeks to demonstrate Donnelly undertook litigation against Defendants for the sole purpose of hindering and disrupting R S USA LP's business operations. See Re/Max Int'l, Inc. v. Realty One, Inc., 173 F.3d 995, 1005 (6th Cir. 1999).
III. Analysis A. Unfair Competition Under Michigan Common Law
In its Michigan common law unfair competition counterclaim, R S USA LP alleges Donnelly: (1) obtained patents by fraud and inequitable conduct; (2) filed and maintained the current, allegedly baseless patent infringement action; (3) publicized the pending action to R S USA LP's actual and potential customers; and (4) advised R S USA LP's actual and potential customers that R S USA LP "will be unable to supply lighted interior automotive rearview mirrors because such mirrors infringe the patents in suit." (R S USA LP's Amended Answer and Counterclaim at ¶ 56.) Donnelly asserts that none of this conduct, even if true, gives rise to a claim under Michigan's unfair competition common law. However, the Court will deny Plaintiff's Motion to Dismiss this counterclaim.
In 1933, the Michigan Supreme Court described a principle of unfair competition law as follows:
Unfair competition ordinarily consists in the simulation by one person, for the purpose of deceiving the public, of the name, symbols, or devices employed by a business rival, or the substitution of the goods or wares of one person for those of another, thus falsely inducing the purchase of his wares and thereby obtaining for himself the benefits properly belonging to his competitor. The rule is generally recognized that no one shall by imitation or unfair device induce the public to believe that the goods he offers for sale are the goods of another, and thereby appropriate to himself the value of the reputation which the other has acquired for his own product or merchandise.Schwannecke v. Genesee Coal Ice Co., 247 N.W. 761, 762 (Mich. 1933). This description is oft-quoted. See, e.g., Love v. New York Times Co., 691 F.2d 261, 265 (6th Cir. 1982); Pennwalt Corp. v. Zenith Labs., Inc., 472 F. Supp. 413, 418 (6th Cir. 1979); Cawley v. Swearer, 936 F.2d 572, 1991 WL 108725, at *2-3 (6th Cir. June 20, 1991); Marion Labs., Inc. v. Michigan Pharmacal Corp., 338 F. Supp. 762, 767 (E.D.Mich. 1972), aff'd without op., 473 F.2d 910 (6th Cir. 1973); Moon Bros. v. Moon, 1 N.W.2d 488, 493 (Mich. 1942). As a result, Donnelly asserts Michigan's common law unfair competition claim encompasses only trademark violations described in the passage in Schwannecke, particularly those violations known as "palming off," where one attempts to disguise his or her goods as those of another in order to trade on the other's business goodwill. In essence, Donnelly asserts that Michigan's common law of unfair competition does not include claims for bad faith assertion of patent actions.
Another federal court in this District has held that Michigan's unfair competition claim is mostly limited to "palming off," although recognizing unauthorized duplication and deception of the public are also theories under which unfair competition claims have been sustained. See Action Publ'ns, Inc. v. Panax Corp., 1984 WL 2268, at *11 (W.D.Mich. Nov. 30, 1984) (Miles, J.) (citing Schwannecke, 247 N.W. at 762 (main source of "palming off" theory); A M Records, Inc. v. M.V.C. Distributing Corp., 574 F.2d 312 (6th Cir. 1978) (unauthorized duplication theory); Clairol, Inc. v. Boston Discount Center of Berkley, 608 F.2d 1114, 1119-20 (6th Cir. 1979) (deception of public theory)).
Donnelly also bases its argument that R S USA LP's allegations are insufficient to state a claim on Letica Corp. v. Sweetheart Cup Co., Inc., 790 F. Supp. 702 (E.D.Mich. 1992). In Letica, another federal court held that an allegation that a company was threatening to assert its right to a product's trade dress, and therefore bar the plaintiff from entry into the market in that product, was not enough to state a claim for unfair competition under Michigan law. See id. at 706. After so holding, the Letica Court noted that "[f]ew, if any, cases exist wherein a claim of unfair competition involved something other than the protection of names of corporations, buildings and other businesses." Id. In addition, the Letica Court noted there was no allegation of any improper business activity, like prosecuting baseless litigation for the purpose of harassing a competitor. See id. at 706-07. Unlike in Letica, however, R S USA LP alleges that Donnelly has prosecuted the current patent litigation in bad faith to steal its customers.
Moreover, R S USA LP counters that other Michigan cases have considered similar conduct to constitute unfair competition and that none of the cases cited by Donnelly conclude that Michigan's common law absolutely excludes a claim based on R S USA LP's allegations. For example, the Michigan Supreme Court has said,
There are many ways, other than by interference with contract, of harassing, interfering with, and obstructing a competitor in such a manner as to amount to unfair competition, in the broadest sense of the term. The business of another may be unlawfully obtained by harassing his customers and salesmen, just as effectively as by passing off his goods as those of another. There may be also interference by bringing a multiplicity of suits. The bringing of a multiplicity of suits, started not in good faith, but for the purpose of deterring the public from purchasing from a rival and ruining his trade was enjoined in Wisconsin. There is no question that it is lawful and proper for the owner of a patent to give a notice of infringement of his patent to any infringer thereof, or to any user of an infringing article. It is also his legal right to bring and prosecute a suit for recovery of damages against an infringer or user. Such suit, however, must be honestly brought and prosecuted in good faith, and not commenced and prosecuted to harass, annoy, intimidate, financially embarrass, and drive out of business a competitor, for such acts and conduct would amount to unlawful and unfair competition.
Attorney Gen. ex rel. James v. Nat'l Cash Register Co., 148 N.W. 420, 428 (Mich. 1914). These statements would appear to recognize a cause of action in Michigan for common law unfair competition to have been stated with the allegations made by R S USA LP.
Donnelly counters that the above discussion concerned only whether the defendants in that case violated Michigan's anti-monopoly statute and did not relate to Michigan's common law of unfair competition. ( See Donnelly's Reply to Motion to Dismiss, at 5 n. 3 (citing Nat'l Cash Register, 148 N.W. at 422).) It is true that the only apparent claim at issue was a claim that defendants violated the anti-monopoly statute, probably owing to the fact that the case was brought by the State of Michigan on the relation of a private individual, instead of directly by the private individual. However, the National Cash Register Court's discussion of why defendants' conduct constituted unfair competition is still relevant to the issue of what may constitute a properly stated unfair competition claim in Michigan. Certainly, it can be inferred from National Cash Register that had there been a claim against defendants for unfair competition, the Michigan Supreme Court may very well have found such a claim to have been properly stated. Cf. id. at 428.
In another case, the Michigan Supreme Court affirmed a trial court decree enjoining the defendants from continuing to engage in practices found to constitute "unfair and immoral competition." See Schwanbeck Bros. v. A. Backus, Jr., Sons, 111 N.W. 1046, 1047 (Mich. 1907). There, the defendants wrote letters to the plaintiff's customers who purchased plaintiff's allegedly infringing product, threatening them with suit for infringement of defendants' patent. See id. at 1046-47. In addition, the defendants refused to litigate the matter of the patent infringement after the plaintiff invited them to do so, and engaged in other activities apparently leading the Schwanbeck Court to conclude that "unfair and immoral competition" was present. See id.
Donnelly responds that Schwanbeck "more closely approximates a tortious interference with business relations claim," not an unfair competition claim, and cites another federal district court who dismissed unfair competition claims because of a lack of evidence in the plaintiff's favor. See Nagle Indus., Inc. v. Ford Motor Co., 173 F.R.D. 448, 456-57 (E.D.Mich. 1997). However, the Nagle Court asserted that the plaintiff's reliance on Schwanbeck was "misplaced" because Nagle had no evidence Ford interfered with its business relationships by threatening its customers with a patent infringement action, whereas "[t]he Schwanbeck Court upheld an unfair competition claim against defendant because plaintiff had presented the court with evidence that defendant had interfered with its business relationships by threatening its customers with a patent infringement action if they purchased plaintiff's products." Id. at 457. Thus, the Nagle Court did not hold that these allegations could only constitute a tortious interference claim and not an unfair competition claim under Michigan law. Cf. id. at 457.
In addition, Michigan follows general principles of unfair competition. Marion Labs., 338 F. Supp. at 767 (citing Clipper Belt Lacer Co. v. Detroit Belt Lacer Co., 194 N.W. 125, 128 (Mich. 1923)); see also Clairol, Inc., 608 F.2d at 1120 ("[m]easur[ing the facts of the case] against principles of law which obtain in Michigan as throughout the United States"). Regarding the scope of unfair competition law, the Clipper Belt Court said,
There is no hard and fast rule by which it can be determined when the court will interfere by injunction to prevent what is practically a fraud upon a person engaged in business by unfair methods of business. Each case must depend upon its own facts, but where it is clearly established that an attempt is being made by one person to get the business of another by any means that involves fraud or deceit, a court of equity will protect an honest trader and restrain a dishonest one from carrying out his scheme.Clipper Belt, 194 N.W. at 128. This statement leads this Court to believe that R S USA LP's allegations state a cognizable claim under Michigan unfair competition law. If R S USA LP proves its allegations, it would be established that Donnelly attempted to take R S USA LP's business by means involving fraud or deceit, both unfair methods of conducting business. See id.
Clipper Belt cites from 2 Nims on Unfair Competition § 4, at 12-16 (1917), which is apparently from where the statement quoted supra was reported. See Clipper Belt, 194 N.W. at 128. Also, Clipper Belt takes note of the statement which was later quoted and made famous in Michigan law by Schwannecke in 1933, see supra, which came from a different treatise or source identified as 26 R.C.L. 826 et seq. See id. The Clipper Belt Court uses both statements in a manner suggesting they both constitute Michigan common law of unfair competition. See id.
Finally, this interpretation of Michigan law is consistent with the common law of other states. See, e.g., Zenith Elecs. Corp. v. Exzec, Inc., 182 F.3d 1340, 1355 (Fed. Cir. 1999) (referring to the claim both as a state law unfair competition claim and a tortious interference claim); Dow Chem. Co. v. Exxon Corp., 139 F.3d 1470, 1472, 1478-79 (Fed. Cir. 1998) (same). In Zenith, the Federal Circuit had occasion to hold that state law unfair competition claims are not preempted by federal patent or antitrust law so long as bad faith is an element of the state law claim. Zenith, 182 F.3d at 1355. "This is because the protection otherwise afforded by the patent laws to a patentee's conduct in enforcing its patent may be lost if the patentee acts in bad faith." Id. at 1343.
This Court presumes that Illinois state law was at issue in Zenith, although the Federal Circuit did not specify. Cf. Zenith, 182 F.3d at 1342 (referring to "the state's unfair competition laws," where the case originated in the Northern District of Illinois).
Donnelly can present no case or other source stating that Michigan common law unfair competition claims absolutely cannot be sustained on the allegations at issue in this case. Moreover, other Michigan cases have recognized similar unfair competition claims under Michigan common law, and federal law apparently does not preempt such a claim. Therefore, Donnelly's Motion to Dismiss the unfair competition counterclaim will be denied.
B. Bifurcation
Donnelly further moves that the trial of all antitrust counterclaims, the patent misuse defense, and the unfair competition counterclaim be bifurcated from the current patent case to promote convenience, expediency, and economy for all participants in these matters. Donnelly further argues that conducting one trial on all issues poses the risk of unfairly prejudicing Donnelly's patent infringement claims by adding many new issues, documents, and witnesses, as well as a great deal more time and complexity to the patent proceedings.
A court may order separate trials of claims or issues "in furtherance of convenience or to avoid prejudice, or when separate trials will be conducive to expedition and economy." Fed.R.Civ.P. 42(b). In deciding whether to bifurcate, the major consideration is directed toward the choice most likely to result in a just final disposition of the litigation. In re Innotron Diagnostics, 800 F.2d 1077,1084 (Fed. Cir. 1986). In the interests of justice, the Court will order two separate trials in this matter — the first trying issues pertaining to the patent infringement claim, and the second trying issues pertaining to the antitrust and unfair competition counterclaims and the patent misuse defense.
1. Antitrust and Unfair Competition Counterclaims
In cases where there is a patent claim and an antitrust defense or counterclaim, it is "acceptable procedure to sever the antitrust claims from the patent claims and to provide for separate trials of each." Standard Pressed Steel Co. v. Astoria Plating Corp., 162 U.S.P.Q. 441, 442 (E.D. Ohio 1969). This practice is common because both issues require voluminous and complex proof and because the proof is non-duplicative. Id.
R S USA LP's antitrust counterclaims are specifically dependant on a finding that Donnelly's patents in question are invalid and unenforceable since "antitrust laws do not negate a patentee's right to exclude others from patent property." In re Indep. Serv. Orgs. Antitrust Litig., 203 F.3d 1322, 1325 (Fed. Cir. 2000). Furthermore, R S USA LP's counterclaims require the examination of many issues outside the scope of the current patent case. In order to prove an antitrust violation, in addition to demonstrating the core assertion of patent invalidity, R S USA LP must first establish the relevant market and then demonstrate the indicia of monopoly power, including (but not limited to) the existence of barriers of entrance into the relevant market, the power to exclude others, the power to raise prices, the lack of product substitutability, predatory intent, market dominance, and guilty knowledge on the part of Donnelly. See Innotron Diagnostics, 800 F.2d at 1085.
R S USA LP argues that because the evidence and proofs needed in the current patent infringement claim and the evidence and proofs needed in the antitrust counterclaim overlap considerably and have largely the same patent "invalidity and unenforceability" basis, bifurcation would result in an excess of redundant litigation. However, if a determination is made that Donnelly's patents are invalid and unenforceable, neither party in this case need again prove the same issues at the antitrust hearing, but need only establish other issues not previously determined, such as the relevant market or predatory intent. Furthermore, although the antitrust counterclaim depends heavily on a determination that Donnelly's patents in question are invalid, the amount of evidence, testimony, and presentation that R S USA LP must show in addition to the basic determination of patent invalidity in order to successfully claim antitrust violations is considerable.
If the Court or a jury finds that Donnelly's patents in question were valid and enforceable, R S USA LP's counterclaims will be weakened if not obviated altogether. See Indep. Serv. Orgs. Antitrust Litig., 203 F.3d at 1325. Although the possibility that antitrust and patent misuse counterclaims may be obviated does not alone warrant bifurcation, it does offer substantial support for it.
Moreover, because patent infringement and antitrust matters involve two completely different and highly complex bodies of law, a single trial for both the patent infringement claim and the antitrust counterclaims will likely cause some degree of jury confusion. A trial requiring the determination of patent validity, infringement, and antitrust violations places a heavy burden on any jury. Henan Oil Tools, Inc. v. Eng'g Enters., Inc., 262 F. Supp. 629, 631 (S.D.Tex. 1966). For all these reasons, the Court will bifurcate the possible trial of R S USA LP's antitrust counterclaims from the current patent infringement proceedings.
The same reasoning applies to the unfair competition counterclaim here, since most of the conduct alleged underlying the unfair competition counterclaim is quite similar to that underlying the antitrust counterclaims. Therefore, trial of the unfair competition counterclaim will also be bifurcated from the patent infringement proceedings and tried together with the antitrust counterclaims.
2. Patent Misuse Defense
Finally, bifurcation of the patent misuse defense is also appropriate under Rule 42(b). The patent misuse defense has been explained as follows:
Where the patent is used as a means of restraining competition with the patentee's sale of an unpatented product, the successful prosecution of an infringement suit even against one who is not a competitor in such sale is a powerful aid to the maintenance of the attempted monopoly of the unpatented article, and is thus a contributing factor in thwarting the public policy underlying the grant of the patent.Kolene Corp. v. Motor City Metal Treating, Inc., 440 F.2d 77, 84 (6th Cir. 1971) (emphasis added). Patent misuse is an equitable doctrine which prevents a patentee from enforcing its rights through wrongful action. Hunter Douglas, Inc. v. Comfortex Corp., 44 F. Supp.2d 145, 156 (N.D.N.Y. 1999). The patentee may not claim the protection of the patent's grant of exclusivity given for reasons of public policy where the patentee uses the grant to subvert the public policy underlying patents. Id. (quoting Morton Salt Co. v. G.S. Suppiger Co., 314 U.S. 488, 492-95 (1942)).
Further discussion of the limits of this defense may be found in Virginia Panel Corp., 133 F.3d. at 868-871.
R S USA LP, to successfully assert its misuse defense, must prove Donnelly "has impermissibly broadened the physical or temporal scope of the patent grant with anticompetitive effect." Hunter Douglas, Inc., 44 F. Supp.2d at 156. While one who misuses a patent does not also necessarily violate antitrust laws, one who violates antitrust laws by using a patent is necessarily guilty of patent misuse. Id.
This Court adopts the reasoning of the Hunter Douglas Court in its conclusion that the patent misuse defense should be bifurcated and tried with antitrust counterclaims. See Hunter Douglas, Inc., 44 F. Supp.2d at 156. Simply stated, this is primarily because the patent misuse defense and the antitrust claims involve the same essential operative facts. See id.
In more significant detail, the Hunter Douglas Court explained the benefits of trying the patent misuse defense separately from the question of infringement, all of which apply to the matter before this Court:
In the abstract, the ultimate issue in determining the merit of a patent misuse defense is whether the patentee has sought to wrongfully extend the rights granted under the patent statute; not whether the patentee has violated the antitrust laws per se. Read in that light, it would in all cases make perfect sense as a matter of law to group the patent misuse defense with patent rather than antitrust issues. Practically speaking, however, a party claiming patent misuse predicated on alleged antitrust violations will present its most forceful case which will entail showing the patentee to be a violator of the antitrust laws. Thus, one missing the primary target of establishing antitrust liability may nonetheless meet the lesser burden of showing misuse. Antitrust and patent misuse, therefore, are connected as a matter of fact.
Juries are fact-finders and as such are called upon to apply the relevant law to the facts presented. In cases involving complex issues, legal or otherwise, the interest of promoting the most orderly presentation of facts takes on added significance. Given the foregoing, the patent misuse defense is better grouped with antitrust counterclaims.
Further, patent misuse is more logically connected to antitrust and state tort issues rather than issues of patent liability. As presently constructed, the first phase of the trial will involve presentation of infringement, validity, and enforceability matters. Each of these pertains to (1) the formalities of the patents [in suit] as they existed on their respective dates of issuance and (2) the actions of [the patent holder] during the prosecution of the patents. [A]ntitrust claims as well as the misuse defense, on the other hand, relate to [the patent holder's] conduct in practicing the patents.
Moreover, placing the misuse defense with the antitrust counterclaims maintains the economies derived from separating the patent liability issues from counterclaims. That is, grouping the misuse defense with the patent liability issues would inject antitrust issues into the patent liability phase when it has already been found that the interests of judicial economy, convenience, and minimizing prejudice are better served when the patent and antitrust issues remain separate.Hunter Douglas, Inc., 44 F. Supp.2d at 156. Accordingly, the Court will bifurcate R S USA LP's patent misuse defense from the current patent infringement proceedings. The patent misuse defense will be tried with the antitrust counterclaims.
C. Stay on Discovery
The Court will not issue a stay on discovery of any issues which may solely relate to the antitrust or unfair competition counterclaims or the patent misuse defense. All discovery will continue so that it will completed prior to the two separate trials.
The Court believes that such a course is best in this matter for several reasons. For one, it will eliminate disagreement between the parties about what is and is not related to which claims and thus what discovery is permitted now and what discovery has been stayed. This will permit the focus to be on the collection of discovery information instead of bickering.
Second, full discovery now, thus permitting the parties to have the complete picture of all available evidence, facilitates settlement of this matter more than a stay would. A more likely chance of settlement serves the interests of justice, convenience, expediency, and conservation of resources of all involved.
Third, full discovery now eliminates the possibility of unfair prejudice to the parties inuring from interpretation of a stay on discovery. For instance, the Court could deny a discovery request on the basis that it did not appear to be calculated to lead to pertinent information in the patent infringement phase. If, in actuality, the request would have led to relevant information in the infringement phase, it would be unfair to the requesting party but there would likely be no way to correct the unfairness.
Fourth, full discovery now will permit quicker resolution of this dispute. Conducting two separate rounds of discovery would undoubtedly delay resolution of the entire dispute assuming the second, antitrust trial is necessary after the patent trial. If the second, antitrust trial is not necessary after the patent trial, the length of the entire proceeding will likely be only slightly longer, if longer at all, than it would have been under a stay of antitrust and unfair competition discovery. Such a course of action will also permit the two separate trials to be conducted in swifter succession, allowing the issues to be fresher in all minds involved and increasing the likelihood of a fully fair resolution of this complex dispute.
III. Conclusion
For the reasons stated, the Court will deny Donnelly's Motion to Dismiss R S USA LP's Michigan common taw unfair competition counterclaim. The Court will grant Donnelly's request for a separate trial of R S USA LP's antitrust and unfair competition counterclaims and patent misuse defense. However, the Court will not grant Donnelly's request for a stay of discovery. An Order consistent with this Opinion will be entered.