DDEL approves case-by-case approach to discovery of license negotiation documents

The District of Delaware in Sciele Pharma, Inc. v. Lupin, LTD, Civil No. 09-37 (RBK/JS) (Redacted Version) (D. Del. January 31, 2013), ruled on plaintiff’s motion seeking production of certain license agreements and related negotiation documents.  The portion of the opinion concerning production of negotiation documents is most interesting.  The court granted the motion as to negotiation documents, but indicated that production in such cases should be based on a case-by-case approach.

Having determined that the defendant was required to produce some license agreements, it was compelled to address plaintiff’s request for the underlying documents, including “negotiations, forecasts and analysis.”  The court noted that there are cases going both ways on settlement negotiation documents, citing:  Tyco Healthcare Group LP v. E-Z-EM, Inc., No. 2:07-cv-262 (tjw), 2010 wl 774878, at *2 (E.D. Tex. March 2, 2010) (ordering production); High Point SARL v. Sprint Nextel Corp., C.A. No. 09-2269-CM-DJW, 2012 WL 1533213 (D. Kan. April 30, 2012) (denying production even though license agreements ordered to be produced).  The court recognized the split was not surprising given the broad discretion afforded courts in deciding discovery issues.

The court declined to adopt a blanket rule on the discoverability of negotiation documents, instead opting for a “case-by-case approach … to determine whether the requested documents were discoverable.”  The court cited Charles E. Hill & Assoc., Inc. v. ABT Elecs., Inc., 854 F. Supp. 2d 427, 429 (E.D. Tex. 2012), in support of this approach.  However, the Delaware court also agreed with Charles E. Hill that “as a general rule license negotiations are less probative and more prejudicial than the licenses themselves,” and that “negotiation documents ‘primarily add heat and not light to an already difficult judicial chore.’”  Slip op. at 10 (quoting Charles E. Hill).