Opinion
No. 00 Civ. 2622 (JSM).
October 30, 2000.
MEMORANDUM OPINION AND ORDER
Pacific Technology Corporation ("Petitioner") seeks an order pursuant to Federal Rule of Civil Procedure 27 directing Jerry R. Ehrenwald and the International Gemmological Institute ("Respondents") to produce all documents comprising the file wrapper for the United States Patent Number 4,467,172 ("Ehrenwald Patent") and to submit to certain depositions regarding the Ehrenwald Patent.
Petitioner and Respondents are in the business of laser-inscribing diamonds. Respondent Jerry R. Ehrenwald is the owner of the Ehrenwald Patent and the International Gemmological Institute is its exclusive licensee. Petitioner claims that it has created a new, patent-pending, inscription process. In an attempt to obtain an opinion letter stating that Petitioner's process does not infringe upon the Ehrenwald Patent, Petitioner has made several attempts to obtain the patent wrapper for the subject patent, which consists, inter alia, of all correspondence between the applicant and the United States Patent and Trademark Office ("USPTO"), including all documentation submitted in support of the original patent application. According to a letter from the Official Search Unit of the USPTO, the file has been misplaced. A further attempt to locate the file within the USPTO failed and the file is presumed lost.
Petitioner claims that Respondents have warned Petitioner's customers that Petitioner is infringing on the Ehrenwald Patent. These customers have requested an opinion letter to the contrary, but Petitioner has been unable to obtain an opinion letter without the file wrapper. As a result of its inability to produce an opinion order or judgment of non-infringement, Petitioner claims that it has lost customers and suffered economic harm. Petitioner intends to bring an action in this court for a declaratory judgment of non-infringement, but the inability to obtain the patent wrapper effectively precludes its ability to do so.
Rule 27, Fed.R.Civ.P., provides:
(a) Before Action.
(1) Petition. A person who desires to perpetuate testimony regarding any matter that may be cognizable in any court of the United States may file a verified petition in the United States district court in the district of the residence of any expected adverse party. The petition shall be entitled in the name of the petitioner and shall show: 1, that the petitioner expects to be a party to an action cognizable in a court of the United States but is presently unable to bring it or cause it to be brought, 2, the subject matter of the expected action and the petitioner's interest therein, 3, the facts which the petitioner desires to establish by the proposed testimony and the reasons for desiring to perpetuate it, 4, the names or a description of the persons the petitioner expects will be adverse parties and their addresses so far as known, and 5, the names and addresses of the persons to be examined and the substance of the testimony which the petitioner expects to elicit from each, and shall ask for an order authorizing the petitioner to take the depositions of the persons to be examined named in the petition, for the purpose of perpetuating their testimony.
Rule 27 provides further:
If the court is satisfied that the perpetuation of the testimony may prevent a failure or delay of justice, it shall make an order designating or describing the persons whose deposition may be taken.
"What circumstances show a possible failure or delay of justice sufficient to call for the issuance of an order is . . . a matter for the sound discretion of the district court." Mosseller v. United States, 158 F.2d 380, 382 (2d Cir. 1946). The right to this relief depends "upon the situation of the party (petitioner), and his power to bring his rights to an immediate investigation." Id.
It is generally recognized that Rule 27 should not be used to determine whether a cause of action exists, "but only to preserve evidence that might otherwise be lost". In re Chary, No. M-23, 1994 WL 177783, at *1 (S.D.N.Y. May 6, 1994) (citing Petition of North Carolina, 68 F.R.D. 410, 412 (S.D.N.Y. 1975)). Furthermore, "the decisions construing Rule 27 make it clear that the purpose of the rule is to preserve and perpetuate known testimony, not to provide litigants with a vehicle for the ascertainment of evidence." In re Wolfson, 453 F. Supp. 1087, 1096 (S.D.N.Y. 1978).
However, as Professor Moore has noted:
The language of Rule 27 is quite broad, granting authority to courts to issue an order on a finding that the perpetuation of testimony may prevent a failure or delay of justice. This language has not been read as a grant to district courts to act independent of the rule's historical limits (citation omitted).
Nonetheless, its broad language directly reflects the equitable origins of the device and the more specific requirements should be read through the eyes of a Chancellor with focus upon the malleable character of orders to perpetuate and their ability to be tailored to specific fact situations.Sunrise Shipping, Ltd. v. M/V American Chemist, No. Civ. A. 96-2849, 1997 WL 639023, at *2 (E.D. La. Oct. 15, 1997) (emphasis added) (quoting 6 Moore's Federal Practice § 27.14[1]). See also Mosseller, 158 F.2d at 381 ("[A] court of equity, may, according to the usages of chancery, direct depositions to be taken in perpetuam rei memoriam, if they relate to any matters that may be cognizable in any court of the United States.").
In this case, Petitioner is not fishing for information that may or may not exist. Rather, Petitioner is seeking a copy of a public record that should have been available to it, but has been lost by the USPTO and is in the Respondents' exclusive possession. There can be no question that this document would be vitally important in an action that may be brought either by the Petitioner or Respondent with respect to the patent at issue. There is also no question that there is currently a dispute between the parties concerning the scope of the patent at issue.
Thus, even if we assume that Petitioner does not have a sufficient basis to commence a declaratory judgment action against Respondent today, there is still no doubt that it is seeking discovery concerning a "matter that may be cognizable in any court of the United States." In these circumstances, a court of equity must balance the need to discourage the use of Rule 27 as a means of obtaining discovery to see if a cause of action exists and the need to preserve evidence that may be highly relevant should an action be commenced. As noted above, Respondent is in possession of the only copy of an important public document that is missing from the government's files. Should Respondent lose or destroy the document prior to any litigation, Petitioner could be severely prejudiced.
In these circumstances, a court of equity should use its power to insure that the document is preserved. See In re Ingersoll-Rand Co., 35 F.R.D. 568 (S.D.N.Y. 1964); In re Alpha Indus., Inc., 159 F.R.D. 456 (S.D.N.Y. 1995). Therefore, the petition will be granted to the extent of requiring Respondent to produce the document in question and a witness to testify that it contains the complete file wrapper. However, Petitioner is not entitled to depose the witness concerning anything beyond the facts necessary to establish the authenticity and completeness of the document.
CONCLUSION
For the foregoing reasons, the petition is granted as to the production of all documents comprising the file wrapper for United States Patent No. 4,467,172, and denied as to the depositions of the Respondents beyond that necessary to establish the authenticity and completeness of the document. The Respondents request for attorney's fees and costs is denied.