Opinion
Index No. 653632/2015
12-20-2019
ECONOMIC ALCHEMY LLC, Plaintiff v. BYRNE POH LLP, MATTHEW T. BYRNE, PHILIP POH, and GARY WALPERT, Defendants
NYSCEF DOC. NO. 131
DECISION AND ORDER
LUCY BILLINGS, J.S.C.:
In this action for defendants' legal malpractice in prosecuting patent applications for plaintiff, defendants move for penalties due to its noncompliance with the order dated October 11, 2019, and the stipulated Status Conference Order dated December 5, 2019, or to compel its production of documents in compliance with those orders. C.P.L.R. §§ 3124, 3126(2) and (3). The Status Conference Order extended the deadline for the production from October 31 to December 18, 2019. Defendants also move to extend the dates set for depositions until 30 days after plaintiff complies with the orders.
Plaintiff cross-moves to renew defendants' prior motion that the court granted in its order dated October 11, 2019, to exclude from the production documents that both that order and the stipulated Status Conference Order dated December 5, 2019, required plaintiff to produce. C.P.L.R. § 2221(e). For the reasons explained below, the court grants defendants' motion to the extent set forth and denies plaintiff's cross-motion. C.P.L.R. §§ 2221(e), 3124, 3126(1).
I. CORRESPONDENCE BY PLAINTIFF'S PREDECESSOR AND SUCCESSOR ATTORNEYS
Plaintiff admits that it has not produced the correspondence by its patent attorneys who preceded and succeeded defendants that they requested and the court ordered. By December 23, 2019, plaintiff shall produce any documents not privileged or protected under C.P.L.R. § 3101(c) or (d)(2) or shall specify an applicable privilege or protection in a log that includes any withheld document's type, subject, and date and other information necessary to identify the document, including the persons to whom it was sent or from whom it was received. C.P.L.R. §§ 3120(1)(i), 3122(a)(1) and (b); Stephen v. State of New York, 117 A.D.3d 820, 820-21 (2d Dep't 2014); Ural v. Encompass Ins. Co. of Am., 97 A.D.3d 562, 566-67 (2d Dep't 2012). These documents are material and necessary to defendants' defenses that plaintiff's predecessor attorneys caused the damages plaintiff claims in this action and that its successor attorneys had and continue to have ample opportunities to mitigate its claimed damages.
Plaintiff's noncompliance with repeated deadlines to produce these documents or a privilege log warrants a further penalty if plaintiff fails to complete this production by December 23, 2019. To the extent that plaintiff fails to produce by then any documents or privilege log pertaining to correspondence by plaintiff's patent attorneys who preceded defendants, the issue of whether any predecessor attorneys caused the damages plaintiff claims in. this action shall be resolved in defendants' favor. To the extent that plaintiff fails to produce by December 23. 2019, any documents or privilege log pertaining to correspondence by plaintiff's patent attorneys who succeeded defendants, the issue of whether any successor attorneys could have mitigated the damages plaintiff claims in this action shall be resolved in defendants' favor. C.P.L.R. § 3126(1); Crooke v. Bonofacio, 147 A.D.3d 510, 510-11 (1st Dep't 2017); Baldwin v. Gerard Ave., LLC, 58 A.D.3d 484, 484-85 (1st Dep't 2009); Horizon Inc. v. Wolkowicki, 55 A.D.3d 337, 338 1st Dep't 2008); Longo v. Armor El. Co, 307 A.D.2d 848, 849 (1st Dep't 2003). See Weissman v. 20 E. 9th St. Corp., 48 A.D.3d 242, 243 (1st Dep't 2008); Schilling v. Quiros, 23 A.D.3d 243, 244 (1st Dep't 2005).
II. PATENT PROSECUTION DOCUMENTS
A. Image File Wrappers
As previously ordered, plaintiff produced to defendants the image file wrapper printouts for patent applications ##13/677,273, 13/677,276, 13/677,278, and 13/677,297, but the materials reflect activity only through April 2, 2019. By January 3, 2020, plaintiff shall review the image file wrappers for these four patent applications and produce to defendants any further materials reflecting activity from April 2, 2019, to January 3, 2020.
By January 3, 2020, plaintiff also shall produce to defendants the image file wrapper printout for patent application #13/677,277. This document is one of the documents that plaintiff seeks to exclude from the required production because the document is a record created by plaintiff rather than by the United States Patent and Trademark Office (USPTO) on its Patent Application Information Retrieval website. To the extent that plaintiff raised this objection in opposition to defendants' prior motion, the court already overruled the objection. C.P.L.R. §§ 3120(1)(i) and 3122(c) require plaintiff to produce the documents requested by defendants (a) as it keeps the documents in its regular course of business, not as kept by the USPTO on its website, which is not necessarily even for the USPTO's business purposes, or (b) organized and labeled to correspond the categories of the request.
Plaintiff admits that it has accessed these patent application materials and created the image file wrapper that defendants requested and the court ordered and admits that only plaintiff is permitted this access. Moreover, the image file wrapper lists the documents chronologically by description, the format envisioned by the parties' prior stipulation dated June 6, 2019, as well as the order dated October 11, 2019, and enables defendants to verify that the production of materials corresponding to patent application #13/677,277 is a complete and accurate response to defendants' request. C.P.L.R. § 3122(c); H.P.S. Mgt. Co., Inc. v. St. Paul Surplus Lines Ins. Co., 127 A.D.3d 1018, 1019 (2d Dep't 2015). See Whitley v. Industrial Funding Corp., 8 A.D.3d 963, 963 (4th Dep't 2004).
This document is material and necessary to defendants' defenses that plaintiff's predecessor attorneys caused the damages plaintiff claims in this action and that plaintiff's invention that was the subject of the patent application was a non-patentable abstract idea. 35 U.S.C. § 101; Alice Corp. Pty. Ltd. v. CLS Bank Int'l, 573 U.S. 208, 219-20 (2014). Plaintiff's noncompliance with repeated deadlines to produce the image file wrapper printout for patent application #13/677,277 warrants a further penalty if plaintiff fails to produce the document by January 3, 2020. Therefore, if plaintiff fails to do so, the issues of whether any predecessor attorneys caused the damages plaintiff claims in this action and whether plaintiff's invention that was the subject of this patent application was a non-patentable abstract idea shall be resolved in defendants' favor. C.P.L.R. § 3126(1); Crooke v. Bonofacio, 147 A.D.3d at 510-11; Baldwin v. Gerard Ave., LLC, 58 A.D.3d at 484-85; Horizon Inc. v. Wolkowicki, 55 A.D.3d at 338; Longo v. Armor El. Co, 307 A.D.2d at 849.
B. Patent Applications Filed by Successor Attorneys
Second, plaintiff seeks to exclude patent prosecution materials for applications ##15/144,732, 15/367,058, 16/033,168, and 62/531,095, because they were filed by attorneys representing plaintiff after it terminated defendants' services. Although plaintiff insists that these four later applications pertain to inventions and patents entirely unrelated to the patent applications defendants filed, plaintiff presents no evidentiary support for this conclusion.
Defendants, on the other hand, claim that these applications were continuations or continuations in part of the same patent applications as defendants prosecuted and thus provided plaintiff the opportunity to mitigate any damages plaintiff claims defendants caused. By plaintiff's own description, applications 16/033,168 and 62/531,095 pertain to the very same "Methods and Systems to Create Synthetic Variables, Indicators, and Indices from Multiple Data and Metadata Sources and Risk Management Contracts Thereon" as application 13/677,273 that defendants prosecuted. Reply Aff. of Aaron M. Barham Exs. A and B. By plaintiff's own description, application 15/144,372, pertaining to "Methods and Systems for the Creation of Synthetic Data Proxies and Automatic Asset Selection Thereon," relates to the same financial forecasting methods and systems as application 13/677,273 that defendants prosecuted. Id. Exs. E and F. By plaintiff's own description, application 15/367,058 pertains to the very same "Methods and Systems to Quantify and Index Liquidity Risk in Financial Markets and Risk Management Contracts Thereon" as application 13/677,277 that defendants prosecuted. Id. Exs. C and D.
These four sets of documents thus may be material and necessary to defendants' defenses that plaintiff's successor attorneys have had ample opportunities to mitigate the damages plaintiff claims in this action and that plaintiff's inventions that were the subject of the earlier patent application were non-patentable abstract ideas. 35 U.S.C. § 101; Alice Corp. Pty. Ltd. v. CLS Bank Int'l, 573 U.S. at 219-20. Again, plaintiff's noncompliance with repeated deadlines to produce the patent prosecution materials for applications ##15/144,732, 15/367,058, 16/033,168, and 62/531,095 warrants a further penalty if plaintiff fails to produce these documents by January 3, 2020. Therefore, if plaintiff fails to do so, the issues of whether any successor attorneys could have mitigated the damages plaintiff claims in this action and whether plaintiff's inventions that were the subject of the patent applications defendants prosecuted were non-patentable abstract ideas shall be resolved in defendants' favor. C.P.L.R. § 3126(1); Crooke v. Bonofacio, 147 A.D.3d at 510-11; Baldwin v. Gerard Ave., LLC, 58 A.D.3d at 484-85; Horizon Inc. v. Wolkowicki, 55 A.D.3d at 338; Longo v. Armor El. Co, 307 A.D.2d at 849.
C. Renewal
As demonstrated above, plaintiff presents no new facts that were unavailable when it opposed defendants' prior motion, as required by C.P.L.R. § 2221(e)(2) and (3). Jones v. City of New York, 146 A.D.3d 690, 691 (1st Dep't 2017); Levin v. New York City Health & Hosps. Corp. (Harlem Hosp. Ctr.), 119 A.D.3d 480, 483 (1st Dep't 2014); Vinik v. Lee, 96 A.D.3d 522, 523 (1st Dep't 2012); Rhodes v. City of New York, 88 A.D.3d 614, 615 (1st Dep't 2011). Plaintiff presents either facts that it presented then or facts that were available to it then. Even if the facts plaintiff presents are new facts that were unavailable previously, however, they do not change the result required by C.P.L.R. §§ 3120(1)(i) and 3122(c), the order dated October 11, 2019, or the Status Conference Order dated December 5, 2019, to which plaintiff stipulated. C.P.L.R. § 2221(e)(2); Jones v. City of New York, 146 A.D.3d at 691; Levin v. New York City Health & Hosps. Corp. (Harlem Hosp. Ctr.), 119 A.D.3d at 483; Windham v. New York City Tr. Auth., 115 A.D.3d 597, 600 (1st Dep't 2014); Hernandez v. St. Stephen of Hungary School, 72 A.D.3d 595, 595 (1st Dep't 2010).
III. CONCLUSION
Plaintiff shall produce the documents as delineated above. C.P.L.R. §§ 3120(1)(i), 3122(c), 3124. To the extent that plaintiff fails to comply, the correlative penalty is automatically imposed. C.P.L.R. § 3126(1). The court denies defendants' motion to the extent that defendants seek a further or different production of documents or further penalties. C.P.L.R. §§ 3124, 3126(2) and (3). The deadline of January 3, 2020, for all documents to be produced does not necessitate a postponement of the depositions scheduled to begin January 17, 2020.
Having again ordered plaintiff to produce the documents that the order dated October 11, 2019, and the stipulated Status Conference Order dated December 5, 2019, ordered plaintiff to produce, the. court denies plaintiff's cross-motion to renew defendants' prior motion that the court granted in its order dated October 11, 2019, to exclude documents from the required production. C.P.L.R. § 2221(e). The court denies any relief for noncompliance with the confidentiality order since plaintiff did not seek such relief in plaintiff's notice of its cross-motion, C.P.L.R. §§ 2214(a), 2.215; DaimlerChrysler Ins. Co. v. Seek, 82 A.D.2d 581, 582 (1st Dep't 2011); Reyes v. Sequeira, 64 A.D.3d 500, 508 (1st Dep't 2009), and defendants have promptly remedied any unintentional claimed noncompliance. DATED: December 20, 2019
/s/_________
LUCY BILLINGS, J.S.C.