DONNA M. RYU, Magistrate Judge.
Before the court is a joint discovery letter ("Letter") filed by Plaintiff Mycone Dental Supply Co., Inc. dba Keystone Research & Pharmaceutical ("Keystone") and third party Gel Products, Inc. ("Gel"). [Docket No. 139.] Keystone subpoenaed Gel seeking documents, which Gel provided. Keystone also conducted a deposition of Gel pursuant to Federal Rule of Civil Procedure 30(b)(6), which occurred on April 30, 2013. This dispute concerns Gel's "clawback" request, sent by letter to Keystone and Defendant Creative Nail Design Inc. ("CND") on June 18, 2013, that the parties return certain documents that Gel contends are privileged and inadvertently produced. The court conducted a hearing on September 4, 2013. For the reasons stated below, Gel's request is denied.
Gel is a corporation owned and operated by Sarah Peterson and Pam Lilley. In 2001, Gel signed a license and development agreement with CND. Gel's work under that agreement led to the development and introduction of several commercial nail polish products for CND. In October 2004, U.S. Patent No. 6,803,394 was issued to Peterson and Lilley, with Gel named as the assignee. In 2010, Gel and CND entered into an agreement wherein Gel assigned ownership of the patent to CND, and in turn CND granted Gel an exclusive license on most but not all of the claims in the '394 patent.
In mid-March 2013, Keystone served subpoenas on Gel and Gel's patent lawyer, Deborah Peacock at the law firm of Peacock Myers. On April 22, 2013, Gel's lawyer in this litigation, Lewis Hoffman, sent an email to Keystone describing privileged material that Gel would not be producing, including "[a]ttorney-client communications representing transmittal of thoughts (including drafts) exchanged between Gel (through its two principal officers) and Peacock during the period of patent prosecution)." That email specifically noted that Gel would be producing "simple transmittal or notice letters." On April 23, 2013, Hoffman produced 35,000 pages from Gel's files and 4,000 pages (in 254 documents) from the files of Peacock Myers. The production includes nine letters, totaling approximately 58 pages, that are the subject of this discovery dispute. The parties describe these letters as "transmittal letters" from Peacock Myers to Gel that informed Gel of its general duty of candor, and urged compliance with that duty. According to Gel, the letters "were each sent in different patent applications, at different times, and provide specific legal advice regarding disclosure duty as to the specific patent applications at issue." Letter at 2. The same letters had apparently been delivered by Gel to CND in January 2011—that is, long before the current lawsuit was filed—when Hoffman instructed Peacock Myers to send "transmittal letters" to CND. Gel claims that it approved Hoffman's instruction to Peacock Myers, but Gel did not realize that Peacock Myers had sent the disputed letters to CND until April 2013, when it was collecting documents for the production currently at issue.
Gel designated Pam Lilley as the "person most knowledgeable" to answer questions at the Rule 30(b)(6) deposition, held on April 30, 2013. During that deposition, Keystone examined Lilley using one of the letters at issue. Hoffman objected that he believed that some of the sentences in that letter were privileged, but agreed to permit Keystone to question Lilley, provided that Keystone agree that Gel was not waiving its privilege assertion or its clawback rights under the protective order. Keystone agreed.
Seven weeks after the deposition, on June 18, Hoffman wrote Keystone a letter demanding that Keystone return or destroy the 58 pages over which Gel asserts a claim of privilege.
The parties to the litigation have entered into a protective order which includes a provision governing the inadvertent production of privileged material:
See Docket No. 93 at ¶ 11 (emphasis added). Gel, as a third party, did not stipulate to this protective order. However, at the hearing, the parties and Gel all agreed that they had been working with the understanding that the protective order applies to Gel in this situation.
In addition, Federal Rule of Evidence 502(b) provides, "When made in a federal proceeding or to a federal office or agency, the disclosure does not operate as a waiver in a federal or state proceeding if: (1) the disclosure is inadvertent; (2) the holder of the privilege or protection took reasonable steps to prevent disclosure; and (3) the holder promptly took reasonable steps to rectify the error, including (if applicable) following Federal Rule of Civil Procedure 26(b)(5)(B)."
The court denies Gel's clawback request because Gel did not promptly take reasonable steps to rectify the error.
Gel argues that the delay should be measured starting from when counsel finally confirmed, after investigation, that the documents were privileged, not from the date of Lilley's deposition. However, the cases cited by Gel for this argument are distinguishable. In Rodriguez-Monguio v. Ohio State Univ., the producing party's counsel clawed the privileged document back immediately after learning of that a "clearly" attorney-client privileged document had been produced. No. 2:08-CV-00139, 2009 WL 1575277 (S.D. Ohio June 3, 2009) (receiving party's counsel had referred to the inadvertently produced email in a five-page single-spaced letter to producing party's counsel on January 22, but producing party's counsel did not carefully review that letter until three weeks later and only then realized that an email that was "clearly" privileged had been inadvertently produced, and immediately requested the email be clawed back). In Valentin v. Bank of New York Mellon Corp., the producing party took approximately 25 days to investigate a privilege issue that was not immediately obvious and required fact-gathering from percipient witnesses. No. 09-cv-9448-GBD-JCF, 2011 WL 1466122 at *3 (S.D.N.Y. Apr. 14, 2011). The court found there was no undue delay where the producing party first focused its attention on a document with handwritten notes on February 3, conferred with human resources, determined on February 18 that the notes had been written by former in-house counsel, verified on February 22 that the notes had been written after the plaintiff served a demand letter and were therefore privileged, and then sought return of the documents on February 28. Here, Gel took 45 days to research its assertion of privilege before sending its clawback letter. This research covered three or four essentially identical sentences in nine essentially identical form transmittal letters, the author of which was obvious on the face of the letters. Under these circumstances, Gel's delay neither meets the requirements of the protective order nor the requirement under Rule 502(b) that the producing party take "reasonable steps to rectify the error" of the inadvertent disclosure.
For the reasons stated above, Gel's clawback request is