RYA W. ZOBEL, District Judge.
Plaintiffs Palomar Medical Technologies, Inc. ("Palomar"), and The General Hospital Corporation bring this action for patent infringement against defendant TRIA Beauty, Inc. ("TRIA"). They claim that TRIA's Laser Hair Removal System infringes on two of their patents entitled "Permanent Hair Removal Using Optical Pulses" ("the '568 patent") and "Hair Removal Using Optical Pulses" ("the '844 patent") (collectively, "patents-in-suit"), issued in 1997 and 1998, respectively. TRIA counterclaims that among other things plaintiffs' alleged withholding of material references and prior art from the U.S. Patent and Trademark Office during the prosecution of the patents-in-suit renders them invalid and/or unenforceable.
TRIA disclosed Dr. Kenneth Arndt as an expert on infringement and invalidity
Plaintiffs' argument relies on a consulting relationship between Dr. Arndt and Palomar which expired almost a decade ago,
On May 2, 2002, Dr. Arndt signed a "Consulting Agreement" with Palomar to "provide consultation . . . with respect to the safety and efficacy of the EsteLux Pulsed-Light System" ("EsteLux System"). Docket # 71 Ex. C at Sch. 1. The EsteLux System uses Intense Pulsed Light ("IPL") to perform a variety of cosmetic and aesthetic procedures, including hair removal, and involves various "hand-pieces" which are each capable of performing different tasks.
The agreement provided that Dr. Arndt was to conduct two clinical studies "per protocol provided by Palomar": "The first of two to commence on May 1, 2002 to evaluate the safety and efficacy of the LuxG hand-piece for treatment facial vascular and pigmented lesions and skin rejuvenation . . .[,]" and the second for "[e]valuation of newly developed hand-pieces and the EsteLux II System (specific details TBD)."
Palomar sent Dr. Arndt two hand-pieces: the LuxG and the LuxY. The LuxG is used for skin rejuvenation and to treat pigmented and vascular lesions; the LuxY is specifically designed to perform hair removal but can also treat pigmented lesions. Palomar files indicate that Dr. Arndt conducted a clinical study of the LuxG for use in skin rejuvenation, but that he did not prepare a final report of this study. The record does not reflect (and plaintiffs do not assert) that he ever used the LuxY.
On June 11, 2002, Dr. Arndt attended a meeting with Dr. Gregory Altshuler, Palomar's Senior Vice President of Research, Dr. Michael Smotrich, Chief Technology Officer, and Michail Pankratov, then Vice President of Clinicals and Consumer Relations. Dr. Altshuler gave a PowerPoint presentation entitled "New Clinical Studies with EsteLux," where he discussed the safety and efficacy of using IPL for hair removal, skin rejuvenation, and the treatment of vascular and pigmented lesions. He also presented information about Palomar's plans to develop an over-the-counter, light-based hair removal product; its design and development of products for light-based hair removal; two technologies related to light-based hair removal which were then patent-pending; and other Palomar products and research including new treatment methods for collagen remodeling, and potential future studies on wrinkle treatment. Docket # 71 Ex. I ¶¶ 8-15.
In September 2002, Dr. Arndt billed Palomar for "monthly services rendered" between May 2002 and July 2002. Handwritten notes on the bill indicate that Dr. Arndt "(1) Treated several patients,"
In or about August 1994, Star Medical, then a subsidiary of Palomar,
"Although courts are generally reluctant to disqualify expert witnesses, federal courts have inherent authority to disqualify experts `if necessary to preserve public confidence in the fairness and integrity of the judicial system.'"
The 2002 consulting agreement contained a provision which defined "confidential information" to include "trade secrets, ideas, data, business plans, drawing, concepts, creative works, inventions, and compilations of information which are owned or licensed by the Company." Docket # 71 Ex. C ¶ 6. In their declarations, Dr. Altshuler and Michail Pankratov discuss meetings with Dr. Arndt where Palomar explained its research plans and future products, which could be considered "confidential information" under the agreement. Docket # 71 Exs. I, O. By signing the agreement, Dr. Arndt committed to using "a reasonable degree of care . . . to protect and prevent unauthorized disclosure" of confidential information and to only use such information "in the performance of this Agreement." Docket # 71 Ex. C ¶ 6. Under these circumstances, plaintiffs have shown that it was objectively reasonable for them to believe that Palomar had a confidential relationship with Dr. Arndt under the 2002-2003 consulting agreement.
The converse is true of Dr. Arndt's 1994 relationship with Star Medical. There is no objective evidence that Star Medical treated the relationship as confidential.
Even though plaintiffs have demonstrated a reasonable belief that the 2002-2003 consulting relationship was confidential, to prevail they must also show that during that relationship, Palomar disclosed confidential information relevant to this litigation. In the context of expert disqualification,
Furthermore, plaintiffs have not shown that Dr. Arndt received information of particular significance relevant to this litigation. The LuxG — with which Dr. Arndt conducted clinical studies — is not used for hair removal. There is no evidence that he ever used the LuxY — the EsteLux hand-piece designed for hair removal — much less conducted clinical studies or evaluated its safety or efficacy. While the consulting agreement says that Dr. Arndt was to conduct a clinical study evaluating "newly developed hand-pieces and the EsteLux II system (specific details TBD)," there is no evidence that any such "details" were ever developed or that such evaluations took place. Thus, whatever Dr. Arndt may have learned in evaluating Palomar's EsteLux System is irrelevant to whether TRIA's Laser Hair Removal System infringes on the patents-in-suit, and certainly would not constitute "substantive information about the case."
Similarly, information Dr. Arndt may have learned in meetings with Dr. Altshuler and other Palomar executives about Palomar's research plans and products is irrelevant. Moreover, whatever Dr. Arndt may have learned about the state of Palomar's research in 2002 has no bearing on whether the prior art at the time the patents-in-suit were prosecuted in the 1990s renders them invalid or unenforceable.
Plaintiffs' motion to disqualify Dr. Arndt and deny him access to plaintiffs' confidential information under the protective order (Docket ## 65,69) is DENIED. Plaintiffs' motion for extension of time to complete certain expert discovery (Docket # 68) is ALLOWED. On or before February 29, 2012, the parties shall submit a proposal with dates for the completion of expert discovery. The parties' motions to seal certain portions of their filings (Docket ## 84, 88, 90, 92) and TRIA's motion for leave to file supplemental materials (Docket # 85) are ALLOWED. Plaintiffs' motion to seal their motion to deny Dr. Mark Weckwerth access to their confidential information (Docket # 92) is DENIED AS MOOT because plaintiffs have withdrawn the underlying motion.
"Consultant shall use a reasonable degree of care . . . to protect and prevent unauthorized disclosure of any Confidential Information . . . unless such information (a) was known to Consultant prior to receipt of the information directly or indirectly from Company; (b) is now or becomes known to Consultant through no act or failure to act on the part of Consultant or of any person under any obligation of confidentiality to Company; or (c) is now or becomes generally known or available to the public. Consultant shall use Confidential Information only in the performance of this Agreement. No other use of Confidential Information, whether for Consultant's benefit or for the benefit of others, shall be permitted. In no event is Consultant authorized to disclose Confidential Information without the prior written approval of Company." Docket # 71 Ex. C ¶ 6.