Can US Discovery Rules Be Used to Gather Evidence for Use in Foreign Proceedings?

By: Joyce Klemmer

In intellectual property cases, it is not uncommon for the parties to be involved in ‘parallel proceedings’ — litigating related issues in more than one country simultaneously. The question often arises whether evidence gathered under liberal US discovery rules may be disclosed for use in foreign proceedings.

28 U.S. Code § 1782 (Assistance to foreign and international tribunals and to litigants before such tribunals) provides that, upon the application of any interested person, a district court may order a person/entity to give his testimony or produce a document for use in a proceeding in a foreign or international tribunal and may prescribe how the testimony will be taken or the document will be produced before a person appointed by the court in accordance with the Federal Rules of Civil Procedure.

PatentlyO’s Using U.S. Discovery in Foreign Proceedings discusses the recent Federal Circuit decision in In re POSCO (Fed. Cir. 2015).

Nippon Steel sued the Korean company POSCO in the US for patent infringement and in Japan for trade secret infringement. POSCO filed a declaratory judgment action in Korea seeking a ruling of non-infringement. In the U.S. lawsuit, the district court entered a discovery protective order that disclosed confidential materials ‘be used by the receiving Party solely for purposes of the prosecution or defense of this action.’ When POSCO disclosed “several million pages of documents containing confidential information” in the U.S. lawsuit, Nippon Steel sought to use some of those documents in the foreign courts. Nippon Steel asked for, and the district court granted, a modification of the protective order that would allow it to use about 200 pages of documents relating to POSCO’s manufacturing process in the foreign court actions. POSCO then petitioned for a writ of mandamus to stop the disclosure. The Federal Circuit remanded the case to the district court with direction to consider 28 U.S.C. § 1782 and Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241 (2004) in determining whether to allow disclosure of POSCO’s confidential protected information to a foreign court.

In Intel Corp. v. Advanced Micro Devices the court enunciated four factors a court should consider:

1)      Is the party from whom discovery is sought also a party to the foreign proceedings and if so, will “ the foreign or international tribunal … exercise its own jurisdiction to order production of the evidence.”

2)      What is “the nature of the foreign tribunal, the character of the proceedings underway abroad, and the receptivity of the foreign government or the court or agency abroad to U.S. federal-court judicial assistance?”

3)      Is the request a “fishing expedition” or “an attempt to circumvent foreign proof-gathering restrictions or other policies of a foreign country or the United States?”

4)      Is the request “unduly intrusive or burdensome?”

For more information on this topic, contact your Intellectual Property counsel at Smith, Gambrell & Russell.

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