Intellectual Property Law

Western District Corrects Discovery Abuses with Adverse Instruction to Jury

By Michael Atkins

Loops LLC’s flexible prison toothbrush featuring “non-shank” design

In 2008, Ferndale’s Loops LLC filed suit in the Western District against Seattle’s Phoenix Trading, Inc., d/b/a Amercare Products, Inc., for trademark and trade dress infringement, among other things.

Both parties sell toothbrushes to prisons. Loops alleges that Amercare has sold toothbrushes under the LOOPS FLEXBRUSH trademark, which is identical to Loops’ registered trademark. It also alleges that Amercare’s toothbrushes are identical to Loops’ registered product design. (Loops’ “non-shank” toothbrush design can bend in half or twist into a spiral without breaking, so it can’t be used as a weapon. Seems a bit functional to me, but I digress.)

Loops moved for an order of contempt, alleging that Amercare has withheld or deleted relevant documents that Loops had requested in discovery. In particular, Loops requested documents related to the manufacture of Amercare’s toothbrushes in China and their importation into the States. Early in the litigation, Judge Ricardo Martinez granted a motion to compel, but Amercare’s documents were not forthcoming. In depositions, it became clear that Amercare had not produced all of the requested documents.

Today, the court found: “Defendants had four or five invoices from Kai Yuen / Jiangsu Light within their possession or control during the pendency of this litigation. They only produced two of them. Defendants were also in control of purchase orders for flexible handle toothbrushes sent from Amercare to H&L Industrial, and invoices from H&L to Amercare, which were not produced. Additionally, Defendants were in control of invoices detailing freight charges for transportation of flexible toothbrushes from factories in China to Chinese ports as well as wire transfers from Amercare to H&L Industrial, and these have not been produced.”

The court added: “Defendants are culpable in either withholding these documents or negligently destroying or losing them after having a duty to preserve them. The Court further finds that these materials were relevant to prove the extent of Defendants’ damages. Finally, the Court finds that some number of e-mails between Amercare and H&L existed during the pendency of this lawsuit which were not produced and have since been negligently deleted. These e-mails were likely relevant to damages and liability. Defendants’ contention that no documents have been destroyed and no more responsible documents exist is directly contradicted by Ms. Hemming’s deposition testimony, which indicates that relevant documents do or did exist.”

To correct these discovery abuses, the court concluded it would give the jury an adverse inference instruction that the evidence Amercare made unavailable was unfavorable to Amercare.

That could really hurt Amercare at trial — as well it should. A party’s not playing fair in discovery threatens to undermine our system for deciding who’s right and who’s wrong based on the merits. No one should be disadvantaged by playing by the rules.

The case cite is Loops LLC v. Phoenix Trading, Inc., No. 08-1064 (W.D. Wash. March 3, 2010). 

Full post as published by Seattle Trademark Lawyer on March 04, 2010 (boomark / email).