Federal Circuit Ducks Question of Federal Mediation Privilege 

  Patently O

November 15, 2011

The Pennsylvania case  Kimberly-Clark Worldwide v. First-Quality Baby Products (Fed. Cir. 2011) is all about diapers!  K-C sued its competitor regarding a dozen diaper-related patents but the appeal focuses solely on a procedural matter which involves the extend that ADR proceedings are discoverable.  In essence, the question before the court is whether K-C can be required to disclose information regarding the prior ADR proceedings—“non binding arbitration” with an agreed upon neutral arbitrator—which they had with a different company, Proctor & Gamble. 

ADR proceedings are not explicitly protected from being discoverable under the Federal Rules of Evidence.  The only exception is Rule 408 which prohibits a party from utilizing “statements made in compromise negotiations” for the purposes of “proving liability, invalidity of a claim, damages, or for impeachment of a witness.” The court also has broad power to determine what should be considered privileged under Rule 501 which permits courts to apply “principles of the common law … in the light of reason and experience.”

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