Philips North America LLC et al v. KPI Healthcare, Inc. et al

Filing 134

AMENDED PROTECTIVE ORDER by Magistrate Judge John D. Early (hr)

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UNITED STATES DISTRICT COURT

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CENTRAL DISTRICT OF CALIFORNIA

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SOUTHERN DIVISION

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PHILIPS NORTH AMERICA LLC, a
Delaware Company, KONINKLIJKE
PHILIPS N.V., a Company of the
Netherlands, and PHILIPS INDIA,
LTD., an Indian Company,
vs.

Plaintiffs,

KPI HEALTHCARE INC., a California
Corporation; KPI HEALTHCARE
ECOMMERCE, INC., a California
Corporation; and DOES 1-10,
inclusive,
Defendants.
KPI HEALTHCARE INC., a California
Corporation; KPI HEALTHCARE
ECOMMERCE, INC., a California
Corporation,
Counterclaimants,
vs.

Case No.: 8:19-cv-01765-JVS-JDEx
[DISCOVERY MATTER]
Magistrate Judge John D. Early
AMENDED PROTECTIVE ORDER
REGARDING CONFIDENTIAL
INFORMATION
First Amended Filed: December 3, 2019
Second Amended Answer and
Counterclaims Filed: May 15, 2020

PHILIPS NORTH AMERICA LLC, a
Delaware Company, and
KONINKLIJKE PHILIPS N.V., a
Company of the Netherlands, and
DOES 1-9, inclusive,
Counter-Defendants.

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Case No.: 8:19-cv-01765-JVS-JDE
AMENDED PROTECTIVE ORDER REGARDING CONFIDENTIAL INFORMATION

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1.

INTRODUCTION

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1.1

PURPOSE AND LIMITS OF THIS ORDER

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Discovery in this action is likely to involve confidential, proprietary, or private

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information requiring special protection from public disclosure and from use for any

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purpose other than this litigation. Thus, the Court enters this Amended Protective

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Order. This Order does not confer blanket protections on all disclosures or responses

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to discovery, and the protection it gives from public disclosure and use extends only to

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the specific material entitled to confidential treatment under the applicable legal

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principles. This Order does not automatically authorize the filing under seal of

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material designated under this Order. Instead, the parties must comply with L.R. 79-

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5.1 if they seek to file anything under seal. This Order does not govern the use at trial

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of material designated under this Order.

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1.2

GOOD CAUSE STATEMENT

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The parties in this case are direct competitors in the ultrasound systems sales

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business. The complaint alleges that the defendants are liable for trademark

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infringement, trade secret misappropriation, and unfair competition, among other

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things. This action will necessarily involve the exchange of confidential commercially

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sensitive information. Accordingly, the special protection of this confidential

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commercial and financial information from public disclosure and from use for any

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purpose other than prosecution of this action is warranted. See Fed. R. Civ. P.

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26(c)(1)(G) (“The court may, for good cause, issue an order to protect a party or

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person…[,] requiring that a trade secret or other confidential research, development,

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or commercial information not be revealed or be revealed only in a specified way.”).

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Such alleged confidential information includes, among other things, source code,

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proprietary or confidential business or financial information, information regarding

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confidential business practices, customer and potential customer lists, or other

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confidential commercial and/or trade secret information otherwise generally

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unavailable to the public, or which may be privileged or otherwise protected from
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AMENDED PROTECTIVE ORDER REGARDING CONFIDENTIAL INFORMATION

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disclosure under state or federal statutes, court rules, case decisions, or common law

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and disclosure of which to another Party or Non-Party would create a substantial risk

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of serious harm.

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Additionally, there is a need for a three-tiered protective order that allows

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designation of certain material as “HIGHLY CONFIDENTIAL - ATTORNEYS’

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EYES ONLY” or “HIGHLY CONFIDENTIAL - SOURCE CODE” as this action

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involves allegations that Defendants misappropriated certain trade secrets and/or other

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confidential or proprietary information and because discovery in this matter may seek

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highly confidential trade secrets, including source code, of the Parties. See Elements

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Spirits, Inc. v. Iconic Brands, Inc., Civ. No. CV 15-02692 DDP(AGRx), 2016 WL

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2642206, at *1–*2, 2016 U.S. Dist. LEXIS 61222, at *4 (C.D. Cal. May 9, 2016)

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(holding that protective order with attorneys’ eyes only designation was warranted to

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protect party’s confidential information) (citing Nutratech, Inc. v. Syntech Int’l, Inc.,

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242 F.R.D. 552, 555 (C.D. Cal. 2008); Brown Bag Software v. Symantec Corp., 960

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F.2d 1465, 1470 (9th Cir. 1992)). The unauthorized or otherwise improper use of a

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Party’s confidential, proprietary, or trade secret information gained through discovery

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in this action is likely to cause grave and irreparable harm to the other Party. Thus, a

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three-tiered designation system is warranted to protect the parties’ confidential,

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proprietary, and trade secret information, including, without limitation, any

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proprietary technology, from improper disclosure and the attendant risk of grave

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competitive harm.

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2.

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DESIGNATING PROTECTED MATERIAL
2.1

Over-Designation Prohibited. Any party or non-party who designates

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information or items for protection under this Order as “CONFIDENTIAL,”

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“HIGHLY CONFIDENTIAL – ATTORNEY EYES ONLY,” or “HIGHLY

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CONFIDENTIAL – SOURCE CODE” (a “designator”) must only designate specific

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material that qualifies under the appropriate standards. To the extent practicable, only

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those parts of documents, items, or oral or written communications that require
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AMENDED PROTECTIVE ORDER REGARDING CONFIDENTIAL INFORMATION

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protection shall be designated. Designations with a higher confidentiality level when a

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lower level would suffice are prohibited. Mass, Indiscriminate, or routinized

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designations are prohibited. Unjustified designations expose the designator to

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sanctions, including the Court’s striking all confidentiality designations made by that

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designator. Designation under this Order is allowed only if the designation is

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necessary to protect material that, if disclosed to persons not authorized to view it,

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would cause competitive or other recognized harm. Material may not be designated if

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it has been made public, or if designation is otherwise unnecessary to protect a secrecy

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interest. If a designator learns that information or items that it designated for

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protection do not qualify for protection at all or do not qualify for the level of

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protection initially asserted, that designator must promptly notify all parties that it is

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withdrawing the mistaken designation.

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2.2

Manner and Timing of Designations. Designation under this Order

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requires the designator to affix the applicable legend (“CONFIDENTIAL,” “HIGHLY

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CONFIDENTIAL – ATTORNEY EYES ONLY,” or “HIGHLY CONFIDENTIAL –

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SOURCE CODE”) to each page that contains protected material. For testimony given

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in deposition or other proceeding, the designator shall specify all protected testimony

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and the level of protection being asserted. It may make that designation during the

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deposition or proceeding, or may invoke, on the record or by written notice to all

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parties on or before the next business day, a right to have up to 21 days from receipt of

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the transcript of the deposition or proceeding to make its designation.

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2.2.1 A party or non-party that makes original documents or materials

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available for inspection need not designate them for protection until after the

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inspecting party has identified which material it would like copied and produced.

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During the inspection and before the designation, all material shall be treated as

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HIGHLY CONFIDENTIAL – ATTORNEY EYES ONLY. After the inspecting party

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has identified the documents it wants copied and produced, the producing party must

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designate the documents, or portions thereof, that qualify for protection under this
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AMENDED PROTECTIVE ORDER REGARDING CONFIDENTIAL INFORMATION

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Order.

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2.2.2 2.2.2 Parties shall give advance notice if they expect a deposition or

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other proceeding to include designated material so that the other parties can ensure

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that only authorized individuals are present at those proceedings when such material is

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disclosed or used. The use of a document as an exhibit at a deposition shall not in any

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way affect its designation. Any transcript that is prepared before the expiration of the

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21-day period for designation shall be treated during that period as if it had been

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designated HIGHLY CONFIDENTIAL – ATTORNEY EYES ONLY unless

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otherwise agreed. After the expiration of the 21-day period, the transcript shall be

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treated only as actually designated. Notwithstanding the foregoing, the parties should

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strive to appropriately designate testimony during the deposition. If the Designating

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Party determines that any portion of a transcript designated during the deposition as

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CONFIDENTIAL or HIGHLY CONFIDENTIAL – ATTORNEY EYES ONLY need

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not be treated as CONFIDENTIAL or HIGHLY CONFIDENTIAL – ATTORNEY

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EYES ONLY, the Designating Party shall notify all other parties that the designation

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is withdrawn, and specify the portions of the deposition transcript about which a

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designation is being withdrawn.

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If a Party challenges a designation in accordance with Section 3 of this Order,

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all Parties agree to treat the deposition transcript and testimony as so designated until

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an appropriate Court Order is entered or the Parties otherwise both agree to the

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removal of a designation.
2.3

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Inadvertent Failures to Designate. An inadvertent failure to designate

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does not, standing alone, waive protection under this Order. Upon timely assertion or

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correction of a designation, all recipients must make reasonable efforts to ensure that

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the material is treated according to this Order.

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3.

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CHALLENGING CONFIDENTIALITY DESIGNATIONS
All challenges to confidentiality designations shall proceed under L.R. 37-1

through L.R. 37-4.
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AMENDED PROTECTIVE ORDER REGARDING CONFIDENTIAL INFORMATION

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4.

ACCESS TO DESIGNATED MATERIAL
4.1

Basic Principles. A receiving party may use designated material only for

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this litigation. Designated material may be disclosed only to the categories of persons

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and under the conditions described in this Order.

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4.2

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Unless otherwise ordered by the Court or permitted in writing by the designator,

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Disclosure of CONFIDENTIAL Material Without Further Approval.

a receiving party may disclose any material designated CONFIDENTIAL only to:

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4.2.1 The receiving party’s outside counsel of record in this action and

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employees of outside counsel of record to whom disclosure is reasonably

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necessary;

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4.2.2 The officers, directors, and employees of the receiving party to

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whom disclosure is reasonably necessary, and who have signed the Agreement

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to Be Bound (Exhibit A);

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4.2.3 Experts retained by the receiving party’s outside counsel of record

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and their employees to whom disclosure is reasonably necessary, and who have

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signed the Agreement to Be Bound (Exhibit A);

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4.2.4 The Court and its personnel;

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4.2.5 Outside court reporters and their staff, professional jury or trial

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consultants, and professional vendors to whom disclosure is reasonably

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necessary, and

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who have signed the Agreement to Be Bound (Exhibit A);

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4.2.6 During their depositions, witnesses in the action to whom

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disclosure is reasonably necessary and who have signed the Agreement to Be

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Bound (Exhibit A);
4.2.7 The author or recipient of a document containing the material, or a

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custodian or other person who otherwise possessed or knew the information.

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4.3

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Disclosure of HIGHLY CONFIDENTIAL – ATTORNEY EYES

ONLY and HIGHLY CONFIDENTIAL – SOURCE CODE Material Without
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AMENDED PROTECTIVE ORDER REGARDING CONFIDENTIAL INFORMATION

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Further Approval.

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Unless permitted in writing by the designator, a receiving party may disclose

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material designated HIGHLY CONFIDENTIAL – ATTORNEY EYES ONLY or

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HIGHLY CONFIDENTIAL – SOURCE CODE without further approval only to:

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4.3.1 The receiving party’s outside counsel of record in this action and

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employees of outside counsel of record to whom it is reasonably necessary to

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disclose the information;

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4.3.2 The Court and its personnel;

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4.3.3 Outside court reporters and their staff, professional jury or trial

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consultants, and professional vendors to whom disclosure is reasonably

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necessary, and who have signed the Agreement to Be Bound (Exhibit A); and
4.3.4 The author or recipient of a document containing the material, or a

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custodian or other person who otherwise possessed or knew the information.

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4.4

Procedures for Approving or Objecting to Disclosure of HIGHLY

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CONFIDENTIAL – ATTORNEY EYES ONLY or HIGHLY CONFIDENTIAL

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–SOURCE CODE Material to In-House Counsel or Experts.

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Unless agreed to in writing by the designator:

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4.4.1 A party seeking to disclose to in-house counsel any material designated

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HIGHLY CONFIDENTIAL – ATTORNEY EYES ONLY must first make a written

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request to the designator providing the full name of the in-house counsel, the city and

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state of such counsel’s residence, and such counsel’s current and reasonably

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foreseeable future primary job duties and responsibilities in sufficient detail to

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determine present or potential involvement in any competitive decision-making. In-

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house counsel are not authorized to receive material designated HIGHLY

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CONFIDENTIAL – SOURCE CODE.

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4.4.2 A party seeking to disclose to an expert retained by outside counsel of

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record any information or item that has been designated HIGHLY CONFIDENTIAL

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– ATTORNEY EYES ONLY or HIGHLY CONFIDENTIAL – SOURCE CODE
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AMENDED PROTECTIVE ORDER REGARDING CONFIDENTIAL INFORMATION

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must first make a written request to the designator that (1) identifies the general

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categories of HIGHLY CONFIDENTIAL – ATTORNEY EYES ONLY or HIGHLY

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CONFIDENTIAL – SOURCE CODE information that the receiving party seeks

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permission to disclose to the expert, (2) sets forth the full name of the expert and the

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city and state of his or her primary residence, (3) attaches a copy of the expert’s

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current resume, (4) identifies the expert’s current employer(s), (5) identifies each

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person or entity from whom the expert has received compensation or funding for work

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in his or her areas of expertise (including in connection with litigation) in the past five

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years, and (6) identifies (by name and number of the case, filing date, and location of

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court) any litigation where the expert has offered expert testimony, including by

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declaration, report, or testimony at deposition or trial, in the past five years. If the

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expert believes any of this information at (4) - (6) is subject to a confidentiality

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obligation to a third party, then the expert should provide whatever information the

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expert believes can be disclosed without violating any confidentiality agreements, and

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the party seeking to disclose the information to the expert shall be available to meet

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and confer with the designator regarding any such confidentiality obligations.

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4.4.3 A party that makes a request and provides the information specified in

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paragraph 4.4.1 or 4.4.2 may disclose the designated material to the identified in-

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house counsel or expert unless, within seven days of delivering the request, the party

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receives a written objection from the designator providing detailed grounds for the

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objection.
4.4.4 All challenges to objections from the designator shall proceed under L.R.

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37-1 through L.R. 37-4.

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5.

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SOURCE CODE
5.1

Designation of Source Code. If production of source code is necessary,

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a party may designate it as HIGHLY CONFIDENTIAL – SOURCE CODE if it is, or

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includes, confidential, proprietary, or trade secret source code.

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5.2

Location

and

Supervision

of

Inspection.

Any

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AMENDED PROTECTIVE ORDER REGARDING CONFIDENTIAL INFORMATION

HIGHLY

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CONFIDENTIAL – SOURCE CODE produced in discovery shall be made available

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for inspection, in a format allowing it to be reasonably reviewed and searched, during

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normal business hours or at other mutually agreeable times, at an office of the

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designating party’s counsel or another mutually agreeable location. The source code

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shall be made available for inspection on a secured computer in a secured room, and

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the inspecting party shall not copy, remove, or otherwise transfer any portion of the

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source code onto any recordable media or recordable device. The designator may

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visually monitor the activities of the inspecting party’s representatives during any

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source code review, but only to ensure that there is no unauthorized recording,

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copying, or transmission of the source code.
5.3

Paper Copies of Source Code Excerpts. The inspecting party may

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request paper copies of limited portions of source code that are reasonably necessary

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for the preparation of court filings, pleadings, expert reports, other papers, or for

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deposition or trial. The designator shall provide all such source code in paper form,

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including Bates numbers and the label “HIGHLY CONFIDENTIAL – SOURCE

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CODE.” Within five business days of receiving a request for paper copies, the

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designator may challenge the amount of source code requested in hard copy form

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under L.R. 37-1 through L.R. 37-4. Requests for continuous blocks of source code

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totaling up to 50 pages and requests totaling up to 500 pages of source code are

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presumed reasonable. Requests for continuous blocks of source code exceeding 50

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pages and requests exceeding 500 total pages of source code are presumed

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unreasonable, but the requesting party may overcome the presumption by presenting

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good cause.

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restrictions and presumptions shall not apply to the limited portions of redacted source

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code provided to the Copyright Office pursuant to its deposit requirements for

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copyrights at issue in this action.

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5.4

It is the requesting party’s burden to obtain such relief.

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Access Record. The inspecting party shall maintain a record of any

individual who has inspected any portion of the source code in electronic or paper
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AMENDED PROTECTIVE ORDER REGARDING CONFIDENTIAL INFORMATION

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form, and shall maintain all paper copies of any printed portions of the source code in

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a secured, locked area.

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The inspecting party shall not convert any of the information contained in the

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paper copies into any electronic format other than for the preparation of a pleading,

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exhibit, expert report, discovery document, deposition transcript, or other Court

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document. Any paper copies used during a deposition shall be retrieved at the end of

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each day and must not be left with a court reporter or any other unauthorized

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individual.

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7.

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PROTECTED MATERIAL SUBPOENAED OR ORDERED PRODUCED

IN OTHER LITIGATION
7.1

Subpoenas and Court Orders. This Order in no way excuses non-

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compliance with a lawful subpoena or court order. The purpose of the duties described

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in this section is to alert the interested parties to the existence of this Order and to give

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the designator an opportunity to protect its confidentiality interests in the court where

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the subpoena or order issued.

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7.2

Notification Requirement. If a party is served with a subpoena or a

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court order issued in other litigation that compels disclosure of any information or

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items designated in this action as CONFIDENTIAL, HIGHLY CONFIDENTIAL –

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ATTORNEY EYES ONLY, or HIGHLY CONFIDENTIAL – SOURCE CODE, that

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party must:

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7.2.1 Promptly notify the designator in writing. Such notification shall
include a copy of the subpoena or court order;

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7.2.2 Promptly notify in writing the party who caused the subpoena or

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order to issue in the other litigation that some or all of the material covered by

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the subpoena or order is subject to this Order. Such notification shall include a

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copy of this Order; and

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7.2.3 Cooperate with all reasonable procedures sought by the designator
whose material may be affected.
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AMENDED PROTECTIVE ORDER REGARDING CONFIDENTIAL INFORMATION

7.3

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Wait For Resolution of Protective Order. If the designator timely

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seeks a protective order, the party served with the subpoena or court order shall not

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produce any information designated in this action as CONFIDENTIAL, HIGHLY

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CONFIDENTIAL – ATTORNEY EYES ONLY or HIGHLY CONFIDENTIAL –

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SOURCE CODE before a determination by the court where the subpoena or order

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issued, unless the party has obtained the designator’s permission. The designator shall

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bear the burden and expense of seeking protection of its confidential material in that

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court.

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8.

UNAUTHORIZED DISCLOSURE OF DESIGNATED MATERIAL

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If a receiving party learns that, by inadvertence or otherwise, it has disclosed

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designated material to any person or in any circumstance not authorized under this

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Order, it must immediately (1) notify in writing the designator of the unauthorized

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disclosures, (2) use its best efforts to retrieve all unauthorized copies of the designated

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material, (3) inform the person or persons to whom unauthorized disclosures were

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made of all the terms of this Order, and (4) use reasonable efforts to have such person

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or persons execute the Agreement to Be Bound (Exhibit A).

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9.

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PROTECTED MATERIAL

INADVERTENT PRODUCTION OF PRIVILEGED OR OTHERWISE

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When a producing party gives notice that certain inadvertently produced

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material is subject to a claim of privilege or other protection, the obligations of the

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receiving parties are those set forth in Federal Rule of Civil Procedure 26(b)(5)(B).

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This provision is not intended to modify whatever procedure may be established in an

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e-discovery order that provides for production without prior privilege review pursuant

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to Federal Rule of Evidence 502(d) and (e).

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10.

FILING UNDER SEAL

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Without written permission from the designator or a Court order, a party may

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not file in the public record in this action any designated material. A party seeking to

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file under seal any designated material must comply with L.R. 79-5.1. Filings may be
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AMENDED PROTECTIVE ORDER REGARDING CONFIDENTIAL INFORMATION

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made under seal only pursuant to a court order authorizing the sealing of the specific

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material at issue. The fact that a document has been designated under this Order is

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insufficient to justify filing under seal. Instead, parties must explain the basis for

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confidentiality of each document sought to be filed under seal. Because a party other

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than the designator will often be seeking to file designated material, cooperation

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between the parties in preparing, and in reducing the number and extent of, requests

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for under seal filing is essential. If a receiving party’s request to file designated

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material under seal pursuant to L.R. 79-5.1 is denied by the Court, then the receiving

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party may file the material in the public record unless (1) the designator seeks

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reconsideration within four business days of the denial, or (2) as otherwise instructed

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by the Court.

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11.

MISCELLANEOUS

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11.1 Right to Further Relief

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11.1.1.

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modification by the Court in the future.

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11.1.2 Right to Assert Other Objections. By entry of this Protective Order, no

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Party waives any right it otherwise would have to object to disclosing or producing

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any information or item on any ground not addressed in this Amended Protective

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Order.

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evidence of any of the material covered by this Protective Order.

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12.

Nothing in this Order abridges the right of any person to seek its

Similarly, no Party waives any right to object on any ground to use in

FINAL DISPOSITION

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Within 60 days after the final disposition of this action, each party shall return

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all designated material to the designator or destroy such material, including all copies,

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abstracts, compilations, summaries, and any other format reproducing or capturing

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any designated material. The receiving party must submit a written certification to the

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designator by the 60-day deadline that (1) identifies (by category, where appropriate)

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all the designated material that was returned or destroyed, and (2) affirms that the

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receiving party has not retained any copies, abstracts, compilations, summaries, or any
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AMENDED PROTECTIVE ORDER REGARDING CONFIDENTIAL INFORMATION

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other format reproducing or capturing any of the designated material. This provision

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shall not prevent counsel from retaining an archival copy of all pleadings, motion

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papers, trial, deposition, and hearing transcripts, legal memoranda, correspondence,

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deposition and trial exhibits, expert reports, attorney work product, and consultant and

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expert work product, even if such materials contain designated material. Any such

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archival copies remain subject to this Order.

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13.

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NON-PARTY DESIGNATIONS
Any Information that may be produced by a non-Party or non-Party witness in

discovery in the Proceeding

pursuant

to

subpoena

or

otherwise

may

be

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designated by such non-Party or non-Party witness as “CONFIDENTIAL” or

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“HIGHLY CONFIDENTIAL – ATTORNEY EYES ONLY” under the terms of this

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Amended Protective Order, and any such designation by a non-Party or non-Party

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witness shall have the same force and effect, and create the same duties and

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obligations on the Parties, as if made by one of the undersigned Parties hereto.

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FOR GOOD CAUSE SHOWN (see Dkt. 46-1 to 46-7, 49, 50, 132-1 to 132-6),
IT IS SO ORDERED.

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Dated: January 08, 2021
JOHN D. EARLY
United States Magistrate Judge

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AMENDED PROTECTIVE ORDER REGARDING CONFIDENTIAL INFORMATION

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EXHIBIT A

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ACKNOWLEDGMENT AND AGREEMENT TO BE BOUND

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I,

[print or type full name], of

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[print or type full address], declare under penalty of perjury that I have

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read in its entirety and understand the Amended Protective Order that was issue by the

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United States District Court for the Central District of California on January 8, 2021

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in the case of Philips North America, LLC, et al. v. KPI Healthcare Inc., et. al., 8:19-

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cv-01765-JVS-JDE. I agree to comply with and to be bound by all the terms of this

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Amended Protective Order and I understand and acknowledge that failure to so

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comply could expose me to sanctions and punishment in the nature of contempt. I

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solemnly promise that I will not disclose in any manner any information or item that is

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subject to this Amended Protective Order to any person or entity except in strict

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compliance with the provisions of this Order.

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I further agree to submit to the jurisdiction of the United States District Court

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for the Central District of California for the purpose of enforcing the terms of this

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Amended Protective Order, even if such enforcement proceedings occur after

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termination of this action. I hereby appoint

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full name] of

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number] as my California agent for service of process in connection with this action or

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any proceedings related to enforcement of this Amended Protective Order.

[print or type
[print or type full address and telephone

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Date:

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City and State where sworn and signed:

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Printed Name:

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Signature:

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AMENDED PROTECTIVE ORDER REGARDING CONFIDENTIAL INFORMATION