Nevro Corp v. Boston Scientific Corporation et al

Filing 109

Discovery Order. Declaration due by 6/14/2017. Reply due by 6/21/2017. Signed by Judge Maria-Elena James on 5/31/2017. (mejlc2S, COURT STAFF) (Filed on 5/31/2017)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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NEVRO CORP,

Case No. 16-cv-06830-VC (MEJ)

Plaintiff,
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DISCOVERY ORDER

v.

Re: Dkt. No. 91

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United States District Court
Northern District of California

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BOSTON SCIENTIFIC CORPORATION, et
al.,
Defendants.

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INTRODUCTION

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Plaintiff Nevro Corp. (“Nevro”) and Defendants Boston Scientific Corporation and Boston

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Scientific Neuromodulation Corporation (together, “BSC”) filed a Joint Letter concerning Nevro‟s

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ability to disclose certain confidential information to its in house counsel and Nevro‟s request that

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BSC supplement certain records. Jt. Ltr., Dkt. No. 91. Having considered the parties‟ positions,

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the relevant legal authority, and the record in this case, the Court issues the following order.
BACKGROUND

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This patent infringement action concerns Nevro‟s spinal cord stimulation (“SCS”) therapy,

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used to treat chronic pain. See Compl., Dkt. No. 1. “Traditional SCS therapy delivers „low

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frequency‟ electrical pulse waveforms . . . to generate a sensation known as paresthesia.” Id. ¶ 3.

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Paresthesia, which is experienced as a tingling, numbness, buzzing, or pins-and-needles sensation,

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masks the patient‟s pain. Id.

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Nevro alleges it developed and patented the Senza system, “an SCS therapy that differs

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dramatically from traditional SCS therapy”: by using a “high frequency” electrical waveform,

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Nevro‟s SCS therapy provides pain relief without generating paresthesia. Id. ¶ 5; see id. ¶ 19. On

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May 8, 2015, the U.S. Food and Drug Administration (“FDA”) approved Nevro‟s Senza system

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for sale in the United States. Id. ¶¶ 7, 22.
Nevro contends BSC “is now aggressively trying to mimic Nevro‟s SCS therapy” and

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initiated a clinical trial that uses SCS devices that operate at the same electrical frequency as

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Nevro‟s SCS system, and that BSC‟s devices infringe Nevro‟s patents. Id. ¶ 8; see id. ¶¶ 30-31.

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Nevro further alleges BSC manufactures and/or sells these infringing in the United States, the

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United Kingdom, and the Netherlands. Id. ¶¶ 40, 43. Nevro asserts six claims for patent

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infringement and six declaratory judgment claims for infringement of those patents. Id. ¶¶ 52-141.

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LEGAL STANDARD

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Federal Rule of Civil Procedure 26 provides that a party may obtain discovery “regarding
any nonprivileged matter that is relevant to any party‟s claim or defense and proportional to the

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United States District Court
Northern District of California

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needs of the case[.]” Fed. R. Civ. P. 26(b)(1). Factors to consider include “the importance of the

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issues at stake in the action, the amount in controversy, the parties‟ relative access to relevant

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information, the parties‟ resources, the importance of the discovery in resolving the issues, and

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whether the burden or expense of the proposed discovery outweighs its likely benefit.” Id.

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Discovery need not be admissible in evidence to be discoverable. Id. However, “[t]he parties and

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the court have a collective responsibility to consider the proportionality of all discovery and

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consider it in resolving discovery disputes.” Fed. R. Civ. P. 26 advisory committee notes (2015

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amendments). Thus, there is “a shared responsibility on all the parties to consider the factors

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bearing on proportionality before propounding discovery requests, issuing responses and

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objections, or raising discovery disputes before the courts.” Salazar v. McDonald’s Corp., 2016

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WL 736213, at *2 (N.D. Cal. Feb. 25, 2016); Goes Int’l, AB v. Dodur Ltd., 2016 WL 427369, at

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*4 (N.D. Cal. Feb. 4, 2016) (citing advisory committee notes for proposition that parties share a

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“collective responsibility” to consider proportionality and requiring that “[b]oth parties . . . tailor

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their efforts to the needs of th[e] case”).

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Rule 26(c) “confers broad discretion on the trial court to decide when a protective order is

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appropriate and what degree of protection is required.” Seattle Times Co. v. Rhinehart, 467 U.S.

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20, 36 (1984). “The court may, for good cause, issue an order to protect a party or person from

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annoyance, embarrassment, oppression, or undue burden or expense,” including by (1) prohibiting
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disclosure or discovery; (2) conditioning disclosure or discovery on specified terms; (3)

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preventing inquiry into certain matters; or (4) limiting the scope of disclosure or discovery to

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certain matters. Fed. R. Civ. P. 26(c)(1).
DISCUSSION

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A.

Disclosures to In House Counsel
Courts may not deny access to confidential information solely on the basis of counsel‟s in-

house or retained status. U.S. Steel Corp. v. United States, 730 F.2d 1465, 1467-68 (Fed. Cir.

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1984). “Denial or grant of access . . . cannot rest on a general assumption that one group of

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lawyers are more likely or less likely inadvertently to breach their duty under a protective order.”

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Id. at 1468. Rather, “the factual circumstances surrounding each individual counsel‟s activities,

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United States District Court
Northern District of California

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association, and relationship with a party, whether counsel be in-house or retained, must govern

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any concern for inadvertent or accidental disclosure.” Id. Denial of access may be appropriate in

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some instances; for example, “where in-house counsel are involved in competitive

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decisionmaking, it may well be that a party seeking access should be forced to retain outside

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counsel or be denied the access recognized as needed.” Id.

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Nevro seeks to disclose a “specific high level summary” of information that BSC

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designated as “Confidential – Attorneys‟ Eyes Only” to Peter Socarras, Nevro‟s Senior Director of

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Intellectual Property. Jt. Ltr. at 3. Socarras is presumably involved with Nevro‟s competitive

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decision-making. See id. at 3 (“Nevro has five in-house counsel. . . . It does not have counsel

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who can run this suit who is not involved in competitive decision-making.”). Nevro argues

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Socarras needs this information so Nevro can make strategic decisions about this lawsuit. Id. at 1.

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BSC disputes the necessity of this disclosure and argues “Socarras is . . . the type of employee that

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these [protective order] protections seek to exclude from access.” Id. at 4.

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In Brown Bag Software v. Symantec Corp., the Ninth Circuit reviewed a protective order

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that shielded the plaintiff‟s in-house counsel from viewing documents that contained the

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defendant‟s trade secrets, but allowed an independent consultant access to them to advise the

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plaintiff as to the documents‟ relevancy. 960 F.2d 1465, 1469-72 (9th Cir. 1992). The Brown Bag

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Court noted that “proper review of protective orders in cases such as this requires the district court
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to examine factually all the risks and safeguards surrounding inadvertent disclosure by any

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counsel, whether in-house or retained.” Id. at 1470. The Ninth Circuit found the district court did

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just that: it issued the protective order after conducting “a comprehensive evidentiary hearing.” Id.

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at 1470. At the hearing, the district court heard testimony regarding both parties‟ interest in the

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confidential information. Id. at 1470-71. The district court also questioned the plaintiff‟s in-house

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counsel about his responsibilities. Id. at 1471. In house counsel testified that “he was responsible

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for advising his employer on a gamut of legal issues, including contracts, marketing, and

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employment.” Id. The district court thus “reasonably concluded that [in-house] counsel‟s

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employment would necessarily entail advising his employer in areas relating to [the defendant‟s]
trade secrets.” Id. This “would place in-house counsel in the „untenable position‟ of having to

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United States District Court
Northern District of California

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refuse his employer legal advice on a host of contract, employment, and competitive marketing

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decisions lest he improperly or indirectly reveal [the defendant‟s] trade secrets.” Id. After

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weighing the hardship a protective order may have on the plaintiff‟s prosecutions of its claims, the

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district court issued a protective order that the Ninth Circuit held “str[uck] a reasonable balance

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between those interests by shielding [the plaintiff‟s] in-house counsel from personal knowledge of

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a competitor‟s trade secrets, but allowing access to information through an independent

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consultant.” Id. “The order did not arbitrarily distinguish [between] outside and in-house counsel.

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Rather, in reaching its decision, the court considered the particular circumstances of [the

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plaintiff‟s] counsel then before it. The same considerations could have applied equally to outside

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counsel.” Id.

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At this point, the undersigned has little information about Socarras, other than his title and

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the fact that he “oversees this litigation.” Jt. Ltr. at 2-3. Nevro does not describe Socarras‟

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responsibilities or duties or indicate to what degree he is involved in competitive decision-making.

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Without such information, the undersigned cannot undertake the requisite factual inquiry to

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balance the risk of inadvertent disclosure of BSC‟s confidential information to competitors against

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Nevro‟s ability to make litigation decisions. See Brown Bag, 960 F.2d at 1470 (“[W]e must

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balance the risk [the defendant] of inadvertent disclosure of trade secrets to competitors against the

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risk to [the plaintiff] that protection of [the defendant‟s] trade secrets impaired prosecution of [the
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plaintiff‟s] claims.”); U.S. Steel, 730 F.2d at 1468 (“Whether an unacceptable opportunity for

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inadvertent disclosure exists . . . must be determined . . . by the facts on a counsel-by-counsel

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basis, and cannot be determined solely by giving controlling weight to the classification of counsel

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as in-house rather than retained.”).

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As such, the Court ORDERS Nevro to file a declaration detailing Socarras‟

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responsibilities as Nevro‟s in house counsel, including but not limited to, the extent of his

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involvement in the competitive decision-making process. Nevro shall file its declaration no later

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than June 14, 2017. BSC may respond to the declaration in no more than two pages by June 21,

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2017.

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United States District Court
Northern District of California

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B.

Supplementation
Nevro seeks an order requiring BSC to provide certain ongoing supplementation. Jt. Ltr. at

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3. It is undisputed that BSC has agreed to do so, and BSC represents it has already complied. Id.

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at 3-4. Nevro nonetheless requests “an order that will state BSC‟s obligations precisely so that

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there will be no dispute.” Id. at 3. BSC does not explain why it refuses to sign a stipulation. See

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id. at 3-5.

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There is no indication Nevro is dissatisfied with BSC‟s supplementation thus far, nor does

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Nevro provide a reason to believe BSC will not continue to abide by its agreement. Because there

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appears to be no present controversy or dispute, the Court DENIES Nevro‟s request for an order

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regarding supplementation. If a dispute arises, the parties may raise it at that time and in

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accordance with the Court‟s Standing Order re: Discovery.

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IT IS SO ORDERED.

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Dated: May 31, 2017
______________________________________
MARIA-ELENA JAMES
United States Magistrate Judge

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