55 Brake, L.L.C. v. Audi of America, Inc. et al

Filing 234

MEMORANDUM DECISION AND ORDER denying 206 Motion to Amend Protective Order. Signed by Judge B. Lynn Winmill. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by cjm)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO

55 BRAKE, LLC,
Plaintiff,

Case No. 1:CV 08-177-BLW

v.
AUDI OF AMERICA, et al.,

MEMORANDUM DECISION
AND ORDER

Defendants.

INTRODUCTION
The Court has before it a motion to amend the Protective Order governing this
case. The motion is fully briefed and at issue. For the reasons explained below, the Court
will deny the motion.
ANALYSIS
In this lawsuit, plaintiff 55 Brake alleges that defendant Volkswagen and others
are infringing 55 Brake’s patent, referred to as the ‘587 patent. To govern the discovery
of confidential information, the parties entered into a Protective Order, approved by the
Court. Among its provisions, the Protective Order barred counsel in this case from
participating in any reexamination proceedings regarding the ‘587 patent in the Patent and
Trademark Office (PTO):
Unless otherwise directed by the Court or authorized in
writing by the Producing Party, no person involved in Patent
Prosecution (defined below) on behalf of Plaintiff 55 Brake,
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L.L.C., including without limitation the inventors of any
pending patent application described herein, shall have access
to CONFIDENTIAL or HIGHLY CONFIDENTIAL
Discovery Material of a Producing Party . . . For purposes of
this Protective Order, Patent Prosecution shall be defined as
preparing, drafting, reviewing, filing, responding to office
actions, signing oaths or declarations, or prosecuting patent
applications or patents, or assisting in any of those activities,
with respect to . . . (c) any . . .re-examinations of any of the
patents asserted in the current litigation . . . .
About two-and-a-half years after this lawsuit was filed, defendant Volkswagen
filed a request with the PTO for reexamination of the ‘587 patent. 55 Brake retained a
team of patent prosecution attorneys to represent it in those reexamination proceedings.
By its motion, 55 Brake seeks to lift the ban on its litigation counsel from assisting the
prosecution team during the reexamination. 55 Brake pledges that their assistance would
be strictly limited to prior art issues and would not include any work leading to
amendment of the patent claims. If the ban was lifted, 55 Brake asserts that its defense in
the reexamination would be much more efficient because its litigation counsel are much
more knowledgable about prior art issues than the prosecution team.
Volkswagen responds that 55 Brake’s pledge is unrealistic because it will be
impossible to sort out the confidential from the non-confidential while assisting the
prosecution team. Moreover, Volkswagen argues, the reexamination request was
anticipated and specifically addressed in the protective order, and the Court should not
alter the agreement of the parties.
To modify the Protective Order, 55 Brake must show preliminarily how the

Memorandum Decision & Order - 2

Protective Order would prejudice its case; “in other words, to demonstrate the requisite
“good cause” to modify the order, [the movant must] demonstrate actual prejudice.”
CytoSport, Inc. v. Vital Pharmaceuticals, Inc., 2010 WL 1904840 (E.D.Cal. May 10,
2010) (citing Brown Bag Software v. Symantec Corp., 960 F.2d 1465, 1470 (9th
Cir.1992)). If 55 Brake establishes good cause, then the court balances, “the risk of
inadvertent disclosure of trade secrets . . . , against the risk . . . that protection of . . . trade
secrets impaired prosecution [of 55 Brake’s] claims.” Intel Corp. v. VIA Techs., Inc., 198
F.R.D. 525, 528 (N.D.Cal.2000).
55 Brake argues that its defense of the reexamination proceeding would be more
efficient if the ban was lifted. But that argument does not show how the ban works a
prejudice to 55 Brake in this case. In general, inefficiency in legal representation does
not amount to “actual prejudice.”
55 Brake argues that the intent of the ban was that litigation counsel not use
confidential information obtained in discovery to amend the patent claims. 55 Brake
agrees not to seek any amendments to the patent claims and asserts that it will merely
assist the prosecution team in responding to prior art claims. There are three flaws in this
argument. First, although Volkswagen filed the reexamination proceedings long after this
lawsuit was filed, the parties obviously anticipated a reexamination because they
expressly addressed it in the Protective Order. Second, the ban is broad and cannot be
read to protect only against the use of confidential information to amend claims. Third, it
would have been easy for the drafters to narrow the ban to only apply to the amendment
Memorandum Decision & Order - 3

of claims, but the broad language was included instead. Under these circumstances, the
Court would have to rewrite the Protective Order to rule for 55 Brake. That would be
justified if 55 Brake could show that without an amendment, its pursuit of this case would
be prejudiced. But no such showing has been made, and in its absence, the risk of
inadvertent disclosure is too great to warrant the amendment 55 Brake requests. In re
Deutsche Bank Trust Co., 605 F.3d 1373, 1378-80 (Fed. Cir. 2010)(discussing the risk of
inadvertent disclosure when patent litigation counsel become involved in patent
prosecution).
The Court’s conclusion is not based on a lack of confidence in 55 Brake’s
litigation counsel. The Court is sure that counsel will not intentionally pass along any
prohibited material to the prosecution team. But it is very difficult to parse out the
confidential from the non-confidential and avoid even an inadvertent disclosure. Id. at
1378 (noting that that “[i]t is very difficult for the human mind to compartmentalize and
selectively suppress information once learned, no matter how well-intentioned the effort
may be to do so”) (internal citation omitted). Because of this, it is critical to draft a
protective order to deal in detail with the use of confidential information in other
proceedings. That was not done here, at least to the extent now desired by 55 Brake.
For all of these reasons, the Court will deny the motion.

ORDER
In accordance with the Memorandum Decision set forth above,
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NOW THEREFORE IT IS HEREBY ORDERED, that the motion to amend
protective order (docket no. 206) is DENIED.

DATED: July 13, 2011

Honorable B. Lynn Winmill
Chief U. S. District Judge

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