Velocity Patent LLC v. Audi of America, Inc. et al

Filing 129

MEMORANDUM Opinion and Order. Signed by the Honorable John W. Darrah on 1/21/2015. Mailed notice (sxw)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
VELOCITY PATENT, LLC,
Plaintiff,
v.
AUDI OF AMERICA, INC.,
Defendant,

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Case No. 13-cv-8418
Judge John W. Darrah

MEMORANDUM OPINION AND ORDER
On November 21, 2013, Velocity filed a Complaint alleging infringement of U.S. Patent
No. 5,954,781 by Defendant Audi of America, Inc. (“Defendant” or “Audi”). On March 4, 2014,
Audi filed a motion to amend the model Protective Order [40] for patent cases in Local Patent
Rule Appendix B. The model Protective Order automatically went into effect when the parties
exchanged initial disclosures per Local Patent Rule 1.4.
LEGAL STANDARD
“[A] party seeking imposition of a patent prosecution bar must show that the information
designated to trigger the bar, the scope of activities prohibited by the bar, the duration of the bar,
and the subject matter covered by the bar reasonably reflect the risk presented by the disclosure
of proprietary competitive information.” In re Deutsche Bank Trust Co. Americas, 605 F.3d
1373, 1381 (Fed. Cir. 2010). The risk of inadvertent disclosure rests on “the extent to which
counsel is involved in ‘competitive decisionmaking’ with its client.” Id. at 1378 (quoting
US. Steel Corp. v. United States, 730 F.2d 1465, 1468 (Fed.Cir.1984)). The standard is not
“regular contact with other corporate officials who make policy, or even competitive decisions,
but advice and participation in competitive decisionmaking.” (Internal quotations omitted.)

In re Sibia Neurosciences, Inc., 132 F.3d 50 (Fed. Cir. 1997) (citing
Matsushita Elec. Indus. Co., Ltd. v. United States, 929 F.2d 1577, 1580 (Fed.Cir.1991)). The
risk of disclosure must be balanced against the resulting harm to the party that opposes the
restriction. AmTab Mfg. Corp. v. SICO Inc., Case No. 11-CV-2692, 2012 WL 195027, at *2
(N.D. Ill. Jan. 19, 2012).
ANALYSIS
Audi argues that there is a significant risk of disclosure because Thomas C. Mavrakakis
is Velocity’s sole member and the named partner at the law firm representing Velocity in the
investigation, Mavrakakis Law Group LLP. Audi further argues that Velocity’s attorneys are
involved in Velocity’s patent licensing and business decisionmaking.
Audi has not met its burden to show good cause for its proposed modification of the
Protective Order. Mavrakakis is the sole manager of Velocity, but he is not one of the
prosecuting attorneys in the case. James Shimota, one of the actual prosecuting attorneys, was
involved in a related entity in the past but is not alleged to be a current member or manager of
Velocity. Audi has not shown that Mavrakakis is involved in patent prosecution or that Shimota
is involved in competitive decisionmaking.
Audi points to a prior decision of this court that found litigation attorneys to be
competitive decisionmakers when they were “deeply involved in a [patentee’s] business
decisionmaking in the area of intellectual property” and “involved in representing the client in
multiple, related infringement cases.” Interactive Coupon Mktg. Grp., Inc. v. H.O.T.! Coupons,
LLC., Case No. 98-CV-7408, 1999 WL 618969, at *3-4 (N.D. Ill. Aug. 9, 1999). However, in
that case, the law firm was likely to represent the patent holder “in the prosecution of numerous
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related patents . . . in the context of a fluid, developing technology.” Id. at *3. Here there is only
one patent at issue; and this area is not a fluid, developing technology. And as previously stated,
Audi has not shown that the litigation attorneys are involved in business decisionmaking.
CONCLUSION
For the reasons discussed above, Audi’s Motion to Amend Protective Order [40] is
denied.

Date:

January 21, 2015

/s/______________________________
JOHN W. DARRAH
United States District Court Judge

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