Kulzer v Biomet et al
OPINION AND ORDER denying 193 Motion to Amend/Correct to Modify the Court's Protective Orders. Signed by Judge Robert L Miller, Jr on 1/18/17. (nal)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
SOUTH BEND DIVISION
IN RE: APPLICATION OF
HERAEUS KULZER GMBH FOR AN
ORDER PURSUANT TO 28 U.S.C. § 1782
TO TAKE DISCOVERY PURSUANT TO THE
FEDERAL RULES OF CIVIL PROCEDURE
FOR USE IN FOREIGN PROCEEDINGS
CAUSE NO. 3:09-CV-530 RLM-MGG
OPINION and ORDER
Heraeus Medical GmbH, successor-in-interest to Heraeus Kulzer GmbH,
moved to modify this court’s protective orders so that Heraeus can use nine
specific documents without the restrictions imposed by the protective orders.
Biomet, Inc., Biomet Orthopedics, LLC, and Esschem, Inc. oppose Heraeus’s
motion. The court heard the parties’ oral arguments on December 14, 2016.
Based on its consideration of the parties’ written submissions and oral
arguments, the court denies Heraeus’s motion.
Heraeus initiated this action in January 2009 to obtain discovery in aid of
its trade secrets misappropriation litigation in Germany. The parties’ written
submissions include a general outline of the protective orders previously entered
in this case; the history of those amendments needn’t be repeated here. See
Eighth Amd. Protective Ord., at 1-7.
In 2014, the Frankfurt Court of Appeals in Germany held that Biomet and
certain of Biomet’s affiliates had misappropriated Heraeus’s trade secrets. The
German court enjoined Biomet from manufacturing, offering, or distributing, or
having manufactured, offered, or distributed any bone cement products
developed using the misappropriated Heraeus trade secrets, including certain
copolymers developed by Esschem. That decision became final when the
Supreme Court of Germany declined to review the appeals court’s decision. While
the German court of appeals limited the scope of its decision to actions in
Germany, at least some other European jurisdictions have held that the German
court’s factual findings bind them.
In 2015, after the German appeals court ruling and while an appeal was
pending before the German Supreme Court, Heraeus asked this court to modify
the protective orders to remove the cited documents—documents relied on in the
German court’s judgment—from the restrictions of the protective orders.
Heraeus argued that amendment of the protective orders was necessary because
Heraeus needed to use the cited documents in European proceedings and the
German appeals court had determined that the trade secrets and confidential
information contained in the cited documents belonged to Heraeus.
This court denied Heraeus’s motion, holding that Heraeus hadn’t shown
good cause to remove the cited documents from the protective order, but invited
the parties to negotiate streamlined procedures for using the cited documents.
The parties subsequently stipulated to entry of the eighth amended protective
order, which allows use of the cited documents if certain safeguards are
implemented and contains a procedure to resolve an impasse regarding those
About a year later, Heraeus filed this motion, which again asks to modify
the protective orders. Heraeus says that based on the entry of the German
judgment, it has filed actions to enforce its rights to its trade secrets in France,
the Netherlands, Austria, Italy, Belgium, Finland, Denmark, Norway, and the
United Kingdom because “[n]otwithstanding the Frankfurt Court’s injunction,
the Biomet Defendants, working in concert with Esschem, continue to sell the
enjoined bone cement products in Europe with the exception of Germany.”
Heraeus has filed or seeks to file the cited documents in those courts under the
terms of the eighth amended protective order. Heraeus argues that modification
is needed because Biomet has used the eighth amended protective order to
obstruct court proceedings in some forums. Heraeus further contends that
Biomet and Esschem don’t need this court to protect the cited documents
because the German judgment and the cited documents themselves show that
the confidential information contained in the cited documents belongs to
Just as good cause is required to enter a protective order, good cause
is also required to modify a protective order. The party seeking to
modify the protective order has the burden of demonstrating that
good cause exists. This burden is especially high where a protective
order is agreed to by the parties before its presentation to the court.
When deciding whether to modify a protective order, courts consider
the nature of the protective order, foreseeability at the time of
issuance of the modification requested, parties’ reliance on the
order, and whether good cause exists for the modification.
Romary Assocs., Inc. v. Kibbi, LLC, No. 1:10-CV-376, 2012 WL 32969, at *1 (N.D.
Ind. Jan. 6, 2012) (internal quotations and citations omitted). Courts in this
circuit apply a four-factor test when considering modifications of a protective
order: “(1) the nature of the protective order; (2) the foreseeability, at the time of
issuance of the order, of the modification requested; (3) the parties’ reliance on
the order; and most significantly (4) whether good cause exists for the
modification.” Chicago Mercantile Exchange, Inc. v. Technology Research Group,
LLC, 276 F.R.D. 237, 239-240 (N.D. Ill. 2011); Braun Corp. v. Vantage Mobility
Int’l, LLC, 265 F.R.D. 330, 332 (N.D. Ind. 2009) (same).
“In determining whether to vacate a protective order, courts consider the
nature of the order – that is, its scope and whether it was court imposed or
stipulated to by the parties.” Murata Mfg. Co., Ltd. v. Bel Fuse, Inc., 234 F.R.D.
175, 179 (N.D. Ill. 2006) (internal quotations omitted). When the parties stipulate
to entry of a blanket protective order, as they did here, it is “more difficult to
modify or vacate” the order. Id.; Braun Corp. v. Vantage Mobility Int'l, LLC, 265
F.R.D. 330, 332 (N.D. Ind. 2009). Heraeus argues that the designation of
documents as confidential by a protective order may be challenged, citing Baxter
Int'l, Inc. v. Abbott Labs., 297 F.3d 544, 546 (7th Cir. 2002), and contends that
paragraph 11 of the protective order, which reserves the parties’ right to seek
relief from any provision of the protective order, overrides the blanket nature of
The parties stipulated to entry of the eighth amended protective order.
Heraeus is correct that the stipulated order provides for the possibility of
amendment; it would be an unusual protective order that can never be amended.
By requiring something beyond simply filing a motion in this court, the eighth
amended protective order actually restricts the right to seek amendment, and
doesn’t support an amendment without a change in circumstances.
“The foreseeability factor . . . has been defined as asking whether the need
for modification of the order was foreseeable at the time the parties negotiated
the original stipulated protective order.” Murata Mfg. Co., Ltd. v. Bel Fuse, Inc.,
234 F.R.D. 175, 180 (N.D. Ill. 2006) (internal quotations and citations omitted).
“Not surprisingly, a party’s oversight in not negotiating a provision in a protective
order considering a matter which should have been reasonably foreseeable at
the time of the agreement has been held not to constitute good cause for relief
from the protective order.” Id. (internal quotations and citations omitted). Much
of what Heraeus argues in its motion to modify are points that have been raised
before, such as the need to use the cited documents in enforcement proceedings
and that Biomet and Esschem haven’t come forth with anything to show
ownership of the information in the cited documents. Such matters can help
explain the significance of what has happened since the existing protective order
was entered, but don’t support a modification without changed circumstances.
The reliance factor “is defined as the extent to which a party resisting
modification relied on the protective order in affording access to discovered
materials.” Id. (internal quotations and citations omitted). For Biomet and
Esschem to rely on indefinite protection would be unreasonable, but without
changed circumstances, there are no grounds to alter this court’s determination
last year that the reliance factors “weighs against modification” because
“discovery proceeded and Heraeus was able to obtain a judgment in the German
proceedings while the parties operated under the terms of the protective orders
for the past [five] years.” In re Application of Heraeus Kulzer GmbH for an Order
Pursuant to 28 U.S.C. 1782 to Take Discovery Pursuant to the Fed. Rules of Civil
Procedure for Use in Foreign Proceedings, No. 3:09-CV-530 RM, 2015 WL
5613156, at *5 (N.D. Ind. Sept. 22, 2015).
The good cause factor “implies changed conditions or new situations; a
continuing objection to the terms of an order does not constitute good cause to
modify or withdraw a protective order.” Murata Mfg. Co., Ltd. v. Bel Fuse, Inc.,
234 F.R.D. 175, 180 (N.D. Ill. 2006) (internal quotations and citations omitted).
The primary change of circumstances to which Heraeus points is that the system
established in the eighth amended protective order hasn’t worked smoothly in
some countries when Heraeus has sought confidentiality protections. Esschem
says, “If it ain’t broke, don’t fix it”; Heraeus says it’s broke.
Heraeus notes that in several countries there have been no issues in
complying with the eighth amended protective order’s provision regarding the
use of the cited documents because adequate confidentiality regimes already
exist. But Heraeus argues that in Belgium, Denmark, and Norway,1 Biomet
1 The dispute related to the confidentiality regime in Norway, which Heraeus alleges
delayed the case for 17 months, had been resolved by the date of the hearing in this
“exploited . . . the restrictions in the Eighth Amended Protective Order to prevent
or impede Heraeus from enforcing its rights” by raising “frivolous and unfounded
objections that have unnecessarily delayed the proceedings.” Biomet disputed
those allegations in its brief and orally at the hearing, arguing that it didn’t object
to protections for the cited documents, rather it objected to Heraeus’s
confidentiality proposals that “went beyond the requirements of the Eighth
Amended Protective Order . . . and sought to impose confidentiality obligations
on Biomet.” In response, Heraeus argued at the hearing that the protective
orders’ provisions were at least causing confusion.
Heraeus, as “the party seeking to modify the protective order[,] has the
burden of demonstrating that good cause exists.” Romary Assocs., Inc. v. Kibbi,
LLC, No. 1:10-CV-376, 2012 WL 32969, at *1 (N.D. Ind. Jan. 6, 2012) (internal
quotations and citations omitted). While the court recognizes Heraeus’s concerns
regarding the slow pace of court proceedings in Belgium, Denmark, and Norway,
the evidence before the court doesn’t show that Biomet used the terms of the
eighth amended protective order to obstruct court proceedings there. Heraeus
conceded at the hearing that the confidentiality disputes might have been the
result of confusion, rather than an effort by Biomet to obstruct. That doesn’t
amount to changed circumstances or good cause for modification.
confidentiality issues by employing the procedure outlined in paragraph six of
the eighth amended protective order. The court encourages the parties to
consider the paragraph six procedure as a resource to resolve confidentiality
disputes related to the cited documents.
The secondary change of circumstances raised by Heraeus is the final
judgment in Germany. As the court understands it from the parties’
presentations, the German court’s factual findings, but not its reasoning or legal
misappropriation, and violation of a trade secret are issues of law. The finality of
the German judgment might be a giant step toward the finish line for Heraeus;
its factual preclusion would seem to the limit the range of arguments available
to Biomet and Esschem concerning ownership and misappropriation. But it
doesn’t get Heraeus across the finish line.
Based on the foregoing, the court DENIES Heraeus’s motion to modify the
protective orders [Doc. No. 193].
January 18, 2017
/s/Robert L. Miller, Jr.
Judge, United States District Court
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