Skyhook Wireless, Inc. v. GOOGLE, INC.
Filing
36
Opposition re 31 MOTION for Protective Order filed by GOOGLE, INC.. (Attachments: # 1 Exhibit, # 2 Exhibit, # 3 Exhibit, # 4 Exhibit, # 5 Exhibit)(Manning, Susan)
EXHIBIT E
Page 1
Caution
As of: Jun 07, 2011
SHARED MEMORY GRAPHICS, LLC, Plaintiff, v. APPLE, INC., et al., Defendants.
No. C-10-2475 VRW (EMC)
UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF
CALIFORNIA
2010 U.S. Dist. LEXIS 125184
November 12, 2010, Decided
November 12, 2010, Filed
SUBSEQUENT HISTORY: Motion granted by Shared
Memory Graphics LLC v. Apple, Inc., 2010 U.S. Dist.
LEXIS 138868 (N.D. Cal., Dec. 30, 2010)
COUNSEL: [*1] For Shared Memory Graphics LLC,
Plaintiff: Adam Vincent Floyd, LEAD ATTORNEY,
Arthur Gollwitzer, III, Chad Phillip Ennis, H. Kenneth
Prol, Joseph Daniel Gray, Kent Jeffrey Cooper, Matthew
S. Wermager, Michael Joseph Smith, Reese Patrick
McKnight, F & B LLP, Austin, TX; Carly Slack Anderson, Geoffrey Patton Culbertson, Nicholas H. Patton,
Patton Tidwell & Schroeder LLP, Texarkana, TX; James
Patrick Martin, Lisa Stockholm, Shartsis Friese LLP, San
Francisco, CA; Nicholas Alfred Schuneman, Floyd and
Buss LLP, Austin, TX.
For Apple Inc., a California corporation, Defendant:
Darin Jeffrey Glasser, LEAD ATTORNEY, O'Melveny
& Myers LLP, Newport Beach, CA; Eric David Chan,
Ryan Yagura, O'Melveny Myers LLP, Los Angeles, CA;
George Riley, PRO HAC VICE, O'Melveny Myers LLP,
Two Embarcadero Center, San Francisco, CA; Iain R
Cunningham, PRO HAC VICE, Apple Inc., Cupertino,
CA; Jon Y Chow, O'Melveny and Myers LLP, Los Angeles, CA; Michael Myers, PRO HAC VICE, O'Melveny
Myers LLP, Newport Beach, CA; Michael Sapoznikow,
O'Melveny & Myers LLP, San Francisco, CA.
For Nintendo of America Inc., a Washington corporation, Nintendo Co. LTD., a Japan corporation, Defendants, Counter-claimant: Grant Edward Kinsel, [*2]
LEAD ATTORNEY, Joseph Preston Hamilton, Perkins
Coie LLP, Los Angeles, CA; Marshall S. Ney, Mitchell
Williams Selig Gates & Woodyard, PLLC, Rogers, AR;
Michael Junwhan Song, PerkinsCoie LLP, Los Angeles,
CA.
For Sony Corporation of America, a New York corporation, Sony Computer Entertainment America Inc., a California corporation, Sony Corporation, a Japan corporation, Sony Computer Entertainment Inc., a Japan corporation, Sony Semiconductor Kyushu Corporation, LTD.,
a Japan corporation, Defendants: Lewis V. Popovski,
LEAD ATTORNEY, Jeong-Ah Joy Lee, Matthew Jacob
Faust, Michelle Carniaux, Miriam London Martinez,
Kenyon & Kenyon LLP, New York, NY; Jeffrey S. Gerchick, Kenyon Kenyon LLP, Washington, DC; Megan
Rae Whyman Olesek, Kenyon & Kenyon LLP, San Jose,
CA.
For Samsung Electronics Co., A Korean business entity,
Samsung Telecommunications America, LLC, A Delaware limited liability company, Samsung Semiconductor,
Inc., A California corporation, Samsung Electronics
America, Inc., A New York corporation, Samsung Austin Semiconductor, LLC, A Delaware limited liability
company, Defendants: Darin Jeffrey Glasser, LEAD
Page 2
2010 U.S. Dist. LEXIS 125184, *
ATTORNEY, O'Melveny & Myers LLP, Newport
Beach, CA; George Riley, PRO [*3] HAC VICE, LEAD
ATTORNEY, O'Melveny Myers LLP, San Francisco,
CA; Michael Myers, PRO HAC VICE, LEAD ATTORNEY, O'Melveny Myers LLP, Newport Beach, CA;
Ryan Yagura, PRO HAC VICE, LEAD ATTORNEY,
Eric David Chan, O'Melveny Myers LLP, Los Angeles,
CA; Jon Y Chow, O'Melveny and Myers LLP, Los Angeles, CA; Michael Sapoznikow, O'Melveny & Myers
LLP, San Francisco, CA.
For Shared Memory Graphics LLC, Counter-defendant:
Adam Vincent Floyd, LEAD ATTORNEY, H. Kenneth
Prol, Joseph Daniel Gray, Kent Jeffrey Cooper, F & B
LLP, Austin, TX; Carly Slack Anderson, Geoffrey Patton Culbertson, Patton Tidwell & Schroeder LLP, Texarkana, TX; James Patrick Martin, Shartsis Friese LLP,
San Francisco, CA; Nicholas H. Patton, Patton Tidwell
& Schroeder L.L.P., Texarkana, TX.
For Nintendo Co. LTD., a Japan corporation, Counterclaimant: Grant Edward Kinsel, LEAD ATTORNEY,
Joseph Preston Hamilton, Perkins Coie LLP, Los Angeles, CA; Marshall S. Ney, Mitchell Williams Selig Gates
& Woodyard, PLLC, Rogers, AR; Michael Junwhan
Song, PerkinsCoie LLP, Los Angeles, CA.
For Samsung Electronics Co., A Korean business entity,
Samsung Semiconductor, Inc., A California corporation,
Samsung Electronics America, Inc., A New York [*4]
corporation, Samsung Telecommunications America,
LLC, A Delaware limited liability company, Counterclaimants: Darin Glasser, Michael Myers, LEAD ATTORNEYS, O'Melveny Myers LLP, Newport Beach,
CA; George Riley, PRO HAC VICE, LEAD ATTORNEY, O'Melveny Myers LLP, San Francisco, CA; Ryan
Yagura, PRO HAC VICE, LEAD ATTORNEY, Eric
David Chan, O'Melveny Myers LLP, Los Angeles, CA.
For Samsung Austin Semiconductor, LLC, A Delaware
limited liability company, Counter-claimant: Darin
Glasser, Michael Myers, LEAD ATTORNEYS,
O'Melveny Myers LLP, Newport Beach, CA; George
Riley, PRO HAC VICE, LEAD ATTORNEY,
O'Melveny Myers LLP, Two Embarcadero Center, San
Francisco, CA; Ryan Yagura, PRO HAC VICE, LEAD
ATTORNEY, Eric David Chan, O'Melveny Myers LLP,
Los Angeles, CA.
ORDER GRANTING IN PART AND DENYING IN
PART CROSS-MOTIONS FOR PROTECTIVE
ORDER
(Docket Nos. 270, 272)
This is a patent infringement case brought by Shared
Memory Graphics ("SMG") against Apple, Inc., Nintendo of America, Inc., Nintendo Co. Ltd., Sony Corp. of
America, Sony Computer Entertainment America Inc.,
Sony Corp., Sony Computer Entertainment Inc., and
Sony Semiconductor Kyushu [*5] Corp., Ltd. (collectively, "Defendants"). The two patents-in-suit were first
patented by Alliance Semiconductor Corporation, which
later sold all rights to the patents to Acacia Patent Acquisition Corporation ("Acacia"). See Compl. ¶ 45. Acacia
then sold all of the rights to the patents to SMG. See id. ¶
47.
Currently pending before the Court is a dispute between the parties over the terms of a protective order to
govern confidential information produced or otherwise
provided in this case. The parties have a disagreement
with respect to three issues: (1) whether SMG's in-house
counsel should have access to Defendants' highly confidential information, (2) whether Defendants' outside
counsel and/or expert witnesses may view the highly
confidential or confidential information of other Defendants, and (3) whether the patent prosecution bar should
include a bar on reexamination of the patents-in-suit by
SMG's litigation counsel.
I. DISCUSSION
A. Legal Standard
Under Federal Rule of Civil Procedure 26(c), "[a]
party or any person from whom discovery is sought may
move for a protective order," and "[t]he court may, for
good cause, issue an order to protect a party from annoyance, embarrassment, [*6] oppressions, or undue burden
or expense." Fed. R. Civ. P. 26(c)(1).
OPINION BY: EDWARD M. CHEN
In the instant case, the parties do not dispute that a
protective order is needed to govern the production of
confidential information in this case. The parties do,
however, disagree as to whether certain terms should be
included in the protective order. As proponents of the
terms, Defendants have the burden of showing good
cause. See Phoenix Sol'ns. Inc. v. Wells Fargo Bank,
N.A., 254 F.R.D. 568, 575 (N.D. Cal. 2008) (noting that
"[t]he burden of demonstrating the need for protection
from discovery is placed on the party seeking a protective order, not on the party opposing the order").
OPINION
B. Access by SMG's In-House Counsel
JUDGES: EDWARD M. CHEN, United States Magistrate Judge.
Page 3
2010 U.S. Dist. LEXIS 125184, *
The parties' first dispute is whether the protective
order should include a term barring SMG's in-house
counsel, Bradley Botsch, from accessing Defendants'
highly confidential information. In resolving this issue,
the Court is guided by Brown Bag Software v. Symantec
Corp., 960 F.2d 1465, 1470 (9th Cir. 1992). In accordance with Brown Bag, the Court must balance the risk
to Defendants if their confidential materials are disclosed
against the risk to SMG if the materials are not disclosed.
See id.
The [*7] Court rejects SMG's suggestion that there
is no risk to Defendants because SMG is not a direct
competitor. As explained by one court, where the party
asserting infringement is in the business of acquiring
intellectual property and enforcing it against other entities using the allegedly infringing technology, "[t]here is
little doubt" that the alleged infringer's confidential information could be of value. ST Sales Tech Holdings,
LLC v. Daimler Chrysler Co., No. 07-346, 2008 U.S.
Dist. LEXIS 107096, 2008 WL 5634214, at *6 (E.D. Tex.
Mar. 14, 2008); see also Intel Corp. v. VIA Techs., Inc.,
198 F.R.D. 525, 530 (N.D. Cal. 2000) (noting that, if
plaintiff's in-house counsel were given information about
technical aspects of defendant's products, defendant's
licensing agreements, and marketing information, that
"may provide [plaintiff] a competitive advantage in negotiating related licenses in the future"). On the other
hand, to the extent SMG asks that Mr. Bosch be given
access to only limited financial information -- more specifically, sales and profit information for the accused
products at issue -- in order participate fully in settlement
discussions, the risk to Defendants is substantially lessened.
Balancing the risk [*8] to each side, the Court concludes that the proper balance is to include a provision
that generally bars SMG's in-house counsel from accessing Defendants' highly confidential information. However, there can be exceptions to the bar where the risk of
competitive advantage is minimal when compared to the
Plaintiff's need to make the information accessible to inhouse counsel, and the parties should meet and confer to
discuss exceptions as the need arises. For the benefit of
the parties, the Court notes that it deems the limited financial information sought by SMG -- i.e., the sales and
profit information for the accused products -- to be such
an exception. Unlike technical aspects of Defendants'
products, the focused financial information sought here
will pose little competitive risk and, at the same time,
provide material information essential to settlement negotiations in which in-house counsel would be expected
to participate.
C. Access by Defendants' Outside Counsel and Expert
Witnesses
The parties' second dispute is whether one Defendant's outside counsel and expert witnesses should be
able to view the highly confidential or confidential information of the other Defendants. SMG argues [*9]
that there should be such access, both as a matter of administrative convenience and as a substantive matter.
The Court rejects SMG's argument that access
should turn on administrative convenience. While SMG
may have to prepare different versions of one filing to
accommodate each Defendant's confidential information,
that is a burden that SMG implicitly accepted in bringing
suit in the first place against the numerous Defendants
and in seeking to utilize their confidential information of
some Defendants in conducting discovery against other
Defendants.
On the substantive question, the Court will not endorse a blanket rule that automatically allows all Defendants' confidential information to be shared, even if only
with the other Defendants' outside counsel and experts.
Such disclosure should be governed by the "reasonably
necessary" standard set forth in Model Protective Order ¶
7.2. The parties shall meet and confer to modify the language of ¶ 7.2 to make clear that its provisions extend
disclosure to co-Defendants' outside counsel and experts.
D. Patent Prosecution Bar
The parties' final dispute is whether the protective
order should include a term barring SMG's litigation
counsel from [*10] engaging in patent prosecution.
SMG does not oppose a patent prosecution bar, so long
as an exception is made that would permit its outside
counsel to participate in any reexamination proceedings
of the patents-in-suit.
Courts have taken varying approaches with respect
to whether counsel for the party asserting infringement
should be barred from participating in reexamination
proceedings. Compare, e.g., Pall Corp. v. Entegris, Inc.,
655 F. Supp. 2d 169, 173 (E.D.N.Y. 2008) (holding that
the prosecution bar would not extend to reexamination),
with MicroUnity Sys. Eng'g, Inc. v. Dell. Inc., No. 04120, 2005 U.S. Dist. LEXIS 36814, 2005 WL 2299455
(E.D. Tex. Aug. 29, 2005) (holding that the prosecution
bar applies equally to reexaminations as it does to new
applications).
Those courts holding that counsel is not barred have
typically focused on the fact that patent claims cannot be
broadened in reexamination proceedings but rather only
narrowed, and thus the risk of conferring a tactical advantage to the patent holder's counsel is minimal. See
Pall Corp., 655 F. Supp. 2d at 173 (noting that, "unlike
prosecution of an initial patent application, the Patent
Act expressly curtails the scope of reexamination, prohibiting [*11] any claim amendment that would enlarge
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2010 U.S. Dist. LEXIS 125184, *
the scope of the initial patent"); see also Mirror Worlds,
LLC v. Apple, Inc., No. 08-88, 2009 U.S. Dist. LEXIS
70092, 2009 WL 2461808, at *2 (E.D. Tex. Aug. 11,
2009) (noting that "[c]laims can only be narrowed during
reexamination; they cannot be broadened" and therefore
concluding that "the risk of harm to Apple is already
greatly limited"); Document Generation Corp. v. Allscripts, No. 08-479, 2009 U.S. Dist. LEXIS 52874, 2009
WL 1766096, at *2 (E.D. Tex. Jun. 23, 2009) (stating
that, "[b]ecause the reexamination process prohibits
claim amendments that would enlarge the scope of the
initial patent, Defendants' fears of expanded claim scope
coverage are largely misplaced").
While it is true that patent claims cannot be broadened in reexamination, the Court is not convinced that
that fact is dispositive to the issue. Claims may still be
restructured in reexamination, and, in a given case, a
patent owner may well choose to restructure claims in a
manner informed by the alleged infringer's confidential
information gleaned from litigation. See, e.g., MicroUnity, 2005 U.S. Dist. LEXIS 36814, 2005 WL
2299455, at *4 (noting that litigation counsel with access
to defendants' confidential information "will inevitably
[amend or supplement [*12] claims to distinguish prior
art] in a way that they believe preserves litigation options
with respect to [defendants'] products"). See also Robert
Greene Sterne et al., Reexamination Practice with Concurrent District Court or USITC Patent Litigation,
ACPA Meeting, Jan. 26, 2009, at 16 1 (noting that "indepth knowledge of a competitor's highly confidential
technical information, combined with the ability to
amend claims, would . . . convey a dangerously unfair
advantage to the recipient of such information"). Hence,
access to confidential information could still provide a
tactical advantage to the patent holder in its effort in reexamination to navigate between prior art and its infringement claims, although the risk of advantage would
appear to be somewhat marginal.
1
Available at www.reexamcenter.com/wpcontent/uploads/2009/08/ACPC-ReexamPaper.pdf.
The Court thus finds persuasive the analysis taken
by the court in Crystal Image Technology, Inc. v. Mitsubishi Electric Corp., No. 08-307, 2009 U.S. Dist. LEXIS
32972 (W.D. Pa. Apr. 17, 2009). There, the court acknowledged "the majority trend recognizing that the nature of the reexamination process [i.e., narrowing claims
and not broadening [*13] them] mitigates against
broadly stated concerns of unfair advantage." Id. at *7.
However, the court ultimately deemed "certain limitations regarding litigation counsel's participation in the
reexamination process . . . appropriate." Id.
First, the court "restrict[ed] litigation counsel's participation in the reexamination process to instances in
which it is the opposing party who initiates reexamination of a patent falling within the scope of the proposed
protective order." Id. at *9 (emphasis added). The court
indicated that when it is the opposing party who seeks
reexamination, then the reexamination is really part and
parcel of the litigation at issue. Id. The court also indicated that it would be unfair to force the patent owner to
simultaneously defend before the PTO and the court with
different counsel. See id. But "[s]hould anyone other than
Defendant seek reexamination . . ., the justifications for
allowing trial counsel to participate are substantially undermined." Id. at *8-9. The court pointed out that the
patent owner could initiate reexamination to secure a
tactical advantage. See Crystal Image, 2009 U.S. Dist.
LEXIS 32972, at *8-9; see also Pall Corp., 655 F. Supp.
2d at 174 [*14] (in dicta, agreeing that a reexamination
bar would be warranted if "a plaintiff patent-owner affirmatively placed his patents into reexamination, . . .
attempting to re-craft them based upon his review of
defendant's confidential litigation discovery [and] . . .
gain a tactical advantage over the infringement defendant
"). The limitation imposed by the Court prevents this
scenario.
Second, the court permitted litigation counsel to participate in reexamination "preconditioned on their acceptance of an express legal obligation . . . not to rely [during reexamination] in any way on confidential information supplied by the opposing party through the course of
this litigation." Id. at *9. Thus, the court directed the
parties to include a provision that "any individual's participation in reexamination proceeding(s) . . . is expressly
conditioned on his/her/its legal obligation, established by
Order of the Court, not to use in any way an opposing
party's Confidential Attorney Eyes Only Information to
draft new claims, or to amend previously existing claims,
through the reexamination process." Id. at *10.
The Court concludes that the two restrictions above
are appropriate for the instant case. [*15] The first restriction is appropriate for the reasons identified in Crystal Image. It prevents SGM from unilaterally employing
any tactical advantage gleaned from confidential information obtained in the litigation. Conversely, it also limits any tactical advantage Defendants might seek to gain
by initiating reexamination proceedings and forcing
SMG to obtain new and additional counsel therein. Indeed, in its papers, SMG has identified only a concern
about a reexamination initiated by or on behalf of Defendants, and not, e.g., by third parties or on its own accord.
See Pl.'s Mot. at 1 (asserting that "Defendants want the
ability to initiate a reexamination and use it to disqualify
SMG's trial counsel"). As for the second restriction, it is
also appropriate to prohibit SMG's counsel from unfair
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2010 U.S. Dist. LEXIS 125184, *
use in any reexamination proceeding of highly confidential information obtained in this litigation.
regarding the terms of a protective order to govern the
production of confidential information in this case.
Accordingly, the Court orders that the parties meet
and confer to reach agreement on a provision that allows
SMG's outside counsel to participate in reexamination
proceedings in accordance with the above.
This order disposes of Docket Nos. 270 and 272.
II. CONCLUSION
/s/ Edward M. Chen
For the foregoing reasons, the Court GRANTS in
part and DENIES in part both parties' [*16] motions
EDWARD M. CHEN
IT IS SO ORDERED.
Dated: November 12, 2010
United States Magistrate Judge
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Page 1
Not Reported in F.Supp.2d, 2000 WL 554219 (E.D.La.)
(Cite as: 2000 WL 554219 (E.D.La.))
Only the Westlaw citation is currently available.
United States District Court, E.D. Louisiana.
In re PAPST LICENSING, GmbH, PATENT LITIGATION
No. MDL 1278.
May 4, 2000.
MEMORANDUM AND ORDER
SEAR, District J.
Background
*1 On October 13, 1999, the Panel on MultiDistrict Litigation transferred to this Court four related patent cases from the Northern District of Illinois, the Northern District of California, the District
of Columbia and the District of Delaware, pursuant to
28 U.S.C. § 1407. Each of the cases involve a number of patents and licensing agreements related to
computer hard disk drives, licensed by Papst Licensing, GmbH and Georg Papst (“Papst parties”) to several hard disk drive manufacturers and their customers (“Non-Papst parties”).
All parties in the this multi-district litigation
submit that a comprehensive protective order is necessary to protect the parties' confidential business,
financial and technical information. The Papst and
Non-Papst parties assert that they agree on most of
the details of the proposed protective order. The parties, however, have not submitted to the Court a joint
proposed protective order because the parties differ
strongly on the issue of whether certain counsel with
access to confidential information should be able to
prosecute related patent applications.
The Non-Papst parties urge the Court to adopt a
modified version of the protective order, entered on
July 9, 1999, by the district court for the District of
Columbia. That protective order includes the following provision:
Confidential Information of a Furnishing Party
may be disclosed only to: Outside Counsel for any
Receiving Party in the Proceeding, except any
Welsh & Katz attorneys or employees who receive
Confidential Information under this Protective Order shall not prosecute, supervise or assist in the
prosecution of any patent application on behalf of
Georg Papst or Papst Licensing, GmbH or any entity related to Georg Papst or Papst Licensing,
GmbH pertaining to the subject matter of the patents in suit during the pendency of this case and for
one year after the conclusion of this litigation, including any appeals.
The Non-Papst parties argue that the provision is
necessary because an unacceptable risk of inadvertent
disclosure or misuse of the Non-Papst parties' confidential information arises from the participation of
Papst parties' counsel in patent prosecution activities.
In support of that assertion, the Non-Papst parties
provide, among other documents, the following: (1)
the declaration of Professor Martin J. Adelman, explaining a patent applicant or owner's ability to obtain
new and broader exclusionary rights by adding additional claims to new, continuation-in-part, continuation and reissue patent applications and distinguishing between “new matter” and “new claims” in various patent application types; (2) a copy of portions of
the transcript from a February 25, 1999 hearing in the
Northern District of California in which Papst parties'
counsel, Jerold B. Schnayer of Welsh & Katz, Ltd.,
testified as to a patent applicant or owner's ability to
add additional claims to existing or pending patents
so long as the basis of that new claim is not confidential information; and (3) a copy of a September 23,
1994 protective order stipulated to by Papst Licensing, GmbH, in its patent infringement suit against
Western Digital Corporation, prohibiting persons
with access to designated confidential prosecution
bar information from prosecuting disk drive patent
applications during the pendency of that suit and for
one year after its conclusion.
*2 The Papst Parties oppose the adoption of the
Non-Papst parties' proposed restriction, arguing that
it unilaterally and unfairly restricts only counsel from
Welsh & Katz without justification. The Papst parties
assert that the Non-Papst proposal seeks merely to
limit the Papst parties' choice of counsel. In support
of that assertion, the Papst parties point out that the
proposed provision allows counsel of the Non-Papst
parties' direct competitors, who prosecute patents,
© 2011 Thomson Reuters. No Claim to Orig. US Gov. Works.
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Not Reported in F.Supp.2d, 2000 WL 554219 (E.D.La.)
(Cite as: 2000 WL 554219 (E.D.La.))
access to allegedly confidential information. Accordingly, the Papst parties argue that the only hardship
the Non-Papst parties would suffer from a rejection
of their proposal would be that the Papst parties'
counsel of choice would be allowed to represent its
long-time client in this litigation and in the prosecution of certain patent applications.
statements.” ’ FN1 Because the interest in protecting
allegedly confidential information conflicts with the
broad discovery mandate of Rule 26(b)(1), allowing
access to all non-privileged information “reasonably
calculated to lead to the discovery of admissible evidence,” the courts seek to balance these interests in
determining a motion for protective order.FN2
In addition to their opposition to the Non-Papst
parties' proposal, the Papst parties submit their own
proposed restriction:
FN1. In re Terra International, Inc., 134
F.3d 302, 305 (5th Cir.1998) (quoting
United States v. Garrett, 571 F.2d 1323,
1326 n. 3 (5th Cir.1978)) (further citation
omitted).
Outside counsel of record having access to Confidential Information from any party in The Litigation, shall not draft, file or prosecute, or assist in
the drafting, filing or prosecution of new patent applications or new continuation-in-part applications
on behalf of the parties during the pendency of The
Litigation before this District Court, during the
pendency of the individual actions upon remand to
their respective District Courts and for one calendar year thereafter. New patent applications and
new continuation-in-part applications are those applications which contain new disclosures not contained in patent applications which are or were
pending anytime before this Protective Order becomes effective.
The Papst parties assert that a similar restriction
was adopted by the district court in the Northern District of California, after an evidentiary hearing in
which that court determined that a restriction on
Welsh & Katz attorneys only and over all existing
patent prosecutions was unreasonable.
Discussion
Rule 26(c) of the Federal Rules of Civil Procedure allows a district court to “make any order which
justice requires to protect a party or person from annoyance, embarrassment, oppression or undue burden
or expense, including ... that a trade secret or other
confidential research, development, or commercial
information not be revealed or be revealed only in a
designated way.” Rule 26(c) requires that the party
seeking to protect allegedly confidential information
show good cause for such an order. The good cause
requirement of Rule 26(c) demonstrates that the burden is upon the movant to show the necessity for the
issuance of a protective order. The Rule “ ‘contemplates a particular and specific demonstration of fact
as distinguished from stereotyped and conclusory
FN2. See Brown Bag Software v. Symantec
Corp., 960 F.2d 1465, 1470 (9th Cir.1992).
*3 Specifically, “the court must balance the risk
of inadvertent disclosure against the risk that the protective order will impair the prosecution or defense of
the other party's claims.” FN3 In balancing these important competing interests, the court seeks to determine whether access to the confidential information
creates “an unacceptable opportunity for inadvertent
disclosure.” FN4 In determining whether an unacceptable risk of inadvertent disclosure exists, the court
must consider “the facts on a counsel-by-counsel
basis, and cannot [make the determination] solely by
giving controlling weight to the classification of
counsel as in-house rather than retained.” FN5
FN3. Id.
FN4. U.S. Steel Corp. v. United States, 730
F.2d 1465, 1468 (Fed.Cir.1984).
FN5. Id.
The primary consideration in making this determination is whether the attorney with access to the
confidential information is involved in “competitive
decisionmaking,” that is, whether the attorney's “activities, association, and relationship with a client ...
are such as to involve counsel's advice and participation in any or all of the client's decisions (pricing,
product design, etc.) made in light of similar or corresponding information about a competitor.” FN6
FN6. Id. at 1468 n. 3.
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Not Reported in F.Supp.2d, 2000 WL 554219 (E.D.La.)
(Cite as: 2000 WL 554219 (E.D.La.))
Several district courts have determined that
competitive decisionmaking also includes advice and
participation in prosecuting patent applications related to the patents in suit. For example, in Mikohn
Gaming Corp. v. Acres Gaming Inc.,FN7 the district
court for the District of Nevada addressed whether
counsel's role as lead trial and patent prosecution
counsel for the defendant created an unacceptable
risk of inadvertent disclosure of the plaintiff's confidential information. Because that court determined
that counsel's patent prosecution activities involved
patents at issue in the suit, the court determined that
the advice rendered by the defendant's counsel was
“intensely competitive” and that the risk of inadvertent disclosure outweighed the impairment of the
defendant's ability to litigate the suit, especially in
light of the defendant's retainer of other experienced
patent counsel.FN8 The court explained that
FN7. 50 U.S.P.Q.2d 1783 (D.Nev.1998).
FN8. See Mikohn, 50 U.S.P.Q.2d at 1786.
Were he given access to [the plaintiff's] technology, [counsel] would be in the “untenable position”
of having to either refuse his client legal advice on
competitive design matters or violate the protective
order's prohibition against revealing [the plaintiff's]
technical information.... No matter how much good
faith [counsel] might exercise, it is unrealistic to
expect that his knowledge of [the plaintiff's] secret
technology would or could not influence the nature
of his advice to [the defendant]. This is so whether
the advice relates to a pending application or a future application....
“Attorneys who were to view [the plaintiff's] voluminous confidential information and then later
prosecute the patents would have to constantly
challenge the origin of every idea, every spark of
genius. This would be a sisyphean task, for as soon
as one idea would be stamped “untainted,” another
would come to mind. The level of introspection
that would be required is simply too much to expect, no matter how intelligent, dedicated, or ethical the ... attorneys may be.” FN9
FN9. Id. (quoting Motorola, Inc. v. Interdigital Technology Corp., 1994 U.S. Dist.
LEXIS 20714 (D.Del.1994)).
*4 Similarly, in Interactive Coupon Marketing
Group, Inc. v. H.O.T! Coupons, L.L.C.,FN10 the
Northern District of Illinois court ordered that all
plaintiff's counsel privy to defendant's confidential
information “shall not participate in the prosecution
of any patent application for plaintiff relating to the
subject matter of the patents in suit during the pendency of this case and for one year after the conclusion
of this litigation, including appeals.” FN11 Although
the court found that competitive decisionmaking extends to “the manner in which patent applications are
shaped and prosecuted,” it cautioned that it is not
appropriate “to disqualify patent prosecution from an
active role in its client's litigation as a matter of
course.” FN12 The court reasoned that the appropriate
inquiry was “whether the firm's prosecution activities
are likely to be shaped by confidential information
about competitors' technology obtained through the
discovery process” and explained that “[t]he concern
is whether the firm's involvement in developing a
patent prosecution strategy will be informed by such
information to the competitors' detriment.” FN13
FN10. 1999 WL 618969 (N.D.Ill.1999).
FN11. Interactive Coupons, 1999 WL
618969 at *3.
FN12. Id.
FN13. Id.
Here, after considering the parties' voluminous
submissions, the determinations of the district courts
to which the individual cases in this multi-district
litigation shall be returned and the applicable case
law, I find that the Non-Papst parties meet their burden of showing good cause for the proposed restriction. The risk of inadvertent disclosure of the NonPapst parties' confidential information clearly outweighs the impairment, if any, of the Papst parties'
ability to litigate this action. Despite the Papst parties'
arguments to the contrary, it is clear that the advice
and participation of the Papst parties' counsel in
preparation and prosecution of patent applications
related to the patents in suit is an intensely competitive decisionmaking activity and would be informed
by access to the Non-Papst parties confidential information. Counsel's ability to file new claims in existing and pending patents based on the confidential
information discovered during the course of this liti-
© 2011 Thomson Reuters. No Claim to Orig. US Gov. Works.
Page 4
Not Reported in F.Supp.2d, 2000 WL 554219 (E.D.La.)
(Cite as: 2000 WL 554219 (E.D.La.))
gation poses an unacceptable opportunity for inadvertent disclosure and misuse. Although the Court is
confident that counsel for the Papst parties maintains
the highest ethical and professional standards, the
risk of inadvertent disclosure and misuse and the difficulty of distinguishing the source of the Papst parties' basis for filing new claims are great.
Furthermore, I find that the Non-Papst parties
proposed restriction works the least burden on the
parties involved in this multi-district litigation. The
parties have operated under an identical restriction
imposed by the District of Columbia court for many
months, and numerous third parties have consented to
the disclosure of their confidential information in
express reliance on that restriction. To alter the restriction significantly after thousands of documents
have been produced would likely create significant
disputes and delays.
*5 Moreover, despite their numerous grounds for
objecting to the Non-Papst parties' proposed restriction, the Papst parties fail to address the underlying
risk of inadvertent disclosure or misuse and have not
persuaded the Court that the Papst parties' ability to
litigate the actions in this multi-district litigation will
be substantially impaired. The Papst parties have
stipulated to similar restrictions in other patent infringement cases and have continued to litigate this
matter for months under the restrictions imposed by
the July 9, 1999 D.C. protective order.
Accordingly, I find that the Non-Papst parties
have met their burden of showing good cause for
their proposed restriction and that the risk of advertent disclosure and misuse clearly outweighs the impairment, if any, on the Papst parties' ability to litigate this matter. Nevertheless, because the risk of
inadvertent disclosure or misuse is identical whether
counsel for the Papst parties is a member or associate
of the Welsh and Katz firm or is inside or retained
counsel, where the Papst parties' counsel with access
to the information sought to be protected gives advice
or participates in the prosecution of patents related to
the patents in suit, the restriction applies to all counsel for the Papst parties prosecuting, supervising or
assisting in the prosecution of patent applications
related to the subject matter of the patents in suit.
This restriction, however, applies only to information
that embodies product design information which is
classifiable as confidential and which is of the type
that can be included in a patent application and form
the basis, or part of the basis for a claim or claims.
Such information shall be designated “ConfidentialProsecution Bar Material.”
Finally, the Papst parties fail to show good cause
for their proposed restriction, limiting all counsel's
ability to prosecute all new and continuation-in-part
patents, regardless of their relation to the patents in
suit. The Papst parties make no argument that any
risk of inadvertent disclosure of the Papst parties'
confidential information exists.
Accordingly,
IT IS ORDERED that the parties shall submit
jointly to the Court on or before May 24, 2000, a
proposed protective order, restricting the Papst parties' counsel, inside and retained, as well as their employees, with access to confidential prosecution bar
materials, from prosecuting, supervising or assisting
in the prosecution of any patent application on behalf
of Georg Papst or Papst Licensing, GmbH or any
entity related to Georg Papst or Papst Licensing,
GmbH pertaining to the subject matter of the patents
in suit during the pendency of this case and for one
year after the conclusion of this litigation, including
any appeals.
IT IS FURTHER ORDERED that the parties, in
preparing the joint protective order, shall rely to the
greatest extent possible on the July 9, 1999 D.C. protective order.
E.D.La.,2000.
In re Papst Licensing, GmbH, Patent Litigation
Not Reported in F.Supp.2d, 2000 WL 554219
(E.D.La.)
END OF DOCUMENT
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