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)

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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 Page 4 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 Page 5 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 Case 4:09-cv-11340-FDS Document 52 Filed 05/13/10 Page 1 of 17 Case 4:09-cv-11340-FDS Document 52 Filed 05/13/10 Page 2 of 17 Case 4:09-cv-11340-FDS Document 52 Filed 05/13/10 Page 3 of 17 Case 4:09-cv-11340-FDS Document 52 Filed 05/13/10 Page 4 of 17 Case 4:09-cv-11340-FDS Document 52 Filed 05/13/10 Page 5 of 17 Case 4:09-cv-11340-FDS Document 52 Filed 05/13/10 Page 6 of 17 Case 4:09-cv-11340-FDS Document 52 Filed 05/13/10 Page 7 of 17 Case 4:09-cv-11340-FDS Document 52 Filed 05/13/10 Page 8 of 17 Case 4:09-cv-11340-FDS Document 52 Filed 05/13/10 Page 9 of 17 Case 4:09-cv-11340-FDS Document 52 Filed 05/13/10 Page 10 of 17 Case 4:09-cv-11340-FDS Document 52 Filed 05/13/10 Page 11 of 17 Case 4:09-cv-11340-FDS Document 52 Filed 05/13/10 Page 12 of 17 Case 4:09-cv-11340-FDS Document 52 Filed 05/13/10 Page 13 of 17 Case 4:09-cv-11340-FDS Document 52 Filed 05/13/10 Page 14 of 17 Case 4:09-cv-11340-FDS Document 52 Filed 05/13/10 Page 15 of 17 Case 4:09-cv-11340-FDS Document 52 Filed 05/13/10 Page 16 of 17 Case 4:09-cv-11340-FDS Document 52 Filed 05/13/10 Page 17 of 17 Case 4:08-cr-40034-FDS Document 72 Filed 03/03/10 Page 1 of 6 Case 4:08-cr-40034-FDS Document 72 Filed 03/03/10 Page 2 of 6 Case 4:08-cr-40034-FDS Document 72 Filed 03/03/10 Page 3 of 6 Case 4:08-cr-40034-FDS Document 72 Filed 03/03/10 Page 4 of 6 Case 4:08-cr-40034-FDS Document 72 Filed 03/03/10 Page 5 of 6 Case 4:08-cr-40034-FDS Document 72 Filed 03/03/10 Page 6 of 6 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. Page 2 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. © 2011 Thomson Reuters. No Claim to Orig. US Gov. Works. Page 3 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 © 2011 Thomson Reuters. No Claim to Orig. US Gov. 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