Clayton Corporation v. Momentive Performance Materials, Inc. et al
MEMORANDUM AND ORDER IT IS HEREBY ORDERED that the parties joint motion for a protective order is GRANTED in part and DENIED in part. (Doc. No. 45) IT IS FURTHER ORDERED that the Court approves the parties proposed protective order as set forth in Ex hibit B. (Doc. No. 45-2.) IT IS FURTHER ORDERED that Defendants request for the inclusion of a patent prosecution bar in the protective order is DENIED without prejudice. re: 45 Joint MOTION for Protective Order filed by Plaintiff Clayton Corporation Signed by District Judge Audrey G. Fleissig on 5/14/13. (JWJ)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
MATERIALS, INC., et. al.,
Case No. 4:12CV1349 AGF
MEMORANDUM AND ORDER
This patent infringement case is before the Court on the parties’ Disputed Joint
Motion for Protective Order. (Doc. No. 45.) Plaintiff Clayton Corporation (“Clayton”)
and Defendants Momentive Performance Materials Inc., Lindal North America, Inc.,
(“Lindal”) and Altachem NV (“Altachem”), (collectively, “Defendants”) request that the
Court enter a protective order. The parties have agreed on all terms of the proposed
protective order except for the inclusion of a two-year patent prosecution bar.1
The disputed language states:
Notwithstanding any provision of this Protective Order, every person of the
receiving party who receives and reviews information of another party
designated as ATTORNEYS’ EYES ONLY INFORMATION under this
Protective Order is precluded from drafting, prosecuting, or supervising the
drafting or prosecution of any patent applications with the United States
Patent and Trademark Office or any similar proceedings in any other
country, involving any patent or patent application having claims or
disclosures related to valves containing glass-filled valve stems for use in
moisture curable foams, for a period of two (2) years after the termination
of this action. For clarity, “prosecution” includes drafting or amending
claims for reexamination, reissue, interference proceedings, or any other
post-grant proceedings, but does not include other involvement with such
post-grant proceedings. For clarity, this paragraph only applies to specific
Defendants contend that such a bar is reasonable and necessary to avoid the use of its
confidential information.2 Plaintiffs oppose the imposition of the patent prosecution bar
arguing that it will interfere with their ability to obtain the advice of their patent counsel.
The parties represent that they have conferred by telephone regarding the dispute, but
have been unable to resolve it. For the reasons set forth below the Court will deny
Defendants’ request to include a patent prosecution bar in the protective order.
Courts presiding over patent cases generally apply “regional circuit law when [a
discovery] issue involves an interpretation of the Federal Rules of Civil Procedure,”
Manildra Milling Corp. v. Ogilvie Mills, Inc., 76 F.3d 1178, 1182 (Fed. Cir. 1996), but
Federal Circuit law will apply if “resolution of the discovery dispute implicates an issue
of substantive patent law.” In re Deutsche Bank Trust Co. Am., 605 F.3d 1373, 1377
(Fed. Cir. 2010) (citations omitted). Patent prosecution bars address the concern over
inadvertent disclosure arising in patent infringement cases when trial counsel also
represents the same client in prosecuting other, usually related, patent applications before
the U.S. Patent and Trademark Office (“PTO”). Id. The Federal Circuit has explicitly
individuals who have received and reviewed information of another party
designated as ATTORNEYS’ EYES ONLY INFORMATION under this
Protective Order and does not apply generally to the firms, and their
attorneys and staff identified as TRIAL COUNSEL.
(Doc. No. 45-3).
Defendant Momentive concedes that its interests will not be affected by the release of
the disputed information here but asserts that it does not object to entry of the patent
prosecution bar in the proposed protective order.
held that “the determination of whether a protective order should include a patent
prosecution bar” is an issue unique to patent law and therefore governed by Federal
Circuit law. Id. at 1378; see also Highway Equip. Co., Inc. v. FECO, Ltd., 469 F.3d
1027, 1032 (Fed. Cir. 2006).
Protective orders typically include provisions specifying that designated
confidential information may be used only for purposes of the current litigation, and such
provisions are generally accepted as an effective way of protecting sensitive information
while granting trial counsel limited access to it for purposes of the litigation.3 There may
be circumstances, however, in which even the most rigorous efforts to preserve
confidentiality in compliance with the provisions of such a protective order may not
prevent inadvertent disclosure. See FTC v. Exxon Corp., 636 F.2d 1336, 1350 (D.C. Cir.
1980) (noting that “it 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”).
The party seeking a patent prosecution bar bears the burden of showing good
cause for its inclusion in a protective order. See Fed. R. Civ. P. 26(c); see also Deutsche
Bank, 605 F.3d at 1377. The proponent of the bar must show that counsel’s
representation of the client in matters before the PTO is likely to implicate “competitive
decision making related to the subject matter of the litigation so as to give rise to a risk of
inadvertent use of confidential information learned in litigation.” Deutsche Bank, 605
This standard protective order for use in patent cases in this District includes such a
provision but does not incorporate a patent prosecution bar. See Local Patent Rules,
United States District Court, Eastern District of Missouri, Appendix A.
F.3d at 1381. If such a risk exists, a court must weigh it against “the potential injury to
the moving party from restrictions imposed on its choice of litigation and [patent]
prosecution counsel.” Id. at 1381.
“[C]ompetitive decision making has been defined as ‘counsel’s activities,
association, and relationship with a client that 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.’” Deustche, 605 F.3d at
1378 (quoting U.S. Steel Corp. v. United States, 730 F.2d 1465, 1468 n.3 (Fed. Cir.
Every patent prosecution or litigation attorney is not necessarily involved in
competitive decision making. Attorneys that are “more substantially engaged with
prosecution,” such as those “making strategic decisions on the type and scope of patent
protection that might be available or worth pursuing” and “writing, reviewing, or
approving new applications,” are more likely to be involved in competitive decision
making, and therefore are more at “risk of inadvertent disclosure of competitive
information learned during litigation.” Deustche, 605 F.3d at 1379.
‘“The facts, not the category must inform the result’ and ‘each case should be
decided based on the specific facts involved therein.’” Deustche, 605 F.3d at 1379
(quoting In re Sibia Neurosciences, Inc., No. 525, 1997 WL 688174, at *3 (Fed. Cir. Oct.
22, 1997)). It is “specific evidence–not an inflexible rule–that supports a finding of
competitive decision making.” Pfizer Inc. v. Apotex Inc., 744 F.Supp.2d 758, 765 (N.D.
Ill. 2010); see also Deutsche Bank, 605 F.3d at 1380 (directing courts “to examine all
relevant facts surrounding counsel’s actual preparation and prosecution activities, on a
counsel-by-counsel basis.”); U.S. Steel, 730 F.2d at 1468 (requiring a showing of “factual
circumstances surrounding each individual counsel’s activities”). Therefore, it is
incumbent upon a party seeking a prosecution bar to provide such evidence. Pfizer, 744
F. Supp. 2d at 765.
Arguments of the Parties
Defendants, who bear the burden of persuasion here, assert that the proposed
prosecution bar is necessary and narrowly tailored to reflect the risk of disclosure. They
further assert that any resulting prejudice to Plaintiff is slight. Defendants dispute
Plaintiff’s assertion that the “design and composition” of the accused products can be
determined entirely by reverse engineering. They contend that the claims of the disputed
’834 patent include function-based elements, which cannot be reverse engineered.
Second, they point out that Plaintiff seeks discovery related to Lindal and Altachem’s
past research and development, not just its commercial work. Third, noting that Plaintiff
is now prosecuting continuation patents to the ’834 patent, Defendants assert that future
patent claims may go well beyond anything that can be “reverse engineered.”
Defendants further contend that the prosecution bar is necessary in this case
because Lindal/Altachem and Clayton are direct competitors and the requested discovery
relates to highly sensitive research and development and manufacturing work.
Defendants also argue that because the proposed prosecution bar is limited only to
individuals who receive and review “Attorneys Eyes Only” Information,” Plaintiff’s
access to counsel will not be compromised because other attorneys at trial counsel’s law
firms may engage in the patent prosecution. In addition, they note that the bar is limited
to a relatively short span of two years, and that trial counsel will still be able to
participate in post-grant proceedings, such as commenting on the prior art. They concede
however, that the bar extends to patent prosecution before the PTO, as well as drafting or
amending claims in post-grant proceedings, such as reexamination and reissue.
Finally Defendants assert that any injury to Plaintiff is outweighed by the potential
injury to Defendants Lindal and Altachem. They argue that the likelihood of injury to
Plaintiff is low because Plaintiff has access to separate counsel from the same law firm
for patent prosecution.
Plaintiff asserts that language already present in the proposed protective order
prohibiting the use of protected information “for competitive purposes or the prosecution
of additional intellectual property rights” is adequate to protect Defendants’ interest here.
Plaintiff notes that this language is found in this District’s standard protective order for
use in patent cases and that there are no special circumstances here warranting the
imposition of a two year patent prosecution bar. See Local Patent Rules, United States
District Court, Eastern District of Missouri, Appendix A.
Moreover, Plaintiff contends that it will be prejudiced by the imposition of such a
bar which will effectively preclude Plaintiff from obtaining the advice of its legal counsel
about patent claims or proposed claim amendments in pending patent applications or
post-grant proceedings involving the asserted patent in this case, simply because counsel
may have reviewed materials produced in this case. Plaintiff asserts that the prosecution
bar is overbroad because it will prohibit Plaintiff’s counsel from providing such advice
even if the information produced in this litigation has no bearing on the advice Plaintiff
Plaintiff also contends that the design and composition of the accused products
may be easily determined through simple analytical tests with items readily available in a
hardware store. Asserting that the parties can easily “reverse engineer” the accused
products without specialized information, Plaintiff argues that a prosecution ban is overly
restrictive. Plaintiff further contends that its access to the advice of counsel should not be
compromised merely because counsel viewed information produced in this litigation that
may reveal nothing more than what could be ascertained through simple tests of the
Upon consideration of the relevant case law and the record before it, the Court
rejects Defendants’ proposal to include a patent prosecution bar in the protective order.
Defendants have not met their burden of showing good cause for entry of such a bar. See
ActiveVideo Networks, Inc. v. Verizon Communications, Inc., 274 F.R.D. 576, 582 (E.D.
Va. 2010); Pfizer, 744 F.Supp.2d at 765; Intellect Wireless, Inc. v. T-Mobile USA, Inc.,
No. 08 C 1215, 2010 WL 1912250, at*2 (N.D. Ill. May 12, 2010); Fairchild
Semiconductor Corp. v. Third Dimension Semiconductor, Inc., No. 08-158, 2009 WL
1210638, at *12-13 (D. Me. Apr. 30, 2009).
Defendants assert only that the parties are competitors, and that because of the
critical nature of the claims Plaintiff’s trial counsel has expressed the desire to comment
on potential claims for the pending application and during any post-grant proceedings.
Defendants offer no specific evidence that trial counsel’s activities with respect to patent
prosecution constitute competitive decision making. Nor have Defendants demonstrated
counsel’s ‘“involvement with the plaintiff’s internal business activities’ that creates a
high risk of inadvertent disclosure.” Pfizer, 744 F. Supp. 2d at 768 (quoting Intellect
Wireless, 2010 WL 1912250, at *2).
Defendants have not provided the Court with an affidavit, declaration, or any other
form of evidence on any issue related to the proposed prosecution bar. As a result, the
Court has no evidentiary basis upon which to determine what relations Plaintiff’s
attorneys have with their client, what the scope of their representation of Plaintiff is, who
they advise or consult within the company, or any other ground by which the Court could
gauge the risk of inadvertent disclosure of confidential information. Without such
evidence, a party has not shown why a court should impose a bar on opposing counsel’s
activities. Intellect Wireless, 2010 WL 1912250, at *2; see also ActiveVideo Networks,
274 F.R.D. at 582; Pfizer, 744 F.Supp.2d at 768. Such “vague statement[s] [are] not
enough to warrant the unnecessary hardship that would result from the issuance of a
patent prosecution bar.” Intellect Wireless, 2010 WL 1912250, at *2.
The Court is unwilling to preclude lawyers from litigating here or in front of the
PTO on the basis of a vague and generalized threat of future inadvertent misuse of
discovered materials and in the absence of specific evidence that Plaintiff’s counsel
engages in competitive decision making. Avocent Redmond Corp. v. Rose Elecs., Inc.,
242 F.R.D. 574, 577 (W.D.Wa. 2007). The Court will therefore deny Defendants’
request for a patent prosecution bar, but without prejudice. The Court will enter the
stipulated protective order attached to the parties’ motion as (Exhibit B).
IT IS HEREBY ORDERED that the parties’ joint motion for a protective order
is GRANTED in part and DENIED in part. (Doc. No. 45)
IT IS FURTHER ORDERED that the Court approves the parties’ proposed
protective order as set forth in Exhibit B. (Doc. No. 45-2.)
IT IS FURTHER ORDERED that Defendants’ request for the inclusion of a
patent prosecution bar in the protective order is DENIED without prejudice.
AUDREY G. FLEISSIG
UNITED STATES DISTRICT JUDGE
Dated this 14th day of May, 2013.
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