Valencell, Inc. v. Apple Inc.

Filing 102

PROTECTIVE ORDER - Signed by U.S. Magistrate Judge James E. Gates on 12/12/2016. (Briggeman, N.)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
WESTERN DIVISION
5: 16-CV-1-D
VALENCELL, INC.,
Plaintiff,
V.

APPLE, INC.,
Defendant.

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PROTECTIVE ORDER

INTRODUCTION

Plaintiff Valencell, Inc. ("Valencell") and Defendant Apple Inc. ("Apple") anticipate that
documents, testimony, or information containing or reflecting confidential, proprietary, trade
secret, and/or commercially sensitive information are likely to be disclosed or produced during
the course of discovery, initial disclosures, and supplemental disclosures in this case (i.e., the
above-captioned case) and have requested that the Court enter a protective order, pursuant to
Rule 26(c) of the Federal Rules of Civil Procedure, setting forth the conditions for treating,
obtaining, and using such information. Notwithstanding their agreement that a protective order
is warranted in this case, they disagree as to the terms of the protective order.
The Court finds good cause for entry of this Protective Order ("Protective Order"),
pursuant to Rule 26(c). The Court has resolved the Parties' material disputes as to the terms to
be included in this Protective Order as set out in a separate order entered contemporaneously
herewith.

1.

PURPOSES AND LIMITATIONS

(a) Protected Material designated under the terms of this Protective Order shall be used
by a Receiving Party solely for this case, and shall not be used directly or indirectly for any other
purpose whatsoever.
(b) To the extent that a Producing Party in this litigation provides Protected Material
under the terms of this Protective Order to a Receiving Party, the Receiving Party shall not
disclose that material to any other party in litigation involving the Patents-in-Suit, including
Valence!!, Inc. v. Fitbit, Inc. , No. 5:16-CV-00002 (E.D.N.C.), absent express written permission

from the Producing Party. This Protective Order does not confer any right to any one party in
litigation involving the Patents-in-Suit to access the Protected Material of any other party in
litigation involving the Patents-in-Suit.
(c)

The Parties acknowledge that this Protective Order does not confer blanket

protections on all disclosures during discovery, or in the course of making initial or supplemental
disclosures under Rule 26(a). Designations under this Protective Order shall be made with care
and shall not be made absent a good faith belief that the designated material satisfies the criteria
set forth below. If it comes to a Producing Party' s attention that designated material does not
qualify for protection at all, or does not qualify for the level of protection initially asserted, the
Producing Party must promptly notify all other Parties that it is withdrawing or changing the
designation.
2.

DEFINITIONS

(a) "Discovery Material" means all items or information, including from any non-party,
regardless of the medium or manner generated, stored, or maintained (including, among other

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things, testimony, transcripts, or tangible things) that are produced, disclosed, or generated in
connection with discovery or Rule 26(a) disclosures in this case.
(b) "Outside Counsel" means (i) outside counsel who have entered an appearance in this
case as counsel for a Party (see Local Civ. Rule 5.2(a), E.D.N.C.); and (ii) partners (including
"of counsel" attorneys), associates, and staff of such counsel to whom it is reasonably necessary
to disclose the information for this litigation.
(c) "Patents-in-suit" means U.S. Patent Nos. 8,923 ,941, 8,886,269, 8,929,965, 8,989,830,
and any other patent asserted in this action, as well as any related patents, patent applications,
provisional patent applications, continuations, and/or divisionals.
(d)

"Party" means any party to this case, including all of its officers, directors,

employees, consultants, retained experts, and outside counsel and their support staffs.
(e)

"Producing Party" means any Party or non-party that discloses or produces any

Discovery Material in this case.
(f)

"Protected Material" means any Discovery Material that is designated as

"CONFIDENTIAL,"

"CONFIDENTIAL

ATTORNEYS '

EYES

ONLY,"

or

"CONFIDENTIAL - OUTSIDE ATTORNEYS' EYES ONLY - SOURCE CODE," as provided
for in this Protective Order. Protected Material shall not include: (i) advertising materials that
have been actually published or publicly disseminated; and (ii) materials that show on their face
they have been disseminated to the public.
(g)

"Receiving Party" means any Party that receives Discovery Material from a

Producing Party.
(h) "Source Code" means computer code, scripts, assembly, binaries, object code, source
code listings, and descriptions of source code, object code listings and descriptions of object

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code, and Hardware Description Language (HDL) or Register Transfer Level (RTL) files that
describe the hardware design of any ASIC or other chip.
(i) "The Court" means the United States District Court for the Eastern District of North
Carolina, in which this case is pending. In the event this case is transferred to another district,
"the Court" shall mean the transferee district.

3.

COMPUTATION OF TIME
The computation of any period of time prescribed or allowed by this Protective Order

shall be governed by the provisions for computing time set forth in Federal Rule of Civil
Procedure 6.

4.

SCOPE
(a) The protections conferred by this Protective Order cover not only Discovery Material

governed by this Protective Order as addressed herein, but also any information copied or
extracted therefrom, as well as all copies, excerpts, summaries, or compilations thereof, plus
testimony, conversations, or presentations by Parties or their counsel in court or in other settings
that might reveal Protected Material.
(b) Nothing in this Protective Order shall prevent or restrict a Producing Party's own
disclosure or use of its own Protected Material for any purpose, and nothing in this Protective
Order shall preclude any Producing Party from showing its own Protected Material to an
individual who prepared the Protected Material.
(c) Nothing in this Protective Order shall be construed to prejudice any Party' s right to
use any Protected Material in court or in any court filing with the consent of the Producing Party
or by order of the Court.

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(d) This Protective Order is without prejudice to the right of any Party to seek further or
additional protection of any Discovery Material or modification of this Protective Order in any
way, including, without limitation, an order that certain matter not be produced at all.

5.

DURATION
Even after the termination of this case, the confidentiality obligations imposed by this

Protective Order shall remain in effect until a Producing Party agrees otherwise in writing or a
court order otherwise directs.

6.

ACCESS TO AND USE OF PROTECTED MATERIAL
(a) Basic Principles. All Protected Material shall be used solely for this case or any

related appellate proceeding, and not for any other purpose whatsoever, including without
limitation any other litigation, patent prosecution or acquisition, patent reexamination or reissue
proceedings, or any business or competitive purpose or function. Protected Material shall not be
distributed, disclosed or made available to anyone except as expressly provided in this Protective
Order.
(b) Patent Prosecution bar. Absent the written consent of the Producing Party, anyone
who reviews and/or receives one or more items designated "CONFIDENTIAL-ATTORNEYS'
EYES ONLY" or "CONFIDENTIAL - ATTORNEYS' EYES ONLY - SOURCE CODE" shall
not be involved in any of the following activities: (i) advising on, consulting on, preparing,
prosecuting, drafting, editing, and/or amending of patent applications, specifications, claims,
and/or responses to office actions, or otherwise affecting the scope of claims in patents or patent
applications relating to the functionality, operation, and design of technology for monitoring,
sensing, collecting, analyzing, or displaying physiological and motion-related information
(generally or as described in any Patent-in-suit) before any foreign or domestic agency, including

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the United States Patent and Trademark Office; and (ii) the acquisition of patents (including
patent applications), or the rights to any such patents or patent applications with the right to
sublicense, relating to the functionality, operation, and design of technology for monitoring,
sensing, collecting, analyzing, or displaying physiological and motion-related information
(generally or as described in any Patent-in-suit). To ensure compliance with the purpose of this
provision, each Party shall create an "Ethical Wall" between those persons with access to
"CONFIDENTIAL - ATTORNEYS' EYES ONLY" or "CONFIDENTIAL - ATTORNEYS'
EYES ONLY - SOURCE CODE" material and any individuals who, on behalf of the Party or its
acquirer, successor, predecessor, or other affiliate, prepare, prosecute, supervise, or assist in the
preparation or prosecution of any patent application pertaining to the Patents-in-suit or the
functionality, operation, and design of technology for monitoring, sensing, collecting, analyzing,
or displaying physiological and motion-related information (generally or as described in any
Patent-in-suit).

These prohibitions are not intended to and shall not preclude counsel from

participating in proceedings on behalf of a Party during post-grant proceedings that may involve
the validity of any patent, but are intended, inter alia, to preclude counsel from participating in or
advising on, directly or indirectly, drafting or amending claims during post-grant proceedings
(e.g., reexamination, inter partes review, covered business method review, or reissue
proceedings) on behalf of a patentee.

These prohibitions shall begin when access to

"CONFIDENTIAL - ATTORNEYS ' EYES ONLY" or "CONFIDENTIAL - ATTORNEYS'
EYES ONLY - SOURCE CODE" materials are first reviewed and/or received by the affected
individual, and shall end two (2) years after the final resolution of this action, including all
appeals.

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(c) Export Control. The parties agree that Source Code may leave the United States and
enter Canada if and only if: (1) such departure from the United States and entry into Canada
occurs in the course of the work relating to this case by the Canada-based expert Valencell has
indicated an intention to retain for this case; (2) prior to the Source Code leaving the United
States, the Canada-based expert is disclosed and cleared pursuant to the other provisions of this
Protective Order; and (3) also prior to the Source Code leaving the United States, the Canadabased expert provides to the Court, in a form reasonably satisfactory to the Parties, a written
submission to the jurisdiction of the Court with respect to any remedial procedures resulting in a
Protective Order violation. Under no other circumstances may any Source Code produced by a
Party leave the United States.
(d) Legal Advice Based on Protected Material. Nothing in this Protective Order shall be
construed to prevent counsel from advising their clients with respect to this case based in whole
or in part upon Protected Materials, provided counsel does not disclose the Protected Material
itself except as provided in this Protective Order.
(e) Limitations. Nothing in this Protective Order shall restrict in any way a Producing
Party's use or disclosure of its own Protected Material. Nothing in this Protective Order shall
restrict in any way the use or disclosure of Discovery Material by a Receiving Party: (i) that is or
has become publicly known through no fault of the Receiving Party; (ii) that is lawfully acquired
by or known to the Receiving Party independent of the Producing Party; (iii) previously
produced, disclosed and/or provided by the Producing Party to the Receiving Party or a nonparty without an obligation of confidentiality and not by inadvertence or mistake; (iv) with the
consent of the Producing Party; or (v) pursuant to order of the Court.

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(f) Notwithstanding the provisions of this Protective Order, a Receiving Party shall not

disclose the Protected Material of a Producing Party to any third party(ies) (e.g., including, but
not limited to, Fitbit, Inc.) through court filings, oral argument in court, expert reports,
deposition, discovery requests, discovery responses, or any other means, without the express
prior written consent of the Producing Party.
7.

DESIGNATING PROTECTED MATERIAL
(a) Available Designations. Any Producing Party may designate Discovery Material

with any of the following designations, provided that it meets the requirements for such
designations as provided for herein: "CONFIDENTIAL," "CONFIDENTIAL - ATTORNEYS'
EYES ONLY," or "CONFIDENTIAL - OUTSIDE ATTORNEYS' EYES ONLY - SOURCE
CODE."
(b)

Written Discovery and Documents and Tangible Things.

Written discovery,

documents (which include "electronically stored information," as that phrase is used in Federal
Rule of Procedure 34), and tangible things that meet the requirements for the confidentiality
designations listed in Paragraph 7(a) may be so designated by placing the appropriate
designation on every page of the written material prior to production. For digital files being
produced, the Producing Party may mark each viewable page or image with the appropriate
designation, and mark the medium, container, and/or communication in which the digital files
were contained. In the event that original documents are produced for inspection, the original
documents shall be presumed "CONFIDENTIAL - ATTORNEYS ' EYES ONLY" during the
inspection and redesignated, as appropriate, during the copying process.
(c) Native Files. Where electronic files and documents are produced in native electronic
format, such electronic files and documents shall be designated for protection under this

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Protective Order by appending to the file names or designators information indicating whether
the file contains "CONFIDENTIAL," "CONFIDENTIAL - ATTORNEYS ' EYES ONLY," or
"CONFIDENTIAL - OUTSIDE ATTORNEYS' EYES ONLY - SOURCE CODE," material, or
shall use any other reasonable method for so designating Protected Materials produced in
electronic format. When electronic files or documents are printed for use at deposition, in a
court proceeding, or for provision in printed form to an expert or consultant pre-approved
pursuant to Paragraph 12, the Party printing the electronic files or documents shall affix a legend
to the printed document corresponding to the designation of the designating Party and including
the production number and designation associated with the native file.
(d) Depositions and Testimony. Parties or testifying persons or entities may designate
depositions and other testimony with the appropriate designation by indicating on the record at
the time the testimony is given or by sending written notice of how portions of the transcript of
the testimony is designated within thirty (30) days of receipt of the transcript of the testimony. If
no indication on the record is made, all information disclosed during a deposition shall be
deemed "CONFIDENTIAL - ATTORNEYS ' EYES ONLY" until the time within which it may
be appropriately designated as provided for herein has passed. Any Party that wishes to disclose
the transcript, or information contained therein, may provide written notice of its intent to treat
the transcript as non-confidential, after which time, any Party that wants to maintain any portion
of the transcript as confidential must designate the confidential portions within fourteen (14)
days, or else the transcript may be treated as non-confidential. Any Protected Material that is
used in the taking of a deposition shall remain subject to the provisions of this Protective Order,
along with the transcript pages of the deposition testimony dealing with such Protected Material.
In such cases, the court reporter shall be informed of this Protective Order and shall be required

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to operate in a manner consistent with this Protective Order. In the event the deposition is
videotaped, the original and all copies of the videotape shall be marked by the video technician
to indicate that the contents of the videotape are subject to this Protective Order, substantially
along the lines of "This videotape contains confidential testimony used in this case and is not to
be viewed or the contents thereof to be displayed or revealed except pursuant to the terms of the
operative Protective Order in this matter or pursuant to written stipulation of the parties."
Counsel for any Producing Party shall have the right to exclude from oral depositions any person
who is not authorized by this Protective Order to receive or access Protected Material based on
the designation of such Protected Material, other than the deponent, deponent' s counsel, the
court reporter, and the videographer (if any). Such right of exclusion shall be applicable only
during periods of examination or testimony regarding such Protected Material.

8.

DISCOVERY MATERIAL DESIGNATED AS "CONFIDENTIAL"
(a) A Producing Party may designate Discovery Material as "CONFIDENTIAL" if it

contains or reflects confidential, proprietary, and/or commercially sensitive information.
(b)

Unless otherwise ordered by the Court, Discovery Material designated as

"CONFIDENTIAL" may be disclosed only to the following:
(i) The Receiving Party' s Outside Counsel, such counsel ' s immediate paralegals
and staff, and any copying or clerical litigation support services working at the direction of such
counsel, paralegals, and staff;
(ii)

Not more than three (3) representatives of the Receiving Party who are

officers or employees of the Receiving Party, who may be, but need not be, in-house counsel for
the Receiving Party, as well as their immediate paralegals and staff, to whom disclosure is
reasonably necessary for this case, provided that: (a) each such person has agreed to be bound by

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the prov1s10ns of the Protective Order by signing a copy of Exhibit A hereto, entitled
"Agreement to Be Bound by Protective Order"; and (b) no unresolved objections to such
disclosure exist after proper notice has been given to all Parties as set forth in Paragraph 12
below;
(iii) Any outside expert or consultant retained by the Receiving Party to assist in
this action, provided that disclosure is only to the extent necessary to perform such work; and
provided that: (a) such expert or consultant has agreed to be bound by the provisions of the
Protective Order by signing a copy of Exhibit A; (b) such expert or consultant is not a current
officer, director, or employee of a Party or of a competitor of a Party, nor anticipated at the time
of retention to become an officer, director or employee of a Party or of a competitor of a Party;
(c) such expert or consultant accesses the materials in the United States only, and does not
transport them to or access them from any foreign jurisdiction except as expressly permitted in
this Protective Order; and (d) no unresolved objections to such disclosure exist after proper
notice has been given to all Parties as set forth in Paragraph 12 below.
(iv)

Court reporters, stenographers, and videographers retained to record

testimony taken in this action;
(v) The Court, jury, and court personnel;
(vi) Graphics, translation, design, and/or trial consulting personnel, having first
agreed to be bound by the provisions of the Protective Order by signing a copy of Exhibit A;
(vii) Mock jurors who have signed an undertaking or agreement agreeing not to
publicly disclose Protected Material and to keep any information concerning Protected Material
confidential ;

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(viii) Any mediator who is assigned to hear this matter, and his or her staff,
subject to their agreement to maintain confidentiality to the same degree as required by this
Protective Order; and
(ix) Any other person with the prior written consent of the Producing Party.

9.

DISCOVERY
MATERIAL
ATTORNEYS' EYES ONLY"
(a)

DESIGNATED

AS

"CONFIDENTIAL

A Producing Party may designate Discovery Material as "CONFIDENTIAL -

ATTORNEYS ' EYES ONLY" if it contains or reflects information that is extremely confidential
and/or sensitive in nature and the Producing Party reasonably believes that the disclosure of such
Discovery Material is likely to cause economic harm or significant competitive disadvantage to
the Producing Party. The Parties agree that the following information, if non-public, shall be
presumed to merit the "CONFIDENTIAL - ATTORNEYS ' EYES ONLY" designation: trade
secrets, pricing information, financial data, sales information, sales or marketing forecasts or
plans, business plans, sales or marketing strategy, product development information, engineering
documents, testing documents, employee information, and other non-public information of
similar competitive and business sensitivity.
(b)

Unless otherwise ordered by the Court, Discovery Material designated as

"CONFIDENTIAL - ATTORNEYS ' EYES ONLY" may be disclosed only to:
(i) The Receiving Party' s Outside Counsel, provided that such Outside Counsel is
not involved in competitive decision-making, as defined by US. Steel v. United States, 730 F.2d
1465, 1468 n.3 (Fed. Cir. 1984), on behalf of a Party or a competitor of a Party, and such Outside
Counsel ' s immediate paralegals and staff, and any copying or clerical litigation support services
working at the direction of such counsel, paralegals, and staff;

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(ii) Any outside expert or consultant retained by the Receiving Party to assist in
this action, provided that disclosure is only to the extent necessary to perform such work; and
provided that: (a) such expert or consultant has agreed to be bound by the provisions of the
Protective Order by signing a copy of Exhibit A; (b) such expert or consultant is not a current
officer, director, or employee of a Party or of a competitor of a Party, nor anticipated at the time
of retention to become an officer, director, or employee of a Party or of a competitor of a Party;
(c) such expert or consultant is not involved in competitive decision-making, as defined by US.
Steel v. United States, 730 F.2d 1465, 1468 n.3 (Fed. Cir. 1984), on behalf of a Party or a
competitor of a Party; (d) such expert or consultant accesses the materials in the United States
only, and does not transport them to or access them from any foreign jurisdiction except as
expressly permitted in this Protective Order; and (e) no umesolved objections to such disclosure
exist after proper notice has been given to all Parties as set forth in Paragraph 12 below;
(iii)

Court reporters, stenographers, and videographers retained to record

testimony taken in this action;
(iv) The Court, jury, and court personnel;
(v) Graphics, translation, design, and/or trial consulting personnel, having first
agreed to be bound by the provisions of the Protective Order by signing a copy of Exhibit A;
(vi) Any mediator who is assigned to hear this matter, and his or her staff, subject
to their agreement to maintain confidentiality to the same degree as required by this Protective
Order; and
(vii) Any other person with the prior written consent of the Producing Party.
(c) The Receiving Party shall maintain a written log of each outside counsel not of
record who reviews and/or receives CONFIDENTIAL - ATTORNEYS' EYES ONLY material,

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but may in its discretion omit any such counsel who at the time of receipt has previously
received and/or reviewed any CONFIDENTIAL - OUTSIDE ATTORNEYS ' EYES ONLY SOURCE CODE material. The log shall contain the name of the outside counsel not of record
who received the CONFIDENTIAL - ATTORNEYS ' EYES ONLY material and the date of
receipt. Upon two (2) days ' advance notice to the Receiving Party by the Producing Party, the
Receiving Party shall provide a copy of this log to the Producing Party. The purpose of this log
is to enable the Producing Party to know which outside counsel not of record have received
CONFIDENTIAL - ATTORNEYS' EYES ONLY material, and not for any litigation-inspired
purpose.
10.

DISCOVERY MATERIAL DESIGNATED AS "CONFIDENTIAL - OUTSIDE
ATTORNEYS' EYES ONLY -SOURCE CODE"
(a) To the extent production of Source Code becomes necessary to the prosecution or

defense of the case, a Producing Party may designate Source Code as "CONFIDENTIAL OUTSIDE ATTORNEYS ' EYES ONLY - SOURCE CODE" if it comprises or includes
confidential, proprietary, and/or trade secret Source Code.
(b) Nothing in this Protective Order shall be construed as a representation or admission
that Source Code is properly discoverable in this action, or to obligate any Party to produce any
Source Code.
(c)

Unless otherwise ordered by the Court, Discovery Material designated as

"CONFIDENTIAL - OUTSIDE ATTORNEYS ' EYES ONLY - SOURCE CODE" shall be
subject to the provisions set forth in Paragraph 11 below, and may be disclosed, subject to
Paragraph 11 below, solely to:
(i) The Receiving Party' s Outside Counsel, provided that such Outside Counsel is
not involved in competitive decision-making, as defined by US. Steel v. United States, 730 F.2d
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1465, 1468 n.3 (Fed. Cir. 1984), on behalf of a Party or a competitor of a Party, and such Outside
Counsel's immediate paralegals and staff, and any copying or clerical litigation support services
working at the direction of such counsel, paralegals, and staff;
(ii) Any outside expert or consultant retained by the Receiving Party to assist in
this action, provided that disclosure is only to the extent necessary to perform such work; and
provided that: (a) such expert or consultant has agreed to be bound by the provisions of the
Protective Order by signing a copy of Exhibit A; (b) such expert or consultant is not a current
officer, director, or employee of a Party or of a competitor of a Party, nor anticipated at the time
of retention to become an officer, director or employee of a Party or of a competitor of a Party;
(c) such expert or consultant is not involved in competitive decision-making, as defined by U.S.
Steel v. United States, 730 F.2d 1465, 1468 n.3 (Fed. Cir. 1984), on behalf of a Party or a
competitor of a Party; and (d) no unresolved objections to such disclosure exist after proper
notice has been given to all Parties as set forth in Paragraph 12 below;
(iii)

Court reporters, stenographers, and videographers retained to record

testimony taken in this action;
(iv) The Court, jury, and court personnel;
(v) Any mediator who is assigned to hear this matter, and his or her staff, subject
to their agreement to maintain confidentiality to the same degree as required by this Protective
Order; and
(vi) Any other person with the prior written consent of the Producing Party.

11.

DISCLOSURE AND REVIEW OF SOURCE CODE
(a)

Any Source Code that is produced by Valencell shall be made available for

inspection in electronic format at the Dallas office of its outside counsel, Bragalone Conroy PC,

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or any other location mutually agreed to by the Parties. Any Source Code that is produced by
Apple shall be made available for inspection at the Kansas City office of its outside counsel,
Shook, Hardy & Bacon LLP, or any other location mutually agreed to by the Parties. Source
Code shall be made available for inspection between the hours of 8 a.m. and 6 p.m. on business
days (i.e. , weekdays that are not federal holidays), although the Parties shall be reasonable in
accommodating reasonable requests to conduct inspections at other times.
(b) The Receiving Party may request the production of Source Code. This request may,
but does not have to, be in the form of a Request for Production. After the Receiving Party
requests the production of Source Code, the Producing Party shall send written notice, within
thirty-three (33) days, that the Source Code is, and will continue to be, available for inspection
on the Source Code Computer upon seven (7) days' notice.
(c)

Source Code that is designated "CONFIDENTIAL - OUTSIDE ATTORNEYS'

EYES ONLY - SOURCE CODE" shall be produced for inspection and review subject to the
following additional provisions, unless otherwise agreed by the Producing Party:
(i)

All Source Code shall be made available by the Producing Party to the

Receiving Party' s outside counsel and/or experts in a secure room on a secured computer without
Internet access or network access to other computers and on which all access ports have been
disabled (except for one printer port), as necessary and appropriate to prevent and protect against
any unauthorized copying, transmission, removal, or other transfer of any Source Code outside
or away from the computer on which the Source Code is provided for inspection (the "Source
Code Computer" in the "Source Code Review Room"). The Producing Party shall install tools
that are sufficient for viewing and searching the Source Code produced, on the platform
produced, if such tools exist and are presently used in the ordinary course of the Producing

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Party's business. If Apple is the Producing Party, Apple shall provide at least the review tools
already discussed between the parties and approved by Apple. The Receiving Party's outside
counsel and/or experts may request that other commercially available software tools for viewing
and searching Source Code be installed on the Source Code Computer, provided, however, that
(a) the Receiving Party possesses an appropriate license to such software tools; (b) the Producing
Party approves such software tools; and (c) such other software tools are reasonably necessary
for the Receiving Party to perform its review of the Source Code consistent with all of the
protections herein. The Receiving Party must provide the Producing Party with the CD or DVD
containing such licensed software tool( s) at least fourteen ( 14) days in advance of the date upon
which the Receiving Party wishes to have the additional software tools available for use on the
Source Code Computer.
(ii) No recordable media or recordable devices, including without limitation
sound recorders, computers, cellular telephones, peripheral equipment, cameras, CDs, DVDs, or
drives of any kind, shall be permitted into the Source Code Review Room.
(iii) The Receiving Party's outside counsel and/or experts shall be entitled to take
notes relating to the Source Code but may not copy the Source Code into the notes and may not
take such notes electronically on the Source Code Computer itself or any other computer.
(iv) The Producing Party may visually monitor the activities of the Receiving
Party's representatives during any Source Code review, but only to ensure that no unauthorized
electronic records of the Source Code and no unpermitted information concerning the Source
Code are being created or transmitted in any way.
(v) No copies of all or any portion of the Source Code may leave the Source
Code Review Room except as otherwise provided herein. Further, no other written or electronic

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record of the Source Code is permitted except as otherwise provided herein. The Receiving
Party may request a paper copy of limited portions of the Source Code that it believes in good
faith are reasonably necessary for the preparation of court filings, pleadings, expert reports, or
other papers, or for deposition or trial, but shall not request paper copies for the purpose of
reviewing the Source Code other than electronically on the Source Code Computer in the Source
Code Review Room. The Producing Party shall Bates number and label "CONFIDENTIALOUTSIDE ATTORNEYS' EYES ONLY-SOURCE CODE" each page of Source Code it
provides the Receiving Party in paper form . Within five (5) days after receiving a request from
the Receiving Party for a printed copy of Source Code, the Producing Party shall either (i)
provide one copy set of such pages to the Receiving Party or (ii) inform the Receiving Party that
it objects that the printed portions requested are excessive and/or not done for a permitted
purpose. If, after meeting and conferring, the Producing Party and the Receiving Party cannot
resolve the objection, either party may seek court resolution of whether the printed Source Code
in question is narrowly tailored and was printed for a permitted purpose. The printed pages shall
constitute part of the Source Code produced by the Producing Party in this action. While the
dispute is pending before the Court, the Producing Party may retain the Source Code that the
Producing Party objected to producing.
(vi) All persons who will review a Producing Party's Source Code on behalf of a
Receiving Party, including members of a Receiving Party's outside law firm, shall be identified
in writing to the Producing Party at least five (5) days in advance of the first time that such
person reviews such Source Code. Such identification shall be in addition to any other disclosure
required under this Protective Order. All persons viewing Source Code shall sign on each day
they view Source Code a log, to be maintained by the Producing Party, that shall include the

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names of persons who enter the Source Code Review Room to view Source Code and when they
enter and depart. The parties agree that the log may not be used for any litigation-inspired
purpose, such as the merits of the case and impeaching experts.
(vii) Unless otherwise agreed in advance by the Parties in writing, following each
day on which inspection is done under this Protective Order, the Receiving Party' s outside
counsel and/or experts shall remove all notes, documents, and all other materials from the Source
Code Review Room. The Producing Party shall not be responsible for any items left in the room
following each inspection session, and the Receiving Party shall have no expectation of
confidentiality for any items left in the room following each inspection session without a prior
agreement to that effect. Proper identification of all authorized persons shall be provided prior to
any access to the Source Code Review Room or the Source Code Computer. Proper
identification requires showing, at a minimum, a photograph identification card sanctioned by
the government of any State of the United States, by the government of the United States, or by
the nation state of the authorized person' s current citizenship.

Access to the Source Code

Review Room or Source Code Computer may be denied, at the discretion of the Producing Party,
to any individual who fails to provide proper identification.
(viii) Other than as provided above, the Receiving Party shall not copy, remove,
or otherwise transfer any Source Code from the Source Code Computer including, without
limitation, copying, removing, or transferring the Source Code onto any recordable media or
recordable device. The Receiving Party shall not transmit any Source Code in any way from the
Producing Party' s facilities or the offices of its outside counsel of record.
(ix) The Receiving Party' s outside counsel of record may make no more than
four (4) additional paper copies of any portions of the Source Code received from a Producing

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Party pursuant to Paragraph 1 l(c)(v), not including copies attached to court filings or used at
depositions, and shall maintain a log of all paper copies of the Source Code. The log shall
include the names of the reviewers and/or recipients of paper copies and locations where the
paper copies are stored.

Upon two (2) days' advance notice to the Receiving Party by the

Producing Party, the Receiving Party shall provide a copy of this log to the Producing Party.
The parties agree that the purpose of this Source Code review log is so that the Producing Party
can know the extent to which others have viewed its Source Code, and not for any litigation
inspired purpose, such as impeaching experts.
(x) The Receiving Party' s outside counsel of record and any person receiving a
copy of any Source Code shall maintain and store any paper copies of the Source Code at their
offices in a manner that prevents duplication of or unauthorized access to the Source Code,
including, without limitation, storing the Source Code in a locked room or cabinet at all times
when it is not in use. No more than a total of ten (10) individuals identified by the Receiving
Party shall have access to the printed portions of the Producing Party's Source Code (except
insofar as such Source Code appears in any court filing or expert report), unless the Producing
Party agrees in writing that a specified larger number of individuals may have such access.
(xi) For depositions, the Receiving Party shall not bring copies of any printed
Source Code. Rather, at least five (5) days before the date of the deposition, the Receiving Party
shall notify the Producing Party about the specific portions of Source Code it wishes to use at the
deposition or may request that the Producing Party bring the Source Code Computer itself to the
deposition, and the Producing Party shall bring printed copies of those portions to the deposition
or the Source Code Computer itself for use by the Receiving Party. Copies of Source Code that
are marked as deposition exhibits shall not be provided to the court reporter or attached to

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deposition transcripts; rather, the deposition record shall identify the exhibit by its production
numbers.

All paper copies of Source Code brought to the deposition shall remain with the

Producing Counsel ' s outside counsel for secure destruction in a timely manner following the
deposition.
(xii) Except as provided in this sub-paragraph, absent express written permission
from the Producing Party, the Receiving Party may not create electronic images, or any other
images, or make electronic copies, of the Source Code from any paper copy of Source Code for
use in any manner (including by way of example only, the Receiving Party may not scan the
Source Code to a PDF or photograph the code). Images or copies of Source Code shall not be
included in correspondence between the Parties (references to production numbers shall be used
instead), and shall be omitted from pleadings and other papers whenever possible. If a Party
reasonably believes that it needs to submit a portion of Source Code as part of a filing with the
Court, the Parties shall meet and confer as to how to make such a filing while protecting the
confidentiality of the Source Code and such Source Code shall not be filed absent agreement
from the Producing Party that the confidentiality protections shall be adequate. If a Producing
Party agrees to produce an electronic copy of all or any portion of its Source Code or provide
written permission to the Receiving Party that an electronic or any other copy needs to be made
for a court filing, access to the Receiving Party' s submission, communication, and/or disclosure
of electronic files or other materials containing any portion of Source Code (paper or electronic)
shall at all times be limited solely to individuals who are expressly authorized to view Source
Code under the provisions of this Protective Order. Where the Producing Party has provided the
express written permission required under this provision for a Receiving Party to create
electronic copies of Source Code, the Receiving Party shall maintain a log of all such electronic

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copies of any portion of Source Code in its possession or in the possession of its retained
consultants, including the names of the reviewers and/or recipients of any such electronic copies,
and the locations and manner in which the electronic copies are stored. Additionally, any such
electronic copies must be labeled "CONFIDENTIAL - ATTORNEYS' EYES ONLY - SOURCE
CODE" as provided for in this Protective Order.

12.

NOTICE OF DISCLOSURE
(a) Prior to disclosing any Protected Material to any person described in Paragraphs

8(b)(ii), 8(b )(iii), 9(b )(ii), or 10(c)(ii) (referenced below as "Person") for the first time, the Party
seeking to disclose such information shall provide the Producing Party with written notice that
includes:
(i) the name of the Person;
(ii) an up-to-date curriculum vitae of the Person;
(iii) the present employer and title of the Person;
(iv) an identification of all of the Person's past and current employment and
consulting relationships, including direct relationships and relationships through entities owned
or controlled by the Person, including but not limited to an identification of any individual or
entity with or for whom the person is employed or to whom the person provides consulting
services relating to the design, development, operation, or patenting of functionality, operation,
and design of technology for monitoring, sensing, collecting, analyzing, or displaying
physiological and motion-related information (generally or as described in any Patent-in-suit);
(v) an identification of all pending patent applications on which the Person is
named as an inventor, in which the Person has any ownership interest, or as to which the Person

22

has had or anticipates in the future any involvement in advising on, consulting on, preparing,
prosecuting, drafting, editing, amending, or otherwise affecting the scope of the claims; and
(vi) a list of the cases in which the Person has testified at deposition or trial within
the last five (5) years.
Further, the Party seeking to disclose Protected Material shall provide such other
information regarding the Person's professional activities reasonably requested by the Producing
Party for it to evaluate whether good cause exists to object to the disclosure of Protected Material
to the outside expert or consultant. During the pendency of and for a period of two (2) years
after the final resolution of this action, including all appeals, the Party seeking to disclose
Protected Material shall immediately provide written notice of any change with respect to the
Person' s involvement in the functionality, operation, and design of technology for monitoring,
sensing, collecting, analyzing, or displaying physiological and motion-related information
(generally or as described in any Patent-in-suit), or the acquisition of intellectual property assets
relating to functionality, operation, and design of technology for monitoring, sensing, collecting,
analyzing, or displaying physiological and motion-related information (generally or as described
in any Patent-in-suit).
(b) Within fourteen (14) days of receipt of the disclosure of the Person, the Producing
Party may object in writing to the Person for good cause, stating with particularity the reasons
for the objection. In the absence of an objection at the end of the fourteen (14) day period, the
Person shall be deemed approved under this Protective Order. There shall be no disclosure of
Protected Material to the Person prior to expiration of this fourteen (14) day period. If the
Producing Party objects to disclosure to the Person within such fourteen (14) day period, the
Parties shall meet and confer via telephone or in person within seven (7) days following service

23

of the objection and attempt in good faith to resolve the dispute on an informal basis. If the
dispute is not resolved, the Party objecting to the disclosure shall have seven (7) days from the
date of the meet and confer to seek relief from the Court. If relief is not sought from the Court
within that time, the objection shall be deemed withdrawn. If relief is sought, no Protected
Material shall be disclosed to the Person in question until the Court resolves the objection.
(c) Prior to receiving any Protected Material under this Protective Order, the Person must
execute a copy of Exhibit A and serve it on all Parties.
(d) An initial failure to object to a Person under this Paragraph 12 shall not preclude the
non-objecting Party from later objecting to continued access by that Person for good cause. If an
objection is made, the Parties shall meet and confer via telephone or in person within seven (7)
days following the objection and attempt in good faith to resolve the dispute informally. If the
dispute is not resolved, the Party objecting to the disclosure shall have seven (7) days from the
date of the meet and confer to seek relief from the Court. The Person may continue to have
access to the Protected Material that was provided to such Person prior to the date of the
objection. If a later objection is made, no further Protected Material shall be disclosed to the
Person until the Court resolves the matter or the Producing Party withdraws its objection.
Notwithstanding the foregoing, if the Producing Party fails to move for a protective order within
seven (7) days after the meet and confer, further Protected Material may thereafter be provided to
the Person.

13.

CHALLENGING DESIGNATIONS OF PROTECTED MATERIAL
(a)

A Party shall not be obligated to challenge the propriety of any designation of

Discovery Material under this Protective Order at the time the designation is made, and a failure
to do so shall not preclude a subsequent challenge thereto.

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(b) Any challenge to a designation of Discovery Material under this Protective Order
shall be written, shall be served on outside counsel for the Producing Party, shall particularly
identify the documents or information that the Receiving Party contends should be differently
designated, and shall state the grounds for the objection. Thereafter, further protection of such
material shall be resolved in accordance with the following procedures:
(i) The objecting Party shall have the burden of conferring either in person, in
writing, or by telephone with the Producing Party claiming protection in a good faith effort to
resolve the dispute.

The Producing Party shall have the burden of justifying the disputed

designation;
(ii) Failing agreement, the Receiving Party may seek a ruling from the Court that
the Discovery Material in question is not entitled to the status and protection of the Producing
Party's designation. A Party' s having stipulated to any terms of this Protective Order shall not
preclude or prejudice the Party from arguing for or against any designation, establish any
presumption that a particular designation is valid, or alter the burden of proof that would
otherwise apply in a dispute over discovery or disclosure of information;
(iii) Notwithstanding any challenge to a designation, the Discovery Material in
question shall continue to be treated as designated under this Protective Order until one of the
following occurs: (a) the Party that designated the Discovery Material in question withdraws
such designation in writing; or (b) the Court rules that the Discovery Material in question is not
entitled to the designation.

14.

SUBPOENAS OR COURT ORDERS
If at any time Protected Material is subpoenaed by any court or arbitral, administrative, or

legislative body, the Party to which the subpoena or other request is directed, if not the

25

Producing Party, shall immediately give prompt written notice thereof to the Producing Party and
to its counsel and shall provide the Producing Party with an opportunity to move for a protective
order regarding production of the Protected Material subject to the subpoena.

15.

FILING PROTECTED MATERIAL
(a) Absent written permission from the Producing Party or a court order obtained after

appropriate notice to all interested persons, a Receiving Party may not file or disclose in the
public record any Protected Material.
(b) If any material to be filed with the Court contains Protected Material, the filing Party
shall file the materials under seal in accordance with Local Civil Rule 79.2, E.D.N.C., along with
Section T of the ECF Administrative Policies and Procedures Manual cited therein (or the
comparable local rule and related provisions of any transferee district), with notice served upon
the Party producing the Protected Material.

16.

INADVERTENT DISCLOSURE OF PRIVILEGED MATERIAL
(a) The inadvertent production by a Party of Discovery Material subject to the attomey-

client privilege, work-product protection, or any other applicable privilege or protection, despite
the Producing Party's reasonable efforts to pre-screen such Discovery Material prior to
production, shall not waive the applicable privilege and/or protection if a request for return of
such inadvertently produced Discovery Material is made promptly after the Producing Party
learns of its inadvertent production.
(b) Upon a request from the Producing Party that has inadvertently produced Discovery
Material that it believes is privileged and/or protected, the Receiving Party shall immediately
return such Discovery Material and all copies to the Producing Party, except for any pages

26

containing privileged markings by the Receiving Party which shall instead be destroyed and
certified as such by the Receiving Party to the Producing Party.
(c) Within five (5) days of the Producing Party' s notice and request for the return and/or
destruction of privileged Discovery Material, the Producing Party shall provide a privilege log
with entries for the inadvertently produced Discovery Material.
17.

INADVERTENT FAILURE TO DESIGNATE PROPERLY
(a) The inadvertent failure by a Producing Party to designate Discovery Material as

Protected Material with one of the designations provided for under this Protective Order shall not
waive any such designation provided that the Producing Party notifies the Receiving Party that
such Discovery Material is protected under one of the categories of this Protective Order within
fourteen (14) days of the Producing Party learning of the inadvertent failure to designate. The
Producing Party shall reproduce the Protected Material with the correct confidentiality
designation within seven (7) days upon its notification to the Receiving Party. Upon receiving
the Protected Material with the correct confidentiality designation, the Receiving Party shall
return or securely destroy all Discovery Material that was not designated properly.
(b) A Receiving Party shall not be in breach of this Protective Order for any use of such
Discovery Material before the Receiving Party receives such notice that such Discovery Material
is protected under one of the categories of this Protective Order, unless an objectively reasonable
person would have realized that the Discovery Material should have been appropriately
designated with a confidentiality designation under this Protective Order. Once a Receiving
Party has received notification of the correct confidentiality designation for the Protected
Material, the Receiving Party shall treat such Discovery Material (subject to the exception in

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Paragraph 17(c) below) at the appropriately designated level pursuant to the terms of this
Protective Order.
(c)

Notwithstanding the above, a subsequent designation of "CONFIDENTIAL,"

"CONFIDENTIAL - ATTORNEYS ' EYES ONLY," or "CONFIDENTIAL - ATTORNEYS '
EYES ONLY - SOURCE CODE" shall apply on a going forward basis and shall not disqualify
anyone who reviewed "CONFIDENTIAL," "CONFIDENTIAL -

ATTORNEYS ' EYES

ONLY," or "CONFIDENTIAL - ATTORNEYS ' EYES ONLY - SOURCE CODE" materials
while the materials were not marked "CONFIDENTIAL - ATTORNEYS ' EYES ONLY" or
"CONFIDENTIAL - ATTORNEYS ' EYES ONLY - SOURCE CODE" from engaging in the
activities set forth in Paragraph 6(b ).

18.

INADVERTENT DISCLOSURE NOT AUTHORIZED BY ORDER
(a) In the event of a disclosure of any Discovery Material pursuant to this Protective

Order to any person or persons not authorized to receive such disclosure under this Protective
Order, the Party responsible for having made such disclosure, and each Party with knowledge
thereof, shall immediately notify counsel for the Producing Party whose Discovery Material has
been disclosed and provide to such counsel all known relevant information concerning the nature
and circumstances of the disclosure. The responsible disclosing Party shall also promptly take
all reasonable measures to retrieve the improperly disclosed Discovery Material and to ensure
that no further or greater unauthorized disclosure and/or use thereof is made
(b) Unauthorized or inadvertent disclosure does not change the status of Discovery
Material or waive the right to hold the disclosed document or information as Protected Material.

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19.

FINAL DISPOSITION
(a) Not later than ninety (90) days after the Final Disposition of this case, each Party

shall return all Discovery Material of a Producing Party to the respective outside counsel of the
Producing Party or destroy such Discovery Material, at the option of the Receiving Party unless
the Producing Party expressly requests the extent to which the Discovery Material be returned
and/or destroyed. For purposes of this Protective Order, "Final Disposition" occurs upon entry
of an order, mandate, or dismissal finally terminating the above-captioned action with prejudice,
including all appeals.
(b) Each Party that has received any Discovery Material shall upon request certify in
writing that all such Discovery Materiai has been returned to the respective outside counsel of
the Producing Party or destroyed pursuant to Paragraph 19(a) above.

Notwithstanding the

provisions for return of Discovery Material, outside counsel may retain one set of pleadings,
correspondence and attorney and consultant work product (but not document productions) for
archival purposes, but must redact Source Code from any pleadings, correspondence, and
consultant work product that contain Source Code.
(c) The return of trial exhibits by the Court shall be governed by Local Civil Rule 79 .1 ,
E.D.N.C. (or the comparable local rule of any transferee district), notwithstanding any contrary
terms in this Protective Order, including any such terms in Paragraphs 19(a) and 19(b) above.
20.

DISCOVERY FROM EXPERTS OR CONSULTANTS
(a) Absent good cause, drafts of reports of testifying experts, and reports and other

written materials, including drafts, of consulting experts, shall not be discoverable.
(b) Reports and materials exempt from discovery under the Paragraph 20(a) above shall
be treated as attorney work product for the purposes of this case and Protective Order.

29

(c) Testifying experts shall not be subject to discovery with respect to any draft of his or
her report(s) in this case. Draft reports, notes, or outlines for draft reports developed and drafted
by the testifying expert and/or his or her staff are also exempt from discovery.
(d)

Discovery of materials provided to testifying experts shall be limited to those

materials, facts, consulting expert opinions, and other matters considered by the testifying expert

in forming his or her final report, trial, or deposition testimony or any opinion in this case. No
discovery can be taken from any non-testifying expert except to the extent that such nontestifying expert has provided information, opinions, or other materials to a testifying expert
considered by that testifying expert in forming his or her final report, trial , or deposition
testimony or any opinion in this case.
(e)

No conversations or communications between counsel and any testifying or

consulting expert shall be subject to discovery unless the conversations or communications are
relied upon by such experts in formulating opinions that are presented in reports or trial or
deposition testimony in this case.
(f)

Materials, communications, and other information exempt from discovery under

Paragraph 20(a)-(c) above shall be treated as attorney-work product for the purposes of this case
and Protective Order.
(g) Nothing in this Protective Order, including Paragraph 20(a)-(c) above, shall alter or
change in any way the requirements in Paragraph 11 regarding Source Code, and Paragraph 11
shall control in the event of any conflict.

21.

MISCELLANEOUS
(a) Right to Further Relief. Nothing in this Protective Order abridges the right of any

person to seek its modification by the Court in the future. By stipulating to this Protective Order,

30

the Parties do not waive the right to argue that certain material may require additional or
different confidentiality protections than those set forth herein.
(b) Final Disposition and Retention of Jurisdiction. The Parties agree that the terms of
this Protective Order shall survive and remain in effect after the Final Disposition of this case.
The Court shall retain jurisdiction after the Final Disposition of this case to hear and resolve any
disputes arising out of this Protective Order. The extent to which the Court retains jurisdiction
over this litigation for enforcement of the provisions of this Protective Order following the Final
Disposition shall be as provided by law.
(c) Successors. This Protective Order shall be binding upon the Parties hereto, their
attorneys, and their successors, executors, personal representatives, administrators, heirs, legal
representatives, assigns, subsidiaries, divisions, employees, agents, retained consultants and
experts, and any persons or organizations over which they have direct control.
(d)

Right to Assert Other Objections.

By having stipulated to any terms of this

Protective Order, no Party shall have waived any right it otherwise has to object to disclosing or
producing any information or item. Similarly, no Party waives any right to object on any ground
to use in evidence any of the Discovery Material or other material covered by this Protective
Order. This Protective Order shall not constitute a waiver of the right of any Party to claim in
this case or otherwise that any Discovery Material, or any portion thereof, is privileged or
otherwise non-discoverable, or is not admissible in evidence in this case or any other proceeding.
(e) Burdens of Proof. Except as expressly provided in this Protective Order, nothing in
this Protective Order shall be construed to change the burdens of proof or legal standards
applicable in disputes regarding whether particular Discovery Material is confidential, which

31

level of confidentiality is appropriate, whether disclosure should be restricted, and if so, what
restrictions should apply.
(f) Modification by Court. This Protective Order is subject to further court order based
upon public policy or other considerations as provided by law, and the Court may modify this
Protective Order sua sponte in the interests of justice or on other grounds as provided by law.
The Court is responsible for the interpretation and enforcement of this Protective Order. All
disputes concerning Protected Material, however designated, produced under the protection of
this Protective Order shall be resolved by the Court.
(g) Discovery Rules Remain Unchanged. Nothing herein shall alter or change in any
way the discovery provisions of the Federal Rules of Civil Procedure, the Local Civil Rules of
the Court, or the other orders of the Court. Identification of any individual pursuant to this
Protective Order does not make that individual available for deposition or any other form of
discovery outside of the restrictions and procedures of the Federal Rules of Civil Procedure, the
Local Civil Rules of the Court, or the other orders of the Court.
SO ORDERED, this 12th day of December 2016.

J~

United States Magistrate Judge

32

EXHIBIT A
Agreement to Be Bound by Protective Order
I, _ _ _ _ _ _ _ _ _ _ _ _ _ _ , acknowledge and declare that I have received
a copy of the Protective Order ("Order") in Valencell, Inc. v. Apple Inc. , United States District
Court, Eastern District of North Carolina, Western Division, Civil Action No. 5:16-cv-00001-D.
Having read and understood the terms of the Order, I agree to be bound by the terms of the Order
and consent to the jurisdiction of said Court for the purpose of any proceeding to enforce the
terms of the Order.
Name of individual: - - -- -- - - - - - - - - - - - - - -- Present occupation/job description: - - - - - - - - - - - - - - -- Name of Company or Firm:

------------------~

Address: - - - - - - - - - - - - - - -- - -- -- - - - - Dated:

--------------------------~

Signature

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