In Enanta Pharmaceuticals, Inc. v. Pfizer, Inc., No. 1:22-cv-10967, Judge Casper granted the Plaintiff's Motion for a Protective Order governing discovery under Rule 26(c)(1).
The parties were unable to agree on two issues, (i) whether the Plaintiff's in-house counsel designee with "competitive decision-making authority" may have access to confidential documents, and (ii) whether the Plaintiff's outside counsel should be barred from prosecuting patents related to the technology at issue on behalf of persons and entities that are not parties in this case.
The Court first held that the Defendant will not be unduly burdened by in-house counsel's access to confidential documents, reasoning that the proposed provisions in the Protective Order would prevent inadvertent disclosure. These provisions included access to only lower tier confidential information, a bar from using this information for "competitive decision-making," and a prosecution bar. Therefore, the Court allowed the Plaintiff's in-house counsel designee to access the confidential documents designated with a lower tier.
Next, the parties had agreed to impose a patent prosecution bar preventing attorneys who receive Defendant's protected materials from prosecuting patents on the Plaintiff's behalf for the disputed technology but disputed whether the bar should extend to prosecution on behalf of non-parties. The Court held that the patent prosecution bar need not extend to representation of non-parties, finding that the Defendant had not clearly stated the harm presented beyond the risk of inadvertent disclosure. Accordingly, the Court did not bar the Plaintiff's outside counsel from prosecuting patent applications regarding related technology for other clients.
The Court thus adopted the Plaintiff's proposed Protective Order.
In Kologik Capital, LLC v. In Force Technology, LLC et al, No. 1.18-cv-11168-GAO, Magistrate Judge Levenson denied the Plaintiff's Motion to Compel Discovery of Defendants' privileged documents.
The Plaintiff argued that the Defendants waived privilege by sending a letter to the Defendants' customers that was prepared by the Defendants' former attorney. The Plaintiff argued that the letter constituted an "opinion of counsel" and was thus subject to attorney-client privilege. According to the Plaintiff, the Defendants waived privilege to the subject matter of the letter by sharing it with third parties. The Plaintiff sought discovery of additional privileged documents beyond the letter that related to the same allegedly waived subject matter.
The Court ruled the "[l]etter is clearly not a privileged communication; therefore, its 'disclosure' does not waive any actual attorney-client privilege," finding that the attorney client privilege "protects only those communications that are confidential and are made for the purpose of seeking or receiving legal advice," while the letter was "never intended to be confidential. Rather it was written for third party customers of the Defendants' product."
The Plaintiff also argued the Defendants would use the letter in an advice of counsel defense, and so discovery was appropriate under the sword and shield doctrine, which "prevent[s] a party from using the advice he received as both a sword, by waiving privilege to favorable advice, and a shield, by asserting privilege to unfavorable advice."
The Court rejected the Plaintiff's sword and shield argument, finding that a party waives privilege only "when an opinion of counsel is placed at issue in litigation – not in the marketplace at large." The Court also noted the Defendants had waived any advice of counsel defense because the time to present such a defense had passed.
Accordingly, the Court denied the Motion to Compel Discovery of the Defendants' privileged materials.
In Virtek Vision International, Inc. v. Assembly Guidance Systems, Inc., No. 1:20-cv-10857-ADB, Magistrate Judge Cabell denied the Defendant's motion for protective order to exclude discovery of their business plans for TargetGuide 2.0, ("TG 2.0") a successor to their allegedly-infringing software and granted the Plaintiff's cross-motion to compel.
Federal Rule of Civil Procedure 26(b)(1) entitles a party to "obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case," including information that is not admissible as evidence. However, under Rule 26(c)(1), the Court may for "good cause" "issue an order to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense."
As the movant, the Defendant bore the burden of showing "good cause," and it provided three independent arguments: lack of relevance, prejudice, and no duty to supplement.
I. Lack of Relevance
The Court held that TG 2.0 was relevant to two issues: the determination of damages and willful infringement.
a. Damages
The Defendant conceded that their business plans for TG 2.0 were relevant to damages, but argued that the Plaintiff waived seeking damages and instead sought only an injunction. Therefore, the Court should consider the evidence irrelevant.
The Court disagreed, finding that the Plaintiff may have waived lost profits (it did not specifically find that they had), and had never waived damages as a whole. Because TG 2.0 is a successor to the accused software, it is relevant to "the ease and cost of designing around the claimed invention" which is part of the reasonable royalty analysis.
Therefore, the Court held that the Plaintiff had not waived damages, and TG 2.0 was relevant to their case.
b. Willful Infringement
The Court ruled that TG 2.0 was relevant to the question of willful infringement because it would help Plaintiff understand how Defendant responded to claims of infringement."
Therefore, the Court held that discovery of business plans relating to TG 2.0 was relevant both to damages and willful infringement, weighing against a protective order.
II. Prejudice
The Defendant also argued that discovery related to TG 2.0 would cause an "undue burden or expense" because it would be "bad for business" and because it would require an "entirely new round of discovery."
Under Rule 26(c), a court can preclude discovery upon a showing of "good cause" based on an "undue burden or expense." However, the Defendant had not provided "any particularized showing of expense or undue burden beyond broad assertions."
The Court also found that the cost of additional discovery was insufficient to demonstrate an undue burden or expense. Discovery remained open and was limited to the scope of several contested motions. Therefore, any additional cost fit within the "ordinary burden of litigation."
Therefore, the Court ruled there was no showing of prejudice that would justify a protective order.
III. No Duty to Supplement
Finally, the Defendant argued that it had no duty to supplement or update prior discovery responses and thus was not obligated to produce business plans relating to TG 2.0. Specifically, the Defendant argued that there was no duty to supplement earlier disclosures with materials that did not exist at the time of the original disclosure, and that the disclosure was complete as of the time it was served.
The Court disagreed, reasoning that the duty to supplement is "not limited to documents existing prior to a response; rather, the term broadly applies to any piece of 'additional' information without reference to the date of its existence." The Court thus held that "the duty to supplement applies to responsive documents that are created after a party has served a response to a discovery request."
Therefore, the Court ruled that if documents relating to TG 2.0 are relevant to earlier discovery requests, the Defendant had a duty to produce those documents.
Accordingly, the Court denied the Defendant's Motion for Protective Order on the TG 2.0 business plans, while granting the Plaintiff's motion to compel discovery of those documents.
Accordingly, the Court denied the Defendant's Motion for Protective Order on the TG 2.0 business plans, while granting the Plaintiff's motion to compel discovery of those documents.
