Brown Bag Software v. Symantec Corp.

960 F.2d 1465, 1992 WL 67204
CourtCourt of Appeals for the Ninth Circuit
DecidedApril 7, 1992
DocketNo. 89-16239
StatusPublished
Cited by199 cases

This text of 960 F.2d 1465 (Brown Bag Software v. Symantec Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Brown Bag Software v. Symantec Corp., 960 F.2d 1465, 1992 WL 67204 (9th Cir. 1992).

Opinions

TANG, Circuit Judge:

Brown Bag Software (“Brown Bag”) sued Symantec Corp. (“Symantec”) and John L. Friend for infringement of Brown Bag’s registered copyright in a computer program for outlining. The district court entered a protective order restricting the access of Brown Bag’s in-house counsel to confidential trade information produced during discovery. The district court subsequently granted Symantec’s and Friend’s motions for summary judgment. Brown Bag appeals the protective order and the grant of summary judgment. We affirm-in-part, vacate-in-part and remand.

FACTUAL AND PROCEDURAL BACKGROUND

In 1983, Symantec developed and marketed the first successful outlining program, “ThinkTank.” By 1985, Symantec had developed and marketed two more outlining programs, “Ready!” and “MORE,” each designed for different types of computer hardware.

John L. Friend is an independent computer program designer, doing business as “Softworks Development.” Friend designed a new outlining program called “PC-Outline,” a program he said was “inspired by” Symantec’s ThinkTank program. Friend stated he “borrowed” several of ThinkTank’s features for PC-Outline.

In April 1987, Friend sold PC-Outline to Brown Bag. As part of the purchase agreement, Friend warranted that he was not then developing a program that would infringe Brown Bag’s newly acquired copyright in PC-Outline. In return, Brown Bag granted Friend a “non-exclusive right” to use 129 pages of computer source code.1

Also in 1987, Friend developed and sold an outlining program called “Grandview” to Symantec. Symantec marketed the new program as an updated version of its ThinkTank and MORE programs. Under [1469]*1469the terms of the sale, Friend retained custody of Grandview’s source code.2

On June 8, 1988, Brown Bag sued Sym-antec and Friend in federal district court. Brown Bag alleged that Symantec’s Grand-view infringed Brown Bag’s copyright and trademark rights in PC-Outline, in violation of federal law. Brown Bag also alleged several pendent state law claims.

At the beginning of the suit, outside counsel represented Brown Bag. Counsel for all parties stipulated to measures designed to protect Symantec’s and Friend’s trade secrets divulged in discovery. These trade secrets included the source code for Grandview, developmental plans for Grand-view, and the identities of “beta testers,” consumer representatives upon whom Sym-antec market-tested different versions of Grandview. The parties’ stipulation restricted access to these materials to “attorneys’ eyes only.”

On February 17, 1989, Brown Bag’s retained counsel withdrew, and Brown Bag’s newly hired in-house counsel entered his appearance on behalf of Brown Bag. Sym-antec moved for a protective order restricting the access of Brown Bag’s in-house counsel to the documents labelled “attorneys’ eyes only” under the parties’ previous stipulation.

On March 8, 1989, after an evidentiary hearing, a magistrate issued an order preventing Brown Bag’s in-house counsel from directly viewing the documents. The order provided for Brown Bag’s access only through an “independent consultant, legal or otherwise.” Specifically, the protective order envisioned an outside consultant hired by Brown Bag who would review the “attorneys’ eyes only” documents and advise Brown Bag regarding their relevance. As the magistrate stated at the hearing, “if [it] is the opinion of the outside consultant that in house counsel needs [certain] material in order to pursue the litigation, then there has to be a very specific request, item by item, back to the court for the items that are deemed to be necessary.” The magistrate thus did not rule out the possibility of some disclosure of sensitive documents to Brown Bag’s in-house counsel.

On April 4 and 5, 1989, Symantec and Friend moved for summary judgment. On April 24, 1989, the district court denied Brown Bag’s motion for reconsideration of the magistrate’s protective order and for extension of the discovery period. On April 28, 1989, Symantec filed a motion to strike the two declarations Brown Bag had filed in opposition to summary judgment. The district court did not separately rule on these motions.

After the May 5 summary judgment hearing, the district court requested supplementary “letter briefs” from all parties. Symantec’s counsel submitted its letter brief on May 11 on behalf of both Syman-tec and Friend. Brown Bag also submitted its letter brief on May 11. On May 19, Friend filed a “supplemental declaration in support of summary judgment.”

On May 24,1989, the district court granted summary judgment to Symantec and Friend. The court subsequently entered an “Amended Order” granting summary judgment to Symantec and Friend, and dismissing Brown Bag’s state law claims. Telemarketing Resources v. Symantec Corp., 12 U.S.P.Q.2d (BNA) 1991 (N.D.Cal.1989). Brown Bag timely appeals the protective order and summary judgment.

DISCUSSION

I. Access of Brown Bag’s In-House Counsel to Trade Secrets Divulged in Discovery

This court reviews a district court’s rulings concerning discovery for an abuse of discretion. Ah Moo v. A.G. Becker Paribas, Inc., 857 F.2d 615, 619 (9th Cir.1988).

Rule 26(c) of the Federal Rules of Civil Procedure explicitly authorizes the district court to protect parties from “undue bur[1470]*1470den or expense” in discovery by ordering “that a trade secret or other confidential research, development, or commercial information not be disclosed or be disclosed only in a designated way.” The parties agree that source codes, development plans, and beta tester information (all of which Symantec produced to Brown Bag’s retained outside counsel under protective stipulation) constitute protectable trade secrets under Rule 26(c). Brown Bag contests, however, the court order requiring Brown Bag to retain an “independent consultant” to view those trade secrets. Brown Bag contends that the court should have permitted its in-house counsel immediate and direct access to those trade secrets.

We have not previously determined when protective orders for trade secrets may be appropriate. The issue entails conflicting interests. On the one hand, parties seeking discovery are entitled to all information “reasonably calculated to lead to the discovery of admissible evidence,” Fed. R.Civ.P. 26(b)(1) — an intentionally broad mandate. On the other hand, responding parties are entitled to protection from “undue burden” in discovery, including protection from misuse of trade secrets by competitors. Fed.R.Civ.P. 26(c). These conflicting interests suggest that a balancing test will best resolve protective order disputes such as the one here. Specifically, in this case we must balance the risk to Sym-antec of inadvertent disclosure of trade secrets to competitors against the risk to Brown Bag that protection of Symantec’s trade secrets impaired prosecution of Brown Bag’s claims.

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960 F.2d 1465, 1992 WL 67204, Counsel Stack Legal Research, https://law.counselstack.com/opinion/brown-bag-software-v-symantec-corp-ca9-1992.