GigaCloud Technology Inc v. Linon Home Decor Products, Inc.

District Court, C.D. California·Decided February 24, 2025·No. 2:24-cv-04308·Unknown

Opinion

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7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 GIGACLOUD TECHNOLOGY INC, a Case No. 2:24-cv-04308-CBM-AGR Cayman Islands corporation, and 12 GIGACLOUD TRADING INC., a STIPULATED PROTECTIVE Delaware corporation, ORDER 13

Plaintiffs, 14 v. 15 LINON HOME DÉCOR PRODUCTS, 16 INC., a New York corporation; L. POWELL NEWCO, INC., a Delaware 17 corporation; DEMETRIOS ZIOZIS; and DOES 1-20, inclusive, 18 Defendants. 19 20 21 22 23 24 25 26 27 28 1 1. INTRODUCTION 2 A. PURPOSES AND LIMITATIONS 3 Discovery in this action is likely to involve production of confidential, 4 proprietary, or private information for which special protection from public 5 disclosure and from use for any purpose other than prosecuting this litigation may be 6 warranted. Accordingly, the Parties hereby stipulate to and petition the Court to enter 7 the following Stipulated Protective Order. The Parties acknowledge that this Order 8 does not confer blanket protections on all disclosures or responses to discovery and 9 that the protection it affords from public disclosure and use extends only to the 10 limited information or items that are entitled to confidential treatment under the 11 applicable legal principles. 12 The Parties further acknowledge, as set forth in Section 13.3, below, that this 13 Stipulated Protective Order does not entitle them to file confidential information 14 under seal; Civil Local Rule 79-5 sets forth the procedures that must be followed and 15 the standards that will be applied when a Party seeks permission from the court to 16 file material under seal. 17 B. GOOD CAUSE STATEMENT 18 Good cause exists for entry of this Stipulated Protective Order because this is 19 an action for alleged trade secret misappropriation. It is likely to involve proprietary 20 and highly sensitive information, such as the Parties’ alleged trade secrets and related 21 confidential information such as quality metrics, product sourcing, channel 22 relationships, and product strategy information1 for which special protection from 23 public disclosure and from use for any purpose other than prosecution of this action 24 is warranted. See Kamakana v. City and Cnty. of Honolulu, 447 F.3d 1172, 1179 25 (9th Cir. 2006) (“[C]ompelling reasons sufficient to outweigh the public’s interest in 26 disclosure and justify sealing court records exist when such court files might have 27 become a vehicle for improper purposes, such as the . . . release of trade secrets.”) 28 1 1 (citation omitted); Skillz Platform Inc. v. AviaGames Inc., No. 21-CV-02436-BLF, 2 2023 WL 8430369, at *2 (N.D. Cal. Dec. 4, 2023) (“Good cause exists to seal trade 3 secrets.”). 4 The same is true for “confidential business information that would harm a 5 party’s competitive standing.” Id.; see also Center for Auto Safety v. Chrysler Group, 6 LLC, 809 F.3d 1092, 1097 (9th Cir. 2016); In re Electronic Arts, Inc., 298 Fed. Appx. 7 586,569 (9th Cir. 2008); Table de France, Inc. v. DBC Corp., 2019 WL 6894521, at 8 *2 (C.D. Cal. 2019). Confidential business information includes (without limitation) 9 specifications by which the Parties’ products are manufactured, produced, packaged, 10 and stored; data about the factories that manufacture the Parties’ products; the pricing 11 terms and allowance deductions for the Parties’ customers; gross profit and 12 contribution margins for the Parties’ products; the number of units of products sold; 13 top selling products by gross sales and margin; other competitively sensitive financial 14 information; internal forecasts and budgeting; and confidential business agreements 15 with third parties. 16 Based on information requested, including that described herein, the Parties 17 anticipate that they will disclose confidential and sensitive trade secret, financial, 18 and/or proprietary information. Confidential trade secret, financial, and/or 19 proprietary information of third parties may also be disclosed. It is important that 20 this information remain protected and not be readily available due to the protection 21 of business competition interests. The unrestricted or unprotected disclosure of such 22 trade secret, financial and/or business information would result in prejudice or harm 23 to the Producing Party and third parties by revealing their information which could 24 result in loss of business and/or violation of federal and state laws and regulations 25 regarding the exportation of technical data. Furthermore, certain technical and 26 business information that the Parties anticipate disclosing is so sensitive that the 27 Parties believe that its disclosure should be restricted to particular individuals even 28 within the context of the litigation to prevent significant harm to the Producing Party 1 or third parties. 2 Accordingly, to expedite the flow of information, to facilitate the prompt 3 resolution of disputes over confidentiality of discovery materials, to adequately 4 protect information the Parties are entitled to keep confidential, to ensure that the 5 Parties are permitted reasonable necessary uses of such material in preparation for 6 and in the conduct of trial, to address their handling at the end of the litigation, and 7 serve the ends of justice, a protective order for such information is justified in this 8 matter. It is the intent of the Parties that information will not be designated as 9 confidential for tactical reasons and that nothing be so designated without a good 10 faith belief that it has been maintained in a confidential, non-public manner, and there 11 is good cause why it should not be part of the public record of this case. A two- 12 tiered designation system is necessary in this Action because (1) the Parties 13 contemplate allowing House Counsel access to certain information; and (2) the 14 Parties contemplate production of trade secret information. 15 2. DEFINITIONS 16 2.1 Action: GigaCloud Technology Inc, et al. v. Linon Home Decor 17 Products, Inc., et al., 2:24-CV-04308-CBM-AGR (C.D. Cal.). 18 2.2 Challenging Party: a Party or Non-Party that challenges the designation 19 of information or items under this Order. 20 2.3 “CONFIDENTIAL” Information or Items: any non-public technical, 21 research, development, regulatory, operational, commercial, non-public personal, 22 financial, marketing, strategic planning information, pricing and cost data, quality 23 metrics, product sourcing, channel relationships, and product strategy information, 24 or any other competitive information, whether oral or in documentary or other 25 tangible form, so designated by any Producing Party that it reasonably and in good 26 faith believes is of the type protectable under the Federal Rules of Civil Procedure or 27 other applicable law or is required to be kept Confidential by law or by agreement 28 with a third party or otherwise. 1 2.4 Counsel (without qualifier): Outside Counsel of Record and House 2 Counsel (as well as their support staff). 3 2.5 Designating Party: a Party or Non-Party that designates information or 4 items that it produces in disclosures or in responses to discovery as 5 “CONFIDENTIAL” or as “HIGHLY CONFIDENTIAL – ATTORNEYS’ EYES 6 ONLY.” 7 2.6 Disclosure or Discovery Material: all items or information, regardless 8 of the medium or manner in which it is generated, stored, or maintained (including, 9 among other things, testimony, transcripts, and tangible things), that are produced or 10 generated in disclosures or responses to discovery in this matter. 11 2.7 Expert: a person with specialized knowledge or experience in a matter 12 pertinent to the litigation who has been retained by a Party or its counsel to serve as 13 an expert witness or as a consultant in this Action.

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GigaCloud Technology Inc v. Linon Home Decor Products, Inc., (C.D. Cal. 2025).

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