Google LLC v. Sonos, Inc.

• Court: District Court, N.D. California
• Decided: April 27, 2021
• Docket: 3:20-cv-03845
• Status: Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 GOOGLE LLC, Case No. 20-cv-03845-EMC (TSH)

8 Plaintiff, DISCOVERY ORDER 9 v. Re: Dkt. No. 71 10 SONOS, INC., 11 Defendant.

12 13 The parties have reached agreement on most of the terms of a proposed protective order, 14 but they disagree about an acquisition bar that Google proposes. Google’s acquisition bar would 15 prevent an individual who receives highly confidential material designated by the producing party 16 from being involved in activity related to the acquisition of certain types of patents or patent 17 applications, as well as from advising or counseling clients regarding such acquisitions, until two 18 years after the final disposition of this action. Sonos objects that no acquisition bar is necessary 19 because the protective order already states that protected material may be used by another party 20 only for prosecuting, defending, or attempting to settle this lawsuit and may not be used for any 21 business purpose. If the Court is inclined to include an acquisition bar, Sonos proposes to limit it 22 as follows: “where the acquired patents (or patents resulting from the acquired patent 23 applications) are then asserted against the Producing Party while this Acquisition Bar is in effect.” 24 Sonos also argues that Google’s proposed bar is overbroad in other ways as well. 25 Let’s think about this from a practical point of view. The portions of the protective order 26 that the parties agree on already reflect a concern about the inadvertent use of protected material 27 by people who have access to it in litigation and who simultaneously have a business role. This is 1 House Counsel of the Receiving Party to whom disclosure is reasonably necessary for this 2 litigation, provided however that such House Counsel do not have responsibility for business 3 decisions and are not otherwise in a position to unfairly benefit from accessing the other side’s 4 confidential information or using it for purposes beyond this this case . . .” For confidential 5 materials, Sonos is willing to live with the limitation that only one in-house counsel may have 6 access to it, as well as the structural limitation that this in-house counsel cannot have 7 responsibility for making business decisions. This structural limitation plainly reflects the reality 8 that people cannot be expected to forget information they know, so an in-house counsel who has 9 responsibility for making business decisions simply cannot have access to a producing party’s 10 confidential information. 11 For highly confidential information, the parties agree that no in-house counsel may have 12 access to it, and that can also only be understood as a protection against inadvertent use. Instead, 13 highly confidential material can only be provided to the receiving party’s outside counsel of 14 record, the receiving party’s experts, the Court, litigation vendors, or the author or recipient of the 15 information or someone who already knows or possesses it. (Highly confidential source code has 16 more restrictions.) 17 So, if we think about who is going to receive protected materials and who is also going to 18 be involved in the acquisition of patents or patent applications, or advising about that, for 19 confidential information, it’s going to be outside counsel of record in this case and that one in- 20 house counsel who does not have responsibility for business decisions, and for highly confidential 21 materials, it’s just going to be outside counsel of record. Google’s proposed acquisition bar only 22 applies to an individual who receives access to highly confidential materials, so that one in-house 23 counsel is not subject to the bar. Thus, the acquisition bar will apply only to outside counsel of 24 record because those are the only people who would have access to highly confidential materials and who would also be involved in the acquisition or advice concerning other patents or patent 25 applications. (The Court supposes that in theory an expert might also be involved, although 26 Sonos’s arguments seem to assume only attorney involvement.) It is simply impossible to believe 27 1 – could put out of their mind what they learn from the opposing side’s document productions. 2 These attorneys are going to spend many hours with the other side’s documents. Remember: 3 Google’s proposed acquisition bar applies to any “individual” who receives access to the other 4 side’s highly confidential material, so it’s not like it applies to every lawyer at the firm; it applies 5 only to the specific people who receive access to highly confidential material and who won’t be 6 able to forget it. 7 The Court agrees with those decisions that have acknowledged that it is fundamentally 8 untenable to allow people to be in a situation in which highly confidential information known to 9 them would be extremely useful, and then demand they act as though they don’t know it. See 10 Catch A Wave Techs., Inc. v. Sirius XM Radio, Inc., 2013 WL 9868422, *1 (N.D. Cal. Aug. 6, 11 2013) (“Without impugning the integrity of plaintiff s counsel, an attorney who has learned the 12 intricacies of Sirius’ secret technologies will be hard-pressed not to rely on that knowledge in a 13 subsequent suit against Sirius. The two-year patent acquisition bar allows time for the limitations 14 of human memory to run their course or for the information to become largely stale.”); EPL 15 Holdings, LLC v. Apple Inc., 2013 WL 2181584, *4 (N.D. Cal. May 20, 2013) (“The purpose of 16 the prosecution bar is to mitigate the risk of inadvertent use of confidential information learned in 17 litigation by barring litigation counsel’s involvement in strategic decisionmaking related to the 18 subject matter of the litigation. The acquisition of patents implicates this concern since litigation 19 counsel may consciously or subconsciously use their knowledge of Apple’s confidential 20 information to advise a client on which patents to acquire, that is, patents that may be asserted 21 against Apple.”). 22 At the same time, Sonos is also right that Google’s proposed acquisition bar is overbroad 23 in that it prohibits the affected individuals from having any involvement at all in activity or advice 24 concerning the acquisition of certain types of patents or patent applications. Prohibiting the affected individuals from advising on which patents or applications to acquire, or from advising on 25 validity (because evidence concerning validity in this case will in part concern the parties’ 26 confidential documents and is not limited to just publicly available information as is sometimes 27 1 advising on contract terms such as indemnification or cooperation provisions in an acquisition 2 agreement. 3 The Court rejects Sonos’s alternative proposal that the acquisition bar should apply only if 4 || the acquired patents are asserted against the producing party during the pendency of this lawsuit or 5 within two years thereafter. There are two problems with that proposal. The first is that it invites 6 || the misuse of the producing party’s highly confidential information (by allowing outside counsel 7 of record with access to that information, and who cannot forget it, to currently advise on which 8 || patents to acquire or which may be valid) and just delays the consequence of that misuse (the 9 || receiving party files the lawsuit alleging infringement of the newly acquired patent two years and 10 || one day after this lawsuit ends). Second, outside counsel advising on patent acquisitions would 11 have no way of knowing if they were complying with the protective order or violating it. That q 12 would depend on when their client files a lawsuit against the producing party based on the newly 5 13 acquired patent, a future event over which they have no control. S 14 Accordingly, the Court holds that there should be an acquisition bar, but Google’s 3 15 proposed bar is overbroad as described above. The Court orders the parties to file a revised 16 || proposed protective order consistent with this order within seven days. 5 7 IT IS SO ORDERED.

19 || Dated: April 27, 2021 20 TAA. |p THOMAS S. HIXSON 21 United States Magistrate Judge 22 23 24 25 26 27 28