1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION 7 8 THE REGENTS OF THE UNIVERSITY Case No. 19-cv-07470-LHK (VKD) OF MICHIGAN, 9 Plaintiff, ORDER RE PROTECTIVE ORDER 10 v. Re: Dkt. No. 48 11 LEICA MICROSYSTEMS INC., 12 Defendant.
13 14 Plaintiff The Regents of the University of Michigan (“UM”) and defendant Leica 15 Microsystems Inc. (“Leica”) ask the Court to resolve their dispute concerning the terms of a 16 proposed protective order that will govern the exchange of disclosures and discovery in this 17 action. Dkt. No. 48. The parties represent that they have agreed to most of the terms of a 18 proposed order based on this District’s model protective order for patent cases.1 Their dispute 19 concerns whether in-house counsel for a Receiving Party may have access to discovery material 20 designated “Highly Confidential – Attorneys Eyes Only” (“HC/AEO”) by the Producing Party, as 21 permitted by optional section 7.3(b) of the model order. In addition, the parties also dispute 22 whether the UM’s proposed designated in-house counsel, Jason Garr, meets the requirements of 23 section 7.3(b) or should otherwise have access to Leica’s HC/AEO discovery material. 24 For the reasons explained below, the Court denies without prejudice the parties’ competing 25
26 1 The parties refer to the Patent Local Rule 2-2 Interim Model Protective Order, which governs unless and until the Court enters a different protective order, and also to the Model Stipulated 27 Protective Order for Litigation Involving Patents, Highly Sensitive Confidential Information 1 requests for entry of their respective protective orders. 2 I. BACKGROUND 3 In this action, UM asserts that Leica infringes one of UM’s patents relating to fluorescence 4 detection of tagged molecules in a sample of material. Dkt. No. 1. Among other things, the 5 complaint recites that Leica declined UM’s pre-suit invitation to take a license to the patent. Id. 6 ¶¶ 22, 47, 49-52. 7 UM argues that the protective order in this case should include optional section 7.3(b) of 8 the model order, which provides that a Receiving Party may disclose material designated HC/AEO 9 to “[n]ot more than one Designated House Counsel of the Receiving Party (1) who has no 10 involvement in competitive decision-making, (2) to whom disclosure is reasonably necessary for 11 this litigation, (3) who has signed the ‘Acknowledgment and Agreement to Be Bound’ (Exhibit 12 A), and (4) as to whom the procedures set forth in paragraph 7.4(a)(1), below, have been 13 followed.”2 Dkt. No. 48-1 at 10. UM proposes to designate Jason Garr as its Designated House 14 Counsel under this provision. Dkt. No. 48 at 2 & n.1. According to UM, Mr. Garr is an Associate 15 General Counsel for UM who advises UM’s Office of Technology Transfer on licensing and 16 litigation matters. Id. UM says that Mr. Garr’s role is “exclusively legal” and that he does not 17 provide business advice and is not involved in competitive decision-making. Id. UM represents 18 that Mr. Garr did not participate in any pre-suit discussions with Leica. Id. at 4. 19 Leica argues that the protective order should not permit in-house counsel for either party to 20 view all HC/AEO material produced in discovery. Id. at 5. In addition, Leica argues that 21 considering Mr. Garr’s responsibilities in advising UM’s Office of Technology Transfer, 22 disclosure of Leica’s HC/AEO material to him would risk misuse of that information for 23 competitive purposes. Id. at 7. Leica points out that UM’s website identifies Mr. Garr as 24 practicing in the area of intellectual property “prosecution” as well as licensing and litigation. See 25 https://ogc.umich.edu/attorneys-staff/jason-garr/. Leica also says that Mr. Garr is a potential fact 26
27 2 Proposed section 7.4(a)(1) requires a Receiving Party to provide certain information about its 1 witness with respect to UM’s willful infringement allegations. Id. at 7-8. 2 II. DISCUSSION 3 In the Ninth Circuit, material produced in pretrial discovery is presumptively public. See 4 In re Roman Catholic Archbishop of Portland in Oregon, 661 F.3d 417, 425-26 (9th Cir. 2011). 5 Rule 26(c) of the Federal Rules of Civil Procedure permits a district court to protect parties from 6 “undue burden or expense” in discovery by ordering that “a trade secret or other confidential 7 research, development, or commercial information not be revealed or be revealed only in a 8 specified way.” Fed. R. Civ. P. 26(c). Ordinarily, the party resisting disclosure of its information 9 must show good cause for entry of a protective order. In re Roman Catholic Archbishop, 661 F.3d 10 at 424, 426. 11 Here, the parties ask the Court to resolve a dispute regarding the terms of an umbrella 12 protective order intended to govern the handling of discovery material to be produced over the 13 course of the action. The parties have stipulated to most of the terms of the protective order, 14 including a two-tier designation scheme that gives outside counsel (and specified others) access to 15 material designated HC/AEO, but gives a broader range of people, including certain party 16 employees, access to material designated “Confidential.” See Sections 7.2(a) & (b), 7.3(a). The 17 agreed portions of the proposed protective order also include a mechanism for challenging 18 confidentiality designations one party believes are too restrictive after the designation is made, 19 reflecting the prospective nature of the proposed order. See Section 6. 20 The disputed provision, section 7.3(b) of the model order, if adopted, would apply to all 21 material the parties may designate as HC/AEO during discovery. The parties agree that material 22 may only be designated HC/AEO if it would qualify for protection under Rule 26(c) and if its 23 “disclosure . . . to another Party or Non-Party would create a substantial risk of serious harm that 24 could not be avoided by less restrictive means.” See Section 2.8. 25 U.S. Steel Corp. v. United States, 730 F.2d 1465 (Fed. Cir. 1984) and Brown Bag Software 26 v. Symantec Corp., 960 F.2d 1465 (9th Cir. 1992) are the leading cases on the propriety of 27 restricting in-house counsel’s access to an adversary’s confidential discovery material. Both cases 1 counsel; they require instead that a district court evaluate the specific factual circumstances that 2 may or may not warrant treating outside counsel and in-house counsel differently. See U.S. Steel, 3 730 F.2d at 1468; Brown Bag Software, 960 F.2d at 1470-71. This evaluation requires the Court 4 to consider the material to be disclosed and the role and responsibilities of the in-house counsel to 5 whom disclosure is proposed. See Brown Bag Software, 960 F.2d at 1470-71 (describing 6 necessity of specific factual inquiry). 7 The Court is not able to resolve the parties’ dispute on the record presented. At this point, 8 the Court is not asked to make specific findings as to whether any particular discovery material 9 should or should not be disclosed to in-house counsel who meet the requirements of section 7.3(b). 10 In fact, the parties’ joint submission reflects disagreement (or perhaps uncertainty) about the kinds 11 of discovery material that may be designated HC/AEO by each side. As for Mr. Garr specifically, 12 the parties disagree about the nature of his role and responsibilities as in-house counsel for UM.
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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION 7 8 THE REGENTS OF THE UNIVERSITY Case No. 19-cv-07470-LHK (VKD) OF MICHIGAN, 9 Plaintiff, ORDER RE PROTECTIVE ORDER 10 v. Re: Dkt. No. 48 11 LEICA MICROSYSTEMS INC., 12 Defendant.
13 14 Plaintiff The Regents of the University of Michigan (“UM”) and defendant Leica 15 Microsystems Inc. (“Leica”) ask the Court to resolve their dispute concerning the terms of a 16 proposed protective order that will govern the exchange of disclosures and discovery in this 17 action. Dkt. No. 48. The parties represent that they have agreed to most of the terms of a 18 proposed order based on this District’s model protective order for patent cases.1 Their dispute 19 concerns whether in-house counsel for a Receiving Party may have access to discovery material 20 designated “Highly Confidential – Attorneys Eyes Only” (“HC/AEO”) by the Producing Party, as 21 permitted by optional section 7.3(b) of the model order. In addition, the parties also dispute 22 whether the UM’s proposed designated in-house counsel, Jason Garr, meets the requirements of 23 section 7.3(b) or should otherwise have access to Leica’s HC/AEO discovery material. 24 For the reasons explained below, the Court denies without prejudice the parties’ competing 25
26 1 The parties refer to the Patent Local Rule 2-2 Interim Model Protective Order, which governs unless and until the Court enters a different protective order, and also to the Model Stipulated 27 Protective Order for Litigation Involving Patents, Highly Sensitive Confidential Information 1 requests for entry of their respective protective orders. 2 I. BACKGROUND 3 In this action, UM asserts that Leica infringes one of UM’s patents relating to fluorescence 4 detection of tagged molecules in a sample of material. Dkt. No. 1. Among other things, the 5 complaint recites that Leica declined UM’s pre-suit invitation to take a license to the patent. Id. 6 ¶¶ 22, 47, 49-52. 7 UM argues that the protective order in this case should include optional section 7.3(b) of 8 the model order, which provides that a Receiving Party may disclose material designated HC/AEO 9 to “[n]ot more than one Designated House Counsel of the Receiving Party (1) who has no 10 involvement in competitive decision-making, (2) to whom disclosure is reasonably necessary for 11 this litigation, (3) who has signed the ‘Acknowledgment and Agreement to Be Bound’ (Exhibit 12 A), and (4) as to whom the procedures set forth in paragraph 7.4(a)(1), below, have been 13 followed.”2 Dkt. No. 48-1 at 10. UM proposes to designate Jason Garr as its Designated House 14 Counsel under this provision. Dkt. No. 48 at 2 & n.1. According to UM, Mr. Garr is an Associate 15 General Counsel for UM who advises UM’s Office of Technology Transfer on licensing and 16 litigation matters. Id. UM says that Mr. Garr’s role is “exclusively legal” and that he does not 17 provide business advice and is not involved in competitive decision-making. Id. UM represents 18 that Mr. Garr did not participate in any pre-suit discussions with Leica. Id. at 4. 19 Leica argues that the protective order should not permit in-house counsel for either party to 20 view all HC/AEO material produced in discovery. Id. at 5. In addition, Leica argues that 21 considering Mr. Garr’s responsibilities in advising UM’s Office of Technology Transfer, 22 disclosure of Leica’s HC/AEO material to him would risk misuse of that information for 23 competitive purposes. Id. at 7. Leica points out that UM’s website identifies Mr. Garr as 24 practicing in the area of intellectual property “prosecution” as well as licensing and litigation. See 25 https://ogc.umich.edu/attorneys-staff/jason-garr/. Leica also says that Mr. Garr is a potential fact 26
27 2 Proposed section 7.4(a)(1) requires a Receiving Party to provide certain information about its 1 witness with respect to UM’s willful infringement allegations. Id. at 7-8. 2 II. DISCUSSION 3 In the Ninth Circuit, material produced in pretrial discovery is presumptively public. See 4 In re Roman Catholic Archbishop of Portland in Oregon, 661 F.3d 417, 425-26 (9th Cir. 2011). 5 Rule 26(c) of the Federal Rules of Civil Procedure permits a district court to protect parties from 6 “undue burden or expense” in discovery by ordering that “a trade secret or other confidential 7 research, development, or commercial information not be revealed or be revealed only in a 8 specified way.” Fed. R. Civ. P. 26(c). Ordinarily, the party resisting disclosure of its information 9 must show good cause for entry of a protective order. In re Roman Catholic Archbishop, 661 F.3d 10 at 424, 426. 11 Here, the parties ask the Court to resolve a dispute regarding the terms of an umbrella 12 protective order intended to govern the handling of discovery material to be produced over the 13 course of the action. The parties have stipulated to most of the terms of the protective order, 14 including a two-tier designation scheme that gives outside counsel (and specified others) access to 15 material designated HC/AEO, but gives a broader range of people, including certain party 16 employees, access to material designated “Confidential.” See Sections 7.2(a) & (b), 7.3(a). The 17 agreed portions of the proposed protective order also include a mechanism for challenging 18 confidentiality designations one party believes are too restrictive after the designation is made, 19 reflecting the prospective nature of the proposed order. See Section 6. 20 The disputed provision, section 7.3(b) of the model order, if adopted, would apply to all 21 material the parties may designate as HC/AEO during discovery. The parties agree that material 22 may only be designated HC/AEO if it would qualify for protection under Rule 26(c) and if its 23 “disclosure . . . to another Party or Non-Party would create a substantial risk of serious harm that 24 could not be avoided by less restrictive means.” See Section 2.8. 25 U.S. Steel Corp. v. United States, 730 F.2d 1465 (Fed. Cir. 1984) and Brown Bag Software 26 v. Symantec Corp., 960 F.2d 1465 (9th Cir. 1992) are the leading cases on the propriety of 27 restricting in-house counsel’s access to an adversary’s confidential discovery material. Both cases 1 counsel; they require instead that a district court evaluate the specific factual circumstances that 2 may or may not warrant treating outside counsel and in-house counsel differently. See U.S. Steel, 3 730 F.2d at 1468; Brown Bag Software, 960 F.2d at 1470-71. This evaluation requires the Court 4 to consider the material to be disclosed and the role and responsibilities of the in-house counsel to 5 whom disclosure is proposed. See Brown Bag Software, 960 F.2d at 1470-71 (describing 6 necessity of specific factual inquiry). 7 The Court is not able to resolve the parties’ dispute on the record presented. At this point, 8 the Court is not asked to make specific findings as to whether any particular discovery material 9 should or should not be disclosed to in-house counsel who meet the requirements of section 7.3(b). 10 In fact, the parties’ joint submission reflects disagreement (or perhaps uncertainty) about the kinds 11 of discovery material that may be designated HC/AEO by each side. As for Mr. Garr specifically, 12 the parties disagree about the nature of his role and responsibilities as in-house counsel for UM. 13 Neither party presents evidence on this point. UM describes Mr. Garr’s responsibilities at a high 14 level of generality in a footnote, and Leica disputes UM’s description by reference to information 15 posted on UM’s website. These circumstances distinguish this dispute from a number of the cases 16 on which the parties rely in which district courts have exercised their discretion to permit or bar 17 in-house counsel’s access to an adversary’s confidential discovery material based on a more fully 18 developed factual record. 19 Given the intended purpose of the proposed protective order—i.e. to facilitate both parties’ 20 production and disclosure of confidential discovery material on a prospective basis—the Court 21 disagrees with UM’s suggestion that the matter may be resolved by simply finding that Leica, the 22 party seeking more restrictive protections, has failed to meet its burden to show good cause to 23 exclude in-house counsel of either party from access to the Producing Party’s HC/AEO discovery 24 material. The Court requires a more specific showing from both parties in order to resolve this 25 dispute. 26 The Court can provide guidance on one point based on the parties’ joint submission and 27 the present record. UM argues that because UM is a university and does not design, make or sell 1 decision-making” and therefore should be permitted access to Leica’s confidential discovery 2 material. See Dkt. No. 48 at 3. This argument is unpersuasive for two reasons. First, although 3 many of the cases that address whether in-house counsel should have access to confidential 4 discovery material involve disputes between competitors, neither U.S. Steel nor Brown Bag 5 Software holds that restrictions on in-house counsel’s access are limited to circumstances whether 6 the parties compete and in-house counsel is involved in competitive decision-making. To the 7 contrary, both cases emphasize the broader point that the district court must examine the particular 8 factual circumstances and not make arbitrary distinctions based on assumptions. UM’s proposed 9 section 7.3(b) relies exclusively on whether in-house counsel engages in competitive decision- 10 making to distinguish between in-house counsel who are and are not eligible to view HC/AEO 11 discovery material. But that single criterion (at least as construed by UM) is not well-suited to this 12 case and does not assist the Court in deciding whether particular in-house counsel should be 13 allowed to view particular discovery material or whether permitting such access will subject a 14 party to undue burden or expense. 15 Second, while UM and Leica are not competitors in the same way the parties in U.S. Steel 16 and Brown Bag Software were, they may well compete on other relevant dimensions. For 17 example, the complaint suggests that both parties have prosecuted patents in the fluorescence 18 detection field. See Dkt. No. 1, ¶ 48.3 Although the record is not developed on this point as to 19 UM and Leica, universities can and do compete with other universities, research institutions, and 20 private entities for such rights. See, e.g., https://synbiobeta.com/with-the-recent-patent-news-who- 21 owns-crispr-now/ (describing competition for patent rights to CRISPR-related technology). 22 Moreover, to the extent one of UM’s objectives is to license its inventions to entities like Leica 23 and Leica’s direct competitors, Mr. Garr’s role in advising UM’s Office of Technology Transfer 24 on such matters may well place him in the difficult position of avoiding inadvertent use or 25 disclosure of Leica’s confidential information in the course of fulfilling his responsibilities to UM 26 in a manner similar to circumstance the Ninth Circuit considered problematic in Brown Bag 27 1 Software. 2 In sum, whether particular in-house counsel should be barred from accessing particular 3 discovery material does not depend on whether in-house counsel’s responsibilities fit a narrow 4 || definition of competitive decision-making arising in a context where the parties are direct 5 competitors for commercial products or services. The analysis is more nuanced and case-specific. 6 |) I. CONCLUSION 7 The Court denies, without prejudice, the parties’ competing requests for entry of their 8 || respective protective orders. The parties may re-submit their dispute to the Court together with 9 supporting material that addresses the concerns outlined above. The parties’ joint submission 10 should comply with the discovery dispute resolution procedures in Judge DeMarchi’s Standing 11 Order for Civil Cases, except that the parties may also submit evidence or other material that they 12 || believe is necessary for the Court’s resolution of their dispute. 5 13 Alternatively, because it appears that there remains room for agreement, the parties may 14 || wish to confer further about categories of HC/AEO information that may be disclosed to in-house 3 15 counsel. See Dkt. No. 48 at 6 (Leica suggesting that it may be willing to disclose some financial 16 || information to in-house counsel for UM). If the parties do reach agreement, they may submit a 3 17 stipulated proposed protective order for the Court’s consideration. IT IS SO ORDERED. 19 || Dated: April 10, 2020 20
9 VIRGINIA K. DEMARCH United States Magistrate Judge 23 24 25 26 27 28