Electronic Scripting Products, Inc. v. HTC America, Inc.

Background

The parties submitted a joint discovery letter brief. HTC America, Inc. asked the court to enter the Northern District of California’s model protective order. HTC argued that discovery would require disclosure of highly confidential technical and financial information belonging to HTC and third parties. Electronic Scripting Products, Inc. stated that it preferred to proceed without a protective order, but proposed two changes if the court entered one.

The court applied Federal Rule of Civil Procedure 26, which allows a court, for good cause, to limit disclosure of trade secrets and other confidential commercial information. The court found good cause because discovery would likely involve highly confidential technical information, including source code, and confidential financial information. The court also noted that the District’s Patent Local Rules generally make the District’s model protective order applicable to discovery unless the court orders a different one.

Requested prosecution-bar modification

Electronic Scripting Products asked the court to remove the model order’s automatic prosecution bar. A prosecution bar limits an attorney’s ability to participate in certain patent-application work after receiving an opposing party’s confidential information. Electronic Scripting Products instead proposed requiring the producing party to identify documents that might trigger the bar and allowing the receiving party to request court review of those documents.

Electronic Scripting Products argued that the automatic bar could interfere with its ability to obtain advice from its current counsel and could violate rights under the First Amendment. HTC responded that Electronic Scripting Products was continuing to pursue patent applications related to the patent asserted in the case, including a reissue application, and that this created a significant risk that confidential technical information could be used unintentionally in patent prosecution.

The court found an unacceptable risk of disclosure because Electronic Scripting Products’ counsel was involved in the litigation and in other work, including reviewing or drafting submissions to the United States Patent and Trademark Office. The court also found the model order’s prosecution bar reasonable in scope. It therefore declined to modify that provision.

Requested confidentiality-label modification

Electronic Scripting Products also sought to change the model order’s requirement that each page be labeled “CONFIDENTIAL,” “HIGHLY CONFIDENTIAL – ATTORNEYS’ EYES ONLY,” or “HIGHLY CONFIDENTIAL – SOURCE CODE,” as appropriate. It argued that labeling the large number of documents would be burdensome and would require an outside vendor.

HTC argued that Electronic Scripting Products was improperly trying to shift the burden of identifying and handling confidential documents to the receiving party. HTC also argued that Electronic Scripting Products had already produced more than 13,000 electronic files without the required confidentiality labels.

The court found no basis to modify the model order. It said the large number of documents, which could be used in depositions, pleadings, and at trial, was the reason the labeling provision existed. The court did not require Electronic Scripting Products to reproduce the files already produced, but ordered that future productions comply with the protective order.

Disposition

The court ordered that HTC’s request for a protective order was granted and that Electronic Scripting Products’ request to modify the model protective order was denied. The parties were ordered to file a stipulated protective order consistent with the court’s order.