Lambda Labs, Inc. v. Lambda, Inc.

Background

Lambda, Inc., referred to as “School” in the opinion, retained Dr. Lynne Weber of Duff & Phelps as a trademark expert. Dr. Weber’s curriculum vitae described more than 35 years of consulting experience in areas including market analysis, statistics, data analytics, econometrics, forecasting, and risk assessment.

Under paragraph 7.4(a) of the parties’ protective order, Lambda, Inc. notified Lambda Labs, Inc. of its intent to disclose Lambda Labs’ “Attorneys’ Eyes Only” materials to Dr. Weber. “Attorneys’ Eyes Only” materials are highly restricted protected information that may be shared only with specified people under the protective order. Lambda Labs objected under paragraph 7.4(b). Under paragraph 7.4(c), Lambda Labs had the burden of showing that the risk of harm from disclosure, considering the proposed safeguards, outweighed Lambda, Inc.’s need to disclose the material to its expert.

Parties’ Positions

Lambda Labs suggested that Dr. Weber’s past consulting engagements with software companies in the artificial-intelligence, machine-learning, and data-analytics fields created a risk of harm. The opinion states that Dr. Weber had not had such an engagement during the preceding five years. Lambda Labs also argued that Dr. Weber provides consulting services to technology companies, has had clients in that industry, and might have future engagements there. Its concern was that confidential information about Lambda Labs’ business strategy, planning, finances, pricing, and supply chain could remain in Dr. Weber’s knowledge and affect later consulting work.

Lambda Labs also sought more information about Dr. Weber’s intended role and the documents or categories of documents that Lambda, Inc. planned to disclose. Lambda, Inc. refused to provide that information, asserting that it was privileged.

Court’s Analysis

The court held that Dr. Weber’s past work in the artificial-intelligence space did not establish a sufficient risk of harm because there was no ongoing relationship with a direct competitor. The court also found that defining the relevant industry as “technology companies” was too broad. That industry includes many products and services unrelated to Lambda Labs, and a general connection to the technology sector did not show that the protective order’s safeguards were inadequate.

The court noted that the protective order could be enforced through sanctions and contempt. It also addressed the situation in which Dr. Weber might become employed or engaged by a competitor during the case: the retaining party would have to notify opposing counsel, and Dr. Weber would have to stop reviewing protected material until the parties were advised and the required consent was obtained. The court further reasoned that an objection applicable to nearly any expert—such as having clients in the technology industry—was too general to establish a specific risk.

The court acknowledged that, in a case involving a substantial risk of harm, information about an expert’s role and intended disclosures might be useful. But Lambda Labs’ showing here was insubstantial. The court stated that a trademark expert would reasonably need to see at least some materials designated as Attorneys’ Eyes Only and found no basis for giving Lambda Labs a preview of Dr. Weber’s expert report or requiring Lambda, Inc. to describe the engagement and planned disclosures in greater detail.

Disposition

The court overruled Lambda Labs’ objection to Lambda, Inc.’s disclosure of Lambda Labs’ Attorneys’ Eyes Only materials to Dr. Weber. The opinion is a discovery order concerning access to protected information; it does not decide the underlying trademark dispute.