Google LLC v. Sonos, Inc.

Background

The parties had agreed on most provisions of a proposed protective order, which governs how confidential information exchanged during litigation may be used. Their dispute concerned Google’s proposed “acquisition bar.” The proposal would prevent an individual who received highly confidential information from participating in activities involving the acquisition of certain patents or patent applications, or from advising or counseling clients about those acquisitions, until two years after the final disposition of the case.

The protective order already limited protected material to use in prosecuting, defending, or attempting to settle the lawsuit and prohibited business use. It also limited access to confidential information by in-house counsel and barred in-house counsel with business-decision responsibilities from receiving that information. Highly confidential information could be provided only to specified people, including outside counsel of record, experts, the court, litigation vendors, and certain people who already knew or possessed the information. Highly confidential source code was subject to additional restrictions.

The parties’ positions

Sonos argued that no acquisition bar was necessary because the other protective-order provisions were sufficient. If a bar were imposed, Sonos proposed limiting it to situations in which acquired patents, or patents resulting from acquired applications, were asserted against the producing party while the bar remained in effect. Sonos also argued that Google’s proposal was overbroad in other respects.

Google’s proposal would have prohibited all involvement in activities or advice concerning the acquisition of the specified patents or applications. The court understood the proposal to reach advice about which patents to acquire, patent validity, and contract terms such as indemnification or cooperation provisions in acquisition agreements.

Court’s analysis

The court agreed that a bar was necessary. It reasoned that outside counsel who spent substantial time reviewing an opposing party’s highly confidential documents could not realistically be expected to put that information out of mind. The court found it fundamentally untenable to give lawyers confidential information that could be useful in later patent-acquisition decisions and then require them to act as though they did not know it.

The court also agreed with Sonos that Google’s proposal was overbroad because it prohibited any involvement in the covered acquisition activity or advice. The court specifically identified concerns about advising on which patents or applications to acquire, advising on validity, and advising on acquisition-agreement terms.

The court rejected Sonos’s alternative proposal. It concluded that the proposal could allow misuse of highly confidential information by merely delaying the consequences until after the lawsuit ended, and that counsel would not know in advance whether later filing a patent-infringement lawsuit would make earlier advice violate the protective order.

Disposition

The court held that the protective order should include an acquisition bar, but that Google’s proposed bar was overbroad. It ordered the parties to file a revised proposed protective order consistent with the order within seven days.