ESC-Toy Ltd. v. Sony Interactive Entertainment LLC

Background

ESC-Toy Ltd. sued Sony Interactive Entertainment LLC for breach of oral and written contracts and related claims. The parties agreed that the Northern District of California’s model protective order for patent, highly sensitive confidential information, and trade-secret litigation would govern discovery.

The dispute concerned the order’s definition of “House Counsel.” Under the model order, House Counsel are attorneys employed by a party, excluding outside counsel of record and other outside counsel. House Counsel may receive confidential information when disclosure is reasonably necessary for the litigation and the attorney agrees to be bound by the protective order.

Sony asked the court to enter a proposed protective order consistent with the model order, along with undisputed modifications described in its counsel’s declaration. The court found those modifications appropriate and granted them.

The Parties’ Positions

ESC-Toy did not oppose Sony’s proposed protective order except for the House Counsel definition. ESC-Toy proposed expanding that definition to cover certain outside attorneys functioning as in-house counsel and certain support staff, subject to restrictions including that they had not previously worked for the opposing party and were not competitive decision-makers. The proposed language also included a process for identifying those individuals before they received highly confidential attorneys’-eyes-only information.

ESC-Toy argued that the change was needed for “parity” because Sony had in-house attorneys who could receive ESC-Toy’s confidential information, while ESC-Toy wanted to share Sony’s confidential information with its outside general counsel, who was not a full-time employee. The opinion states that this attorney was not ESC-Toy’s litigation attorney or counsel of record. ESC-Toy did not explain the attorney’s role in the litigation or why she needed access to Sony’s confidential information.

Court’s Analysis

The court stated that the district’s model protective order is presumptively reasonable. A party seeking to depart from it bears the burden of showing the specific harm and prejudice that would result if the requested change were denied.

The court found that ESC-Toy’s only stated basis was parity. In the court’s view, parity already existed because the model order barred both parties from allowing outside corporate counsel who were not counsel of record to access the other party’s confidential material. ESC-Toy also had not explained why its part-time outside counsel, who did not represent ESC-Toy in this litigation, needed access to Sony’s confidential or highly confidential material. The court therefore found that ESC-Toy had not met its burden.

Disposition

The court denied ESC-Toy’s motion to modify the House Counsel definition in the Model Protective Order. It also granted the undisputed modifications in Sony’s proposed protective order. The order resolved the parties’ discovery dispute without a hearing.