Wisk Aero LLC v. Archer Aviation Inc.

Background

Wisk and Archer are developing electronic vertical takeoff and landing aircraft. Wisk alleges that Archer’s aircraft design resembles a design Wisk submitted in a confidential patent application and that Archer’s design infringes Wisk patents. Wisk also alleges that Archer hired ten Wisk engineers, including Wisk’s vice president of engineering and chief engineer.

Archer asked to modify the existing protective order. The proposed change would allow Archer’s outside counsel to show a former Wisk employee limited portions of Wisk’s trade-secret disclosure and discovery responses if Wisk contended that the employee developed or used the identified trade secret while working at Wisk. The employee would have to agree to follow the protective order and could view the material only in the presence of Archer’s outside counsel.

Archer argued that the former employees were important firsthand witnesses concerning whether they developed or used the alleged trade secrets, whether Wisk treated the information as secret, and where the information came from. Wisk argued that its own personnel, documents, and experts could provide the relevant information and that giving the former employees renewed access could increase the risk of misuse. Wisk requested additional restrictions, including a prosecution bar, limits on Archer’s patent applications, and additional depositions.

Court’s analysis

Under Federal Rule of Civil Procedure 26(c), a court may protect trade secrets and other confidential commercial information by limiting how it is disclosed. The court applied the balancing approach from Brown Bag Software v. Symantec Corp., weighing the risk that a competitor could misuse trade secrets against the risk that restricting access would impair Archer’s ability to defend the case.

The court concluded that the former Wisk employees should have limited access because Wisk identified them as people who may have firsthand knowledge about developing or using the alleged trade secrets and about Wisk’s efforts to keep the information secret. The court stated that expert testimony could not substitute for facts uniquely within the former employees’ knowledge.

The court also recognized the risk that disclosure could refresh the employees’ memories about information they had not seen for roughly two years. It rejected Wisk’s proposed restrictions as too severe, describing restrictions on the employees’ work in the electronic vertical takeoff and landing industry and disruption of Archer’s patent applications as a “competitive poison pill.” The court distinguished cases involving people learning sensitive competitive information for the first time because, under Wisk’s theory, these employees already possessed most or all of the information at issue while working for Wisk.

Ruling and conditions

The court granted in part and denied in part Archer’s motion to modify the protective order. The modification is subject to these conditions:

- Each former Wisk employee whom Wisk contends developed or used an alleged trade secret must agree in writing to be bound by Section 7.1 of the protective order, which limits use of protected material to prosecuting, defending, or trying to settle the case. - The employee may view only the relevant portions of Wisk’s trade-secret disclosure and interrogatory responses concerning the trade secrets associated with that employee. - The employee may view the restricted information only in the presence of Archer’s outside counsel. - Viewing time is limited to 15 minutes total per trade secret. - The employee may not retain copies or take notes about the restricted information. - Within two days after fact discovery closes, Archer must identify each former Wisk employee who received the information under the modification. - Within seven days after disclosure, each such employee must submit a sworn declaration stating the viewing time for each trade secret, who was present, that the employee did not copy or take notes, and describing in detail the employee’s use of the information afterward. The declarations may not include attorney-client privileged information.

The court also granted the parties’ request to extend their filing deadline by two days. It denied Wisk’s request to stay the order for 14 days so Wisk could seek review.