Auris Health, Inc. v. Noah Medical Corporation

Background

The parties disputed how much of Noah Medical Corporation’s proprietary source code the plaintiffs—Auris Health, Inc., Verb Surgical Inc., and Cilag GmbH International—could access during discovery. The plaintiffs sought a forensic neutral firm to identify source code files, firmware, and tests authored or modified by individual defendants. The dispute focused on Diana Cardona Ujueta and Mouslim Tatarkhanov.

The plaintiffs alleged that Cardona Ujueta downloaded documents, including source code files, from an Auris-issued laptop to a personal external hard drive before leaving Auris. She later joined Noah. Noah did not dispute that she took the documents, but relied on her verified response that she did not transfer the information to Noah. Noah also stated that searches of its systems and her Noah-issued laptop found no responsive documents. Noah said Cardona Ujueta was not a software engineer, although one of her responsibilities was testing hardware with code written by others.

Tatarkhanov was Noah’s Head of Research and Innovation Software and wrote source code for Noah’s prototype devices. He had also worked on software and firmware related to Auris products. The plaintiffs did not assert source-code trade-secret claims against him, but alleged that he downloaded more than 60 software-quality documents before leaving Auris and reformatted two hard drives. Tatarkhanov stated that he saved the downloaded files only to his Auris-issued laptop and did not transfer the plaintiffs’ information to Noah. Noah’s searches, including searches using the names of the downloaded files, found no responsive documents.

The case also had a stipulated protective order governing disclosure of highly confidential source-code information.

Legal standard

Under Federal Rule of Civil Procedure 26(b)(1), discovery may cover nonprivileged information relevant to a claim or defense and proportional to the needs of the case. The court may limit discovery that is cumulative, can be obtained from a more convenient or less burdensome source, or falls outside the permitted scope.

Rulings on Cardona Ujueta

The court denied the plaintiffs’ request to review source-code files, firmware, and tests authored or modified by Cardona Ujueta at that point. It ordered the parties to engage a forensic neutral firm to examine her personal device and determine whether files downloaded from Auris and saved to her external hard drive were later transferred from that device.

If the forensic firm found signs of transfer, the plaintiffs would be permitted to review Cardona Ujueta’s interactions with GitLab, Noah’s source-code storage tool. The firm had to follow the stipulated protective order and any additional protective conditions established by the parties.

Rulings on Tatarkhanov

The court rejected unrestricted review of all Noah source code created by Tatarkhanov but found that Noah’s position set too high a bar for source-code discovery in light of the allegations concerning the reformatted hard drives and Tatarkhanov’s possible involvement. The court ordered a forensic neutral firm to identify Noah source-code files, firmware, and tests authored or modified by Tatarkhanov.

The firm was to share only the minimum information necessary for the parties to meet and confer about the scope of Noah’s source-code production. The firm also had to comply with the stipulated protective order and any additional protective conditions established by the parties.

Disposition

The court granted in part and denied in part the relief requested in the joint discovery letter brief. It ordered the forensic review concerning Cardona Ujueta, allowed a possible later GitLab review if signs of transfer were found, and ordered identification of Tatarkhanov-related Noah materials for a later discussion about production.

The order’s title also states that the administrative motion to consider whether another party’s material should be sealed was granted. The footnote states that the court granted the plaintiffs’ separate motion to file portions of the joint discovery letter brief under seal at the February 2, 2024 hearing.