International Business Machines Corporation v. Kede de Freitas Lima

Background

The parties jointly requested a confidentiality agreement and protective order under Federal Rule of Civil Procedure 26(c). That rule permits a court, for good cause, to limit the disclosure or use of information exchanged during discovery. The court found good cause for a tailored order covering the pretrial phase of the action.

Confidentiality designations

The order defines “Discovery Material” as information produced or disclosed during discovery. Such material may be used only to prosecute or defend this action, including appeals, and not for business, commercial, competitive, or other litigation purposes.

A producing party may designate material “Confidential” if it reasonably and in good faith believes the material includes previously undisclosed financial information, information about ownership or control of a private company, business or marketing plans, personal or intimate information, or another category later protected by the court.

The order also creates three heightened designations:

- IBM may designate highly sensitive proprietary business information, trade secrets, or other commercial or financial information as “Highly Confidential IBM Information.” - Lima may designate highly sensitive confidential personal or financial information as “Highly Confidential Lima Information.” - Microsoft may designate highly sensitive proprietary business information, trade secrets, or other commercial or financial information as “Highly Confidential Microsoft Information.”

Who may receive protected material

Confidential material may be disclosed to the parties and their insurers’ counsel, counsel retained for the case and their assigned staff, litigation vendors, mediators or arbitrators who sign the required nondisclosure agreement, certain people identified in a document, potential witnesses and experts who sign the required agreement, deposition transcription services, and the court and its personnel.

The heightened IBM, Lima, and Microsoft designations receive narrower treatment. They generally may be shown to counsel for the parties and the court. The order permits some additional access, including access by Lima to qualifying highly confidential IBM material and access by Lima to highly confidential Microsoft material. The order also bars IBM-designated confidential material from being shared with Microsoft or people acting for Microsoft, and bars Lima- and Microsoft-designated material from being shared with IBM or people acting for IBM, subject to the order’s stated procedures.

Challenges, depositions, and court filings

A party may challenge a confidentiality designation by written notice. The parties must first try to resolve the dispute informally and in good faith. If they cannot, either side may ask the court to rule; disputes involving the three heightened designations are to be presented for the court’s private review of the material. The order provides an expedited meet-and-confer process for challenges made before the hearing on IBM’s motion for a preliminary injunction.

Deposition testimony is treated as confidential for 30 days after the deposition. A producing party may designate specific testimony during the deposition or may identify pages and lines in writing within that 30-day period.

A party filing protected material under seal must publicly file a redacted version and submit an unredacted version under seal. The party must also file a letter brief and supporting declaration explaining, on a particularized basis, why continued sealing is justified. The court retains discretion over whether to keep discovery material confidential when it is submitted in connection with a motion or proceeding, and the order warns that material introduced at trial is unlikely to remain sealed.

Privilege and return of materials

If privileged or attorney work-product material is accidentally disclosed, the disclosure does not waive the privilege or protection under the order. The receiving party must return or destroy the material within five business days after notice and provide a certification. The producing party must then provide a privilege log, and the receiving party may ask the court to order production. The producing party retains the burden of establishing that the material is privileged or protected.

Within 60 days after final disposition of the action, including appeals, recipients must return or, with the producing party’s permission, destroy confidential material and certify that they have not retained copies or other reproductions. Lawyers specifically retained for the case may keep archival copies of specified case materials, but those copies remain subject to the order. The order survives termination of the litigation, and the court retains jurisdiction to enforce it and impose contempt sanctions.

Ruling

Judge Philip M. Halpern entered the stipulated confidentiality agreement and protective order on July 16, 2020. This was a discovery-related order, not a decision on the merits of IBM’s claims or Lima’s defenses.