Paragon Digital Lifestyle Inc. v. Adaptive Micro-Ware, Inc.

Background

The parties submitted an agreed confidentiality stipulation and proposed protective order for information and documents exchanged during the pretrial phase of the case. The court found good cause to issue an appropriately limited protective order under Federal Rule of Civil Procedure 26(c), which allows courts to protect discovery materials from improper use or disclosure.

Order’s Requirements

The order allows counsel to designate information as confidential when, in good faith, the designation is needed to protect proprietary information, trade secrets, or other sensitive nonpublic information. Confidential information may be used only for this litigation. The order permits disclosure to the requesting party and its counsel, necessary litigation employees, consultants or experts assisting with the case, and the court or people who have access to the information through their court-related positions.

Before disclosure, counsel must explain the information’s confidential nature and the order’s restrictions and must obtain the recipient’s signed agreement to comply. A party’s failure to mark material as confidential when produced does not permanently waive the ability to designate it later. The parties must make a good-faith effort to resolve disputes over confidentiality designations before seeking the court’s help.

Personally identifying information, such as Social Security numbers, financial account numbers, passwords, and information that could be used for identity theft, must be stored securely and shared only with authorized people. The receiving party must promptly notify the producing party of a data breach and cooperate in addressing it. Under Federal Rule of Evidence 502, inadvertent or other production of attorney-client privileged or work-product-protected material does not waive that protection in this case or another federal or state proceeding.

The order also states that confidential discovery material is not automatically eligible for filing under seal. The parties must follow the court’s procedures and obtain a prior court order. At the end of the litigation, confidential material must generally be returned or destroyed within 30 days after final judgment is no longer subject to further appeal, although counsel may retain protected working files. Disclosure is still allowed when required by law or a valid subpoena.

Ruling

Judge Jesse Furman ordered the listed confidentiality restrictions and directed the Clerk of Court to terminate ECF No. 31. The court did not decide that any specific documents were confidential; that question would be determined, if necessary, through review of individual documents under the court’s procedures. The court also declined to approve any provision that purported to let the parties file material under seal without prior court authorization.