Atallah Group US Inc. v. GMA Accessories, Inc.

Background

The court addressed a dispute over one provision of the parties’ proposed protective order in a trademark case. GMA requested an exception to the “Attorney’s Eyes Only” designation for highly confidential information. Under the proposed exception, GMA’s lawyers could verbally disclose specific information about the defendants’ total revenue to GMA officers and employees, without providing the underlying documents.

GMA argued that the information was needed to make litigation decisions, especially decisions about damages based on sales of allegedly infringing goods. The defendants argued that the exception would undermine the attorneys-eyes-only designation, disclose highly sensitive nonpublic information, and was unnecessary because GMA could eventually obtain the information through a damages expert.

Court’s Analysis

The court concluded that the defendants had not shown a sufficient basis for withholding total-revenue information from the opposing party. A party resisting discovery as confidential must show that disclosure would cause a clearly defined and very serious business injury. The court found that the defendants’ statements about the competitive value and private nature of total revenue did not explain in enough detail the information’s value, the measures used to protect it, or the specific risk of disclosure.

The court also found the information relevant. GMA said it needed to understand the overall damages and the participants in the alleged infringement so it could make decisions about budgeting, motions to amend, summary judgment, trial, and settlement. The court rejected the argument that GMA should have to hire an expert and wait for an expert report, reasoning that doing so would add delay and expense inconsistent with the federal rules’ goal of a just, speedy, and inexpensive determination.

Ruling

The court approved the exception allowing GMA’s counsel to verbally share total-revenue information covered by the attorneys-eyes-only designation with GMA’s officers and employees. It directed the parties to file a signed joint proposed protective order containing the approved language by June 13, 2022, for the court’s approval.

The court separately denied GMA’s request to rule at that stage that total-revenue information and the identities of resellers of alleged knockoffs were not confidential. The court stated that the confidentiality question could be reconsidered if the case proceeded to dispositive-motion practice or trial.