FCX Solar, LLC v. FTC Solar, Inc.

Background

FCX Solar, LLC brought patent-infringement and breach-of-contract actions against FTC Solar, Inc. During discovery, FCX served 13 subpoenas on third-party customers of FTC. The subpoenas sought documents and information about the customers’ purchases and operation of FTC’s solar trackers.

FTC moved for a protective order under Federal Rule of Civil Procedure 26, asking the court to prohibit the requested disclosures and order FCX to withdraw the subpoenas. A protective order is a court order limiting discovery to prevent undue burden, expense, or other harm. The court considered the motion in both related cases.

The court’s analysis

The court explained that Rule 45 governs subpoenas directed to nonparties. A party seeking to quash or modify such a subpoena generally must show a privilege, privacy interest, or proprietary interest in the requested material. The party seeking a protective order also bears the burden of persuasion.

FTC argued that the subpoenas sought information duplicative of discovery FCX was obtaining from FTC, imposed burdens on FTC, harassed FTC’s customers, and interfered with FTC’s customer relationships. The court held that FTC lacked standing—that is, a sufficient legal interest—to challenge the subpoenas on relevance or undue-burden grounds because the subpoenas were served on third parties. The court noted that the subpoena recipients themselves could move to quash subpoenas that imposed an undue burden on them.

The court also rejected FTC’s argument that the subpoenas were irrelevant or duplicative. Documents already produced by two third parties showed that the subpoenas sought information FCX had not obtained from FTC, including tests performed by a customer after installing a solar tracker at the customer’s site.

FTC asserted that four document requests could seek proprietary and confidential information, including detailed design files and testing information. The court stated that FTC had not adequately identified what proprietary information the third parties possessed that could respond to those requests. It concluded that FTC’s general assertion that the subpoenas sought sensitive commercial information was insufficient to establish the required interest or carry FTC’s burden. The court also noted that any sensitive information could be designated highly confidential under the existing stipulated protective order, which covered documents produced by third parties.

Disposition

The court denied FTC’s request for a protective order concerning FCX’s third-party subpoenas. It directed the Clerk of Court to terminate the motions at ECF No. 124 in case 1:21-cv-03556 and ECF No. 82 in case 1:21-cv-08766.