The opinion of the court was delivered by: BECKER
This opinion addresses one of the most difficult and vexatious issues judges confront in managing complex litigation-the access and First Amendment rights of litigants and the public in connection with the large quantity of documents that is marked confidential pursuant to a protective order such as is entered to facilitate discovery in virtually every complex case. The setting of the present dispute is a massive international antitrust case, the nature and the history of which are described in our opinions granting summary judgment for defendants on all of plaintiffs' claims. See Zenith Radio Corp. v. Matsushita Elec. Indus. Co., 513 F. Supp. 1100 (E.D.Pa.1981), appeal pending, No. 81-2331 (3d Cir.) (Summary Judgment Motions Related to Plaintiff's Sherman Act, Wilson Tariff Act, Clayton Act, and Robinson-Patman Act Claims) (hereinafter "Final Summary Judgment Opinion"); Zenith Radio Corp. v. Matsushita Elec. Indus. Co., 494 F. Supp. 1190, (E.D.Pa.1980), appeal pending, No. 80-2080 (3d Cir.) (1916 Antidumping Act).
Two cognate motions are before us, both rooted in pretrial order ("PTO") 35 (Dec. 22, 1975), the "umbrella" confidentiality order governing pretrial discovery.
One motion seeks vacatur of PTO 35 in its entirety. The other, to which the bulk of this opinion will be devoted, seeks "wholesale" declassification, i.e., removal from confidential status, of: (1) all pleadings and other papers filed of record that have been stamped "confidential" under the aegis of PTO 35; (2) all documents offered by the parties at the pretrial evidentiary hearings; and (3) all documents produced in discovery which, under the aegis of PTO 35, have been stamped "confidential." Defendants vigorously oppose the motions.
There have been to date over 3,500 docket filings in this case. These filings may be grouped into three categories relevant to the instant issues. The first category encompasses 385 filings that have been made under seal, pursuant to PTO 35.
The most important of these filings is plaintiffs' final pretrial statement ("FPS"), a multi-volume document that incorporates virtually all of the significant material contained in the other filings. Plaintiffs' FPS contains some 17,000 pages and is cross-referenced to approximately 250,000 documents. The etiology of the FPS is explained in Part III of the Final Summary Judgment Opinion, 513 F. Supp. at 1130-1135. Suffice it to say here that the FPS provided the basic charter for our final summary judgment hearing. It is a document in which the plaintiffs
were required to set forth:
Each fact that the party intends to prove at trial either affirmatively or by way of defense, together with a list of: (1) the witnesses (including expert witnesses) whose testimony will be advanced to prove that fact; (2) the documents ... which will be offered to prove that fact; and (3) line by line references to any portions of depositions and to answers to interrogatories and requests to admit which will be offered to prove that fact.
The second category sought to be declassified is comprised of many thousands of pages of documents, each assigned a document submission sheet ("DSS") number, which plaintiffs offered at the pretrial evidentiary hearing. The evidentiary hearing was of enormous significance because plaintiffs' case was founded almost entirely on documents. See id. at 1200-1202 (describing plaintiff's litigation strategy). The pretrial evidentiary hearing, which lasted for over five weeks, had a two-fold purpose. First, it enabled us to rule upon the admissibility of the most critical documents in plaintiffs' case (the DSS's) so that we could determine whether we should consider them in ruling upon defendants' summary judgment motions addressed to plaintiffs' Sherman Act, Wilson Tariff Act, Clayton Act, and Robinson-Patman Act claims. Second, the hearing provided the forum for a pretrial ruling on the question whether the plaintiffs had come forward with a fair preponderance of evidence aliunde of the existence of a conspiracy among the various defendants to permit the introduction of co-conspirator declarations.
The third and final category of documents sought to be declassified consists of the millions of pages of documents produced in discovery.
This category includes the documents contained in the document depository created pursuant to PTO 219 to house what the parties (mainly the plaintiffs) asserted to be the more important documents in the case. No one has counted the number of documents in the depository, but we estimate it to be over 100,000. In light of the quantity of documents produced in discovery, the potential sweep of the wholesale declassification motion is enormous. Nor is much discussion required to demonstrate that the burden of reviewing each document individually in order to determine whether its continuing confidential status is justified would be almost impossible to meet.
PTO 35 was entered by our immediate predecessor in this case, Judge A. Leon Higginbotham, Jr., on December 19, 1975, slightly more than one year after the filing of the Zenith complaint. That order supplanted a more restrictive confidentiality order that had been entered by Judge Shaw in the District of New Jersey at the outset of the National Union Electronic Corporation ("NUE") litigation.
PTO 35 states that many documents produced for discovery relate to trade secrets or other confidential research, development or commercial information, as those terms have been defined pursuant to Rule 26(c) (7) of the Federal Rules of Civil Procedure.
The order defines "confidential information" as any information that is designated "confidential" at the time of its disclosure by the disclosing party. The order provides that confidential information shall be used only in the preparation for trial and/or trial of these actions, and not for any other purpose whatsoever.
PTO 35 further provides that confidential information may be disclosed only to persons denominated as "qualified persons," and provides specific procedures by which additional "qualified persons" may be named.
The order requires parties objecting to a "confidential" designation of information to follow prescribed procedures in order to challenge that designation. Parties seeking confidential treatment of information, however, must ultimately bear the burden of establishing their right to the court's protection. Upon final determination of these actions, PTO 35 requires all confidential information to be returned to the producing party. Of critical importance to the matters before us is the fact that PTO 35 governs only pretrial discovery and does not address the confidentiality of documents at open pre-trial hearings or at trial.
The parties dispute whether PTO 35 was a product of their overt agreement, or at least their mutual acquiescence,
or whether Judge Higginbotham imposed the order after considering the parties' proposals, but without their joint approval. It is indisputable, however, that: (1) throughout almost a decade of litigation, parties (plaintiffs as well as defendants) and non-parties to these actions have produced and marked "confidential" millions of documents in reliance upon PTO 35; (2) plaintiffs failed to challenge PTO 35 prior to June 28, 1977, by which time hundreds of thousands of documents and hundreds of voluminous pleadings had been designated confidential without objection; and (3) throughout the history of the litigation plaintiffs have never once availed themselves of the procedures of PTO 35 to challenge the propriety of the designation of any specific documents as confidential. Moreover, by designating as confidential hundreds of thousands of their own documents produced in discovery for defendants, plaintiffs have made as much use of PTO 35 as have defendants.
Under these circumstances, plaintiffs have ratified PTO 35 and we will treat it as a consent order.
When the wholesale declassification motion was filed on June 28, 1977,
this case was still assigned to the docket of Judge Higginbotham, who briefly considered the motion but deferred ruling on it in light of other, more pressing imperatives of case management.
Facing the onerous tasks of completing discovery, disposing of the summary judgment motions, and moving the case to trial, we followed essentially the same course.
We did, however, discuss declassification with counsel on a number of occasions shortly after assuming the case. See infra pages 877-878. More importantly, in order to satisfy plaintiffs' complaints that PTO 35 was hampering their trial preparation by barring them from adequately discussing material produced in discovery with Zenith executives and their consumer electronic products experts, we initiated procedures that expanded the scope of PTO 35 by creating two additional categories of persons entitled to have access to PTO 35 material: "qualified executives" and "qualified witnesses."
Although we were (and still are) convinced that PTO 184 satisfied plaintiffs' trial-preparation needs, plaintiffs continued to press for resolution of their confidentiality motions, and we heard them again at the conclusion of the final summary judgment argument in August 1980. We again deferred consideration of these motions-this time pending our decision on the motions for summary judgment.
It is useful to underscore the different procedural settings of the case at the time of our various hearings on the declassification motions and at the present. The early hearings took place at a purely pretrial stage. The final hearing took place after the in limine pretrial evidentiary hearings that preceded the final summary judgment argument and which plaintiffs assert to have been part of the trial itself. We file this opinion in the wake of our grant of summary judgment in defendants' favor as to all of plaintiffs' claims, so that, unless that decision is reversed by the Court of Appeals, plaintiffs' claims will not go to trial.
The parties have presented us with multifaceted contentions regarding wholesale document declassification. We will presently set forth these contentions at length. We will also explain why the current motions will not be resolved wholly within the framework of the parties' contentions, but rather within a somewhat different framework which we will elaborate. Neither the contentions of the parties, however, nor the framework which we have designed for the disposition of these motions can be understood without some further background concerning the history of our case management as it bears upon the confidentiality of documents, and a fuller description of the nature of the critical documents at issue. We proceed now to supply that additional background.
B. Case Management History as it Bears Upon Confidentiality
Problems with document confidentiality first came to the court's attention with the filing of plaintiffs' motion for wholesale declassification. That motion was filed near the end of Judge Higginbotham's stewardship.
Although Judge Higginbotham was unable to deal at length with the motions, he did make some telling observations and helpful suggestions in a bench memorandum during a pretrial conference on July 5, 1977:
A review of the briefs convinced me that among the massive documents produced and labeled as confidential in this case, there must be a plethora of such documents which no longer could be justified with the imprimatur of confidentiality as that term is related to discovery under the applicable cases. For such documents the reasons for confidentiality have expired with the passing of the seasons, and while the parties are obligated to treat these documents with total confidentiality until there has been some modification under Pretrial Order Number 35, the reasons for confidentiality have expired.
Yet, in contrast, I am equally confident that there are also many documents which were originally labelled confidential which are still confidential or at least should not be automatically declassified by the rubric of ascertaining whether they were filed before or after September 21, 1974. As to the number which merit today confidentiality, I can only conjecture.
I received broad conclusionary statements about the confidentiality of documents which may vary in number from several thousands to hundreds of thousands. For this magnitude of discovery, conclusionary statements are not adequate to provide me with the specificity of contents of even one document or even as to one category of documents or as to any factual analysis of how the strands of categories are interrelated or intertwined in this discovery problem.
Though not the most rational method, perhaps the easiest judicial approach would be for the trial judge to peremptorily order the parties to file memorandum on each and every document which has been marked as confidential so that he can then make an independent determination as to whether there is still a viable claim of confidentiality, but if common sense is still a virtue, and if controlling unnecessary litigation costs is still an appropriate goal even in cases involving massive amounts of documents, there must be a more rational approach.
In this case it would be far more appropriate for each side to take an anatomical view of the case and to first identify those broad categories which are significantly different. Thus, which categories should have a period of confidentiality that precedes September 1974. They should note the time period for confidentiality of that category. As an example, should Category A because of its uniqueness have a period of confidentiality to 1973, or 1971, or 1969.
To the extent that the problems cannot be solved in terms of categories, then the Court will have no alternative but to deal with each document. The magnitude of such a challenge either through the Court or through a Master would be a clear revelation that all of us as lawyers and as a Court are functionally unable to work out rational alternatives to problems of moderate complexity. Therefore, I expect for counsel to give me a written report no later than ten a.m. July 18, 1977, as to whether this matter has been solved, and if in the unlikely probability that it has not been amicably solved, they must file their separate proposals as to each major category, identifying it with precision and the related time period for confidentiality of that category.
PTO 81, at 2-5 (July 5, 1977) (Transcript of Pretrial Conference).
Regrettably, Judge Higginbotham's optimism was unrequited. As we have observed in earlier opinions, this case was then fraught with acrimony among counsel, and counsels' efforts to agree on the kinds of categories suggested by Judge Higginbotham failed. When the declassification motion came to our attention we explored the possibility of designating categories of documents which might be declassified, but, we too were unsuccessful in attaining any agreement. Detailed consideration of the motions was less pressing than other exigencies of case management, so we deferred it.
As the case reached a more structured stage, with the filing of plaintiffs' preliminary pretrial memorandum ("PPTM") and defendants' responsive PPTM's, the spate of "confidential" designations continued. Indeed, most answers to interrogatories continued to be filed under seal, see supra note 2, and the PPTM, an assortment of briefs, some transcripts of pretrial conferences at which documents were discussed, and ultimately the FPS were likewise filed with confidential designations. Indeed the parties had long since gone far beyond erring on the side of caution and had stamped "confidential" on their submissions and discovery materials almost as a matter of course.
The inertia of habit ultimately carried the parties to such an extreme that even innocuous legal briefs began to sport the badge of confidentiality.
The keystone of our approach to case management was the FPS, which we have described above. The FPS's detail was required principally as a surrogate for the plaintiffs' inadequate responses to the defendants' discovery requests. However, as we have explained in Part III of our Final Summary Judgment Opinion, 513 F. Supp. at 1130, the FPS fell short of its intended purpose. We were confronted at the time of its filing with defendants' Motions for Summary Judgment which we had deferred until we possessed an adequate record upon which to base a decision. Rule 56(e) requires that a party opposing a motion for summary judgment "by affidavits or as otherwise provided in this rule ... set forth specific facts showing that there is a genuine issue for trial." The rule also requires summary judgment proceedings to be based upon admissible evidence. See id. at 1118 n.3. Mindful of those principles, we concluded early in 1980 that in order for us meaningfully to deal with the summary judgment motions, two devices would be required: (1) a pretrial evidentiary hearing, and (2) a summary judgment argument of sufficient length that plaintiffs would have an opportunity to call to our attention any document in the record that would create a genuine issue of material fact. We consequently proceeded to implement both devices.
The tenor of the pretrial evidentiary or "in limine" hearing has been described in opinion addressing the admissibility of public records and reports. See 505 F. Supp. at 1136-37. Suffice it to say here that plaintiffs marshalled their key documents, assigning each a DSS number, and argued the admissibility of most of them to the Court. Defendants argued in response, and extensive briefs were submitted by the parties. The hearing resulted in the three lengthy and detailed opinions mentioned above.
The in limine hearing commenced in June 1980. Not until the middle of the second week of the hearing was a question raised as to whether the hearing was open to the public or closed pursuant to PTO 35. Following a colloquy with counsel, see PTO 270, at 17-27 (Aug. 1, 1980), we ruled that the hearing would be considered open until consideration of the Yajima diaries, at which point the hearing would be closed, subject to a later review of the transcript. No one other than "qualified persons" had been in the courtroom up to that time. Presumably because of the ordinary character of the hearing, no spectators ever appeared for the balance thereof. Hence, no one was ever excluded from the courtroom.
Our opinions addressing the evidentiary questions arising during the hearings contain detailed discussions of the documents at issue. The opinions were, of course, immediately filed on the public record and were promptly published. It should also be noted that almost all of the fifty-nine briefs filed within the ten week period surrounding the pretrial evidentiary hearings, most of which were filed by defendants and many of which dealt with documents considered during the hearings, were not filed under seal.
Argument on the summary judgment motions lasted seven days. As is made clear by PTO 154, supra note 5, by the transcripts of numerous pretrial conferences addressed to case management, and the transcript of the summary judgment hearing the FPS was the principal focus of the summary judgment hearing. The critical question before us was whether there was anything in the FPS, the distillation of thirty million document pages and ten years of litigation, that created a genuine issue of material fact as to the existence of a Sherman Act conspiracy among the defendants. The confidential documents rescribed or referenced in the FPS were a constant subject of colloquy in the courtroom. For the most part, they were simply paraphrased, summarized, or referred to, though on occasion excerpts were read into the record. The public was never excluded from the hearing, and no request for exclusion was made. The briefs filed by defendants addressing the summary judgment issues were, for the most part, filed on the public record. The transcript of the summary judgment hearing was also filed on the public record. Counsel were aware of that fact from the time of filing of the transcript, shortly after the hearing, and have never voiced any objection. Our summary judgment opinion discusses the contents of the FPS in detail. That opinion is of course on the public record and has been published.
We have noted above that at no time did plaintiffs utilize the procedures of PTO 35 to object to the "confidential" classification of any specific documents, and that their only attack has been via their motion for wholesale declassification. Concomitantly, the defendants have never been put to the burden of justifying confidential treatment for any given document. Defendants' response has been to object to wholesale declassification and to point out in general how declassification of documents containing technical, financial, and marketing information would be harmful to their interests, even where the data is as much as ten years old.
The vast bulk of defendants' response has been by means of defense counsels' oral and written submissions. In 1977, however, while the matter was pending before Judge Higginbotham, the Hitachi defendants filed a lengthy telex from a Hitachi Corporate Secretary, Mr. Miyamoto, which Judge Higginbotham accepted in lieu of an affidavit. The telex explained, in general terms, how declassification would be harmful to Hitachi's interests.
A similar submission in affidavit form was made at that time by Mr. Kenji Yamagishi on behalf of Matsushita.
The judges who have presided over this case have had a number of occasions to act upon confidentiality matters. Some of these occasions arose when the parties submitted stipulations that relief from PTO 35 be granted in response to a government agency demand. There were also several contested confidentiality motions. We annotate these instances briefly to amplify the background of the treatment of confidentiality matters in this litigation and to contrast them with the parties' failure to challenge specific documents.
C. General Description of the Principal Documents Whose Confidentiality is at Issue
We turn now to a general description of the most critical documents and filings in the case, with a view ultimately to determining the need for their continued confidentiality. For reasons that will appear, it is only these documents and filings which we will consider. Because we have already described the pretrial evidentiary hearings, it will be convenient to begin with the DSS's. The important documents considered during the evidentiary hearings fall into a number of broad categories, as follows:
1. Documents, including certain findings, promulgated by the United States Treasury Department and the United States Tariff Commission in connection with proceedings under the 1921 Antidumping Act.
2. Documents, including certain findings, promulgated by the United States Tariff Commission and its successor, the United States International Trade Commission, as well as the Secretary of Labor, under §§ 301(b)(1) and (c)(1) and (2) of the Trade Expansion Act of 1962 and §§ 201(b) and 221 of the Trade Act of 1974.
3. Certain purported findings and related documents of the Japanese Fair Trade Commission ("JFTC") arising out of proceedings in two cases before the JFTC: the first, brought in 1957 against the Home Electric Appliance Market Stabilization Council, some of whose members are defendants in this action, alleging industry-wide price-fixing; and the second, brought in 1967, alleging retail price maintenance against defendant Matsushita Electric Industries Company.
4. Diaries of officials of several of the Japanese defendants, alleged to contain evidence of the conspiracy asserted in plaintiffs' complaint, which were seized in 1966 and utilized in the course of JFTC Case No. 6 of 1966 (the "Six Company Case"). That case involved an investigation and proceedings against six of the defendants: Sanyo Electric Corporation, Tokyo Shibaura Electric Corporation (Toshiba), Hayakawa Electrical Industry Corporation (now Sharp Corporation), Hitachi Industry Corporation, Matsushita Electric Industry Corporation (MEI), and Mitsubishi Electric Corporation (MELCO). The six companies were charged with a conspiracy to fix prices and to engage in a variety of activities in violation of the Japanese Anti-Monopoly Law. The eight diaries in dispute have been attributed to Mr. Yajima (3 diaries), an employee of Toshiba; Messrs. Yamamoto (2 diaries) and Yamada, both employees of Hitachi; Mr. Okuma, an employee of MELCO; and Mr. Tokizane, an employee of MEI. Also included in this category are a number of internal company memoranda which were seized by the JFTC.
6. Various agreements and rules of certain Japanese manufacturers' associations relating to export practices.
7. Various documents alleged to be minutes or memoranda of meetings of certain Japanese manufacturers' associations, including the Electronics Industries Association of Japan (EIAJ) and the so-called TV Export Council.
8. A purported internal memorandum of the Japan Victor Company, fifty-one percent of which is owned by MEI, allegedly reflecting the decision made by the EIAJ to conceal from the Japanese Ministry of International Trade and Industry (MITI) the discrepancy between domestic and export prices and suggesting changes in accounting methods by which such concealment could be accomplished.
9. Numerous memoranda, letters, telexes, and transactional documents produced by the defendants in discovery, involving the Japanese manufacturers, their trading companies, their American sales subsidiaries, and various American customers, which, in plaintiffs' submission, show a pattern of "under the table" or concealed rebates that reduced the price of Japanese television receivers to American customers below the "check price" that was reported to United States Customs, and also reveal a "cover-up" of what plaintiffs describe as a predatory export scheme.
10. A potpourri of other documents, produced during discovery for the most part from defendants' files.
11. Voluminous reports setting forth the opinions and supporting data of plaintiffs' experts. The reports at issue were: (1) "Economic Study of the Japanese Television Industry," by Dr. Horace J. DePodwin, Dr. David Schwartzman, and Marcio Teixeira of Horace J. DePodwin Associates, Inc., an economic consulting firm; (2) "The Pervasive Use of Collusive and Company Group (Keiretsu) Activities in Achieving the Rapid Increase of Japanese Exports of Television Receivers to the United States," by Professor Kozo Yamamura, Chairman of the Japan Studies Program and Professor of Economics and East Asian Studies at the University of Washington; (3) "Economic Analysis of Evidence Relating to Japanese Electronic Products Antitrust Litigation," by Stanley Nehmer of Economic Consulting Services, Inc.; (4) "The Impact of Japanese Financial and Employment Practices on Japanese Production, Marketing, and Price Behavior," by Professor Gary R. Saxonhouse, Professor of Economics at the University of Michigan; and (5) "Vertical Restraint by Japanese Television Manufacturers: Anticompetitive Effects," by Professor John Owen Haley, Associate Professor of Law at the University of Washington.
We turn from the DSS's to those critical filings on the record of the case that are designated "confidential." The most critical filing in plaintiffs' case is, as we have stated, the FPS. The FPS incorporated the DSS's, but also subsumed numerous other matters, almost all document-related. The subject matter of these other documents is covered in Part VII of the index to the Final Summary Judgment Opinion, 513 F. Supp. at 1115-16. While these other documents are more numerous, in qualitative terms they are similar to the DSS's.
One facet of the FPS and of several of the confidential record filings bears special mention. Included in the appendices to the FPS are the voluminous model-by-model matchups and price comparisons described in the 1916 Antidumping Act Opinion, 494 F. Supp. at 1204. Also included among the sealed filings are the Answers to Interrogatories 45 and 46(c) of Plaintiffs' Interrogatories to Defendants, Set No. 1, which set forth the prices of defendants' television receivers at each level of distribution, and several other similar interrogatory responses. All of this economic data has been analyzed and distilled by plaintiffs' experts in their reports. It is plain, however, that if there is any potential competitive harm to defendants from declassification, it would come from disclosure of this raw economic data, not from the expert reports or the FPS text. We do not take up the other record filings, voluminous as they are, because they are essentially subsumed within the FPS.
We have thus generally described the critical documents. What is important of course is the question whether the documents-and the FPS is principally an agglomeration of documents and excerpts therefrom-are of a character that their confidentiality must be protected under the applicable law. The resolution of that question requires more than a general description of the documents; it requires an analysis of their underlying content, in the wake of a description of the applicable law.
D. The Contentions of the Parties
Plaintiffs' motions are grounded on a number of arguments. First, they maintain that most of the documents designated by defendants as confidential do not qualify as trade secret or other confidential research, development, or commercial information within the meaning of Federal Rule 26(c)(7) which is, as we have noted, the provision that informs PTO 35 for purposes of this case. Even if Rule 26(c)(7) does cover the information, say plaintiffs, there is not "good cause" to protect them from disclosure. In plaintiffs' submission, the material at issue, by and large, never qualified under Rule 26(c)(7), and if it ever did, no longer qualifies because the passage of time has rendered it stale. Much of the technical and commercial data at issue is from ten to twenty years in age.
Second, although the pretrial evidentiary hearing was closed in part to the public, plaintiffs submit that the closure was improper and, therefore, that all the documents offered at the hearing, regardless of our admissibility rulings, must be declassified because of the common law right of access in the public to inspect and copy court documents. This result is also compelled, in plaintiffs' submission, by the reference to many of the documents in our various published opinions in this case. Plaintiffs point out that this case has received widespread publicity in domestic and international legal and financial circles, and that it is a case of great public importance. Plaintiffs contend that legal scholars and economists cannot evaluate the result we have reached unless they have access to the "raw material" upon which our decisions are based. This includes, plaintiffs say, at least the following: (1) all the DSS's offered and considered by us in the pretrial evidentiary hearing;
(2) all the documents referred to during the summary judgment hearing; (3) all documents referred to in the Final Summary Judgment Opinion; and (4) plaintiffs' entire FPS and the 250,000 documents referenced therein.
Plaintiffs seek to justify inclusion of this latter category by emphasizing that the FPS was the focal point of the summary judgment hearing and deliberation, and of the opinion granting summary judgment for defendants.
Finally, plaintiffs claim that, PTO 35 notwithstanding, the First Amendment gives them the right to speak about and, upon request, to disseminate material obtained in discovery. Plaintiffs' position on this last point relies, for the most part, upon In Re Halkin, 194 U.S. App. D.C. 257, 598 F.2d 176 (D.C.Cir.1979), a controversial decision addressing the question of First Amendment rights in discovery materials.
Defendants counter plaintiffs' arguments on numerous grounds. First, they argue that PTO 35 was a typical confidentiality order, eminently proper in a case such as this where, pursuant to plaintiffs' massive discovery requests, the defendants and a number of third parties produced literally millions of pages of documents containing detailed technical and commercial information exposing the very heart of their business operations. Defendants submit that PTO 35 has effectuated the orderly process of discovery and pretrial preparation in this litigation. They point out that for a decade both parties and non-parties, in good faith and in reliance on PTO 35, have produced countless documents the discovery of which they might have challenged on a document-by-document basis but for PTO 35. They argue that those who have made disclosure would be seriously and irreparably harmed if confidentiality were now revoked.
In defendants' submission, a competitor would have a distinct advantage in planning the manufacturing and marketing of its own products if it were armed with information about defendants' production and sales plans and techniques; marketing, pricing, and advertising plans and philosophy; customer information, long term plans, product development patterns; and other vital competitive information. Defendants claim that the materials previously disclosed by them in this case contain such information.
Moreover, defendants claim that wholesale declassification would be grossly unfair in view of plaintiffs' failure timely to avail themselves of the procedures afforded by PTO 35 for challenging the confidential designations.
As a major predicate for these contentions, defendants point to their production to the plaintiffs of copies of their pricing materials, which demonstrate the prices of their merchandise at various levels of distribution. They then explain that the pricing process does not vary greatly from year to year, and the conclusion which they thereupon draw is that much can be learned about the manner in which the defendants arrive at their prices by analyzing this data, even if it is relatively "stale," and by comparing any year's price list at various sales levels. Defendants note too that marketing strategies, and the amount of money allocated for promotional needs, necessary discounts, and allowances, remain relatively constant from year to year. They allege that ...