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Rotex Global, LLC v. Gerard Daniel Worldwide, Inc.

United States District Court, M.D. Pennsylvania

October 11, 2019


          Conner Chief Judge


          Martin C. Carlson United States Magistrate Judge

         I. Factual Background

         We are overseeing on-going discovery disputes in this complex patent litigation. As part of this process, we have emphasized for all counsel our view that discovery in this case should be conducted in a symmetrical fashion, with the greatest degree of transparency possible, consistent with legitimate concerns relating to confidentiality of trade information. We also underscored for all counsel our view that they should work cooperatively to tailor discovery to the needs of the case and noted that clear communications between counsel are essential to achieve these goals.

         Notwithstanding our expression of these aspirational goals, the parties remain embroiled in a discovery dispute relating to a motion to compel discovery filed by the plaintiff, Rotex. (Doc. 107). In this motion to compel, Rotex seeks two forms of relief. First, it asks that we direct Gerard Daniel Worldwide (GDW) to re-designate customer lists, which it had previously identified under a stipulated protective order as “Highly Confidential, ” as merely “Confidential”. The effect of this re-designation would be to allow Rotex's counsel to share GDW's customer lists with officials at Rotex. Additionally, or in the alternative, Rotex argues that GDW has redacted the identities of these customers from its “Highly Confidential” discovery disclosures. Rotex contends that these redactions should be removed because the identity of the GDW customers is an important element of proof in Rotex's claims that GDW infringed its patent and then used that infringed patent to market equipment to Rotex customers. According to the plaintiff, the actual identity of the GDW customers is a crucial component to showing the loss of sales suffered by Rotex since it would demonstrate which former Rotex customers later purchased infringing goods from GDW.

         For its part, GDW has responded to the twofold argument advanced by Rotex with a twofold rejoinder. First, GDW argues that Rotex is not entitled to compel it to re-designate customer information as merely “Confidential” rather than “Highly Confidential” since the parties' stipulated protective order expressly allows for the designation of customer information as “Highly Confidential.” In addition, citing primarily to cases which have allowed the redaction of sensitive but irrelevant information from documents, GDW contends that Rotex's argument that the identities of customers potentially lost by Rotex due to GDW's alleged infringement is relevant to its claims and loss calculations, “while superficially appealing, really makes little sense, ” since other factors may potentially also affect Rotex's sales. (Doc. 135, at 17).

         With Rotex's claims, and GDW's rejoinders, framed in this manner, it is apparent that this motion to compel in the first instance stems out of a dispute between the parties regarding the meaning and interpretation of a stipulated protective order entered into by the litigants in November of 2017. (Doc. 73). Such stipulated protective orders are a commonplace feature of complex commercial litigation where sophisticated parties are engaged in a dispute that may require the disclosure of sensitive business information. The stipulated protective order is designed to allow this discovery process to move forward in a fashion that allows for the sharing of information while protecting client confidences. When this process works correctly, it eliminates the need for discovery litigation. However, when-as in this case-the process breaks down, the court is called upon to intervene.

         Given the nature of this particular dispute, our consideration of the parties' contentions begins with the language of their November 2017 stipulated protective order. (Doc.73). That order, which provides a process for disclosing sensitive commercial information, allows parties to designate information as either “Confidential” or “Highly Confidential, ” and defines these designations in the following terms:

For purposes of this Protective Order, the term “Confidential” shall mean any and all documents, materials, or information concerning the products, projects, activities, intellectual property, marketing, promotion, business, or financial affairs of any party to the Action acquired in the course of the party's respective work that such party believes in good faith would qualify for a protective order if sought from the Court. For purposes of this Protective Order, the term “Highly Confidential” shall mean any and all Confidential Material that qualifies as “Confidential” and further relates to financial information about the party, future business plans, pending patent applications, customer information, competitive information, product formulation details, trade secret information, or proprietary computer source code.

(Id., ¶ 4).

         The protective order then prescribes how “Confidential” and “Highly Confidential” information may be disseminated and used by the parties in their litigation. In this regard, the order provides the following with respect to the disclosure of “Confidential Information”:

         Confidential information shall be disclosed only to:

(a) No. more than two employees, officers, or board members of each party, to be designated as such by each party in writing prior to disclosure;
(b) This Court and any court to which an appeal might lie, including court personnel and trial jurors;
(c) Outside litigation counsel of record for the non-designating parties, together with their respective associate attorneys and office personnel employed or engaged in the preparation for, or aiding in the trial of, the Action;
(d) Outside vendors who perform microfiching, photocopying, computer classification, or similar clerical functions, but only for so long as and to the extent necessary to perform those services;
(e) Court reporters and other persons engaged in preparing transcripts of testimony of hearings in the Action;
(f) Outside experts and/or advisors consulted by counsel in connection with the Action, whether or not retained to testify at trial, except that, absent written consent from the Designating Party, no party shall disclose Confidential Material to any expert or advisor, or to such person's support personnel, if such person currently or at any time in the past has been an employee, contractor, or customer of any of the parties;
(g) Jury selection consultants, and participants in any mock trial or similar simulation, employed for purposes of trial preparation in this matter but only for so long as and to the extent necessary to perform those services;
(h) Witnesses at any deposition in the Action, subject to the provisions of paragraphs 11, 12, and 13 of this Protective Order to the extent that the witness is reflected on the face of the document, or is reasonably believed by counsel to be, a writer or a recipient of the document; and
(i) Any other persons to whom the Designating Party agrees in writing.

(Id., ¶ 6).

         As might be expected, the stipulated protective order then affords a heightened level of protection to information designated as “Highly Confidential, ” stating that:

In the event that a party designates information as Highly Confidential, the information shall be treated the same as and shall be subject to the same procedures as set forth in this Protective Order for information designated Confidential, except that such information shall be disclosed ...

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