United States District Court, D. Delaware
MEMORANDUM OPINION AND ORDER
WILLIAM C. BRYSON UNITED STATES CIRCUIT JUDGE
the Court is The Parties' Joint Submission Regarding
Proposed Protective Order. Dkt. No. 69. In the
submission, the parties explain that they have been unable to
reach agreement on all the terms of the proposed protective
order in this case and that they require the Court's
intervention to resolve the two remaining issues between
joint submission, the parties each made brief factual
presentations and legal arguments with respect to the two
issues. Following receipt of the submission, the Court
conducted a telephonic conference on March 6, 2019, and
directed that plaintiff British Telecommunications PLC
(“British Telecom”) submit declarations
addressing certain points raised during the conference. At
the conclusion of the conference, both sides stated that they
did not wish to offer additional evidence bearing on the
protective order issues. Pursuant to the Court's
direction, British Telecom submitted a declaration, to which
it added further argument. See Dkt. No. 77. The
defendants filed a response to that submission. Dkt. No. 79.
Based on the parties' written presentations and the
arguments made by the parties during the telephonic
conference, the Court makes the following rulings on the two
issues in dispute.
Access to Highly Confidential Information
first issue that the parties presented in their joint
submission was whether two in-house attorneys for British
Telecom should be allowed access to the defendants'
information designated as “highly confidential-outside
attorneys' eyes only” (section 2.8 of the proposed
protective order) and the defendants' information
designated as “highly confidential-attorneys' eyes
only- source code” (section 2.9 of the proposed
protective order). In its supplemental submission, British
Telecom withdrew its request with respect to one of the two
in-house attorneys and limited its request as to the
remaining in-house attorney to the materials covered by
section 2.8 of the proposed protective order.
Telecom argues that its in-house attorney will be working on
the litigation and needs to have access to the discovery
information in the case in order to represent his client
adequately. The defendants, on the other hand, argue that the
in-house attorney is regularly engaged in patent enforcement
on behalf of British Telecom and that his access to the
defendants' highly confidential information could result
in prejudice to the defendants in the event of any future
patent disputes between the parties.
facts that bear on this issue, as summarized by the parties,
are as follows: The in-house lawyer in question is Neil
Hobbs, who is responsible for managing litigation for British
Telecom in the United States. British Telecom takes the
position that Mr. Hobbs is not involved in any competitive
business decision-making for the company and is not involved
in patent prosecution. His responsibilities, according to
British Telecom, “involve management of the litigation
and related settlement discussions, if any.” Dkt. No.
69, at 3. In his declaration, Mr. Hobbs states that as part
of his responsibilities he is expected “to perform a
similar role to that of outside counsel, ” including
“reviewing all briefs, assessing the parties'
respective positions, and making informed settlement
recommendations.” Dkt. No. 77-1, at 1.
defendants argue that although British Telecom represents
that Mr. Hobbs has limited roles and responsibilities within
the British Telecom organization as a whole and that he does
not prosecute patents, he clearly has a role in British
Telecom's patent enforcement program. Based on their
experience prior to the filing of this action, the defendants
assert that Mr. Hobbs has participated actively in patent
enforcement and licensing activities for British Telecom.
During pre-filing meetings attended by Mr. Hobbs, according
to the defendants, British Telecom presented not only the
patents that were ultimately asserted in this action, but
also numerous other patents that British Telecom represented
were relevant to the defendants' commercial activities.
The message from British Telecom, the defendants argue, was
that the defendants “should pay license fees
notwithstanding a weak case of infringement because [British
Telecom] will use the size of its portfolio to harass IAC
with more and more patent assertions.” Dkt. No. 69, at
4. The defendants contend that allowing Mr. Hobbs to have
access to the details of the defendants' proprietary
technical materials and source code “would be a
significant tool in this process.” Id. at 5.
Telecom represents that Mr. Hobbs has no responsibilities
within the organization outside of patent enforcement,
assertion, and litigation activity, that he does not engage
in patent prosecution, and that his portfolio is limited to
the management of patent litigation and settlement
negotiations. Dkt. No. 77-1, at 3-4. Although the defendants
point out that Mr. Hobbs acknowledged working or
collaborating with members of the British Telecom
Intellectual Property Rights Licensing Team, which is
responsible for “identifying opportunities for [British
Telecom's] patent enforcement, licensing, and
acquisitions, ” Dkt. No. 77-1, at 4, he stated in his
declaration that his role in advising that team is limited to
“evaluating the legal risks associated with U.S.
litigation against target companies for [British
Telecom's] licensing and/or enforcement programs but does
not include identifying those targets nor the identification
or evaluation of the patents to acquire, assert, or license,
” and that he is “not involved in identifying
which specific patents are to be asserted against specific
targets.” Id. at 3.
supplemental submission, British Telecom agreed that Mr.
Hobbs would not seek or obtain access to the defendants'
source code referred to in section 2.9 of the Proposed
Protective Order, Dkt. No. 69-1, which is entitled
“Highly Confidential-Outside Attorneys' Eyes Only-
Source Code.” British Telecom also agreed that if Mr.
Hobbs actually reviews any of the material referred to in
section 2.8 of the Proposed Protective Order, which is
entitled “Highly Confidential-Attorneys' Eyes Only,
” he would “thereafter be barred, going forward,
from participating in any way with any consideration of any
additional [British Telecom] patents for assertion against
these Defendants.” Dkt. No. 77, at 3.
Court accepts the representations in the parties'
submissions as the factual basis for the Court's rulings.
parties do not disagree about the legal principles that apply
to whether Mr. Hobbs should be allowed access to the
defendants' highly confidential information produced
during discovery. As a general matter, a party has a
“strong interest in choosing its own counsel,
particularly in the complex and technical realm of patent
litigation.” Xerox Corp. v. Google, Inc., 270
F.R.D. 182, 185 (D. Del. 2010); Koninklijke Philips N.V.
v. iGuzzini Lighting USA, Ltd., 311 F.R.D. 80, 87
(S.D.N.Y. 2015). An attorney's representation, moreover,
generally comes with a right of access to all of the
materials in the case, including confidential materials
produced by the other side in discovery. That principle,
however, must give way under various circumstances, such as
when there is an unacceptably high risk of harm to a party
from giving a particular individual access to that
party's confidential materials.
Circuit cases set out the basic rules that apply here. In
U.S. Steel Corp. v. United States, 730 F.2d 1465
(Fed. Cir. 1984), the court ruled that, as a general matter,
a lawyer's access to confidential materials should not be
determined based simply on whether the lawyer in question is
in-house or retained. Id. at 1468. In particular
cases, however, such as “where in-house counsel are
involved in competitive decisionmaking, ” the court
noted that “it may well be that a party seeking access
should be forced to retain outside counsel or be denied the
access recognized as needed.” Id. The court
explained that the term “competitive
decisionmaking” is “shorthand for a counsel's
activities, association, and relationship with a client that
are such as to involve counsel's advice and participation
in any or all of the client's decisions (pricing, product
design, etc.) made in light of similar or corresponding
information about a competitor, ” and that a protective
order could enforce appropriate limitations on access to an
opposing party's confidential materials. Id. at
1467, 1468 n.3; see also Matsushita Elec. Indus. Co. v.
United States, 929 F.2d 1577, 1579 (Fed. Cir. 1991).
leading case from the Federal Circuit dealing with such
protective orders is In re Deutsche Bank Trust Co.
Americas, 605 F.3d 1375 (Fed. Cir. 2010). Deutsche
Bank involved a request for a protective order that
would prohibit plaintiff's trial counsel, who were given
access to the defendant's confidential information, from
participating in certain related patent prosecutions. In that
setting, the court ...