Yesterday, Special Master Gregory B. Williams issued an order in TQ Delta, LLC v. Dish Network Corp., C.A. No. 16-614-RGA (D. Del.) requiring the plaintiff to turn over unredacted copies of its expert reports, declarations, and testimony from prior cases. These materials contain the confidential information—possibly even source code—of prior defendants.
As set forth by the Special Master, this information is relevant to the plaintiff's current cases, because it involves related patents with similar issues:
[T]he Prior Litigation Materials are relevant to the claims and defenses in the present action. Specifically, [the expert] Dr. Madisetti's prior opinions concern other "phase scrambling" patents in the same patent family as the '158 and '243 patents. . . . In fact, in the ADTRAN Case, Dr. Madisetti opined on the construction of the "phase characteristic" term. . . . This term is similarly recited by the '158 patent in the present action. Thus, based on the resemblance of the patents at issue in the present action and the patents at issue in the Prior Actions, the Special Master finds that the Prior Litigation Materials are relevant to the claims and defenses in this action.
He also found that the protective orders in those cases included notice provisions, and that complying with the notice provisions would not be burdensome to plaintiff:
[T]he Protective Orders in the Prior Actions limit the use of documents or other discovery materials produced or exchanged in connection with the Prior Actions to use in each Prior Action respectively, absent written consent by the Designating Party[] or unless otherwise ordered by the Court. . . . [T]he Protective Orders provide that if "an order issued in other litigation would compel disclosure" of such confidential information "the Receiving Party must so notify the Designating Party, in writing, promptly and in no event more than ten (10) court days after receiving the ... order" and must include a copy of the order. . . . Such notice requirements are not unduly burdensome for TQ Delta.
Finally, Special Master Williams noted the interest the the prior defendants themselves have in preventing disclosure of their confidential information, but that it was lessened to some degree because the litigation interests of the previous defendants align with the defendants in this action, and because the materials could be produced with confidentiality designations corresponding to the original cases:
The Special Master certainly wants to be sensitive to avoid doing any harm that may result to the non-parties by requiring the disclosure of non-party confidential information in this action. The Special Master is unaware of any manner in which the non-parties are adverse to DISH. To the contrary, by virtue of both the non-parties and DISH being adverse to TQ Delta in pending patent litigations, their interests appear to be somewhat aligned. . . . Thus, any Prior Litigation Materials produced in this action may be designated as "HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY" or "HIGHLY CONFIDENTIAL - SOURCE CODE" to continue to protect the non-party confidential information in this action.
He ordered plaintiff to send the notices to the previous defendants within two days, and gave the previous defendants eight days after the notices go out to file motions for protective orders if they feel the need to do so.
How big of a problem is this for the earlier defendants?
Some of the prior defendants may have strong feelings about this ruling. After all, the prior defendants' confidential information—possibly even source code—will be conveyed to counsel for a different set of defendants in a new case, who may or may not treat it as carefully as counsel in the original case.
Even if they do treat it carefully, the more copies of confidential information that are floating around out there, the greater the chance that something will inadvertently go public, whether through an inadvertent filing or a data breach at one of the firms.
On the other hand, the prior defendants may feel that the particular information used in the earlier cases wasn't that all that important, and that the risk of extra copies floating around is insignificant. After all, it will still be subject to a similar protective order as the original case, and it will be held by attorneys who likely deal with this kind of highly-confidential information on a daily basis.
So, all told, it's hard to say. It will be interesting to see whether any of the prior defendants file motions to prevent disclosure.
We should note that Special Master Williams happens to run his own blog about IP litigation in Delaware! Check it out here.
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