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United States District Court Northern District of California v. Acronis Corporation


August 20, 2012


The opinion of the court was delivered by: Jacqueline Scott Corley United States Magistrate Judge


Pending before the Court is the parties' Joint Discovery Letter Brief concerning Plaintiff Symantec's proposed expert witness and consultant. (Dkt. No. 96). Defendant 22 Acronis objects to Plaintiff disclosing its highly confidential technical information (source 23 code) to Plaintiff's technical expert Dr. Martin Kaliski and consultant Edward Haletky. 24 Having considered the parties' filing and having had the benefit of oral argument on August 25 9, 2012, as stated on the record the Court DENIES Plaintiff's request to quash Defendant's 26 objections.


Recovery and True Image products infringe on five of Symantec's patents. The parties are 4 competitors in the back-up and recovery market

6 intends to use as a testifying expert and consultant, respectively, to help it prepare for and 7 present its case at trial. Pursuant to the Stipulated Protective Order ("Protective Order"), 8 which District Judge Chen granted on July 2, 2012, Plaintiff notified Defendant that it 9 intended to disclose information that had been designated as "Highly Confidential" to Dr. 10

Kaliski and Mr. Haletky. The Protective Order requires the party seeking to disclose highly 11 confidential information to serve written notice on the other party which: 12


CODE" information that the Receiving Party seeks permission to disclose to the Expert, (2) sets forth the full name of the Expert and the city and state of his or her primary residence, (3) attaches a copy of the Expert's current resume, (4) identifies the Expert's current employer(s), (5) identifies each person or entity for the past 5 years for whom the Expert has provided professional services or from whom the Expert received compensation or funding, including in connection with litigation, (6) identifies all of the Expert's patents and pending patent applications in which the Expert is an inventor, assignee, or holds a financial interest; (7) identifies all source code relevant to this litigation in which the Expert holds a financial interest, and (8) identifies any professional services provided by the expert or any of his staff to Symantec, Acronis, Inc., or Acronis International GmbH or any predecessors or successors (merged,

acquired or otherwise), parents, divisions, subsidiaries, associated organizations,

joint ventures, and affiliates thereof. (Dkt. No. 89, 11:20-12:6). Under the Protective Order, if a party opposes disclosure of highly 23 confidential information, the party may file a timely written objection. If the parties are 24 unable to resolve the issue through meet and confer, the party seeking to disclose the highly 25 confidential information shall file a motion which "must describe the circumstances with 26 specificity, set forth in detail the reasons why the disclosure to the Expert is reasonably 27 necessary, assess the risk of harm that the disclosure would entail, and suggest any additional 28

In this patent infringement action, Symantec alleges that Acronis' Backup and The underlying dispute concerns two individuals whom Plaintiff has indicated it

(1) identifies the general categories of "HIGHLY CONFIDENTIAL -- means that could be used to reduce that risk." (Dkt. No. 89, 12:11-21). If a motion is filed, 2 "the Party opposing disclosure to the Expert shall bear the burden of proving that the risk of 3 harm that the disclosure would entail (under the safeguards proposed) outweighs the 4

Plaintiff provided written notice of its intent to disclose highly confidential information 6 to Dr. Kaliski and Mr. Haletky. Defendant responded with written objections which objected 7 to disclosure to Dr. Kaliski because Plaintiff had failed to provide sufficient information 8 regarding his clients for the past five years. Defendant objected to disclosure to Mr. Haletky 9 because it contended that there was a significant risk of harm associated with the disclosure 10 given that Mr. Haletky currently provides private consulting services in the very area in which 11 Acronis develops its products and he also publishes in this same field. The underlying motion 12 to quash these objections followed. (Dkt. No. 96). At oral argument the parties advised the

Court that they had resolved the motion with respect to Dr. Kaliski; accordingly, this Order 14 only addresses Defendant's objections to Mr. Haletky. 15 Defendant objects to disclosure of its confidential information to consultant Edward

Haletky because he actively consults on product development and publishes on product 18 comparison in the field of virtualization. Defendant contends that there is a significant risk 19 that given his involvement in this field, his knowledge of its highly confidential source code 20 will become intertwined with his other knowledge such that it will be disclosed, inadvertently 21 or otherwise, in the course of his future work. Defendant contends that it would be impossible 22 to compartmentalize Mr. Haletky's knowledge of the source code from the rest of his work, 23 and thus, absent a showing that Mr. Haletky possesses unique knowledge within this field -- a 24 showing it alleges Plaintiff has not made -- Defendant should not have to share its highly 25 confidential information with Mr. Haletky. 26

He is the President of a company called The Virtualization Practice, which performs 28 virtualization security and other virtualization product testing and analysis including product

Receiving Party's need to disclose the Protected Material to its Expert." (Id. at 12:25-28).


Mr. Haletky's resume indicates that he actively consults in the area of virtualization. reviews requiring detailed knowledge of the virtual environment and the product being 2 reviewed. (Dkt. No. 96-23, p. 8). He has been designated as a VMware vExpert since 2009 3 and VMware is a maker of virtualization products some of which are supported by the 4 96-31 ¶ 7). He has also published several books on VMware products, including two that are 6 supported by Acronis's software. (Dkt. No. 96-33). Further, Mr. Haletky has worked with 7 one of Defendant's competitors on a podcast about virtualization. (Dkt. Nos. 96-31 ¶ 9, 96-8

At the hearing, Plaintiff attempted to distinguish Mr. Haletky's consulting work in this 10 field by suggesting that he consults on a macro level, rather than what the Court will term the 11 micro-source code level. The argument being that any source code Mr. Haletky was exposed 12 to as a consultant in this case would never come up in his more macro level consulting in the

field of virtualization. The Court is not persuaded by this argument. Mr. Haletky's resume 14 indicates that he consults and develops training for "advanced VMware ESX Server issues 15 and assists customers" with "solving VMware . . . operating system, clustering, compiler, 16 shell, and other software development and programming issues" -- this sounds like consulting 17 on both a macro and micro level. (Dkt. No. 96-23, p. 8). Moreover, Plaintiff was unable to 18 satisfactorily respond to the Court's inquiry as to why if Mr. Haletky's expertise and 19 consulting in the field of virtualization does not involve work with source code, it is necessary 20 for him to review Acronis's highly confidential source code in this action. 21 22 in the field of virtualization creates a substantial risk and that absent a showing that Mr. Haletky possesses unique expertise he should not be allowed access to Defendant's highly 24 confidential information.*fn1 In Advance SemiConductor Materials America v. Applied 25

Materials, No. 95-20169, 1996 U.S. Dist. LEXIS 21459 (N.D. Cal. Oct. 28, 1996), the court 26 considered a similar situation and found that it had "to balance [plaintiff's] interest in Acronis software, including some of the products at issue in this case. (Dkt. Nos. 96-23 ¶ 11, 5 34).

A review of the relevant case law supports a finding that Mr. Haletky's ongoing work selecting the experts most beneficial to its case with [defendant's] interest in protecting its 2 trade secrets from disclosure to its competitors." Id. at *8. Two facts weighed heavily in the 3 plaintiff's favor in Advanced Semiconductor. First, the expert in that case had not consulted 4 for a competitor on the subject matter of the litigation for four years and had no future plans to 5 do so. Id. at *10. Second, the expert possessed qualifications that other designated experts 6 could not. Id. at *9. The Advance Semiconductor court concluded that in light of these two 7 facts, the plaintiff "must be permitted to present the experts who it believes possess the ability 8 to convey highly technical information to lay persons, and those experts must be permitted 9 access to [defendant's] confidential information." Id. at *9. The court in Verigy v. Mayder, 10 No. 07-04330, 2008 WL 4183493 (N.D. Cal. Sept. 8, 2008), similarly found the question of 11 whether the experts at issue had consulted for a competitor within the last few years 12 dispositive. Id. at *1 (finding no risk of harm where the challenged experts had retired from the key competitor two years ago and did not have an ongoing relationship with the 14 competitor).

found in another expert. Further, Mr. Haletky does have ongoing relationships with 17 competitors in the field of virtualization. Thus, there is a tangible risk that Mr. Haletky will 18 not be able to separate the highly confidential information he gleans from reviewing 19

Defendant's source code with his consulting and publication work in that same technical field 20 and this finding is not outweighed by a showing that he has expertise that other experts do not. 21

The Court also notes that his status as a consultant, rather than a testifying expert, further 22 undercuts a claim that he is essential to Plaintiff's case.

24 objections in this case effectively allows Acronis a veto power with respect to Symantec's 25 experts. The Court's ruling is limited to Mr. Haletky and the very specific situation presented 26 by Mr. Haletky, a non-testifying consultant who actively consults with Defendant's 27 competitors -- absent a showing that he possesses unique knowledge which no other experts 28 possess, Defendant should not have to provide him access to its highly confidential Here, Plaintiff has not shown that Mr. Haletky has unique knowledge that could not be Finally, the Court is not persuaded by Plaintiff's argument that sustaining Defendant's information.*fn2 Plaintiff shall select a consultant who does not currently consult with 2 competitors in the field of virtualization. 3


Based on the foregoing, Plaintiff's Motion to Quash Defendant's Objections to 5 consultant Edward Haletky is DENIED; the motion is DENIED AS MOOT with respect to 6 Dr. Martin Kaliski.

This Order disposes of Docket No. 96.


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