PROTECTIVE ORDER RE CONFIDENTIAL INFORMATION
ANDREW J. WISTRICH, Magistrate Judge.
Good cause exists for the Court to enter the following Protective Order Re. Confidential Information (the "Protective Order"). Plaintiff Dino Ditta ("Ditta") is the current President and CEO of DataTrax Incorporated, which has proprietary software products, and Ditta also works as a consultant on products and business activities for third parties in the software product industry. Defendant Mentor Graphics Corporation ("Mentor") manufactures and sells computer software that assists engineers in designing and fabricating complex electronic systems such as printed circuit boards and integrated circuits. Ditta and Mentor (collectively, "the parties") are thus both in the software industry and have highly sensitive business information. Ditta's former business, Router Solutions, Inc., the acquisition of which is at issue in this litigation, was a private business that did not report any financial information to the public. Moreover, Mentor and Ditta maintain confidential, proprietary and trade secret information relating to the software at issue in this litigation, as well as business plans, customer information, and financial information relating to their businesses and the software at issue. The broad dissemination of this confidential information can permanently and irreparably harm the parties' competitive standing by allowing competitors to use the information for business gain without the incidental expenditures and costly research required to independently create it. This unfair advantage is problematic to the discovery process in this action because each party, without a protective order in place, runs the risk of serious and irreparable harm to its business. The Ninth Circuit recognizes that dissemination of confidential business information is the "precise sort of information" which, if disclosed, would harm a litigant's competitive standing. Electronic Arts, Inc. v. United States District Court, Case No. 08-74426, 2008 U.S. App. LEXIS 22476, at *4-5 (9th Cir. Oct. 28, 2008).
The parties have jointly drafted this Protective Order and seek to have it entered by the Court to prevent harmful disclosure of the parties' confidential information while balancing the public's right to acquire information that properly falls outside the scope of the parties' protectable, confidential interests. The parties agree that the adoption and adherence to this Protective Order will facilitate an orderly and cost-effective discovery process and preparation for trial or settlement, and that the confidential information will not be used for any purpose that is not directly related to this litigation. Therefore, good cause exists to enter this Protective Order to facilitate the mutual exchange of information without harming the competitive standing of the parties in the Action.
IT IS HEREBY ORDERED:
1. Disclosure and discovery activity in this action are likely to involveproduction of confidential, proprietary, or private information for which special protection from public disclosure and use for any purpose other than prosecuting this litigation is warranted. Accordingly, the parties stipulate to and petition the Court to enter the following Protective Order, which shall govern the procedure for designating as confidential certain categories of documents and information produced in connection with discovery in this Action, including by non-parties, and shall define limitations on the use and disclosure of such confidential materials. The parties further acknowledge that this Protective Order creates no entitlement to file confidential information under seal; the Local Rules of this Court set forth the procedures that must be followed and reflects the standards that will be applied when a party seeks permission from the Court to file material under seal.
2. Any party who is required to produce documents or information in discovery in this case (hereafter referred to as the "producing party") may designate the material produced as "confidential" pursuant to this Protective Order. In doing so, the producing party represents that it has a bona fide belief that the document or information designated as "confidential" (a) constitutes trade secret, proprietary or commercial information which has been preserved or maintained in a manner reasonably calculated to preserve its confidentiality from the public, (b) is subject to a legally-protected right of privacy by the producing party, including but not limited to any right of privacy created by or recognized under the United States Constitution, the California Constitution, any state or federal statute or case law, or (c) would reveal confidential research, development, financial, marketing, customer, personnel or other business information of the producing party or its clients. (Documents and information within this category shall be referred to herein as "confidential material.")
At minimum, a producing party must designate those documents which he or it believes contain confidential material by (i) affixing to each such document the legend "CONFIDENTIAL" in a size and location(s) which makes the designation readily apparent; (ii) designating by Bates-stamp number; or (iii) describing by way of category or other unambiguous designation. A "CONFIDENTIAL" designation also must be affixed to any documents produced in the course of this Action, including portions of briefs, memoranda or any other writings filed with the Court, which mention, discuss or comment upon any confidential material.
3. With regard to the production of documents or information by any non-party to this Action, any party to this Action may designate all or any portion of such documents and information to be confidential material pursuant to this Protective Order by serving on all parties a specific designation, by Bates number to the extent possible, of the material claimed as "confidential" within thirty (30) days of receiving copies of the material. In doing so, the designating party makes the same representation set forth in paragraph 2 with respect to confidential material. Once designated as "confidential" the confidential material shall be treated in accordance with such designation for all purposes consistent with the terms of this Protective Order, and each party shall make certain that all such confidential material bears the "CONFIDENTIAL" legend pursuant to the requirements of this Protective Order.
4. All copies, extracts, summaries, charts or notes (collectively, "Extracts") of any confidential material shall also constitute and be treated as confidential material as provided in this Protective Order. Any person making Extracts or causing Extracts to be made of any confidential material shall make certain that all such Extracts bear the "CONFIDENTIAL" legend pursuant to the requirements of this Protective Order.
5. Confidential material shall not be used for any purpose other than the prosecution or defense of this Action or as otherwise required by law. The parties to this Action and their counsel shall take all diligent precautions to prevent the disclosure of any confidential material designated in this lawsuit to persons not authorized pursuant to this Protective Order.
6. Confidential material designated in this Action may not be disclosed to any person unless the disclosure is authorized by the terms of paragraph 9 of this Protective Order. In the event that additional persons become parties to or appear in this Action, neither the additional persons nor their counsel of record, in-house counsel, or any person acting on their behalf or retained to assist such additional persons, shall have access to any confidential material designated in this Action until such additional person's counsel of record has consented in writing to this Protective Order. Each such additional person must obtain written consent of the parties hereto prior to entering into this Protective Order, which consent shall not be unreasonably withheld.
7. Any document or information designated as confidential in this Action which is filed with the Court for any purpose shall be filed in a sealed envelope or other container marked on the outside with the caption of this Action and the following statement:
"CONFIDENTIAL - SUBJECT TO PROTECTIVE ORDER" If any person fails to file under seal any confidential material designated in this lawsuit, such person immediately shall contact the Court's clerk and arrange to have the confidential material designated in this lawsuit placed under seal. The producing party may apply to have the confidential material designated in this lawsuit placed under seal.
8. The parties shall use their best efforts to include confidential material designated as such in Court filings only when absolutely necessary, and shall, to the extent possible, file redacted versions of sealed filings that redact any portions of those filings that contain or reflect material designated as "confidential." If an application to seal is pending, any materials filed under seal shall remain under seal and shall not be disclosed to any person other than Court personnel, counsel of record who have agreed to this Protective Order, and any other person permitted under the terms of this Protective Order to have access to the sealed materials, until the Court has ruled on the ...