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Software Rights Archive, LLC v. Facebook, Inc.

United States District Court, Ninth Circuit

January 13, 2014

SOFTWARE RIGHTS ARCHIVE, LLC, Plaintiff,
v.
FACEBOOK, INC., Defendant. SOFTWARE RIGHTS ARCHIVE, LLC, Plaintiff,
v.
LINKEDIN CORPORATION, Defendant. SOFTWARE RIGHTS ARCHIVE, LLC, Plaintiff,
v.
TWITTER, INC., Defendant.

ORDER GRANTING-IN-PART SRA'S MOTION TO CLARIFY OR MODIFY PROTECTIVE ORDER (Re: Docket No. 86, 5:12-cv-03970) (Re: Docket No. 61, 5:12-cv-03971) (Re: Docket No. 54, 5:12-cv-03972)

PAUL S. GREWAL, Magistrate Judge.

Before the court is Plaintiff Software Rights Archive, LLC's motion to clarify or modify the protective order in this case so that SRA's litigation counsel may participate in the ongoing inter partes review ("IPR") proceedings initiated by Defendants Facebook, Inc., LinkedIn Corporation, and Twitter, Inc. Defendants oppose SRA's motion. The parties appeared for a hearing last week. After considering their respective arguments, the court GRANTS-IN-PARTS SRA's motion.

I. BACKGROUND

SRA filed three suits in July 2012 accusing Defendants of infringing three U.S. patents.[1] Each of these patents has expired. On July 30, 2013 Defendants filed four IPR petitions with the United States Patent and Trademark Office. Defendants successfully moved this court to stay the case while the IPR proceeded, in part, to streamline invalidity arguments.[2]

II. LEGAL STANDARDS

Fed. R. Civ. P. 26(c)(1) places the burden of seeking any protective order on the party from whom discovery is sought, a tenet the Ninth Circuit underscored when it held that a party "from whom discovery is sought bears the burden, for each particular document it seeks to protect, of showing that specific prejudice or harm will result if no protective order is granted."[3] Nevertheless, this district is authorized under Fed.R.Civ.P. 83 to establish a presumption of a so-called "prosecution bar" that extends to reexamination or review proceedings, an authority exercised by the combination of Section 6 of the district's model protective order and Patent L.R. 2-2.[4] Under such circumstances, the burden is appropriately shifted to the patentee to establish that an exemption from the bar is appropriate.[5] In particular, once "a patent prosecution bar is imposed" the "burden is reversed and the party seeking an exemption from a patent prosecution bar must show on a counsel-by-counsel basis: (1) that counsel's representation of the client in matters before the PTO does not and is not likely to implicate competitive decisionmaking related to the subject matter of the litigation so as to give rise to a risk of inadvertent use of confidential information learned in litigation, and (2) that the potential injury to the moving party from restrictions imposed on its choice of litigation and prosecution counsel outweighs the potential injury to the opposing party caused by such inadvertent use.'"[6]

Any prosecution bar should serve only to mitigate the risk of inadvertent use of proprietary information by a patentee, not to unduly burden a patentee with additional expense. While other courts have rejected any application of the prosecution bar to reexamination or review proceedings because neither permits the broadening of patent claims, [7] this court has recognized that claims may still be restructured in these proceedings in a way that would undoubtedly benefit from access to an alleged infringer's proprietary information.[8] With these standards in mind, the court turns to the dispute at hand.

III. DISCUSSION

A. The Model Protective Order's Applies to IPR Proceedings of Expired Patents

SRA first argues that because the plain language of the model order's prosecution bar applicable in this litigation does not expressly include IPR proceedings it, in fact, does not cover IPR proceedings. While SRA concedes that as in traditional prosecution "IPR of unexpired patents may also involve claim drafting or amendment, "[9] activities that are expressly barred, SRA points out that the IPR of expired patents statutorily cannot involve claim drafting or amending.[10] SRA also points out that IPR proceedings are designed to resemble litigation; discovery, [11] direct and cross-examination of witnesses, [12] and motion practice all are available.[13] SRA notes that its litigation counsel would perform many of the same tasks in either setting, including preparing declarations, taking and defending depositions, and reviewing documents.

Defendants counter that the prosecution bar in the model protective order covers any patent prosecution before the PTO including "directly or indirectly drafting, amending, advising, or otherwise affecting the scope or maintenance of patent claims."[14] Defendants urge that representing "the patent owner in attempting to maintain patent claims in an IPR proceeding falls squarely within" the model order's understanding of prosecution. In addition, Defendants note that case law cited by SRA confirms that the model order's prosecution bar covers IPR proceedings.[15] Defendants also contend the adversarial posture of IPR proceedings is irrelevant - prosecution under the model order is still prosecution.

Even though the case before the court is distinguishable from the situation Judge Illston faced in Ariosa - the patent term has expired[16] - the result is the same. Quite clearly, IPR proceedings carry the potential to modify - directly or indirectly - the scope or maintenance of patent claims. Conduct "taken in, or support of, the pending IPR proceedings could affect the scope or maintenance of the claims" in SRA's patent.[17] At the extreme, challenged patent claims could be fully invalidated based on the prior art. Even though SRA's litigation counsel may not use confidential information to expand the scope of the claims, it could use such information to prophylactically cede claim scope through limiting arguments. Especially in light of SRA's concession at the hearing that IPR constitutes prosecution, the court confirms that the model order's prosecution bar covers IPR proceedings.

B. The Model Order Should Be Modified in this Case

With the issue of whether the prosecution bar lodged within the model order extends to IPR proceedings resolved, the court turns to the next question at hand: should the model order nevertheless be modified to permit SRA's litigation counsel a limited role in the proceedings? On this issue, the Federal Circuit's guidance in Deutsche Bank is controlling. First, the court considers whether competitive decisionmaking is sufficiently implicated giving rise to an unacceptable risk of ...


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