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Synopsys, Inc. v. Mentor Graphics Corp.

United States District Court, Ninth Circuit

January 29, 2014

SYNOPSYS INC., Plaintiff(s),


DONNA M. RYU, Magistrate Judge.

Before the court is a joint discovery letter submitted by Plaintiff Synopsys Inc. and Defendant Mentor Graphics Corp. [Docket No. 113.] Mentor seeks entry of a protective order in this litigation that mirrors the protective order in other litigation between the parties pending before the District of Oregon. Synopsys urges the continued use of this district's model protective order ("Model PO"), which has by default governed the case since discovery began in March 2013. In particular, Synopsys wants the protection of the prosecution bar contained in the Model PO, while Mentor does not. On January 14, 2014, the court ordered the parties to submit supplemental briefing addressing the extent to which the issues, subject matters of the inventions, and subject matters of highly confidential information overlapped between the Oregon case and this case. [Docket No. 122.] The court held a hearing on the letter on January 23, 2014. For the reasons stated below and at the hearing, Mentor's motion is granted in part and denied in part.


On December 21, 2012, Synopsys filed a complaint against Mentor alleging four counts of patent infringement.[1] [Docket No. 1.] This lawsuit is only one of four active district court actions between Synopsys and Mentor. The other three actions have been consolidated into one and are pending in the District of Oregon.[2]

The parties are apparently also engaged in litigation in Japan and in an inter partes review ("IPR") before the Patent and Trademark Office, see Letter at 3, but have not provided this court with details about the subject matter of those proceedings.

Synopsys avers that it is a direct competitor of Mentor, as they are the first and third largest providers of electronic design automation tools in the world. Letter at 6.

A. The Oregon Protective Order

On January 26, 2011, the Oregon court entered a stipulated protective order (the "Oregon PO").[3] At the time, Synopsys was not a party to the Oregon litigation, as it had not yet acquired EVE.

While the Oregon PO does not have the Model PO's prosecution bar, it does contain provisions that are not in the Model PO that reduce the risk of disclosing sensitive information to individuals involved in the patent prosecution process. For example, the Oregon PO states that materials designated as "HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY" may be viewed at outside counsel's office by two Designated In-House Counsel (and their administrative staff or paralegals), provided that those Designated In-House Counsel are "(i) not involved in competitive decision-making activities such as pricing and product design; or (ii) not involved in patent prosecution related to emulation, functional verification, or logic synthesis tools, " and that the receiving party notify the designating party in writing that those materials will be disclosed to the in-house counsel. Oregon PO at ¶ 10. Furthermore, "[a]ny Designated In-House Counsel shall not engage in any competitive decision-making or restricted patent prosecution for six months after the individual's last access of HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY' information, " id., and may not possess such documents but may only view them at "at outside counsel's office." Id. at ¶ 10(c).

On July 10, 2013, after the other case that Synopsys filed in this district was transferred to the District of Oregon, Synopsys moved the Oregon court to modify the Oregon PO to, inter alia, add a prosecution bar. See Docket No. 394, Mentor Graphics, No. 10-cv-954-MO (D. Or. July 10, 2013). The court denied the motion and declined to add a prosecution bar to the Oregon PO. See Docket No. 409, Mentor Graphics, No. 10-cv-954-MO (D. Or. July 19, 2013).

B. The Model Protective Order

This district's Patent Local Rule 2-2 states that "the Protective Order authorized by the Northern District of California shall govern discovery unless the Court enters a different protective order. The approved Protective Order can be found on the Court's website."[4] Thus, by default, the parties have been operating under the Model PO since discovery began in March 2013. However, the parties appear to have agreed upon some modifications to the Model PO; Mentor avers that the parties have employed certain provisions of the Oregon PO regarding source code and product inspection that do not have parallels in the Model PO. See Docket No. 107 at 10.

The Model PO includes a prosecution bar provision that states:

Absent written consent from the Producing Party, any individual who receives access to "HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY" or "HIGHLY CONFIDENTIAL - SOURCE CODE" information shall not be involved in the prosecution of patents or patent applications relating to [insert subject matter of the invention and of highly confidential technical information to be produced], including without limitation the patents asserted in this action and any patent or application claiming priority to or otherwise related to the patents asserted in this action, before any foreign or domestic agency, including the United States Patent and Trademark Office ("the Patent Office"). For purposes of this paragraph, "prosecution" includes directly or indirectly drafting, amending, advising, or otherwise affecting the scope or maintenance of patent claims.[5] To avoid any doubt, "prosecution" as used in this paragraph does not include representing a party challenging a patent before a domestic or foreign agency (including, but not limited to, a reissue protest, ex parte reexamination or inter partes reexamination). This Prosecution Bar shall begin when access to "HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY" or "HIGHLY CONFIDENTIAL - SOURCE CODE" information is first received by the affected individual and shall end two (2) years after final termination of this action.

Thus, under the Model PO, anyone who views the designated information, including outside counsel, becomes subject to the two-year prosecution bar. By comparison, under the Oregon PO, only Designated In-House counsel who are not already competitive decision-makers or patent prosecutors in the proscribed subject area are prohibited from engaging in those activities for six months as a consequence of viewing protected documents. Outside counsel may view the protected information without triggering the limitations on future practice that are imposed through a prosecution bar.

C. Other Differences Between Oregon PO and Model PO

The Oregon PO has additional provisions that the Model PO does not: (1) it allows the parties to use evidence produced in Oregon as a good faith basis for an allegation in other litigation, or to request the information in other litigation, whereas the Model PO does not address this issue; (2) it has a fourth tier of confidentiality (undesignated; confidential, highly confidential; and third-party confidential), whereas the Model PO has only three; (3) it has detailed procedures for designating and marking confidential material; and (4) it creates procedures for the inspection of source code and products. Letter at 2-3, 5. Synopsys' position with respect to these additional terms is not clear from the parties' joint letter. Instead, the focus of the parties' dispute is the prosecution bar in the Model PO.


Federal Rule of Civil Procedure 26(c) "confers broad discretion on the trial court to decide when a protective order is appropriate and what degree of protection is required." Seattle Times Co. v. Rhinehart, 467 U.S. 20, 36 (1984). "The trial court is in the best position to weigh fairly the competing needs and interests of parties affected by discovery. The unique character of the discovery process requires that the trial court have substantial latitude to fashion protective orders." Id.

"[T]he determination of whether a protective order should include a patent prosecution bar is a matter governed by Federal Circuit law." In re Deutsche Bank Trust Co. Americas, 605 F.3d 1373, 1378 (Fed. Cir. 2010). Generally, a party seeking to include a prosecution bar in a protective order carries the burden of showing good cause for its inclusion. Id. Here, however, the Model PO has been approved by the court and governs discovery unless the court enters a different protective order. See N.D. Cal. Patent L.R. 2-2. In fact, the parties have been conducting discovery under the Model PO since March 2013. Under ordinary circumstances, "the court treats the model protective order as setting forth presumptively reasonable conditions regarding the treatment of highly confidential information." Kelora Sys., LLC v. Target Corp., No. 11-cv-2284 CW LB, 2011 WL 6000759, at *2 (N.D. Cal. Aug. 29, 2011).


A. Inclusion of Prosecution Bar

Mentor argues that Synopsys' motion for a prosecution bar in the Oregon PO was denied by that court, and its current insistence on the prosecution bar in this litigation is an attempt to get a second bite at the apple. However, while the Oregon court's rejection of the prosecution bar is relevant to the court's consideration, it is not dispositive.[6] This court is not bound to the decisions of the Oregon court, particularly where the Model PO reflects this district's default position on the appropriate terms of a protective order in a patent case. Moreover, in the Oregon case, Synopsys had moved to add the prosecution bar to the protective order after the parties had for two years been operating under a protective order that did not include a prosecution bar; here, the prosecution bar operates as a default, and it is Mentor who seeks to disrupt the status quo, as the parties have been abiding by the Model PO since March 2013.

However, the court does consider the Oregon PO to the extent that having a different protective order in this case would create confusing obligations for the parties. Mentor contends that having a prosecution bar in this case but not in any of the other proceedings between the parties would create inconsistent responsibilities. If the same documents are produced both here and in Oregon, certain Mentor attorneys would be permitted to view those materials and be involved in the prosecution of patents relating to the subject matter of those materials under the Oregon PO, but the same attorneys could be prohibited from those same activities if the Model PO imposes a prosecution bar on them.[7] Such an outcome would contradict the intention of the Oregon court by prohibiting behavior that it has permitted.

While Synopsys admits it has produced some of the same materials in discovery in Oregon and here, it also contends that it has produced certain materials only in this case, and that those materials involve highly confidential information that could be used to damage its competitive position. The parties also stated at the hearing that they would be able to determine whether a document had been produced only in this case, as opposed to in both cases or only in the Oregon case.

The judges of this district have adopted the Model PO, inclusive of a prosecution bar, and as such it is presumptively reasonable. Mentor has not articulated any specific potential difficulties it will face as a result of being limited by the prosecution bar to certain counsel in this litigation or being required to engage other counsel for purposes of patent prosecution, other than a generalized concern that the prosecution bar will restrict its access to the "technical know-how" of all of its attorneys.[8] These factors counsel in favor of requiring the parties follow the Model PO's prosecution bar. However, to avoid creating inconsistent obligations for counsel, only protected information that is produced solely in this case and not in the Oregon case shall be subject to a prosecution bar. Discovery that is produced both here and in the Oregon case shall continue to be governed by the Oregon PO.

B. Subject Matter and Scope of Prosecution Bar

Synopsys proposes that the prosecution bar cover the subject matters of "emulation, functional verification, or logic synthesis tools." Mentor requests that, if the court orders a prosecution bar, it should be limited to the purported technology of the asserted patents, which Mentor describes as "logic synthesis tools." Letter at 4.

Synopsys admits that the patents-in-suit cover only logic synthesis. See Docket No. 123 at 1 ("The asserted patents in this case concern logic synthesis...."). At the hearing, Synopsys averred that, despite the narrow subject matter of the patents-in-suit, Synopsys's inventions that practice the patents involve other technology in addition to logic synthesis, and that discovery about those products necessarily includes ancillary confidential and proprietary information about those other technologies. Mentor responded that Synopsys had not produced documents sufficient for Mentor to evaluate this assertion.

The court declines to rule on the subject matter scope of the prosecution bar, and instead orders the parties to meet and confer on the matter. Synopsys shall produce responsive documents to Mentor to permit Mentor to evaluate Synopsys's contention that discovery in this case implicates Synopsys's confidential technical information about technologies outside the field of logic synthesis.

The parties also indicated at the hearing that they had not met and conferred on certain other elements of the protective order. Accordingly, the court orders the parties to meet and confer on all above matters and submit a stipulated proposed protective order by February 28, 2014. If the parties are unable to resolve their disputes, they shall file a joint discovery letter on the remaining disputes by the same date. Any such joint discovery letter shall include as attachments documents supporting each party's arguments regarding the subject matter of the prosecution bar.


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