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Mad Catz Interactive, Inc. v. Razor Usa, Ltd.

United States District Court, S.D. California

August 19, 2014

Mad Catz Interactive, Inc., Plaintiff,
v.
Razor USA, Ltd., Defendant.

ORDER GRANTING MAD CATZ INTERACTIVE INC.'S MOTION TO MODIFY THE PROTECTIVE ORDER [ECF No. 35]

JILL L. BURKHARDT, Magistrate Judge.

This is a patent infringement case. Before the Court is Plaintiff Mad Catz Interactive Inc.'s Motion to Modify the Protective Order (ECF No. 35) filed on May 13, 2014. The Motion seeks to modify the terms of the operative protective order such that attorney Whitney E. Peterson, Mad Catz's General Counsel and lead trial attorney, can review and access documents and information that Defendant Razer USA Ltd. or other parties in this case produced and marked as highly confidential. On May 29, 2014, Defendant Razer filed its Opposition to the Motion. (ECF No. 36.) Then, on June 5, 2014, Plaintiff filed its Reply in support of the Motion. (ECF No. 40.) The Court held oral argument on the Motion on July 10, 2014. (ECF No. 48.) Having considered the arguments and submissions of the parties, the Court hereby GRANTS Plaintiff's Motion for the reasons outlined below.

I. Factual Background

Plaintiff, Mad Catz Interactive, Inc., filed suit against Defendant, Razer USA, Ltd., for patent infringement. Plaintiff holds an exclusive license to, inter alia, produce and sell certain computer gaming mice with an adjustable palm rest which fall within the scope of Patent No. 6, 175, 370 (the 370 Patent). Plaintiff alleges Defendant's "Ouroboros" mouse falls within the scope of this Patent. Defendant counterclaims that Plaintiff infringes on its Patent No. 8, 605, 063 (the 063 Patent) which covers certain backlighting technology for gaming keyboards.

The Court entered a protective order governing all document production on May 8, 2014. As per the protective order, any documents considered to be most sensitive by the producing party, such as documents reflecting trade secret or other confidential research, development, financial, or other highly sensitive commercial or business information, would be marked "HIGHLY CONFIDENTIAL - DESIGNATED COUNSEL'S EYES ONLY." (ECF No. 34 at 5.) Thus, only "designated counsel" may access and review documents and information marked "highly confidential."

According to the terms of the protective order, Mr. Peterson, Mad Catz's General Counsel and lead trial attorney for this case, has limited access to the documents. The protective order defines who is included as "designated counsel." With respect to Mr. Peterson, the protective order provides that Mr. Peterson is designated counsel, but "only with respect to documents and information produced by third party Humanscale Corporation pursuant to a subpoena issued by Razer USA, Ltd. and not with respect to any documents or information produced by Razer USA, Ltd. or any other third party (unless such other third party agrees that Mr. Peterson may have access to such documents or information)."[1] (ECF No. 34 ΒΆ4.)

Plaintiff filed the instant motion seeking to amend the protective order to remove the limitations placed on Mr. Peterson as designated counsel, thereby providing him with authorized access to all documents and information produced in this case. Defendant opposes the amendment sought by Plaintiff, arguing Mr. Peterson is a competitive decision maker for Mad Catz and any inadvertent disclosures of sensitive information could both irreparably harm Razer and provide Mad Catz with an unfair competitive advantage.

II. Legal Standard

Parties seeking discovery are generally entitled to all information "reasonably calculated to lead to the discovery of admissible evidence." Fed.R.Civ.P. 26(b)(1). "On the other hand, responding parties are entitled to protection from undue burden in discovery, including protection from misuse of trade secrets by competitors." Brown Bag Software v. Symantec Corp., 960 F.2d 1465, 1470 (9th Cir. 1992); Fed.R.Civ.P. 26(c)(1)(G). A court reviewing a protective order dispute must balance these interests.

In this case, these interests must be balanced to determine whether Defendant Razer is entitled to the continued protection provided by the operative protective order insofar as it restricts attorney Peterson's access to highly confidential information produced in this litigation. Here, because the parties stipulated to the protective order, it was entered by the Court without a finding of good cause. (ECF Nos. 33, 34.) As such, Defendant bears the burden of showing good cause exists for the continued protection it seeks. In re Roman Catholic Archbishop of Portland in Oregon, 661 F.3d 417, 424 (9th Cir. 2011) ("When the protective order was a stipulated order and no party ha[s] made a good cause' showing, ' then the burden of proof... remain[s] with the party seeking protection.'"); Phillips v. Gen. Motors Corp., 307 F.3d 1206, 1210-11, n.1 (9th Cir. 2002) ("the burden of proof will remain with the party seeking protection when the protective order was a stipulated order and no party had made a good cause' showing.").

Further, the Ninth Circuit has developed a balancing test to determine when a protective order restricting an attorney's access to highly confidential information may be appropriate. See Brown Bag, 960 F.2d at 1470. A court must weigh the prejudice to the party whose attorney is being denied access to protected documents against the risk of inadvertent disclosure of highly confidential information and the potential harm of inadvertent disclosure to the party wishing to maintain the protective order. Id. In doing so, the Court is to "examine factually all the risks and safeguards surrounding inadvertent disclosure" and factor in "the nature of the claims and of a party's opportunity to develop its case through alternative discovery procedures." Id. This analysis "must be determined... by the facts on a counsel-by-counsel basis." U.S. Steel Corp. v. United States, 730 F.2d 1465, 1468 (Fed. Cir. 1984).

III. Analysis

A. Harm to Razer from Modifying ...


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