United States District Court, N.D. California, San Jose Division
ORDER GRANTING-IN-PART DEFENDANTS' MOTION TO ENFORCE PROSECUTION BAR AND REMEDY PROTECTIVE ORDER VIOLATION
(Re: Docket No. 546)
PAUL S. GREWAL, Magistrate Judge.
Four years ago in this case, the court entered a stipulated protective order patterned on the Northern District's Model Protective Order. The order was explicit that any individual who receives highly confidential, attorney's eyes only or source code information may not "be involved in the prosecution of patents or patent applications relating to laser drivers (including but not limited to VCSEL drivers), transimpedance amplifiers, parallel optical interconnects, and optical communication systems (using VCSELs)." Despite this unambiguous bar on prosecution, Plaintiffs Avago Technologies, Inc., et al.'s expert, Dr. Dennis Deppe, prosecuted at least one patent and patent application relating to optical communication systems using VCSELs, parallel optical interconnects and laser drivers (including VCSEL drivers) after receiving confidential information from Defendant IPtronics et al. and third parties. IPtronics now moves to enforce the prosecution bar and remedy the protective order violation. The court GRANTS-IN-PART IPtronics' motion, as explained below.
In patent cases like this one, stipulated protective orders with limits on patent prosecution are common. One party, or both, recognizes the need to produce sensitive information to the other side, but legitimately fears that the information may find its way into the other's patents and patent applications. A mere ban on such misuse is not enough; apart from the challenge of knowing what is happening in an ex parte proceeding, there is the matter of proof. "There may be circumstances in which even the most rigorous efforts of the recipient of such information to preserve confidentiality in compliance with the provisions of such a protective order may not prevent inadvertent compromise. As aptly stated by the District of Columbia Circuit, it is very difficult for the human mind to compartmentalize and selectively suppress information once learned, no matter how well-intentioned the effort may be to do so.'" And so parties regularly agree to a complete ban on prosecution in technical arts similar to those of the patents-in-suit.
This case arises from Defendants' claims for infringement of Avago's patent rights under United States Patent Nos. 5, 359, 447 and 6, 947, 456, as well as for false descriptions or representations contrary to the Lanham Act and misappropriation of Avago's trade secrets. Avago retained Deppe as an expert as of the date it filed the original complaint in June 2010. The parties stipulated to a protective order, which the court entered in May 2011. The relevant portion of the order 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 laser drivers (including but not limited to VCSEL drivers), transimpedance amplifiers, parallel optical interconnects, and optical communication systems (using VCSELs), including without limitation the Patents-in-Suit and any patent or application claiming priority to or otherwise related to the Patents-in-Suit, 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. 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) nor does it include sharing work product based on information and material obtainable from asserted public prior art. 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.
The "relating to" language in this provision is taken from this court's "model protective order for litigation involving patents, highly sensitive information and/or trade secrets." The prosecution bar defines the activity precluded as "including drafting, amending, advising, and affecting the scope or maintenance of patent claims." It also defines the subject matter prohibited: topics "relating to laser drivers (including but not limited to VCSEL drivers), transimpedance amplifiers, parallel optical interconnects, and optical communication systems (using VCSELs)" as well as the precise subject matter of the patents-in-suit. The prosecution bar applies when a person first receives designated confidential information and stays in effect until two years after the final termination of this action.
Roughly one year later, Avago disclosed Deppe as an expert to IPtronics. Consistent with this disclosure, Deppe received information designated by IPTronics and third parties as "Highly Confidential-Attorneys' Eyes Only." But even as he received this information, Deppe was named inventor on and involved in the prosecution of U.S. Patent No. 8, 774, 246, filed in January 2012, and U.S. Patent Application No. 14/282, 547, filed in May 2014-a continuation-in-part of the application that resulted in the issuance of the 246 patent. The 246 patent was omitted from the list of pending applications in Deppe's curriculum vitae filed with the court in April 2012.
Claiming that both the 246 patent and the 547 application refer to optical communication systems using VCSELs, parallel optical interconnects and laser drivers, including VCSEL drivers,  IPtronics now seeks an order that (i) Deppe immediately return all designated information he has received in this action and confirm he will make no further use of such information, (ii) Deppe be precluded from testifying in this action and (iii) Avago and its counsel be jointly and severally sanctioned for violation of the stipulated protective order in the form of fees and costs.
The court has jurisdiction under 28 U.S.C. §§ 1331, 1338(a), 1338(b) and 1367(a). The matter was referred to the undersigned pursuant to Fed.R.Civ.P. 72(a).
Remedies such as "[p]reclusive sanctions are within the court's discretion." Magistrate judges may issue monetary and other non-dispositive sanctions.
Fed. R. Civ. P. 37(b)(2)(A) authorizes remedies for violations of protective orders. These remedies include "prohibiting the disobedient party from... introducing designated matters in evidence." Violation of a prosecution bar also may require a return of any confidential information and a limitation on testimony. In addition, "the court must order the disobedient party, the attorney advising that party, or both to pay the reasonable expenses, including attorney's fees, caused by the failure, unless the failure was substantially justified or other circumstances make an award of expenses unjust." "[T]o determine if conduct violates a protective ...