It appears that in February 1995, soon after work on the Vigneri harvester had begun, Shuknecht came to believe that one of its former employees, Scott Mabon, might be working with others, including Vigneri, who were making, or thinking of making, onion harvesters. Accordingly, Shuknecht, through its attorney Martin LuKacher, wrote to Mabon reminding him that he possessed proprietary and confidential information concerning Shuknecht harvesters, and that he had signed an agreement not to divulge any such information to others. Item 1, Ex. B. At the same time, LuKacher wrote to Vigneri, stating that Shuknecht was the owner of the '278 and '046 patents, that those patents protected certain features of onion harvesters, and that Vigneri had not been authorized to use any of the inventions covered by the patents Id., Ex A. Neither Mabon nor Vigneri responded. Item 1, P 6(a).
On September 8, 1995, LuKacher wrote again to Vigneri, stating that he understood that Vigneri had completed an onion harvester that might be covered by one or more claims of the '278 and '046 patents. Item 1, Ex. C. He requested that Vigneri permit him to inspect the machine, within the following week. The inspection would be at the Vigneri premises, and would take about one half hour. If Vigneri did not permit the inspection, LuKacher would "be justified in inferring that the Shuknecht patents are being infringed," and would take legal action. Id.
Four days later, on September 12, 1995, Vigneri responded through its attorney, David Teske. Item 1, Ex. D. Teske informed LuKacher that the Vigneri harvester was not available for inspection, due to the demands of the current harvest season. Id. at 1. He explained in detail why he believed that it did not infringe any claim of the '278 or '046 patents, and indicated that since there was no infringement, he would consider the matter closed. Id. at 1-3.
LuKacher persisted. On September 14, 1995, he wrote to Teske again, asking to be allowed to inspect the Vigneri machine on Friday September 15, at 9:00 a.m., before harvesting of the onion crop would begin for that day. Item 1, Ex. E. Such an inspection would help to "clear the air." Id. LuKacher attached to his letter a copy of the '000 patent, which had been issued on July 11, 1995. However, he made no claim that Shuknecht had any reason to believe that the Vigneri machine infringed any of the claims of that patent. Id.
Teske responded on the same day, indicating that Vigneri would grant the request for inspection when the harvesting season ended, by early October at the latest. Item 1, Ex. F. Any inspection would have to be "under an 'attorney's-eyes-only' Confidential Disclosure Agreement as the harvester includes trade secrets of P. Vigneri & Sons." Id.
In the next few days, further correspondence between LuKacher and Teske established that although an accommodation might be reached over the question of confidentiality, there would be no agreement allowing for an immediate inspection. Item 1, Exs. G-I; Item 15, Ex. G; see also, Item 6.
On September 21, 1995, Shuknecht filed its petition in this proceeding, under Fed. R. Civ. P. 27(a), seeking, inter alia, an order requiring Vigneri to allow inspection of its harvester by Shuknecht. Items 1-3. It asserted that it was a prospective plaintiff in an action to enforce the '278, '046, and '000 patents against Vigneri, but had been precluded by Vigneri's actions from obtaining sufficient evidence to support the filing of an infringement claim. Item 1.
In a letter dated October 2, 1995, Vigneri informed the court that it remained willing to allow an inspection at a convenient time after the conclusion of the harvest, if the court were to issue a protective order to safeguard Vigneri's trade secrets. Item 6, p. 2. Accordingly, on October 3, 1995, the court issued an order under which Shuknecht's attorney, LuKacher, would be allowed to conduct a visual inspection of the Vigneri harvester, on October 10, 1995, for the purpose of confirming the absence of patent infringement. Items, pp. 1-2. Under the terms of the order, LuKacher was to maintain the confidentiality of, and not provide to anyone, including Shuknecht, any information concerning or relating to the Vigneri harvester obtained through the inspection. Id. Further, he was not to produce any record (e.g., written description, oral description on audio tape, diagrams, photographs, or videotape) of the inspection. Id.
The inspection was duly carried out on October 10, 1995. According to papers submitted by Vigneri, LuKacher performed a thorough inspection, and made a photographic record using both still and video cameras. Item 15, P 12. He was allowed unfettered access to the harvester. Id., P 13. Vigneri's attorney, Teske, orally identified each of the features of the machine that Vigneri claimed as a trade secret. Id. Vigneri video-taped the entire inspection. Id., P 14. At one point, LuKacher stated that he disagreed that anything that had been identified as a trade secret by Vigneri was, in fact, so. Id. at 15. Near the end of the inspection, LuKacher requested clarification on the configuration of the harvester's sickle bar cutter. Id., P 16. That configuration was identified by Vigneri as a trade secret. Id. LuKacher requested that Vigneri provide a drawing of the sickle bar cutter cross-section, for his review. Vigneri complied with this request. Id., PP 17-18.
On October 19, 1995, LuKacher notified the court that the inspection had taken place, and that it revealed no infringement of the Shuknecht patents. Item 7. The matter could be closed, he stated, except for Vigneri's claims of confidentiality. Id. He maintained that "in effect the entire machine is alleged to be a trade secret," and requested that Vigneri be ordered to show cause why any aspect of the design is a trade secret over the machines shown in the Shuknecht patents. Id.
Vigneri responded promptly. In a letter to the court dated October 23, 1995, it expressed concern over LuKacher's application, which it characterized as a request that the October 3, 1995, protective order be summarily voided. Item 10. It set forth reasons why the protective order should remain in place, and requested that the court dismiss the underlying Fed. R. Civ. P. 27 proceeding, without modification of the order. Id. The parties made further letter submissions to the court. Items 8 and 9. Shuknecht then filed a formal motion for an order requiring Vigneri to show cause why the protective order should not be rescinded. Item 11.
In support of its motion, Shuknecht maintains that during the course of his inspection of the Vigneri harvester, LuKacher observed no trade secrets. Item 11, p. 1. It also maintains that Vigneri has identified the alleged trade secrets in such vague and general terms that they encompass the entire machine. Id. at 1-2. Vigneri, it contends, has failed to demonstrate the need for confidentiality, and the protective order should therefore be lifted. Id. at 3-4.
In response, Vigneri maintains that Shuknecht has been frustrated in its attempts to obtain the Vigneri trade secrets, and is now improperly seeking the court's assistance to force their disclosure. Item 14, p. 1. It argues that Shuknecht must bear the burden of showing "good cause" for modification of the protective order, and that Shuknecht has failed to meet that burden. Id. at 4-5. It has not demonstrated that Vigneri has no trade secrets to protect. Id. at 6-12. The protective order was narrowly tailored to place the parties in the positions they held prior to the inspection, except insofar as the inspection might have revealed infringement of the Shuknecht patents; thus it ensured that Shuknecht's Fed. R. Civ. P. 27 motion would not become an improper means of obtaining the Vigneri trade secrets. Id. at 13. It was foreseeable that Shuknecht would challenge Vigneri's assertion of trade secrets, and Vigneri was willing to allow the inspection only on the basis that those secrets would be protected. Id. at 13-14.
Shuknecht has filed a reply memorandum. Item 17. It reiterates its position that Vigneri has failed to adequately designate its trade secrets. Id. at 1-2. Further, it maintains that Vigneri has mischaracterized the nature of Shuknecht's motion, and has wrongly accused Shuknecht of attempting to acquire trade secrets improperly. Id. at 2-3. More specifically, it argues that the protective order was an "umbrella" order, issued:
with the understanding that the court would entertain motions if Shuknecht believed that the protective order was used to designate items which were not trade secrets, erroneously or improperly. Under such circumstances, the burden of going forward is on the proponent of the trade secret.
Id. at 2.
In ruling on Shuknecht's motion, the nature of this proceeding must be kept in mind. Shuknecht initiated the proceeding as a petition to perpetuate evidence under Fed. R. Civ. P. 27. It claimed that the Vigneri harvester might infringe one or more of its patents and that Vigneri had thwarted its efforts to obtain sufficient evidence to support the filing of a patent infringement action.
The record makes it clear that from the start, Vigneri was willing to allow Shuknecht's attorney, LuKacher, to inspect the harvester to try to obtain what Shuknecht claimed it was seeking -- some evidence of patent infringement. Vigneri's concern throughout has been to protect what it believes to be its own trade secrets. Indeed, in its initial communication to the court, it indicated that it would have no objection to LuKacher's inspection if its trade secrets were protected by a court order. Item 6, p. 2. Accordingly, the court ordered that the inspection could take place, for the limited purpose of confirming (or refuting) Vigneri's claim that there was no infringement of the Shuknecht patents. Item 5. With this exclusive purpose in mind, LuKacher was directed to maintain the confidentiality of all other information concerning or relating to the harvester obtained through his inspection. Id. at 2.
Shuknecht has accomplished the purpose of its Fed. R. Civ. P. 27 petition by determining that the Vigneri harvester does not infringe its patents. It is disingenuous, to say the least, for Shuknecht to now seek disclosure of information obtained incidentally by LuKacher during the course of the court-ordered inspection. This court will not countenance this attempt by Shuknecht to gain access, through an inspection ordered by the court for the sole purpose verifying the absence of patent infringement, to what Vigneri strenuously argues are its trade secrets. Neither will it, in the context of a Fed. R. Civ. P. 27 proceeding to perpetuate evidence of patent infringement, be drawn into a dispute between Shuknecht and Vigneri as to whether or not Vigneri's trade secrets claims are, in fact supportable.
"Whether to lift or modify a protective order is a decision committed to the sound discretion of the trial court." In re "Agent Orange" Product Liability Litigation, 821 F.2d 139, 147 (2d Cir.), cert. denied sub nom. Dow Chemical Co. v. Ryan, 484 U.S. 953, 98 L. Ed. 2d 370, 108 S. Ct. 344 (1987). The Second Circuit has not yet established a legal standard applicable to a motion by a party to lift or modify a protective order for purely private reasons. See Bayer AG and Miles, Inc. v. Barr Laboratories, Inc. 162 F.R.D. 456, 460 (S.D.N.Y. 1995). In Bayer, the court developed a standard under which four factors should be weighed, (1) whether good cause exists for the modification, (2) the nature of the protective order, (3) the foreseeability, at the time of issuance of the order, of the modification requested, and (4) the parties' reliance on the order. Id. at 462-63. The Bayer standard is simply and appropriately applied in this case.
1. Good Cause
As discussed in Bayer, Fed. R. Civ. P. 26(c) provides that a protective order may be entered only upon a showing of "good cause" by the party seeking the order, but is silent as to who bears the burden on a motion to modify or lift the order. Bayer AG and Miles, Inc. v. Barr Laboratories, Inc. 162 F.R.D. at 463. This court accepts the Bayer position that:
If good cause was not shown when a protective order was initially issued, then the party seeking to maintain the order should bear the burden of establishing the need for continued protection. However, if the protective order was supported by a showing of good cause, the burden should be on the party seeking modification.