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Infosint S.A. v. H. Lundbeck A.S.

May 16, 2007

INFOSINT S.A., PLAINTIFF,
v.
H. LUNDBECK A.S., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Ronald L. Ellis, United States Magistrate Judge

MEMORANDUM OPINION & ORDER

I. INTRODUCTION

Pending before this Court is plaintiff, Infosint S.A.'s ("Infosint"), motion for entry of a protective order pursuant to Federal Rule of Civil Procedure 26(c)(7). Infosint and defendants, H. Lundbeck A.S., Lundbeck Inc., and Forest Laboratories, Inc. (collectively, "Lundbeck"), agree that a protective order is necessary to protect the confidential information being exchanged between the parties and are ready to enter into a stipulated agreement, but disagree as the scope of the proposed order. Infosint requests that the protective order permit information designated as confidential to be accessible to all parties' designated counsel whereas Lundbeck proposes an order in which confidential information would be available to all counsel but only United States trial counsel would have access to information designated by the parties as highly confidential. For the reasons set forth below, Infosint's request is GRANTED, in part, and DENIED, in part.

II. BACKGROUND

Infosint, as owner of two patents that claim processes for the synthesis of the drug citalopram, brings this action for infringement against Lundbeck. Infosint S.A.'s Memorandum in Support of its Motion for Entry of Protective Order ("Pl. Mem.") at 1. Infosint claims that Lundbeck has infringed upon its patents by marketing products made by the claimed processes in the United States. Id. Because the nature of discovery in this case requires the production of trade secrets and other confidential material, all parties agree that a protective order is necessary. Id. The parties' dispute is over whether two of Infosint's designated counsel, Stefano de Bosio and Gianfranco Dragotti, will have full access to the information designated as confidential. Infosint relies on de Bosio, an attorney with an Italian law firm, Studio Legale Nodari & Associati, for commercial and corporate legal advice. Id. at 4, 6. Dragotti is also an attorney with an Italian law firm, Dragotti & Associati. Id. at 4. Dragotti advises Infosint on patent issues. Id.

Infosint's proposed protective order designates one category of materials, comprised of trade secrets or other proprietary information, as confidential. Id, Exh. A at 1. Access to this information by counsel would be limited to outside counsel for all parties who have entered an appearance in this litigation: de Bosio, Paolo Nodari, and Dragotti, outside Italian counsel for Infosint; and Charles Ryan, John Meidahl Petersen, and Thomas Kirkback, in-house counsel for Lundbeck. Id, Exh. A at 3. Lundbeck objects, arguing that Infosint's proposed order does not adequately safeguard the highly sensitive information Lundbeck is disclosing. Defendants' Memorandum in Opposition to Plaintiff's Motion for Entry of a Protective Order ("Def. Mem.") at 1. In the alternative, Lundbeck suggests a protective order with two levels of confidentiality. Id., Exh. A at 1. Trade secrets and other proprietary information would be designated as confidential and available to all counsel listed above. Id., Exh. A at 2-4. In addition, each side would be permitted to designate certain information as "Outside Counsel Eyes Only." Id., Exh. A at 2. This category would presumptively include "pending patent applications, current manufacturing processes, and ongoing research and development concerning 5-carboxyphthalide and/or citalopram and/or processes for making them." Id. Only outside counsel for all parties and Paolo Nodari, Italian counsel for Infosint,*fn1 would have access to the information designated as "Outside Counsel Eyes Only." Infosint's Italian counsel, de Bosio, and its patent attorney, Dragotti, as well as Lundbeck's in-house counsel, would have the information designated as confidential available to them, but would be denied access to information classified as "Outside Counsel Eyes Only."

II. DISCUSSION

A. Standard of Review

According to Rule 26(b) of the Federal Rules of Civil Procedure, a party "may obtain discovery regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action." FED. R. CIV. P. 26(b)(1). Rule 26(c)(7) authorizes courts, for good cause shown, to "make any order which justice requires to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense, including . . . that a trade secret or other confidential research, development, or commercial information not be revealed or be revealed only in a designated way . . . " FED. R. CIV. P. 26(c)(7). "The party seeking a protective order has the burden of demonstrating that good cause exists for issuance of the order." Uniroyal Chem. Co. v. Syngenta Crop Prot., 224 F.R.D. 53, 56 (D. Conn. 2004) (internal citations omitted); see also Dove v. Atlantic Capital Corp., 963 F.2d 15, 19 (2d Cir.1992) (citations omitted). More than "[b]road allegations of harm unsubstantiated by specific examples or articulated reasoning," good cause requires "the moving party [to] demonstrate that 'disclosure will work a clearly defined and very serious injury.'" Uniroyal Chem. Co., 224 F.R.D. at 56 (internal citations omitted).

"Whether information merits protection in a particular case depends upon: 1) the extent to which the information is known outside the business; 2) the extent to which information is known to those inside the business; 3) the measures taken to guard the secrecy of the information; and 4) the value of the information to the business and its competitors." Id. at 56-57. Protective orders limiting access to highly confidential information to counsel and experts "are commonly entered in litigation involving trade secrets and other confidential research, development, or commercial information." Vesta Corset Co., Inc. v. Carmen Foundations, Inc., 1999 WL 13257, at *3 (S.D.N.Y. Jan 13, 1999) (internal citations omitted). Here, the information the parties seek to protect consists of trade secrets and other confidential or proprietary information not known to the public or the receiving party. Pl. Mem., Exh. A at 1. The action concerns the alleged infringement by Lundbeck of patents, held by Infosint, the subject of which is a "novel method of making one of the intermediates in the overall . . . synthesis" of the drug citalopram. Id. at 1. As the parties themselves anticipate, discovery will necessarily involve the exchange of proprietary information, the disclosure of which is likely to cause economic harm. -- is appropriate subject matter for a protective order. Therefore, this information merits a protective order pursuant to Rule 26(c)(7).

B. Balancing of Competing Interests

"Where a party seeks a protective order restricting the scope of discovery of technical, proprietary information, the court should balance . . . 'the interests in full disclosure of relevant information and reasonable protection from economic injury.' (internal citation omitted) Relevant considerations in striking this balance include: 1) whether the person receiving the confidential information is involved in competitive decision making or scientific research relating to the subject matter of the patent, 2) the risk of inadvertent disclosure of proprietary information, 3) the hardship imposed by the restriction, 4) the timing of the remedy and, 5) the scope of the remedy." Uniroyal Chem. Corp., 224 F.R.D. at 57 (internal citations omitted). "The competing interests to be evaluated in determining the outcome of such a dispute are one party's right to broad discovery and the other party's ability to protect its confidential materials from misuse by competitors." Medimmune, Inc. v. Centocor, Inc., 271 F. Supp. 2d 762 (D. Md. 2003) (internal citations omitted).

Whether a protective order should bar access to information by one party's attorney depends on the potential for "inadvertent or accidental disclosure." U.S. Steel Corp. v. United States, 730 F.2d 1465, 1468 (Fed. Cir. 1984). When conducting an inquiry, courts have adopted a case-by-case analysis, rather than a category-based exclusion policy, looking at "the factual circumstances surrounding each individual counsel's activities, association, and relationship with a party." Id. "[P]roper review of protective orders in cases such as this requires the district court to examine factually all the risks and safeguards surrounding inadvertent disclosure by any counsel, whether in-house or retained." Brown Bag Software v. Symantec Corp, 960 F.2d 1465, 1470 (9th Cir. 1992) (emphasis in original). The inquiry should not be directed at any one attorney's own ethical standards or record. Mikohn Gaming Corp. v. Acres Gaming Inc., 50 U.S.P.Q. 2d 1783, 1784 (D. Nev. 1998). "Even if the competitor's counsel acted in the best of faith and in accordance with the highest ethical standards, the question remains whether access to the moving party's confidential information would create 'an unacceptable opportunity for inadvertent disclosure.'" Id. (quoting U.S. Steel Corp. v. United States, 730 F.2d 1465, 1468 (Fed. Cir. 1984)).

Lundbeck's proposed two-tier system of confidentiality would exclude Infosint's Italian counsel, de Bosio, and its patent attorney, Dragotti, from having access to information designated as "highly confidential." Def. Mem. at 1-2. Lundbeck's proposed order would also prevent disclosure of Infosint's "highly confidential" information to its own in-house counsel. Id. Infosint's proposed order would permit all information designated as confidential under the protective order to be available to ...


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