United States District Court, D. Utah, Central Division
DEFINITIVE HOLDINGS, LLC, a Utah limited liability company, Plaintiff,
POWERTEQ LLC, a Kentucky limited liability company, Defendant.
MEMORANDUM DECISION AND ORDER DENYING PLAINTIFF'S
SHORT FORM DISCOVERY MOTION
B. PEAD MAGISTRATE JUDGE.
Judge Ted Stewart referred this matter to undersigned in
accordance with 28 U.S.C. § 636(b)(1)(A). (ECF No. 22.)
The matter is before the court on Plaintiff Definitive
Holdings, LLC's renewed Motion for Short Form Discovery.
(ECF No. 55.) Definitive Holdings seeks an order that James
E. Conforti, Jr. is “qualified as a Technical Advisor
under the Protective Order” and also requests
guidelines for review of Defendant Powerteq LLC's source
matter is fully briefed and the court has carefully reviewed
the moving papers submitted by the parties. Pursuant DUCivR
7-1(f), oral argument is unnecessary and the court will
determine the motions on the basis of the written papers.
a software patent infringement case involving modifying
software that resides in the electronic control unit in
vehicles. See Amended Complaint, ECF No. 8.
In the Amended Complaint, Definitive Holdings identifies Mr.
James E. Conforti, Jr., approximately six times, as a
co-inventor of patented technology at issue in this matter.
See generally Amended Complaint. Definitive Holdings
once again seeks to have Mr. Conforti qualified as a
Technical Advisor as set forth in the Standard Protective
Order (Protective Order). See DUCivR 26-2(a),
Protective Order available online at
https://www.utd.uscourts.gov/usdc-forms. The court
denied this same request previously without prejudice. (ECF
No. 50.) In that order the court expressed some concerns with
whether Mr. Conforti qualifies to serve as a Technical
Advisor under the requirements of the Protective Order. The
court found that Mr. Conforti's relationship to
Definitive Holdings was unclear based upon the information
before it. Additionally, the court expressed concern about
whether Definitive Holdings was “attempting to
circumvent the overarching principle of the Protective Order
requiring that nominating a disinterested person serve in the
role of Technical Advisor.” (ECF No. 50, p. 4.)
Definitive Holdings renews its motion and attaches an
affidavit from Mr. Conforti in support.
Protective Order governs information produced in this action,
designating information into protective categories such as
Confidential Information - Attorneys Eyes Only and
Confidential Information. It also classifies individuals who
are authorized and not authorized to review the designated
information. See DUCivR 26-2(a), Protective Order
available online at
https://www.utd.uscourts.gov/usdc-forms. Under the
Protective Order terms, parties may designate any person as a
Technical Advisor if certain conditions are met. The term
Technical Advisor refers “to any person who is not a
party to this action and/or not presently employed by the
receiving party or a company affiliated through common
ownership, who has been designated by the receiving party to
receive another party's” Protected Information.
Protective Order p. 4. A Technical Advisor is to sign a
disclosure agreement identifying in relevant part, his or her
affiliation, or lack thereof, with the receiving party.
See Id. at 20. Upon receipt of the disclosure
agreement, the producing party may object in writing within
seven days to the designation. Defendant Powerteq failed to
file a timely objection when Definitive Holdings submitted
the required disclosure agreement to have Mr. Conforti
designated as a Technical Advisor. Although improper, the
court did not hold this failure against Powerteq in its prior
order due to concerns involving the overarching principles of
the Protective Order. (ECF No. 50, p. 4.)
qualify as a Technical Advisor Mr. Conforti cannot be a party
to the action, an employee of Definitive Holdings, or a
“company affiliated through common ownership.”
Protective Order p. 4. Plaintiff Definitive Holdings seeks to
remedy the vague status between it and Mr. Conforti cited to
by the court previously, by submitting another declaration
from Mr. Conforti. Mr. Conforti states: he is one of the
co-inventors of the patent in suit; “Definitive
Holdings is owned indirectly by the Conforti Family Trust
(50%) and, to the best of my knowledge, Rod Barman (50%), my
co-inventor on the patent in suit”; Definitive Holdings
business purpose is to license the patent in suit and if
necessary litigate any infringement; “Rennsport
Research is a business venture” Mr. Conforti co-founded
with a partner and neither Rennsport Research or the partner
in Rennsport Research, has any interest in Definitive
Holdings; Mr. Conforti is not employed by any third party;
and Rennsport Research has no interest in the patent in suit.
(ECF No. 55-1, p. 1-2.) With this background information,
Definitive Holdings argues the Protective Order does not
provide that an ownership interest, such as that Mr. Conforti
has in Definitive Holdings via the trust, is disqualifying.
Thus, Mr. Conforti is not precluded from being a Technical
Advisor because he is not a party to this action and is not
presently employed by the receiving party or a company
affiliated through common ownership. See Protective
questions presented in this dispute-who should have access to
confidential information by being designated a technical
advisor and the underlying concerns of inadvertent disclosure
or misuse of such information-are common questions in our
modern technological competitive landscape. For example, this
court has weighed risks of disclosure and dangers of gaining
an unfair competitive advantage in denying access to a former
business officer and in-house counsel, Catheter
Connections, Inc. v. Ivera Med. Corp., No. 2:14-CV-70
TC, 2014 WL 3945880, at *1 (D. Utah Aug. 12, 2014), in
preventing the reclassification of an expert report with
sensitive information, ClearOne Commc'ns, Inc. v.
Chiang, No. 2:07 CV 37 TC, 2008 WL 4527344, at *1 (D.
Utah Oct. 1, 2008), and in excluding certain individuals from
reviewing source code. White Knuckle IP LLC v. Elec. Arts
Inc., No. 1:15-CV-36 DN, 2015 WL 6125774, at *2 (D. Utah
Oct. 16, 2015).
presiding over patent cases have often crafted protective
orders that address the need to limit access to such
protected technical information. See, e.g., Safe
Flight Instrument Corp. v. Sundstrand Data Control,
Inc., 682 F.Supp. 20, 22 (D.Del.1988) (collecting
cases). “Courts dress technical information with a
heavy cloak of judicial protection because of the threat of
serious economic injury to the discloser of scientific
information.” Id.Where the protection sought
is to prevent a certain individual from viewing information
courts balance the risk of inadvertent disclosure to
competitors against the risk of prejudice to the other
party's ability to prosecute or defend their case.
See Layne Christensen Co. v. Purolite Co.,
271 F.R.D. 240, 249 (D.Kan. 2010). Here Plaintiff argues that
the Protective Order does not disqualify someone who has an
ownership interest. And avers that it would be an
“extreme financial hardship” if Mr. Conforti is
not permitted to be qualified as a Technical Advisor.
weighing the information that has been submitted and the
competing interests, the court finds Mr. Conforti should not
be qualified as a Technical Advisor. Contrary to
Plaintiff's position, ownership in a trust that shares
control of Plaintiff implicates the prohibition against a
Technical Advisor who is part of a “company affiliated
through common ownership.” In this instance it is a
trust that shares ownership rather than a company. In
practice, however, this is a distinction without a difference
as trust ownership could enable Mr. Conforti to utilize a
competitor's information for Definitive Holding's
unfair competitive advantage. As noted by Powerteq, nothing
is disclosed about whether Mr. Conforti is a trustee, a
beneficiary or related to any trustee or beneficiary.
Further, even if Definitive Holdings has no employees and
only seeks to license the patent at issue, or if necessary
litigate infringement, Plaintiff has failed to disclose if
Mr. Conforti is involved in the business decisions of
Plaintiff as a part owner or as an indirect manager or
officer. Courts have utilized the “competitive decision
making” test when balancing risks and a person's
inability to compartmentalize competitive information.
See Suture Exp., Inc. v. Cardinal Health,
2013 WL 6909158, at *7 (D. Kan. Dec. 31, 2013). “[I]t
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.” FTC
v. Exxon Corp., 636 F.2d 1336, 1350 (D.C.Cir.1980);
see also Hitkansut LLC v. United States,
111 Fed.Cl. 228, 239 (Fed.Cl.2013) (“[T]he fallibility
of the human brain is paramount. It is simply impossible for
a human being to segregate, or ‘unlearn,' certain
pieces of knowledge.”). And here, given Mr.
Conforti's partial ownership of Plaintiff, the risk of
either misusing confidential information or inadvertent
disclosure is too high to warrant qualifying him as a
Technical Advisor when weighed against the burden placed on
because the court declines to qualify Mr. Conforti as a
Technical Advisor, it denies Plaintiff s joint renewed
unsupported request that Plaintiff be permitted to ...