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McDavid Knee Guard, Inc. v. Nike USA

June 9, 2009

MCDAVID KNEE GUARD, INC., AND STIRLING MOULDINGS LTD., PLAINTIFFS,
v.
NIKE USA, INC., DEFENDANT.



The opinion of the court was delivered by: Michael T. Mason, United States Magistrate Judge

District Judge Suzanne B. Conlon

MEMORANDUM OPINION AND ORDER

Pending before this Court is plaintiffs' Motion to Disclose Certain Technical Information Designated Highly Confidential to David S. Taylor [41] ("motion"). For the reasons below, plaintiffs' motion is denied.

Background

Plaintiffs McDavid Knee Guard, Inc. ("McDavid") and Stirling Mouldings Ltd. ("Stirling") (collectively "plaintiffs") have sued defendant Nike USA, Inc. ("Nike") for infringement of U.S. Patent Number 6,743,325 ("the '325 patent" or "the patent"). Plaintiffs allege that Nike imports foam padded products into the United States containing foam padding made in Taiwan by the method claimed in the '325 patent. According to plaintiffs, Finn Tech, Inc. ("Finn Tech"), a non-party to this litigation, manufactures foam padding using the accused method protected by the '325 patent and supplies that padding to Nike.

On 12/18/08, Judge Conlon entered the parties' Stipulated Protective Order [25]. Among other things, that order differentiates between information designated "Confidential" and information designated "Highly Confidential." David S. Taylor, the inventor of the '325 patent and Stirling's Managing Director, is specifically included among those eligible to review Confidential Information under ¶11 of the order, but not among those eligible to review Highly Confidential Information under ¶12.

A "Confidentiality Undertaking" signed by Mr. Taylor on 4/2/09 states that he understands that "unauthorized disclosure of any Designated CONFIDENTIAL INFORMATION or HIGHLY CONFIDENTIAL INFORMATION, or its substance, may constitute contempt of this Court and may subject me to sanctions or other remedies that may be imposed by the Court and to potential liability in a civil action for damages by the disclosing party." (Ex. 5 to Mot. [41-6].) Mr. Taylor also states in the Undertaking that he lives in England, and has designated an attorney at plaintiffs' counsel's firm as "his Illinois agent for service of process in connection with this litigation and any proceedings related to enforcement of the Stipulated Protective Order." (Id.)

The Stipulated Protective Order allows any party "on motion and for good cause shown" to seek a modification of the order's terms (¶25). It also provides that a party receiving Highly Confidential Information may move the Court for an order that a person not identified in ¶12 be given access to Highly Confidential Information (¶13(B)).

As part of their efforts to establish infringement by Nike of the '325 patent, plaintiffs have served various discovery requests on Nike regarding the processes actually used by Finn Tech. Additionally, plaintiffs have sought documents from Finn Tech, deposed its president, Daniel Kim, and served a subpoena on Mr. Kim personally, as Finn Tech's president, seeking an inspection of the processes used in Finn Tech's factory in Taiwan. (Reply at 3, 4.)

Relying on Finn Tech's representations, Nike has stated in its interrogatory responses that Finn Tech used one manufacturing method before December 25, 2008, and a different method thereafter. (Ex. B to Reply at 2 [49-2].) Finn Tech, in response to plaintiffs' requests, initially produced a video showing only the post-December 25, 2008 process as well as a document prepared by Mr. Kim's attorney explaining that process, and marked those documents Highly Confidential. (Reply at 3.) Finn Tech's attorney also agreed to allow plaintiffs' litigation counsel to make a restricted video inspection of Finn Tech's manufacturing process at its Taiwan factory. That offer was premised on the condition that all information and materials disclosed during that inspection would be designated Highly Confidential and limited to attorneys' eyes only under the Stipulated Protective Order. (Id. at 4; Ex. A to Decl. of Bub-Joo Lee, attached to Opp'n [47-14, 47-15].) That inspection occurred in April 2009.

Plaintiffs' Motion

In their motion, plaintiffs seek leave to designate Mr. Taylor as an expert witness on infringement and invalidity in this case and to disclose to him technical information designated Highly Confidential. (Mot. at 1.) Plaintiffs would limit the scope of Highly Confidential Information made available to Mr. Taylor to technical information only, that is, "documents directed to the accused method(s) practiced by Finn Tech." (Mot. at 3.) The technical information plaintiffs seek to show Mr. Taylor would include the video and whatever other information was gleaned from plaintiffs' litigation counsel's in-person inspection of Finn Tech's Taiwan factory in April. (Reply at 7.)

Plaintiffs contend that, as the inventor of the subject matter in the '325 patent and with nearly 10 years of "extensive experience in the field of manufacturing foam padding," Mr. Taylor is the "most knowledgeable person" regarding the invention of the patent and its technology. (Id. at 1-2.) Plaintiffs argue that Mr. Taylor's expertise is "vital to the evaluation" of plaintiffs' infringement claims, including the decision of whether to settle or proceed with this litigation. (Id. at 3.)

Plaintiffs argue that the Stipulated Protective Order, as well as Mr. Taylor's signing of the Confidentiality Undertaking, sufficiently protect Finn Tech from any harm, as those documents prohibit the disclosure of any confidential information to unauthorized persons, and thus "Stirling will be prevented from adopting the accused second method, because Mr. Taylor cannot tell anyone else at Stirling about it." (Mot. at 3.) Plaintiffs contend their right to disclose relevant information to Stirling's in-house expert "outweighs Nike's interest in protecting the confidentiality of its supplier's manufacturing ...


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