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Saso Golf, Inc. v. Nike

October 5, 2009

SASO GOLF, INC., PLAINTIFF,
v.
NIKE, INC., DEFENDANT.



The opinion of the court was delivered by: Magistrate Judge Nan R. Nolan

Judge Blanche M. Manning

MEMORANDUM OPINION AND ORDER

Plaintiff Saso Golf, Inc. has filed suit against Defendant Nike, Inc. alleging that its golf clubs infringe one of Saso Golf's patents in violation of 35 U.S.C. § 271. The case has been referred to this court for discovery supervision. Currently before the court is Saso Golf's motion to permit disclosure of Nike's highly confidential information to Saso Golf's expert. For the reasons set forth here, the motion is granted in part and denied in part.

BACKGROUND

The court entered a Protective Order ("PO") in this case on September 11, 2008. (Minute Order of 9/11/08, Doc. 43.) Under the PO, both parties have agreed to limit disclosure of "Confidential" and "Highly Confidential" information, defined as trade secrets and other sensitive information "the disclosure of which to certain persons would, in the good faith judgment of the producing party, impair its commercial value or competitive worth, or otherwise be commercially injurious." (PO, Doc. 44, ¶ 2.) A party may disclose Highly Confidential information to a testifying or consulting expert who is "not currently employed by a party" as long as the opposing party receives notice and an opportunity to object. (Id. ¶ 7(c).)

On August 6, 2009, Saso Golf notified Nike that it had retained Mark C. Myrhum as an expert in this case, and that it intended to show him Nike's Highly Confidential information. Mr. Myrhum is President and Owner of MCM Golf, Inc., a golf industry consulting firm in Hartland, Wisconsin. (Pl. Mot., Ex. B.) In his Curriculum Vitae, Mr. Myrhum states that he provides consulting services to golf original equipment manufacturers on a variety of topics, including manufacturing in China, Japan, Taiwan, and Korea. (Id.) Based on this information, Nike conducted a public records search and discovered that Mr. Myrhum "has worked for, consulted for, or presently consults with" direct competitors of Nike. (Def. Resp., at 3.) According to Nike, these include Dynacraft Golf International (now merged with Hireko Golf), Element 21 Golf Company, Tour Edge Golf and Wilson Golf. (Id. at 3-4.)

As an example of the direct competition, Nike points out that Mr. Myrhum is credited with designing Element 21's "Emc(2)" driver, and that he provides manufacturing expertise to the company. (Exs. F, K to Def. Resp.) Notably, Element 21 pitches its Emc(2) driver against Nike's SUMO brand of clubs in advertising materials. (Ex. L to Def. Resp.) Saso Golf, in turn, alleges here that a number of the SUMO brand of clubs infringe its patent.

Armed with this information, Nike has objected to Saso Golf showing Mr. Myrhum three categories of its Highly Confidential information: (1) native electronic engineering files; (2) sales data; and (3) manufacturing communications. Nike argues that disclosing these materials to Mr. Myrhum would be commercially injurious to the company due to the substantial likelihood of an unintended, inadvertent disclosure. Saso Golf disagrees and insists that Nike's limitations will essentially preclude Saso Golf from utilizing the expert of its choice.

DISCUSSION

When, as here, the parties have executed a protective order governing disclosure of confidential information, the court must balance the interests of the party seeking disclosure against those of the party seeking protection. Telular Corp. v. Vox2, Inc., No. 00 C 6144, 2001 WL 641188, at *1 (N.D. Ill. June 4, 2001). Specifically, "the court will balance [Saso Golf]'s interest in selecting the consultant most beneficial to its case, considering the specific expertise of this consultant and whether other consultants possess similar expertise, against [Nike]'s interest in protecting confidential commercial information from disclosure to competitors." BASF Corp. v. United States, 321 F. Supp. 2d 1373, 1378 (C.I.T. 2004) (citing Telular, 2001 WL 641188, at *1). Saso Golf bears the burden of showing that "there are not other experts available or that those who are available will be less useful than [Mr. Myrhum]." United States Gypsum Co. v. LaFarge N. Amer., Inc., No. 03 C 6027, 2004 WL 816770, at *1 (N.D. Ill. Mar. 2, 2004) (citing Telular, 2001 WL 641188, at *3). Nike, in turn, bears the burden of showing that the confidential information will be "useful to [Nike]'s competitors, and that [Mr. Myrhum] is in a position that could allow the information to be used by competitors." Id. (citing Telular, 2001 WL 641188, at *2).

A. Competition

Nike does not object to Saso Golf retaining Mr. Myrhum as an expert in this case. Rather, Nike argues that Mr. Myrhum should not be allowed to see three highly confidential categories of information. This circumscribed approach is well-considered, as Nike has not made a particularly strong showing that Mr. Myrhum is a competitor sufficient to disqualify him from reviewing any confidential information in the case. Indeed, the parties discuss only Mr. Myrhum's work for Element 21, with Nike making much of the fact that he designed the Emc(2) driver, which competes directly with Nike's SUMO brand of clubs. (Def. Resp., at 4.) It appears, however, that Element 21 deals primarily in fishing rods and equipment, deriving only 5% of sales from its golf business. (Myrhum Aff., Ex. G to Pl. Reply, ¶ 7.) In addition, Element 21's golf clubs are made out of scandium, a material no other company -- including Nike -- utilizes. Nike's accused clubs, for example, are made out of titanium. (Pl. Reply, at 6; Myrhum Aff. ¶ 7.)

B. Relevance and Risk of Disclosure

The court therefore turns to the particular confidential information at issue to determine whether it is properly disclosed to Mr. Myrhum. Nike seeks to withhold its (1) native.IGS computer files; (2) non-public sales and cost data; and (3) communications with vendors and manufacturers. Nike argues that Mr. Myrhum does not need to see any of this information in order to render an opinion in this case, and that ...


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