IP Law Essentials

Stipulated Protective Orders During Patent Litigation


Discovery in patent cases often requires parties to produce confidential technical, business, and financial information. To safeguard this sensitive information, courts issue protective orders limiting who can access it, under what conditions, and for what purpose.

Many district courts have model protective orders that parties may use as a starting point for negotiating a stipulated protective order, such as the Northern District of California's Model Protective Order and the Eastern District of Texas' Sample Protective Order. If the parties cannot agree to all protective order terms, the court will resolve any disputed issues.

How do stipulated protective orders protect confidential information?

Protective orders are court orders. Violating a protective order carries serious consequences for the violating party and/or its attorneys. The particular sanctions depend on the nature of the violation. For example, courts may prohibit violating attorneys from prosecuting patents, disqualify the violating party's expert, preclude the violating party's use of certain evidence, publicly reprimand a law firm, and award attorneys' fees. Additionally, attorneys who violate a protective order jeopardize their license to practice law.

What types of restrictions do stipulated protective orders impose on the disclosure and use of confidential information?

Protective orders commonly establish different tiers of protections for different categories of confidential information. For example, a protective order could have the following tiers:

  • Confidential: Information with this designation could be limited to use only for purposes of the litigation, but sharable with everyone involved in the litigation, including the opposing party's employees. For example, pre-suit communications exchanged between the parties may be designated "Confidential." These communications may be confidential with respect to third parties, but there is no need to restrict their distribution within the parties.
  • Highly Confidential - Attorneys and Client Representatives Eyes' Only: Information with this designation is subject to heightened protection by limiting access by the opposing party only to its in-house counsel and certain agreed-upon client representatives. This designation permits necessary decision-makers to access select information so they can evaluate the case and assess settlement offers. For example, during settlement negotiations, to facilitate resolution a party may selectively decide to designate information such as financial data or licensing activity summaries as "Highly Confidential - Attorneys and Client Representatives Eyes Only."
  • Highly Confidential - Outside Counsel Eyes' Only: Information with this designation is further protected by limiting access only to outside legal counsel, as well as necessary legal support staff, court personnel, and experts.For example, parties may designate documents reflecting trade secrets or containing competitively sensitive product design or manufacturing information as "Highly Confidential - Outside Counsel Eyes Only."

How do stipulated protective orders safeguard source code?

Because source code is especially sensitive information, protective orders can include heightened security procedures for the inspection and production of source code that can be designated separately as "Highly Confidential - Source Code." That designation adds protections on top of the highest confidentiality protections. A protective order may restrict the physical location for source code inspection, who can be in the inspection room, what can be brought into the inspection room, the number of pages of source code that may be printed if at all, and how those printouts must be stored. The protective order typically requires tracking all individuals with access to the code, and may also set forth procedures for transporting and using source code at depositions. For example, a protective order may allow printed source code exhibits, or alternatively, it may require the producing party to provide access to source code on a laptop during depositions.

How is confidential information handled during depositions?

Protective orders typically allow a party to designate part(s) of a deposition transcript as containing confidential information. The party can do so either during the deposition or within a certain time period after the deposition.

Can confidential information learned during litigation be used to draft better patent claims?

A well-drafted protective order should ensure the answer to this question is "No." For example, a protective order should limit the use and access of all designated information to the case at hand thereby preventing the use of that information for any other purpose or litigation. Oftentimes, parties will seek more explicit protections in a patent case. A patent "prosecution bar" is a protective order provision that prevents individuals who receive another party's confidential information from prosecuting patent claims at the U.S. Patent and Trademark Office (USPTO) if those claims relate to the same subject matter as the received confidential information. It is common for defendants in patent cases to seek a prosecution bar to prevent the plaintiff from using the defendant's confidential information to draft patent claims that specifically target the defendant's products.

Can confidential information be used in court filings or during trial?

The First Amendment and common law afford the public a qualified right to access public filings and courtroom proceedings. Courts do, however, permit parties to file confidential information "under seal," thereby preventing public access. To submit a filing under seal, parties must seek permission from the court according to that court's local rules. Practically, in many courts, unless challenged by the opposing party or a third party, courts regularly permit filings under seal. Some courts, however, may require the parties to limit redactions to only the most sensitive confidential information. Similarly, upon request of a party, courts can restrict the display of confidential information during courtroom proceedings and, in limited circumstances, order the courtroom to be closed when confidential information is presented during hearings or at trial.

Is produced confidential information still protected after the litigation is resolved?

The parties' and their attorneys' confidentiality obligations under the protective order outlast the litigation. Moreover, a protective order usually includes steps that each party must take after the conclusion of a case to delete, destroy, or return confidential information to the producing party.

More questions? Contact the authors or visit Fish's Intellectual Property Law Essentials.

Authors: Rodeen Talebi, Katie Prescott