Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_11-cv-02304/USCOURTS-azd-2_11-cv-02304-0/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 35:271 Patent Infringement

---

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

Helferich Patent Licensing, LLC, an Illinois 

limited liability company, 

Plaintiff, 

vs. 

Suns Legacy Partners, LLC, dba Phoenix 

Suns, a Delaware Limited Liability 

Company, 

Defendant. 

Lead No. CV-11-02304-PHX-NVW

CONSOLIDATED WITH 

Helferich Patent Licensing, LLC, an Illinois 

limited liability company, 

Plaintiff, 

vs. 

Phoenix Newspapers, Inc., dba the Arizona 

Republic, an Arizona Corporation, 

Defendant. 

No. CV-11-02476-PHX-NVW

Case 2:11-cv-02304-NVW Document 140 Filed 12/05/12 Page 1 of 7
- 2 - 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

Helferich Patent Licensing, LLC, an Illinois 

limited liability company, 

Plaintiff, 

vs. 

Nissan Motor Co., Ltd., a Japanese 

Corporation; Nissan North America, Inc., a 

California Corporation; and Midway 

Holdings, Inc., dba Midway Nissan, an 

Arizona Corporation, 

Defendants. 

No. CV-12-00060-PHX-NVW

Helferich Patent Licensing, LLC, an Illinois 

limited liability company, 

Plaintiff, 

vs. 

NBA Properties, Inc., a New York 

Corporation; and National Basketball 

Association, Inc, a New York Corporation, 

Defendants. 

No. CV-12-00100-PHX-NVW

ORDER 

Before the Court is Defendants’ Motion for a Protective Order (Doc. 122), 

Plaintiff’s Response, and the Reply. For the following reasons, the Motion will be 

denied. 

This is a consolidated case consisting of four actions which collectively assert that 

Defendants have infringed a number of claims of Helferich’s patents. Counsel for 

Helferich in each of these actions also represents Helferich before the United States 

Patent and Trademark Office (“PTO”). All of the actions before this Court and the 

proceedings before the PTO at issue here arise from seven of Helferich’s patents, which 

have been pending since 1997. From those original patents, Helferich has pursued a large 

number of patent claims before the PTO, and is currently pursuing additional claims 

there. In addition, Helferich is participating in seven patent reexamination proceedings 

Case 2:11-cv-02304-NVW Document 140 Filed 12/05/12 Page 2 of 7
- 3 - 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

before the PTO, in each instance represented by counsel that also represents Helferich in 

this lawsuit. All of the parties have agreed to a proposed protective order (Doc. 122-2) 

that would govern the discovery process with the exception of one provision that would 

establish a patent prosecution bar. Defendants seek, and Helfreich objects to, such a 

prosecution bar. 

I. Legal standard 

Despite protective orders that limit the use of confidential information only for 

purposes of current litigation, courts recognize that in patent litigation “there may be 

circumstances in which even the most rigorous efforts of the recipient of such 

information to preserve confidentiality in compliance with the provisions of such a 

protective order may not prevent inadvertent compromise.” In re Deutsche Bank Trust 

Co., 605 F.3d 1373, 1378 (Fed. Cir. 2010). In order to protect against such inadvertent 

compromise, a court may issue a patent prosecution bar as part of a protective order. 

Such a prosecution bar can operate to prevent any individual who has access to highly 

confidential information as part of patent litigation from also participating in the patent 

proceedings before the PTO. 

The determination of whether a protective order should include a patent 

prosecution bar is governed by Federal Circuit law. Deutsche Bank, 605 F.3d at 1378. 

The party seeking a protective order has the burden of showing good cause for its 

issuance. See Fed. R. Civ. P. 26(c). The same is true for a party seeking to include a 

patent prosecution bar in a protective order. Deutsche Bank, 605 F.3d at 1378. 

A. Unacceptable Risk of Inadvertent Disclosure 

In 2010, the Federal Circuit clarified the standards for imposing a prosecution bar 

in Deutsche Bank. The party seeking a patent prosecution bar bears the burden to first 

show that there is an “unacceptable” risk of inadvertent disclosure of confidential 

information. U.S. Steel Corp. v. United States, 730 F.2d 1465, 1468 (Fed. Cir. 1984). 

To determine whether there is such an unacceptable risk, courts examine the extent to 

which counsel is involved in “competitive decisionmaking” with its client. Id. The 

Case 2:11-cv-02304-NVW Document 140 Filed 12/05/12 Page 3 of 7
- 4 - 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

Federal Circuit has defined competitive decisionmaking as “a counsel's activities, 

association, and relationship with a client that are such as to involve counsel's advice and 

participation in any or all of the client's decisions (pricing, product design, etc.) made in 

light of similar or corresponding information about a competitor.” Id. at 1468, n. 3. 

Not every patent prosecution attorney is necessarily involved in competitive 

decisionmaking. Deutsche Bank, 605 F.3d at 1379. The Deutsche Bank court 

distinguished administrative and oversight duties, which pose a less significant risk of 

inadvertent disclosure, from activities in which counsel play a “significant role in crafting 

the content of patent applications or advising clients on the direction to take their 

portfolios,” which poses a more significant risk. Id. at 1379–80. In order to determine 

the risk, courts must “examine all relevant facts surrounding counsel's actual preparation 

and prosecution activities, on a counsel-by-counsel basis.” Deutsche Bank, 605 F.3d at 

1380. 

B. Balancing Risks 

If a party seeking a prosecution bar meets its burden to show there is unacceptable 

risk of inadvertent disclosure, courts must then balance that risk against the potential 

harm to the opposing party from being denied its choice of counsel. Id. (citing U.S. Steel, 

730 F.2d at 1468). To evaluate this potential harm, a court must consider factors such as 

the extent and duration of counsel's past history in representing the client before the PTO, 

the degree of client's reliance on that past history, and the potential difficulty the client 

might face if forced to rely on other counsel for the pending litigation or engage other 

counsel to represent it before the PTO. Id. at 1381. 

In that balancing, a court must “be satisfied that the kind of information that will 

trigger the bar is relevant to the preparation and prosecution of patent applications before 

the PTO.” Id. at 1381. As a result, a party seeking a prosecution bar also has the burden 

to show that the proposed bar “reasonably reflect[s] the risk presented by the disclosure 

of proprietary competitive information.” Id. at 1381. Such a showing requires that the 

information said to trigger the bar, the scope of activities prohibited by the bar, the 

Case 2:11-cv-02304-NVW Document 140 Filed 12/05/12 Page 4 of 7
- 5 - 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

duration of the bar, and the subject matter covered by the bar all reasonably reflect the 

risk presented by disclosure. Id. A district court has broad discretion to determine the 

degree of protection that is required in balancing these conflicting interests. Id. at 1380. 

II. Analysis 

Defendants contend that Helferich’s counsel participates in competitive 

decisionmaking by prosecuting new patent claims and patent reexaminations, and adding 

new claims to existing patents. Because of that participation, Defendants argue that a 

prosecution bar is necessary to ensure that confidential information is not misused by 

Helferich’s counsel to craft new patent claims. Helferich does not contend that its 

counsel is not involved in competitive decisionmaking, and there is ample evidence that 

Helferich’s counsel does play a significant role in crafting patent applications. Helferich 

is prosecuting new patent applications arising from its original disclosures with the 

assistance of Mr. Kappes and Mr. Lisa, both of whom are counsel that also represent 

Helferich in this case. Further, Mr. Lisa is involved in pricing decisions regarding 

Helferich’s licenses and negotiates the terms of those licenses. As a result, under the 

Deutsche Bank standard, there is an unacceptable risk that counsel for Helferich might 

misuse Defendants’ confidential information to file new patent claims based on that 

information. 

 But the unacceptable risk of disclosure is itself not enough to justify the issuance 

of a patent prosecution bar: Defendants also bear the burden of demonstrating that risk 

outweighs the potential harm to the opposing party in denying it the counsel of its choice. 

To weigh the risk of inadvertent disclosure of proprietary competitive information, a 

court must evaluate whether the kind of information to be protected is relevant to the 

patent prosecution proceedings. In this case, Defendants do not identify any specific 

confidential information that could be misused, apart from broad allegations of potential 

harms. As a result, Defendants have not met their burden of showing good cause for the 

issuance of a prosecution bar. 

Case 2:11-cv-02304-NVW Document 140 Filed 12/05/12 Page 5 of 7
- 6 - 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

In order for a court to evaluate whether the information is related, a party seeking 

a prosecution bar “must present a particular and specific demonstration of fact, as 

distinguished from stereotyped and conclusory statements.” AmTab Mfg. Corp. v. SICO 

Inc., No. 11 C 2692, 2012 WL 195027, at *2 (N.D. Ill. January 19, 2012) (citation and 

internal quotation marks omitted). In order to justify a prosecution bar, in other words, 

the moving party must identify “specific information that would cause it injury if 

disclosed.” Id. 

The confidential information allegedly at risk in this case is vague and speculative. 

Defendants contend that information to be produced in discovery “could be reviewed by 

a good patent lawyer to inspire him or her to draft new patent claims targeted on 

Defendants’ systems and plans for future systems (if any).” (Doc. 131 at 5.) But the 

information Defendants identify is merely broad “categories of information [that] are 

non-public and confidential.” (Id.) These broad allegations of speculative harm are not 

sufficient to establish good cause: nothing in the Defendants’ Motion identifies a “clearly 

defined and serious injury.” AmTab, 2012 WL 195027 at *2. Defendants argue that 

Helferich’s counsel could add new patent claims based on services currently in use, but 

do not identify any specific information that would cause injury if disclosed. All of the 

examples of the alleged risk to Defendants are highly speculative. (Doc. 131 at 9-10.) 

These examples are not enough to warrant the unnecessary hardship that would result 

from the issuance of a patent prosecution bar. 

Against that speculative risk, the Court must weigh the potential injury to 

Helferich from restricting its choice of litigation and patent prosecution counsel. 

Helferich “clearly has a strong interest in choosing its own counsel—particularly in the 

complex and technical realm of patent litigation.” Xerox Corp. v. Google, Inc., 270 

F.R.D. 182, 185 (D. Del. 2010). Counsel for Helferich, including Mr. Kappes and Mr. 

Lisa, have represented Helferich both in litigation and before the PTO for many years and 

are deeply familiar with the patents at issue here. Depriving Helferich of the specialized 

Case 2:11-cv-02304-NVW Document 140 Filed 12/05/12 Page 6 of 7
- 7 - 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

representation that its counsel can provide in this case would force them to rely on less 

knowledgeable counsel, either in this litigation or before the PTO, and “thus increase 

costs and duplicate effort.” Xerox, 270 F.R.D. at 185. Because that harm outweighs the 

speculative risk of inadvertent disclosure, Defendants have not met their burden of 

establishing good cause for a patent prosecution bar. 

Further, the prosecution bar that Defendants seek in this case is unnecessarily 

broad in scope given the narrow risk of inadvertent misuse. The risk that any confidential 

information could be used in future patent claims or reexamination can be mitigated 

without the harm of a prosecution bar by adding specific protection against such use in 

the protection bar in this case. To that end, the protective order will be modified to 

include a specific requirement that Helferich not rely on highly confidential information 

disclosed by Defendants in this litigation in any proceeding before the PTO. As a result, 

if Plaintiff misuses any confidential information to pursue claims before the PTO, 

inadvertently or otherwise, the Court can remedy such misuse as it arises without 

depriving Plaintiff of its choice of counsel. Counsel shall confer about language to effect 

such modification. If they cannot agree, Defendants may file a motion requesting a 

specific modification. 

IT IS THEREFORE ORDERED that Defendants’ Motion for Protective Order 

(Doc. 122) is DENIED without prejudice to Defendants’ opportunity to move for a 

prosecution bar as appropriate in the future. 

IT IS FURTHER ORDERED that the parties submit a revised joint proposed 

protective order or, lacking agreement on a proposed order, that Defendants file a motion 

requesting specific modification by December 14, 2012. 

Dated this 5th day of December, 2012. 

Case 2:11-cv-02304-NVW Document 140 Filed 12/05/12 Page 7 of 7