Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_07-cv-00232/USCOURTS-caed-2_07-cv-00232-3/pdf.json

Nature of Suit Code: 820
Nature of Suit: Copyright
Cause of Action: 17:501 Copyright Infringement

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IN THE UNITED STATES DISTRICT COURT 

FOR THE EASTERN DISTRICT OF CALIFORNIA 

PATRICIA S. KELLEY, dba PKELLEY 

ENTERPRISES, a California 

Company, 

 Plaintiff, 

 v. 

EUROMARKIET DESIGNS, INC., dba 

CRATE & BARREL, INC., et al., 

 Defendants. 

______________________________/

No. Civ. S-07-0232 RRB EFB 

Memorandum of Opinion

and Order

 The matter before the court is Patricia Kelley’s (“Kelley”) 

motion to amend the Complaint pursuant to Rule 15(a) of the 

Federal Rules of Civil Procedure and request to deem discovery 

responses non-confidential. Crate & Barrel Inc. (“Crate & 

Barrel”) opposes the motion.1 For the reasons stated below, the 

court GRANTS the motion. 

 

1

 Inasmuch as the Court concludes the parties have submitted 

memoranda thoroughly discussing the law and evidence in support 

of their positions, it further concludes oral argument is 

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I. 

 In the instant motion, Kelley seeks a determination that 

the identity of Crate & Barrel’s suppliers is non-confidential 

information under the protective order so that she can amend the 

Complaint to add these entities as additional defendants. Crate 

& Barrel opposes the motion on the ground that the identity of 

its suppliers is confidential commercial information under the 

protective that is not subject to disclosure. Additionally, 

Crate & Barrel opposes the motion on the ground that leave to 

amend is improper because Kelley seeks to amend the Complaint in 

bad faith. Finally, Crate & Barrel maintains that, even if the 

court is inclined to permit Kelley to amend her Complaint to add 

the supplier entities as additional defendants, these entities 

cannot be added unless the Complaint is filed under seal because 

their identities are confidential, sensitive, proprietary 

business information. 

// 

// 

// 

 

neither necessary nor warranted with regard to the instant 

matter. See Mahon v. Credit Bureau of Placer County, Inc., 171 

F.3d 1197, 1200 (9th Cir. 1999)(explaining that if the parties 

provided the district court with complete memoranda of the law 

and evidence in support of their positions, ordinarily oral 

argument would not be required). 

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A. Legal Standards 

1. Rule 15(a) 

 “Rule 15(a) is very liberal and leave to amend ‘shall be 

freely given when justice so requires.’ But a district court 

need not grant leave to amend where the amendment: (1) 

prejudices the opposing party; (2) is sought in bad faith; (3) 

produces an undue delay in litigation; or (4) is futile.” 

Amerisource Bergen Corp. v. Dialysist West, Inc., 465 F.3d 946, 

951 (9th Cir. 2006); Eminence Capital, LLC v. Aspeon, Inc., 316 

F.3d 1048, 1051-52 (9th Cir. 2003). 

2. Rule 26(c) 

 “It is well-established that [under the Federal Rules of 

Civil Procedure,] the fruits of pretrial discovery are, in the 

absence of a court order to the contrary, presumptively public.” 

San Jose Mercury News, Inc. v. United States District CourtNorthern District, 187 F.3d 1096, 1103 (9th Cir. 1999); Phillips 

v. General Motors Corp., 307 F.3d 1206, 1210 (9th Cir. 2002). 

Rule 26(c), which governs the granting of a protective order, 

“authorizes a district court to override this presumption where 

‘good cause’ is shown.”2 Rule 26(c) confers “broad discretion on 

 

2

 Under Rule 26(c), the court, for good cause shown, “may 

make any order which justice requires to protect a party . . . 

from annoyance, embarrassment, oppression or undue burden or 

expense, including one or more of the following: . . . (G) that 

a trade secret or other confidential research, development, or 

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the trial court to decide when a protective order is appropriate 

and what degree of protection is required.” See Seattle Times 

Co. v. Rhinehart, 467 U.S. 20, 36 (1984). Moreover, a district 

court has the power to modify or lift a protective order that it 

has entered. Empire Blue Cross & Blue Shield v. Janet Greeson’s 

A Place For Us, Inc., 62 F.3d 1217, 1219 (9th Cir. 1995). 

To obtain a protective order, the party resisting discovery 

or seeking limitations must, under Rule 26(c), show good cause 

for its issuance. Specifically, the moving party must make a 

clear showing of a particular and specific need for the order. 

Blankenship v. Hearst Corp., 519 F.2d 418, 429 (9th Cir. 1975). 

“For good cause to exist, the party seeking protection bears the 

burden of showing specific prejudice or harm will result if no 

protective order is granted.” Phillips v. General Motors Corp., 

307 F.3d 1206, 1210-11 (9th Cir. 2002). “[B]road allegations of 

harm, unsubstantiated by specific examples or articulated 

reasoning, do not satisfy the Rule 26(c) test.” Beckman Indus., 

Inc. v. Int’l Ins. Co., 966 F.2d 470, 476 (9th Cir. 2003). If a 

court finds particularized harm will result from disclosure of 

information to the public, then it balances the public and 

private interests to decide whether a protective order is 

necessary. Phillips, 307 F.3d at 1211. 

 

commercial information not be revealed or be reveled only in a 

designated way. . . .” Fed.R.Civ.P. 26(c). 

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In the case of trade secrets, the moving party must show 

(1) that the information is a “trade secret or other 

confidential research, development, or commercial information,” 

under Rule 26(c)(7);3 and (2) that its disclosure would be 

harmful to the party’s interest in the property. See Centurion 

Indus., Inc. v. Warren Steurer & Assoc., 665 F.2d 323, 325 (10th 

Cir. 1981) (holding that there is no absolute privilege for 

trade secrets and similar confidential information); see also

Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 1122, 1131 

(9th Cir. 2003) (the party requesting a protective order has the 

burden to demonstrate that (1) the material in question is a 

trade secret or other confidential information and that (2) 

disclosure would cause an identifiable, significant harm). The 

burden then shifts to the party seeking discovery to show that 

the information is relevant to a party’s claims or defenses or 

the subject matter of the lawsuit and is necessary to prepare 

the case for trial. Centurion, 665 F.2d at 325-26. Where 

trade secrets or other confidential commercial information is 

involved, the court will balance the risk of disclosure to 

 

3

 The court notes that Rule 26(c) has been renumbered such 

that Rule 26(c)(7) is now Rule 26(c)(G). The court further 

notes that the 2007 amendment to the statutory language of Rule 

26(c) was stylistic only and was done as part of the general 

restyling of the Civil Rules to make them more easily understood 

and to make style and terminology consistent throughout the 

rules. 

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competitors against the risk that a protective order will impair 

prosecution or defense of the claims. Brown Bag Software v. 

Symantec Corp., 960 F.2d 1465, 1470 (9th Cir. 1992). The court 

may order that the trade secret or commercial information not be 

revealed or be revealed only in a designated way. Fed.R.Civ.P. 

26(c)(G). 

B. Analysis 

In the present case, the stipulated protective order allows 

a party or non-party to initially determine whether a particular 

item is confidential without court intervention. As such, the 

protective order is akin to a blanket protective order, which is 

“inherently subject to challenge and modification, as the party 

resisting disclosure generally has not made a particularized 

showing of good cause with respect to any individual document.” 

San Jose Mercury News, Inc. v. United States District CourtNorthern District, 187 F.3d 1096, 1103 (9th Cir. 1999); Beckman, 

966 F.2d at 476.4

 Therefore, Crate & Barrel bears the burden 

 

4

 Here, the stipulated protective order gives the parties 

and third parties blanket authority to deem information as 

“confidential” and to file such material under seal. 

Specifically, the order states that any party or third party may 

designate as “confidential” any information that it believes 

embodies confidential research, development, commercial, 

financial, or personnel information. Stipulated Protective 

Order at 1-2. The protective order further states that all 

documents filed with the court containing material designated as 

“confidential” shall be lodged with the court under seal and not 

made public, except by written order of the court. Id. at 3-4. 

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under Rule 26(c) to show good cause as to why the identities of 

its suppliers should not be disclosed. Phillips, 307 F.3d at 

1210-11, n.1. 

In the instant motion, Crate & Barrel argues that the 

identity of its suppliers is protected proprietary business 

information because it relies on these entities to maintain a 

competitive edge and disclosure would enable competitors to take 

advantage of its experience and relationships with these 

entities. Such reasoning is insufficient to satisfy Crate & 

Barrel’s burden to demonstrate good cause as to why the identity 

of its suppliers should not be disclosed. Even assuming 

arguendo that the identity of Crate & Barrel’s suppliers is 

confidential commercial information, Crate & Barrel has failed 

to set forth the specific prejudice or particularized harm that 

will result if this information is disclosed, i.e., Crate & 

Barrel did not articulate a significant identifiable harm that 

would result if this information is disclosed. Instead, Crate & 

Barrel broadly asserts that disclosure of this information would 

enable competitors to take advantage of its experience and 

relationship with its suppliers. However, because broad 

allegations of harm, unsubstantiated by specific examples of 

articulated reasoning, does not satisfy Rule 26(c)’s good cause 

test, the identity of Crate & Barrel’s suppliers is not properly 

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designated as confidential under the protective order.5 

Moreover, because the suppliers’ participation in the 

development and production of the infringing products is 

relevant and essential to proving Kelly’s copyright infringement 

claims,6

 she is entitled to learn the identities of Crate & 

 

5

 To the extent that Crate & Barrel cites several cases for 

the proposition that the identity of a company’s suppliers is 

confidential commercial information, the court finds these cases 

unpersuasive. As Kelley correctly points out, none of the cases 

relied on by Crate & Barrel involved allegations that the 

suppliers themselves participated in copyright infringement or 

were potential defendants. As such, these cases are irrelevant 

because in this action Kelley asserts that Crate & Barrel’s 

suppliers have engaged in contributory and/or vicarious 

copyright infringement and are therefore proper defendants. 

6

 Two doctrines of indirect copyright liability are 

recognized: contributory copyright infringement and vicarious 

copyright infringement. Ellison v. Robertson, 357 F.3d 1072, 

1076 (9th Cir. 2004). “[A] defendant is a contributory 

infringer if it (1) has knowledge of a third party’s infringing 

activity, and (2) ‘induces, causes, or materially contributes to 

the infringing conduct.’ ” Perfect 10, Inc. v. Visa Intern. 

Service Ass’n, 494 F.3d 788, 795 (9th Cir. 2007); see MetroGoldwyn-Mayer Studios, Inc. v. Grokster, Ltd., 545 U.S. 913, 930 

(2005) (a defendant infringes contributorily by intentionally 

inducing or encouraging direct infringement); see also Fonovisa, 

Inc. v. Cherry Auction, Inc., 76 F.3d 259, 264 (9th Cir. 1996) 

(noting that contributory liability is based in tort law and 

“stems from the notion that one who directly contributes to 

another’s infringement should be held accountable”). Thus, in 

order to be contributorily liable for copyright infringement a 

plaintiff must show that defendant knew or had reason to know of 

the infringing activity taking place and that defendant 

materially contributed to the infringing activity. Ellison, 357 

F.3d at 1077. A defendant infringes vicariously by profiting 

from direct infringement while declining to exercise a right to 

stop or limit it. Grokster, 545 U.S. at 930. Thus, in order to 

be vicariously liable for copyright infringement, a plaintiff 

must show that a defendant derived a direct financial benefit 

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Barrel’s suppliers and examine their role in the development and 

production of the allegedly infringing products.7 

Accordingly, because Crate & Barrel failed to meet its 

burden under Rule 26(c) to show good cause as to why the 

identity of its suppliers should not be disclosed, and because 

the identity of Crate & Barrel’s suppliers is relevant and 

essential to proving Kelly’s copyright infringement claims, 

Kelley is entitled to amend her Complaint to add these entities 

as additional defendants.8

 Crate & Barrel did not overcome Rule 

15(a)’s presumption in favor of granting leave to amend by 

 

from the infringement and had the right and ability to supervise 

the infringing activity. Ellison, 357 F.3d at 1078. Here, 

Kelley seeks to amend the Complaint to add the following 

parties: (1) Mary Ellen Putiganno, the artist who collaborated 

with the other infringing parties to incorporate Kelley’s 

designs into products sold by Crate & Barrel; and (2) the 

supplier entities that created and distributed the infringing 

products containing Kelley’s copyrighted designs. Additionally, 

Kelley seeks to amend the Complaint to add contributory 

infringement claims against the supplier entities by alleging 

that these entities knowingly incorporated Kelley’s designs into 

their products and distributed them to Crate & Barrel for sale. 

Finally, Kelley seeks to amend the Complaint to add vicarious 

infringement claims against the supplier entities by alleging 

that these entities directly profited from Crate & Barrel’s 

direct infringement and had the right and ability to supervise 

the infringing activity. 

7

 Crate & Barrel does not dispute that its suppliers 

participated in the development and production of the allegedly 

infringing products. 

8

 Kelley is also permitted to add Mary Ellen Putiganno as a 

defendant. Crate & Barrel did not argue that she is an improper 

defendant in this action. 

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demonstrating that amendment: (1) would cause undue prejudice; 

(2) is sought in bad faith; (3) would produce an undue delay in 

litigation; or (4) is futile. 

For these reasons, it is hereby ordered that leave to amend 

the Complaint, pursuant to Rule 15(a), is GRANTED. Kelley is to 

file an amended complaint within 10-days of service of this 

order.

II. 

 For the reasons stated above, the motion is GRANTED. 

IT IS SO ORDERED. 

 ENTERED this 25th day of January, 2008. 

 s/RALPH R. BEISTLINE 

 United States District Judge 

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