could question Schneider regarding the competitive harm it might suffer if the Agreement
is disclosed.

As an initial matter, we should note that the facts before us are different than those
in Baxter because we are not considering the public disclosure of the Agreement. Instead,
Rockwell merely seeks to be able to share the Agreement and its terms with its in-house
counsel and business decision makers. Schneider does not object to the disclosure per
se, but instead argues that allowing additional copies of the Agreement to be passed
around to inside counsel for Rockwell (who is admittedly one of Schneider's biggest
competitors), increases the chance that the Agreement could be stolen or used by
unauthorized individuals, and for non-litigation purposes.*

After reviewing the parties’ arguments and considering the Baxter case, we believe
that at this time, it is appropriate to modify our previous order to allow Rockwell's in-house
counsel (but not its other business decision makers) to be able to see the terms of the
Agreement and discuss them with Rockwell's outside counsel, pursuant to the terms of the
protective order. However, no copies of the Agreement (or any part of the Agreement)
should be given to Rockwell's in-house counsel or kept at Rockwell's offices. Further,
Rockwell's in-house counsel may only have access to the Agreement in the presence of
its outside counsel, as necessary to discuss litigation strategy for this case.

We modify our original opinion for several reasons. Although Schneider's counsel

explained that dissemination of the Agreement could harm it competitively by causing its

2 There isa protective agreement in place in this case that limits the use and dissemination of certain
documents. Schneider argues that in-house counsel of Rockwell should not be allowed to review the
Agreement pursuant to the protective order because of its concern that copies of the Agreement will be
improperly disseminated.



has not provided any concrete reason why disclosure of the Agreement to Rockwell's in-
house counsel (as opposed to outside counsel only) could hurt Schneider's competitive
advantage. Rockwell argues that it and the other defendants are unable to involve their
in-house counsel in strategic decisions regarding the motions to dismiss since in-house
counsel is barred from seeing the terms of the Agreement. It also argues that there is no
legitimate reason to keep the terms of the Agreement away from the public.

The only case relevant to this issue was cited by defendant Jefferson Smurfit
(“Smurfit”), which filed a reply in support of Rockwell’s motion. In Baxter International, Inc.
v. Abbott Laboratories, No. 02-2039, 2002 WL 1543385 (7" Cir., July 16, 2002), the
Seventh Circuit ordered that certain documents, including a licensing agreement, had to
be disclosed to the public on appeal despite the parties’ previous agreement to keep them
confidential. The Court noted that information transmitted to the Court of Appeals was
presumably public because the appellate record is “normally vital to the case’s outcome.”
id. at*1. Further, the Court held that in civil cases, only bona fide trade secrets, attorney-
client material, and information required to be confidential by statute should remain
confidential on appeal. Parties may wish to keep many pieces of information (such as
salaries or the price paid under a contract) confidential, but when the information is critical
to a legal claim, they must be disclosed. /d. at *2.

The Baxter Court found that the parties’ general assertion that the license
agreement should be kept confidential because its disclosure “could” hurt Abbott's
competitive advantage was not enough to support a continuation of the protective order.
Similarly, Rockwell argues that Schneider has failed to explain exactly why disclosure of

the Agreement could harm it competitively. We had the parties return to Court so that we

3



customers to question and worry about their rights and protections under the Agreement,*
such harm would only occur if the Agreement were taken by a competitor and used for an
improper purpose. We are not ordering (as Rockwell alternatively suggests), that the
Agreement be disclosed to the public at this time. This case is not at the appeals stage,
and the Agreements relevance to the various legal issues is still at issue. Since we agree
that Rockwell's in-house counsel needs access to the Agreement to be able to
communicate effectively with its outside counsel, and since we have seen no evidence that
such in-house counsel is not capable of abiding by the protective order, we will allow them
to see the Agreement.

For the above reasons, we modify our order of July 11, 2002 as stated herein. Itis

so ordered.

ENTER:
WM of
MICHAEL T. ON

United States Magistrate Judge

Dated: August 20, 2002

3 As explained in the magazine article submitted by Schneider's counsel, Solaia is currently suing
various manufacturers, alleging that they are infringing on Solaia’s patent (acquired from Schneider), without
paying any sort of licensing fee. The Agreement apparently provides some protection from suit for certain of
Schneider’s customers, and the article raises the question of whether Solaia might focus its attention on some
of these customers (or others), and sue them for infringement as well. We could imagine a scenario under
which a Schneider competitor obtains a copy of the Agreement and uses it to threaten Schneider customers
with the idea that they are not properly protected from suit under the Agreement. See Peggy Smedley & John
Buell, Clorox Settles... Others are Sued, Start Magazine, August, 2002 at 38.

5


‘Minuy? Order Form (06/97)

United States District Court, Northern District of Illinois

Name of Assigned Judge James F. Holderman Sitting Judge il Other Michael T. Mason
or Magistrate Judge . than Assigned Judge .
CASE NUMBER OL C 6641 DATE 8/20/2002
CASE Solaia Technology vs. Jefferson Smurift
TITLE
Lin the following bux (2) indicate the party filing the motion, ¢.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature
MOTION: of the motion being presented.)
DOCKET ENTRY:
a) ia Filed motion of { use listing in “Motion” box above.)
(2) im Brief in support of motion due __
(3) a Answer brief to motion due__. Reply to answer brief due,
4 OO Ruling/Hearingon____set for___—_at
(5) oO Status hearing[held/continued to] [set for/re-set for] on _. set for at
(6) O Pretrial conference[held/continued to] [set for/re-set for]on___ set for at :
{7) o Trial{set for/re-set for] on _at
(8) Oo [Bench/Jury trial] [Hearing] held/continued to at
(9) oO This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]
OFRCP4(m) CO Local Rule 41.1. OOFRCP41(a)(1) 1 FRCP41(a)(2).
do) «oi [Other docket entry] For the reasons stated in the attached Memorandum Opinion and Order,
Rockwell’s motion to reconsider the Magistrate Judge’s 7/11/02 order [170-1] is granted in part and
denied in part. Enter Memorandum Opinion and Order.
di) [For further detail see order attached to the original minute ordet.]
No notices required, advised in open court. Document
Number
No notices required. umber of notices
wv | Notices mailed by judge's staff. AUG 2 Ya ratty
Notified counsel by telephone. ate docketed
Docketing to mail notices. Cc . (
Mail AO 450 form. ~ dockerin dep bial
J | Copy to judge/magistrate judge. ‘
202002
date mated notice
courtroom
KF deputy's Ke
initials
Date/time received in
central Clerk's Office siting lepty iis



IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

SOLAIA TECHNOLOGY LLC,

Plaintiff,
AUG Ee No. 01 C 6641
Vv. “= 2002

Judge James F. Holderman

JEFFERSON SMURFIT CORPORATION, Mag. Judge Mason

THE CLOROX COMPANY, INC., and
BMW MANUFACTURING CORPORATION,
Defendants

And

THE CLOROX COMPANY, INC. and
JEFFERSON-SMURFIT CORPORATION,

Third-Party Plaintiffs,
Vv.

ROCKWELL SOFTWARE, INC. and
ALLEN BRADLEY COMPANY, LLC,

ww SS SS SS SSS SS Se Se SS See ee eS

Third-Party Defendants.
MEMORANDUM OPINION AND ORDER
Michael T. Mason, United States Magistrate Judge:

On July 11, 2002, this Court entered an order designating a patent assignment
agreement (“Agreement”) between plaintiff Solaia Technology, LLC (“Solaia") and
Schneider Automation, Inc. and Square D Company (collectively, “Schneider’) as “outside
counsel only”, and redacting a customer list appended to the Agreement. Since that time,
various defendants in the case have moved to dismiss the complaint, arguing that Solaia

is not the real party in interest, since through the Agreement, Schneider and some of its

SIN



customers retain certain rights and privileges related to the patent. Based on these
motions, third party defendant Rockwell Software, Inc. (“Rockwell”) has moved for
reconsideration of our previous order regarding the Agreement’s confidentiality. After
considering the parties’ new briefs, as well as answers to certain questions we posed to
the parties in open court, we modify our previous order, as explained below.

There are two separate issues relating to the Agreement. First is the question of
whether the list of Schneider's customers attached to the Agreement should continue to
be redacted, and not disclosed to any party. Rockwell argues that the customer list is
critical to the question of whether Schneider is the real party in interest in this case
because it shows the scope of rights that Schneider retains with respect to its customers
even after assigning the patent to Solaia. Rockwell's argument for disclosing the names
to outside counsel is that being able to determine what share of the market a particular
customer has will enable Rockwell and the other defendants to specifically show that
Schneider retains significant rights related to the patent, and thus should be sued as a real-
party-in-interest.

In court, Schneider's counsel indicated that it had no objection to Rockwell's being
able to argue that the customer list contained 136 names, and that some of them were
Fortune 100 or Fortune 500 companies.’ We do not see any reason to modify our original
decision that the specific identity of Schneider's customers should not be disclosed and
thus uphold that portion of the order.

A bigger question concerns the Agreement itself. Rockwell argues that Schneider

‘ Indeed, counsel for Schneider submitted a magazine article discussing the lawsuit to the Court, in
which the number of Schneider customers on the list was revealed

2