Free Opening Brief in Support - District Court of Delaware - Delaware

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE VO1TH PAPER GMBH & CO. KG, ) Plaintiff, ) C.A. No. 07-226-JJF

V.
.IOHNSONFOILS, INC.,
Defendant.
)

PLAINTIFF VOITH PAPER GMBH & CO. KG'S OPENING BRIEF IN SUPPORT OF ITS MOTION FOR A PROTECTIVE ORDER PURSUANT TO FEDERAL RULES OF CIVIL PROCEDURE 26(c) PROHIBITING THE DISCLOSURE OF VOITH'S HIGHLY CONFIDENTIAL INFORMATION TO INDIVIDUALS ENGAGED IN COMPETITIVE BUSINESS PRACTICES FOR OR ON BEHALF OF VOITH'S COMPETITOR JOHNSONFOILS, INC.

Adam W. Poff (#3990) Chad S.C. Stover (#4919) YOUNG CONWAY STARGATT & TAYLOR, LLP The Brandywine Building 1000 West Street, 17tH Floor Wilmington, Delaware 19599 (302) 571-6642 apoffGycst.com Neil F. Greenblum Michael J. Fink Neal Goldberg

GREENBLUM & BERNSTEIN, P.L.C. 1950 Roland Clarke Place
Reston, Virginia 20191 (703) 716-1191 Attorneys for Plainti ff Voith Paper GmbH & Co. KG

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TABLE OF CONTENTS
Page NATURE AND STAGE OF THE PROCEEDING STATEMENT OF FACTS..... A.
B. C. D.

1 3 ........ ..... ..------..3

The Parties' Allegations .............................. .....................

Voith' s Highly Confidential Information ...... ______........ _._,......_-.__..----.--.....-.... 3 Measures Taken to Maintain the Confidentiality of Voith' s CBI. ...............4 JohnsonFoils Is A Direct Competitor of Voith With Respect to Subject Matter Relevant to This Action .............................·--------------·--......................- 5 The Disclosure of Voith CBI to Individuals Involved in Competitive Business Practices Would Likely Harm Voith ----- ---- ___ ,--.... 5 1. 2. There are numerous potential improper uses of Voith' s CBI.......... . 5 Voith's greater investment in its CBI mares it likely that JohnsonFoils would unfairly benefit from a disclosure of Voith's CBI to individuals involved in competitive business for or on behalf of JohnsonFoils..................................................·---------............ 6 There is a high likelihood that Voith's CBI will be improperly used if disclosed to individuals involved in competitive business practices ...... ...._ -_---. 7 14 .--------...------ ................1 S

E.

3.

F.

Voith's Efforts to Negotiate an Agreed Protective Order

SUMMARY OF ARGUMENT. ARGUMENT-----------------------------------------------------------1.

INTRODUCTION----, ...............................................................................................15 A. Disclosing Voith' s Confidential Information to its Competitor JohnsonFoils Risks Serious Harm to Voith ----_---· ........................................15 JohnsonFoils has Unreasonably Rejected Voith's Proposals to Reduce the Risk of Harm Resulting from the Disclosure of Voith ' s CBI Without Articulating Any Overriding Prejudice to Johnson Foils or Cooperating With Voith to Ameliorate Any Prejudice -----------------------....17

B.

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C.

Both Parties' Protective Order Proposals Provide for Unilateral Confidentiality Designations, But Differ in Specifying Restriction on the Disclosure of Confidential Information...... .......... ----- --- ...... -----20 Both parties propose an umbrella protective order ............ .............20 2. The parties differ on whether individuals involved in competitive business practices should be excluded from the disclosure of Voith's CBI

20

II.

THE IMPOSITION OF A PROTECTIVE ORDER PURSUANT TO RULE 26(c)(7) IS NEEDED TO PROTECT VOITH FROM THE SUBSTANTIAL RISK OF SERIOUS HARM RESULTING FROM IMPROPER OR INADVERTENT DISCLOSURE OR USE OF VOITH'S CBI
A.

22

Rule 26(c)(7) Expressly Authorizes The Imposition of Protective Orders to Limit the Disclosure of Voith's Confidential Information..._._._ 23 Protective Orders Are Especially Warranted In Patent Litigation Disputes Between Private Litigants In Which Limitations on the Disclosure of Confidential Information is Consistent With the Public Interest

B.

25

C.

The Disclosure of Voith' s CBI to Individuals Involved in Competitive Business Practices For or On Behalf Of JohnsonFoils Would Result in a Serious Risk of Harm to Voith Which Outweighs Any Inconvenience to JohnsonFoils From the Imposition of a Protective Order ____________----------- 27 I. JOhnsonFoils status as a competition of Voith in the wet-end rebuild market poses an unacceptable risk that Voith's CBI would be unacceptably disclosed or used.-- ................ ................27 The disclosure of Voith's CBI is reasonably limited to individuals who are not involved in competitive business practices on behalf of JohnsonFoils ..............................................29 A bar on patent prosecution activities on behalf of a competitor is a reasonable constraint on individuals provided access to 30 Voith's CBI

2.

3.

III.

THE VOLUME OF CONFIDENTIAL DOCUMENTS IN THIS PATENT LITIGATION WARRANTS THE IMPOSITION OD AN UMBRELLA PROTECTIVE ORDER AS PROPOSED BY BOTH PARTIES... ................... 33 CONCLUSION..-........ ............................................................. ........ ----34

IV.

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TABLE OF AUTHORITIES

CASES CITED
Affyrnetrix, Inc. v. 111urnina, Inc.,

fames

2005 U.S. Dist. LEXIS 15482 ( D. Del., July 28, 2005)--------------------American Standard Inc. v. Pfizer, Inc.,

__._-_.._.....--·29, 31

198 F.2d 734 (Fed. Cir. 1987) ............ ......
Brown Bag Software v. Symantec Carp.,

_..._.. 28

28,30 960 F.2d 1465 (9th Cir. 1992),,. .............................. ........ 28,
Carpenter Tech. Corp. v. Armco, Inc.,

132 F.R.D. 24 (E.D. Pa.. 1990)----------------------------- .... .. . .
Cipollone v. Liggett Group, Inc.,

. _. 28, 29

785 F.2d 1108 (3d Cir. 1986) ................................................................................................ 33
Coca-Cola Bottling Co. of Shreveprt, Inc. v. Coca-Cola Co.,

107 F.R.D. 288 (D. Del. 1985)..

........... .. . ......

...................................

28

Darniano v. Sony lYlusic Entertainment, Inc., 168 F.R.D . 485 (D .N.J. 1996 )........ ----------------------------------------------------------------F. T. C. v. Exxon Corp.,

.........._ 25

636 F.2d 1336 (D.C. Cir. 1980)--------------------------------------------Glenmede Trust Co. v. Thompson,

..... ... ._..__.....

---------- --30

56 F.3d 476 (3d Cir.1995)..................... -------.... ..... Intel Corp. v. VIA Tech. Inc., 198 F.R.D. 525 (N.D. Cal. 2000)...... .......... .............
Interactive Coupon Nlktg. Group, Inc. v. H. 4. T! Coupons, LLC.,

------- ._------25 ......... ........ 28, 29, 30

No. 98 C 7408, 1999 WL 618969 (N.D.111. Aug 9, 1999) ................................................ 31
Leucadia, Inc. v. Applied Extrusion Techs., Inc.,

998 F.2d 157 (3d. Cir. 1993)-----------------------------------

.-...................... ................... 4

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Aylikohn Gaining Corp. v. Acres Gaining Inc.,

50 U.S.P.Q. 2d 1783 (D. Nev. 1998). ................................
Motorola, Inc. v. Interdigital Tech. Corp.,

-----...............------ 31 .---.................... 24, 31, 32

1994 U.S. Dist. LEXIS 20174 (D. Del. 1994),,. ..... - .................
Neoteric Cosmetics, Inc. v. Beiersdorf, Inc.,

35 F.Supp.2d 370 (D. Del. 1998) ...... ............................. ......................................
Pansy v. Borough ofSroudsburgh,

28

23 F.3d 772 (3d Cir. 1994).............. ----------- --------------------------------------------------------------24, 25, 27
R.R. Donnelley & Sons Co. v. Quark, Inc.,

No. CIVA 06-032 JJF (D. Del. 2007)------------------------------Safe Flight Instrument Corp. v. Sundstrand Data Control, Inc.,

---

------ 24,28, 29

682 F.Supp. 20 (D. Del. 1998)-----------------------------------------------------------------Shingara v. Skiles,

24, 28

420 F.3d 301 (3d Cir. 2005 ) ..............................................
United States Steel Corp. v. United States,

----------24, 25, 27

730 F2d 1465 (Fed. Cir. 1984).......---

----------------------------------------------------------------28, 29, 30 _Pages

STATUTES AND RULES CITED

D. Del. Local Rule 26.2 35 U.S.C. § 103 .. Fed. R. Civ. P. 7.1
Fed. R. Civ. P. 16(b) ..................................... Fed. R. Civ. P. 26(c) .............................................

. 9,12,13, 33 -----------........... .......3, 4 ------------------------------------------------ 12, 18, 19
2 ....1, 22, 24, 33

Fed R. Civ. P. 26(c)(7) ..........................................................................................15, 21, 22, 23, 24

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Plaintiff Voith Paper GmbH & Co. KG (hereinafter referred to as "Plaintiff' or "Voith") by and through its attorneys hereby moves this Court to enter a protective order, pursuant to Federal Rules of Civil Procedure 26(c), providing that JohnsonFoils, Inc. ("JohnsonFoils") may not disclose Voith's highly confidential infor nation to any individual involved, either presently or for some reasonable time in the future, in competitive business practices and decision making relating to twin wire formers-----the subject matter of United States Patent Nos. 5,718,805 ("tile '805 patent") and 5,972,168 ("the '168 patent") (collectively, "the Patents-in-Suit")-inciudiiig competitive patent prosecution, competitive product research, competitive product development, competitive product planning, competitive marketing, and competitive bidding. As part of the requested protective order, Voith requests the imposition a bar on patent prosecution activities relating to the Patents-in-Suit for a period of three (3) years on any individual to whom Voith's Highly Confidential infori-nation is disclosed. NATURE AND STAGE OF PROCEEDINGS This is a patent infringement action. The Complaint was filed by Voith on April 27, 2007, against Defendant JohnsonFoils. See Complaint, D.I. 1. After requesting and obtaining several unopposed extensions of time, Johnson.Foils filed its answer, affirmative defenses, and counterclaims, on August 16, 2007. See "Defendant, JohnsonFoils, Inc.'s Answer, Affirmative Defenses, and Counterclaims to Plaintiff, Voith Paper GmbH & Co. KG's Complaint," (JohnsonFoils's "Answer, Defenses, and CounterClaims") D.I. 19. Voith replied to the Counterclaims on September 5, 2007. See "Voith's Answer to Defendant's CounterClaims," D.I. 31. On August 1, 2007 , a scheduling conference pursuant to Fed. R. Civ. P. 16(b) was held. A Scheduling Order was entered on August 3, 2007, ordering that the "[e]xchange and

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completion of contention interrogatories, identification of fact witnesses and document production shall be commenced so as to be completed by February 15, 2008." Rule 16(b) Scheduling, Order, "Scheduling Order," D.I. 17. On August 16, 2007, JohnsonFoils served seven (7) deposition notices before written discovery had even begiun. JohnsonFoils filed a "Motion for Summary Judgment That U.S. Patents 5,718,805 and 5,972,168 are Invalid," on August 22, 2007. D.I. 25. JohnsonFoils withdrew that motion on August 24, 2007. See JohnsonFo1Is's Notice of Motion to Withdraw its Motion for Sunnmary Judgmennt, dated August 24, 2007, D.I. 26. JohnsonFoilS filed its "Defendant's Motion to Stay the Proceedings Pending Reexamination of the Patents in Suit or in the Alternative For Leave to File a Motion for Summary Judgment Prior to August 20, 2008 That U.S. Patents 5,718,805 and 5, 972,168 are Invalid" oil August 28, 2007. D.I. 28. Voith filed its response "Plaintiff Voith Paper GmbH & Co. KG's Response To Defendant's Motion to Stay the Proceedings Pending Reexamination of the Patents in Suit OF in the Alternative For Leave to File a Motion for Summary Judgment Prior to August 20, 2008 That U.S. Patents 5,718,805 and 5, 972,168 are Invalid" oil September 17, 2007. D.I. 33. JohnsonFoils' Motion is currently pending and no hearing date has been set.
Both parties have served discovery requests and their respective objections and responses

to discovery requests.

Voith filed its "Motion to Compel Defendant JohnsonFoils, Inc. to Provide Information Requested in Voith's First and Second Sets of Interrogatories and to Produce Documents Responsive to Voith's First and Second Requests for Documents" on November 9, 2007. D.I. 43 ("Voith's Motion to Compel"). JohnsonFoils' "Opposition to [Voith's Motion to Compel]" was filed on November 28, 2007. D.1, 46. Voith filed its "Reply to JohnsonFoils' Opposition to

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Voith's Motion to Compel" on December 3, 2007, D.I.. 48. The Court issued an Oral Order on December 6, 2007, cancelling the scheduled December 7 Motion Day hearing and stating that the Court would rule based on the parties' written submission. STATEMENT OF FACTS A. The Parties ' Allegations

Volth's Complaint alleges that JohnsonFoils has and continues to infringe Volth'S '805 patent and Voith's '168 patent, (the "Patents-in-Suit"), both entitled Twin Wire Former, and relating to paper forming machines. See Complaint, 1111 14-26, D.I. 1. JohnsonFoils' Answer and Counterclaims purports to dispute Volth'S Infringement allegations. See JohnsonFolls' Answer and Counterclaims, Second Affirmative Defense, D.I. 19. JohnsonFoils' Answer and Counterclaims further purports to allege, miter alicr, that the Patentsin-Suit are invalid under 35 U.S.C. 5 103. See id., Third Affirmative Defense; id., Second Counterclaim, 1119.

B.

Voith' s Highly Confidential Information

As part of its response to JohnsonFoils' requests for documents, Voith has collected doctl111eI1tS for production that contain Volth'S confidential business information ("Voith's CBI"). Declaration of Kurt F. Brandauer, 111, Esh. 1.i For example, JohnsonFoils has requested doCLIMents "establishing Voith's alleged investment, [sales, costs, profits, and revenue] associated with the subject matter of the Patents-in-Suit." hL,- Defendant JohnsonFoils , Inc.'s First Set of Requests for Documents and Things to Plaintiff, Request Nos. 3-7, Exh. 2. JohnsonFoils further requests "applicant" documents relating to the Patents-in-Suit, including document files, design documents, installation documents, and manufacturing documents. See
1 The characterizations oflohnsonFoils' requests for production are provided for the purpose of demonstrating JohnsonFoils' apparent intent to obtain Voith's CBI, without in any play waiving or deviating from the objections and responses to Johnsonl:oils' discovery requests as fully set forth in Voith's respective Objections and Responses.

J

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id., Request Nos. 8-9, 11 . In addition to its relevance to JohnsonFoils' discovery requests, Voith's CBI is also relevant to Voith ' s defenses to JohnsonFoils' Purported Counterclaim allegation that the Patents -in-Suit are invalid pursuant to 3S U.S.C. §103. JohnsonFoils ' Answer and Counterclaims , Third Aff rniative Defense; id., Second Counterclaim, 11 19.
Voith's CBI includes both technical information and general business information. Declaration of Kurt F. Brandauer , 113. For example, Voith's CBI includes technical information relating to the research, development, manufacturing, and testing of Voith' s paper formers, their components, and their accessories . ICI. Among other things, Voith 's CBI Includes trade secrets and know -how which have neither been publicly disclosed nor disclosed as part of any pending patent application . Icl. Voith' s CBI also includes information relating to Voith 's costs,

investments, revenues, profits , marketing, exportation , importation , distribution, sale, and licensing of Voith's paper formers , their components, and their accessories. Id. C. Measures Taken to Maintai n the Confidentiality of Voith's CBI

Voith takes numerous measures to protect its CBI . Declaration ofKurt F. Brandauer, First, Voith' s CBI Is only disclosed to individuals who are under all obligation to maintain its confidentiality. Id. Moreover, all employees of Voith are required, as a condition of their employment, to agree not to disclose any Voith CBI to any unauthorized individuals. Icl. To the limited extent that Voitll discloses its CBI to third parties, such third parties are required to maintain the confidentiality of Voith's CBI, k1. Voith has invested in technical and physical measures to protect the confidentiality of its CBI, including encryption and secure servers, as well as conventional physical security , including security personnel responsible for ensuring compliance with Voith' s CBI security measures. Id.

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D.

JohnsonFoils Is a Direct Competitor of Voith With Respect to Subject Matter Relevant to This Action

JohnsonFoils, and its parent company AStenJohnson, Inc. (collectively, "JohnsonFoils"), are direct competitors of Voith in the paper forming machine rebuild market. Declaration of Kurt F. Brandauer, J^ 4. JohnsonFoils has made competing bids on "vet end" paper former rebuilds. Id. Such "wet end" rebuilds are directly related to the subject matter of this action. Id. .lohnsonFoils' requests .for documents include at least some Voith CBI directly related to the competitive technical and business aspects of the "wet end" of paper forming machines, Id. In addition to competing with Voith on "wet end" paper former rebuilds, JohnsonFoilS also competes with Voith for intellectual property on paper forming machines. For example, United States Patent Application Publication No. 2007/0267161 ("tile '164 Application"), entitled "Headbox and Stock Delivery System for a Papermaking Machine" is assigned to JohnsonFolls' parent company AstenJohnson, Inc. See United States Patent Application Publication No. 2007/0267164, Exh. 3. The correspondence address for the '164 Application is listed as "Volpe and Koenig, P.C.," JohnsonFoils' counsel of record in the current action. Id. Moreover, JohnsonFolls' lead attorney in this case, Randolph J. Huts, Esq., filed a substantive paper in the prosecution of the '164 Application as recently as December 13, 2007. See Supplemental information Disclosure Statement, Exh. 4; Pacer, Record Attorneys, Exh. 5. E. The Disclosure of Voith' s CSI to Individuals Involved in Competitive Business Practices Would Likely Harm Voith 1. There are numerous potential improper uses of Voith's CBI.

The disclosure of Voith's C131 to its competitors, or the disclosure of Voith's CBI to individuals engaged in competitive activities on behalf ofVoith's competitors, including Voith's direct competitor JohnsonFoils, would likely be highly prejudicial to Voith. See Declaration of

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Kurt F. Brandauer, 115. The disclosure of Voith's technical CBI to a competitor would haral Voith because accurate information about Voith's technical and business activities at least provides an informed competitor with the ability to 1) focus its pending patent applications on excluding Voith's specific technology from the marketplace, 2) optimally adjust its competitive bids and marketing rased on information about Voith's bids, marketing, costs, and revenues, and 3) unfairly benefit from the results of Voith's research by directing its research efforts to either building on Voith's research results or avoiding the expense of duplicating Voith's research results. Id.

2.

Voith's greater investment in its CBI makes it likely that JohnsonFoils would unfairly benefit from a disclosure ofVoith's CBI to individuals involved in competitive business practices for or on behalf of JohnsonFoils.

JohnsonFoils has entered into direct competition with Voith only recently, within the last 4 years. See Declaration of Kurt F. Brandauer, 116. Voith's investment in creating the CBI requested by JohnsonFoils, extending over decades, likely vastly exceeds JohnsonFoils' investment in creating its CBI. Voith's CBI, if disclosed to individuals involved in competitive activities for or on behalf of JohnsonFoils, would confer a substantial and undeserved benefit on JohnsonFoils, to Voith's detriment. Id. 3. There is a [sigh likelihood that Voith's CBI will be improperly used if disclosed to individuals involved in competitive business practices.

Because JohnsonFoils is a direct competitor of Voith, it would be difficult, if not impossible, for someone engaged in preparing the claims of a competitive patent application, a patent continuation, or a patent reissue, to avoid being influenced by their exposure to Voith's CBI. Declaration of Kurt F. Brandauer, 417. As part of their routine practice, patent prosecutors specifically target their competitor's present and potential future products and services. Id.

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Exposure to Voith's CBI would prejudice Voith by eliminating the guesswork associated with that practice, even on the part of a prosecutor having the best intentions to respect limitations on the improper- use of Voith's CBI. Id. Although Voith would prefer not to disclose its CBI to any attorney involved in competitive patent prosecution, imposing a limit on competitive prosecution activities of three (3) years would reasonably protect Voith in two ways. Id. First, the three (3) year bar would provide Voith with a fair opportunity to seep prior protection for any Voith CBI disclosed in the JohnsonFoils Litigation. Id. Second, the three (3) year bar would limit the impact of the disclosure by rendering the CBI less current. Id. In addition, it would be difficult , if not impossible, for counsel involved in other forms of competitive
avoid decision m aking, such in fluenced by

as business p lan ning, marketing, and bidding
to

decisions, to

being

exposure

V o ith's

CBI, to

Voith's detriment. De c lara tion of K urt F.

Brandauer,
competitive

11 S.

As part of the routine consideration of business plans, marketing, sales, and
in dividuals involved in

b i dding,

Such bus iness de cisions consider"

the

potential

activities of competitors. Id. Also, a company's decision whether to award a contract to Voith
or to

one

of V o ith's competitors depends on comp aring competing bids and services.

ICI.

Disclosing Voith's CBI to individuals involved in competition with Voith would likely eliminate the guesswork associated with predicting the nature and scope of expected competition from Voith, and unfairly benefit JohnsonFoils, to Voith's detriment. Id. F. Voith' s Efforts to Negotiate an Agreed Protective Order

Voith informed JohnsorFoils on September 21, 2007, that its proposed protective order would permit two levels of confidentiality - Highly Confidential and Confidential. See Letter from Michael .I. Fink to Anthony S. Volpe, dated September 21, 2007, Etch. 6. Voith explained

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that Highly Confidential information tivould be limited to litigation counsel and qualified experts. Id. During the party's telephone conference relating to discovery issues held oil October 24, Voith reiterated that it would be producing documents in accordance with these confidentiality designations. Voith also reiterated its request that JohnsonFoils produce document pursuant to this Court's Local Rule 26.2. In response, JohnsonFoils informed Voith, for the first time, that it would not respect Voith's confidentiality designations prior to entry of an agreed protective order. See Letter from Anthony S. Volpe to Neal Goldberg, dated October 24, 2007, Exh. 7. JohnsonFoils provided no reason for rejecting Voith's confidentiality designations, and said nothing about a potential conflict resulting from JohnsonFoils' trial counsel's involvement in competitive prosecution activities. Id. .lohnsonFoils also refused to produce any documents prior to entry of an agreed protective order. Id.
Voith provided JohnsonFoils with a detailed proposed protective order which included the two levels of confidentiality, Confidential and Highly Confidential, originally disclosed to JohnsonFoils on September 21, 2007. See Voith's Proposed Protective Order, Exh. 8. Voith's Proposed Protective Order limits disclosure of a party's confidential information to individuals not involved in competitive activities, such as competitive patent prosecution and competitive

product development on the subject matter of the Patents-in-Suit. Id., Jill 6-8. Oil November 2, JohnsonFoils stated that it was in the process ofreviewing Voith's Proposed Protective Order, and .further assured Voith that it tivould provide comments and revisions. See Email from Anthony S. Volpe to Neal Goldberg, dated November 2, 2007, Exh. 9. Havin received no response from JohnsonFoilS on Voith's Proposed Protective Order, Voith delivered its initial production of responsive documents to JohnsonFoils on November 7,

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2007, specifying that documents designated Highly Confidential could only be disclosed to counsel of record who accept Voith's proposed limits on patent prosecution activities relating to the subject natter of the Patents-in-Suit. See Letter from Neal Goldberg to Anthony S. Volpe, dated November 7, 2007, Exh. 10. Without any prior coinferral with Voith, JohlnsolnFoils returned Voith's documents. See Letter from Anthony S. Volpe to Neal Goldberg, dated November 8, 2007, Exh. 11. In refusing to accept Voith's documents, JohnsonFoils did not provide any explanation for rejecting Voith's proposed limitation on patent prosecution for individuals viewing Voith's Highly Confidential documents. Id. JohnsonFoils' sole stated basis for returning Voith's documents was that Voith's proposed limit on prosecution constituted a "Unilateral demand." Icl.

JohnsonFoils subsequently rejected Voith's Proposed Protective Order in its entirety. See Letter from Anthony S. Volpe to Michael J. Fink, dated 9:55 a.m., November 16, 2007, Exh. I2. In rejecting Voith's Proposed Protective Order, JohnsonFolls did not identify any particular disagreement
with any

particular

provision.

Id. Instead of providing JohnsonFolls

the

promised

comments

and revisions on Voith's Proposed Protective Order,

provided its own draft

protective order. See Email from Anthony S. Volpe to Michael J. Fink, dated 4:55 p.m., November 16, 2007, Exh. 13; JohnsonFoils' Draft Protective Order, Exh. 14. As of November 16, 2007, JohnsonFoils' only stated criticism of Voith's Proposed Protective Order was that Voith's proposal was "unworkable." See Letter from Anthony S. Volpe to Michael J. Finn:, dated 9:55 a.m., November 16, 2007 ("[W]e found you (sic) proposal unworkable and set about preparing our own draft ...."). Johnson.Foils Draft Protective Order provides for only one confidentiality designation: "Attorneys Eyes Only." See JohnsonFoils' Draft Protective Order, J[ 1. Although nominally

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designated "Attorneys Eyes Only," JohnsonFoiIs' Draft Protective Order allows documents so designated to be disclosed to a non-attorney "party representative." N., 115. JohnsonFolls' Draft Protective Order further provides for the disclosure of documents designated "Attorneys Eyes Only' to a party's in-house counsel. Id. JohnsonFoils' Draft Protective Order places no limit on the disclosure of confidential documents to in-house counsel, party representatives, or counsel of record, involved in competitive activities for, or on behalf of, JohnsonFoils, except foi- the general proscription against using Voith's confidential information for pLn-poses other than the instant litigation. Id., 112. Similar to Voith's Proposed Protective Order, JohnsonFoils' Draft Protective Order is an "umbrella protective order" which provides that the producing party chooses the confidentiality designation of its own documents and information in the first instance. See id., 113.

After a review of JohnsonFoils' Draft Protective Order, Voith invited JohnsonFoils to participate in a conference call to "narrow the points in dispute" between the parties' respective protective order proposals. See Email front Michael J. Fink to Anthony S. Volpe, dated November 18, 2007, Exh. 15. JohnsonFoils ignored Voith's invitation to confer, instead stating that Voith's Proposed Protective Order "goes well beyond anything necessary for [tile technology at issue]...." See Email from Anthony S. Volpe to Michael J. Fink, dated November 19, 2007, Exh. 16. In response, Voith explained in detail its basis for concluding that JohnsonFoils' Draft Protective Order would result in unnecessary risks that Voith's confidential information would be improperly used by individuals involved in competitive business activities, such as patent prosecution or competitive bidding, against Voith. See Enlail from Michael J. Fink to Anthony S. Volpe, dated November 20, 2007, Exh. 17.

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In response, JohnsonFoils stated that "[t]here is little, if any, reason for [Voith's] broad exclusion of any attorney who sees Voith's information from prosecuting patents. The subject platter has long been public and there is little, if any, information to be produced that related to current prosecution of subject platter in patents that are near to expiration." See Email from Anthony S. Volpe to Michael I Fink, dated November 21, 2007, Exh. 18. JohnsonFoils further stated that "[JohnsonFoils'] in-house general counsel is not a technical person and is not a patent prosecutor," but did not disclose that JohnsonFoils' trial counsel are engaged in competitive patent prosecution. hd. Voith responded to JohnsonFoils' contention that no highly confidential information exists relating to the Patents-in-Suit by explaining that documents disclosing the incorporation of the claimed invention in present-day paper forming machines would contain sensitive proprietary information. See Email from Neal Goldberg to Anthony S. Volpe, dated November 21, 2007, Exh. 19. JohnsonFoils responded that "JohnsonFoils does not accept that there is highly sensitive information simply because [Voith] say[s] there may be such information...." See Email from Anthony S. Volpe to Neal Goldberg, dated November 26, 2007, Exh. 20. ,TohnsonFoils added that disclosing Voith's Highly Confidential information to an in-house JohnsonFoils non-legal representative "is a risk that Voith understood when [Voith] asserted the patents." Iel. JohnsonFoils further directed Voith to seek a protective order from the Court. See id; Entail from Anthony S. Volpe to Michael J. Flr^ -:, dated November 21, 2007.

For the first time, in its Opposition to Voith's Motion to Compel filed November 28, TohnsonFoils disclosed that a limit on competitive prosecution activities "could potentially exclude TohnsonFoils' litigation counsel from reviewing [Voith's] `Confidential' or `Highly Confidential' information." See Defendant's Answering Brief in Opposition to Plaintiff's

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Motion to Compel, D.1. 46, at p. 2, fn. 1. JohnsonFoils did not identify any particular litigation Counsel who "could potentially" be excluded. Id. Nor did JohnsonFoils identify the basis for the potential exclusion. Id. Prior to November 28, 2007, JohnsonFoils only stated basis for its failure to respond to Voith's discovery requests was the lack of an agreed protective order. Id., passim. The following day, on November 29, 2007, nearly seven months after its first appearance on May 4, 2007, D.I. 5, JohnsonFoils filed its Disclosure Statement pursuant to Rule 7. 1, disclosing that AstenJohnson, Inc. is the corporate parent of JohnsonFoils. D.I. 47. In a further effort to move discovery forward, Voith then asked JohnsonFoils to agree to a temporary interim modification of Rule 26.2 which would permit Voith to limit the disclosure of Voith's Highly Confidential documents to those ofJohnsonForls' litigation counsel not engaged in competitive business practices, including patent prosecution, until the parties' pending protective order dispute was resolved by the Court. See Email from Michael J. Fink to Anthony S. Volpe, dated November 30, E.xh 2 1. JohnsonFoils refused. See Email from Anthony S. Volpe to Michael J. Fink, dated December 2, 2007, Exh. 22.
Responding to JohnsonFoils' reliance on the parties' protective order dispute to defend its failure to respond to discovery requests in JohnsonFoils' Opposition to Voith's Motion to Compel, Voith requested that this Court enter a temporary protective order, pending resolution of the parties' dispute, limiting the disclosure of Highly Confidential documents to litigation counsel subject to a prosecution bar oil the subject natter of the Patents-In-Sort. See Reply to JohnsonFoils' Opposition to Voith's Motion to Compel, at 11-12. D.I. 48.

A month after returning Voith's documents, on Friday, December 7, JohnsonFoils sent a fax to Voith purporting to object to Voith's discovery responses and reiterating JohnsonFoils' refusal to agree to any prosecution limitation oil JohnsonFoils' counsel provided access to

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Voith's Highly Confidential documents gilder Rule 26.2. See Fax from Anthony S. Volpe to Neil F. Greenblurn and Michael J. Fink, dated December 7, 2007, Exh. 23. On Monday, December 10, Voith provided a detailed response to the discovery issues raised in JohnsonFoils' Letter, and referred JohnsonFoils to Voith's pending request to this Court for a temporary modification of Rule 26.2 to prohibit the disclosure of Highly Confidential or Attorneys' Eyes Only documents to individuals involved in patent prosecution on the subject matter of the Patents-in-Suit pending resolution of the parties' protective order dispute. See Letter from Neal Goldberg to Anthony S. Volpe, dated December- 10, 2007, Exh. 24. In advance of the parties' scheduled conference call to discuss pending discovery disputes, Voth asked .lohnsonFoils to identify those of its litigation counsel involved in patent prosecution in the subject matter of the Patents-ill-Suit. See Entail from Michael J. Fink to Anthony S. Volpe, dated December 12, 2007, Exh. 25. In that letter, Voith explained the benefits of agreeing to a temporary limit on prosecution activities: This proposal would allow JohnsonFoils to obtain access to Voith's documents immediately, subject only to a limit on prosecution that would be subject to Court approval. Such a temporary limit would impose no restraint on JohnsonFoils litigation counsel not presently, or for some time in the future, prosecuting patents in the subject matter of the Patents-in-Suit. Moreover, Voith's proposal would impose no substantial restraint oil any JohnsonFoils litigation counsel if the Court

ultimately rejects Voith's proposed prosecution bar. M. Voith then illitiated a telephone conference with JohnsonFoils, oil December 13, 2007, to discuss the parties' pending discovery dispttes. See Declaration of Neal Goldberg, JJ 2, Exh. 26. The participants at the telephone conference included Voith's counsel, Michael J. Fink and Neal Goldberg, and JohnsonFoils' counsel, Anthony S. Volpe and John O'Mally. Icf. During this telephone conference, JohnsonFoils stated that it would not identify any litigation counsel engaged in prosecution activities on behalf of JohnsonFoils or AstenJohnson. Id., 4114.

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JohnsonFoils also refused Voith's offer to provide its Highly Confidential documents to a designated JohnsonFoils counsel of record, including local Delaware Counsel, not involved in prosecution or other competitive business activities on behalf of JohnsonFoils, pending the Court's resolution of the parties' protective order dispute. Id.,11 5. JohnsonFoils acknowledged that the Court might impose a prosecution bar if Voith satisfied the Court that its document production included documents meriting such protection, but refused to agree to Voith's proposed compromise temporary prosecution bar contingent on Court approval. Id., 116. SUMMARY OF ARGUMENT 1. Voith's document production includes documents that contain Voith's CBI, including

trade secrets and other confidential business information, that are relevant to support Voith's claims and defenses, and are responsive to JohnsonFoils' document requests. The disclosure of Voith's CBI to individuals involved in competitive business activities
for or on behalf of.lohnsonFoils would be highly prejudicial to Voith, and is not necessary for JohnsonFoils to defend or assert any claim in this litigation. Because patent prosecution is directed to excluding competitors front the market, disclosing Volth's CBI to individuals involved in patent prosecution matters either- now, or tivithin the next three (3) years, would increase the risk that JohnsonFoils would improperly use Voith's confidential information to target Voith's technology and exclude Voith from the marketplace. In addition, disclosing Voith's CBI to individuals involved in competitive business activities, such as bidding for paper forming rebuild contracts, would increase the risk that Voith's CBI would be improperly used to improve the competitiveness of JohnsonFoils' bids. Moreover, the risk of harm to Voith from the disclosure of its CBI to individuals involved in competitive business activities in the subject matter of the Patents-in-Suit is substantial and outweighs any inconvenience to JohnsonFoils

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from having to limit the disclosure of Voith's CB1 to individuals not involved in such competitive activities. 3. Because this is a commercial action between private litigants in which a limitation on the

disclosure of a party's CBI to individuals involved in competitive business practices adverse to the disclosing party is necessary to prevent serious harm and is consistent with the public interest, the imposition of a protective order pursuant to Fed. R. Civ. P. 26(c)(7) is warranted. 4. Because the risk of harm to Voit1 from the disclosure of Voith's CBi to individuals

involved in competitive patent prosecution or other competitive business activities is great compared with any inconvenience to Johnson.Folis resulting from tie imposition of a protective order, the disclosure of Voith's CBI should be limited to those of JohnsonFolls' counsel who are not involved in competitive business activities, including competitive patent prosecution either now or within the next three (a) years. 5. Moreover, because of the volume of responsive documents containing Voith's CBI and

the fact that both parties have proposed "umbrella protective orders" in their respective proposed protective orders, a protective order should be entered which permits each party to designate documents "Highly Confidential" in the first instance, and benefit from restrictions on the disclosure of Highly Confidential documents. ARGUMENT I. INTRODUCTION A. Disclosing Voith's Confidential information to its Competitor JohnsonI'oils Risks Serious Harm to Voith

As a world leader in the paper forming machine industry, Voith's technological and marketplace activities are keenly followed by its competitors. Voith's substantial investment in research makes Voith an easy target for copyists seeking to unfairly benefit from Voith's

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innovations. Voith's established position in the marketplace also makes Voith the primary target in the competition for paper forming machine contracts. To maintain the competitive edge conferred by its technological and business know-how, Voith maintains strict confidentiality and control over its confidential business information ("CBI"). JohnsonFoiis, a competitor of Voith for the past four years in the paper forming machine rebuild market, has requested documents that contain Voith's CBI. For example, JohnsonFoils has requested inforrriation on paper forming machines which embody the invention of the Patents-in-Suit. Although the Patents-in-Suit were originally filed in the early nineties, the extraordinary utility of the claimed invention has led to its continued incorporation in today's paper forming machines. Consequently, documents relating to such machines are likely to disclose recent, and highly confidential, innovations and proprietary know-horn. JohnsonFoils has also requested documents establishing the costs, revenues, and profits associated with machines incorporating the claimed invention. Because, as confirmed by JohnsonFoils' accused activities, such machines are the subject of present-day competitive bidding, that request also includes current and highly sensitive Voith CBI.
In addition to the documents requested by JohnsonFoils, other documents which support Voith's claims and defenses also contain Voith's CBI. For example, documents relating to the widespread incorporation of the claimed invention in paper forming machines contain Voith's technical CBI and demonstrate the objective nonobviousness of the Patents-In-Suet. Financial documents relating to the degree of commercial success of paper forming machines

incorporating the claimed invention also contain Voith's CBI. In addition, documents relating to
Voith's

damages,
projects

in cl uding

documents e stablishing Volth's

lost

profits

from infringing wet-en d

rebuild

performed b y .lohnsonFoils, contain Voith's CBI.

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Disclosing Voith's CBI to competitors, such as JohnsonFoils, risks serious harm to Voith. Disclosing Voith's technical CBI to a competitor would decrease the value of Voith'S substantial investment in research and product development by closing the technological gap between Voith and its rivals. In addition, knowledge of Voith's technical CBI would provide a competitor with the ability to focus the claims of pending and future patent applications, continuation

applications, and reissue applications, on excluding Voith's products from the marketplace. Without Voith's CBI, a competitor would have to rely on guesswork or risk drafting overly broad claims that fatally incorporate the prior art. Disclosing Voith's business CBI to a competitor would harni Voith by, inter alicr, eliminating the guesswork a competitor would ordinarily do in order to formulate competitive bids for contracts. B. JohnsonFoils Has Unreasonably Rejected Voith 's Proposals to Reduce tile Risk of Harm Resulting From the Disclosure of Voith's CBI Without Disclosing Any Overriding Prejudice to JohnsonFoils or Cooperating With Voith to Ameliorate Any Prejudice

Despite Voith's reheated attempts to explain the risk to Voith of disclosing Voith's CBI to Individuals involved in competitive activities, including patent prosecution, for or on behalf of JohnsonFolls, JohnsonFoils insists that JohnsonFoils' patent prosecutors have unlimited access to Voith's CBI, while refusing to disclose the extent to which,lohnsonFoils' counsel are engaged in competitive business activities, including patent prosecution.

Although JohnsonFoils now appears to raise the possibility that its counsel of record's involvement in patent prosecution for JohnsonFoils is at the heart of its objection to Voith's Proposed Protective Order, prior- to JohnsonFoils' November 28, 2007, Opposition to Voith's Motion to Compel, JohnsonFoils based its rejection of Voith's confidentiality concerns on its asserted, and extraordinary, disbelief that any such confidential business information existed. See Letter from Anthony S. Volpe to Michael J. Fink, dated November 21, 2007. Responding to

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JohnsonFoils' contention that the filing date of the Patents-in - Snit rendered Voith's CBI public, Voith explained that the invention , due to its success , had been incorporated in present day paper forming machines for which documents would reveal more recent technological developments. See, e.^., Email from Neal Goldberg to Anthony S. Volpe, dated November 21, 2007. Although denying the existence of Voith's CBI in its protective order negotiations with Voith,

JohilsonFoils told this Court, in its Opposition to Voith ' s Motion to Compel, dated November 25, 2007, that Voith ' s proposed restrictions on the disclosure of its confidential information had the "potential" to exclude JohnsonFOils ' trial coLIllsel. This was the first time that JohnsonFoils raised the issue of this potential conflict as its reason for rejecting Voith's proposed prosecution bar. Then, on November 29, 2007, JohnsonFoils filed its Rule 7.1 Disclosure statement,
disclosing AstenJohnson , Inc. as its corporate parent nearly seven months after JohnsonFoils' May 4, 2007, appearance . D.I. (appearance of Anthony S. Volpe ); D.I. 47 (Rule 7.1

Statement); Fed. R. Civ. P . 7.l(b)(1) (requiring the filing of the 7 . 1 corporate disclosure statement with a party's first appearance). Apart from this vague snMMestiOn that Voith's proposed limits on the competitive activities of those exposed to Voith's CBI could exclude JohnsonFoils ' counsel of record, ]however, Johnson Foils , to this day, has identified no particular counsel that would be excluded by Voith' s proposed prosecution bar. Voith subsequently attempted to ascertain the extent to which JohnsonFoils' litigation counsel may be "potentially excluded" by a prosecution bar, but .1011nsonFoils flatly refused to identify any such counsel. See En1ai1 from Neal Goldberg to Anthony S. Volpe, dated December 12, 2007; Declaration of Neal Goldberg, 114. By refusing to disclose its litigation counsel's involvement in competitive business practices, including patent prosecution , JohnsonFoils has also concealed the extent of any

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inconvenience to JohnsonFoils resulting from the imposition of Voith's Proposed Protective
Order, and has effectively blocked a negotiated resolution of the parties' dispute. Without the information withheld by JohnsonFoils, it is difficult, if not impossible, to balance any potential inconvenience to JohnsonFolls against the serious risk to Voith of disclosing Voith's CBl to individuals involved in competitive business practices. Moreover, JohnsonFoils' refusal to disclose the existence of potentially conflicting competitive activities of any of its counsel of record casts doubt on the efficacy of leaving to JohnsonFoils the responsibility of eliminating the risk that Voith's CBI will be improperly used. JohnsonFoils' further seven month delay in filing its Rule 7.1 disclosure statement, disclosing its corporate patent AstenJohnSon, Inc., the assignee of at least some JohnsonFoils patents, is evidence of a pattern of JohnsonFoils' delay in disclosing facts relevant to the potential misuse of Voith's CBI. Nonetheless, even without the information concealed by JohnsonFoils, it is clear that no potential inconvenience to JohnsonFoils of Voith's Proposed Protective Order outweighs the serious prejudice to Voith of disclosing Voith's CBI to individuals involved in competitive business activities for or on behalf of JohnsonFoils. Becailse Voith's proposed limitations on JohnsonFoils' counsel only limit post-disclosure involvement in patent prosecution, JohnsonFoils could easily overcome qLiy prejudice to its defense of this action by retaining alternative patent prosecution counsel for prosecution matters relating to the subject matter of the Patents-in-Suit. Moreover, any purported inconvenience to JohnsonFoils is purely speculative, if not nonexistent, if at least some of JohnsonFoils' counsel, including its local counsel of record, are not engaged in the competitive business practices at the heart of this protective order dispute.

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C.

Both Parties' Protective Order Proposals Provide for Unilateral Confidentiality Designations, But Differ in Specifying Restrictions on the Disclosure of Confidential Information 1. Both parties propose an umbrella protective order.

Despite their differences, both parties' protective order proposals permit each party to unilaterally designate the confidentiality level of its documents, subject to a potential challenge. Thus, the parties agree that there is no need, apart from specific, instances where a party's ;ood faith confidentiality designation is challenged, to demonstrate the need for confidentiality on a document by document basis in the first instance. This approach is broadly approved for complex patent cases, and makes the most sense in this case in view of the expected close of document discovery oat February 15, 2008. In addition to conserving on judicial resources, the protective order most consonant with both parties' proposals would include this "umbrella protective order" procedure. 2. The parties differ on whether individuals involved in competitive business practices should be excluded from the disclosure of Voith's CRI. Although agreeing that all Umbrella protective order is appropriate, the parties differ oil whether Voith's CBI should be disclosed to individuals involved in competitive business practices, including patent prosecution. As explained above, in response to Voith's repeated attempts to resolve the parties' protective order dispute, JohnsonFoils has refused to address Voith's concerns, instead relying on 1) its, incredible, denial that Voith's CBI exists, 2) Its claim that it would be inconvenienced if denied the opportunity to discuss Voith's CBI with .IohnsonFoils employees familiar with the industry, and 3) its suggestion that a prosecution bar "could potentially exclude" some unspecified litigation counsel. Johnson-Foils' concealment of its counsel's involvement in competitive activities renders any purported inconvenience

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speculative. Such speculative inconvenience is insufficient to outweigh the serious risk to Voith of disclosing its CBI to individuals involved in competitive activities. Tile current impasse between Voith and TohnsonFoils is best resolved by adopting the protective order provisions proposed by Voitll, which protect the parties' highly confidential information from disclosure to individuals involved in competitive business activities. The serious risk that in-house counsel involved in competitive business activities will be influenced by their exposure to Voith's CBI, to Voith's detriment, is reason alone for barring all such individuals from access to Voith's CB1. The risk of disclosing CBI to the in-house employees of a competitor is so great that courts have imposed a presumption against such disclosures absent a demonstration that measures have been taken to insulate the CBI from individuals presently or prospectively involved in competitive activities.
The risk of disclosing Voith's CBI to those of JohnsonFoils' 0ft81de counsel engaged in competitive business activities, such as advising JohnsonFoils oil their intellectual property portfolio and prosecuting patent applications, patent continuations, and reissue applications, is no less serious. Intellectual property development is an intensely competitive endeavor. Indeed, the patent right is quintessenta]ly a riglit to exclude competitors. Knowledge of a competitor's CBI would eliminate the guesswork ordinarily involved in the effort to maximize the effect of patent exclusivity on competition. Even if a competitor's patent portfolio is directed to only a small, but difficult to substitute, part of a larger machine, patent enforcement could shut down a competitor's entire enterprise. Voith's proposed bar on competitive patent prosecution at least offsets the risk of this substantial harm.

As more fully explained below, Voith's Proposed Protective Order Rule provides precisely the protections intended by Rule 26(c)(7).

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II.

THE IMPOSITION OF A PROTECTIVE ORDER PURSUANT TO RULE 26(c)(7) IS NEEDED TO PROTECT VOITH FROM THE SUBSTANTIAL RISK OF SERIOUS HARM RESULTING FROM IMPROPER OR INADVERTENT DISCLOSURE OR USE OF VOITH'S CBI
In order to fully support its claims and defenses, as well as respond to JohnsonFoils'

discovery requests, Voith expects to produce documents containing highly confidential business and technical information. For example, documents demonstrating the incoil)oration of the claimed invention in present-day paper making machines are relevant to the commercial success of the invention, one of the objective considerations of a nonobviousness defense to JohnsonFoils' invalidity allegations. Such documents include highly confidential information relating to Voith's current methods for paper malting in general, and the practice of the invention in particular. Voith's C131 also supports Voith's claim for lost profits due to JohnsonFoils' accused infringing activities. Although the production of Voith's CB1 is not at issue, Voith's Proposed Protective Order, consistent with Rule 26(c), seeps to limit the Inannea· and extent of the disclosure in order to balance the risk of inadvertent or improper use of Voith's CB1 against any purported inconvenience to JohnsonFoils.

The application of the required balancing to this case supports Voith's contention that Voith's CBl should not be disclosed to individuals involved in competitive business activities, including competitive patent prosecution on the subject matter of this lawsuit for a period of three (3) years, for or on behalf of JohnsonFoils. First, the harm to Voith from inadvertent or improper- use of its CB1 is as great as it is difficult to detect or prevent, even on the part of wellmeaning and responsible members of the bar. Courts have recognized that exposure to a competitor's confidential information puts individuals involved in competitive business practices in the untenable position of having to deprive their employer- or client of advice or leaving to providing advice that improperly benefits from another party's confidential information.

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Any inconvenience to JohnsonFOils from precluding individuals involved in competitive business practices from receiving Voith's CBI must be balanced against the harm to Voith from the risk that its confidential information will be being improperly or inadvertently disclosed or used. At most, such a restriction forces JohnsonFoils to choose between having a particular lawyer receive Voith's CBI or having that lawyer engage in competitive business practices, such as patent prosecution, oil JohnsonFoils' behalf. To the extent that this choice constitutes a hardship, it is inconsequential when balanced against the potential prejudice to VOith. Indeed, this is the kind of choice that routinely occurs in the ordinary course of legal practice. Despite the heavy presumption that members of the bar strive to behave ethically, tile rules of professional responsibility nonetheless require lawyers to avoid even the appearance of impropriety and turn away potentially conflicting opportunities where there is a risk that confidences obtained in the course of representing one client will be'inlproperly or inadvertently disclosed or used in the course of representing another client. In the context of legal conflicts, as here, a party's ability to retain the counsel of its choice on a particular matter is barred to avoid ever the risk, however slight, that confidences will be inadvertently or improperly used.

A.

Rule 26(c)(7) Expressly Authorizes The Imposition of Protective Orders to Limit the Disclosure of Voith' s Confidential Information explained
above,

As

t he

harm to

V O ith ofdisclos ing its CBI to individuals involved in
Inclu di ng competitive patent

co mpetitive busillesS practices

for or

o n behalf of JohnsonFoils,

prosecution in the subj ect matter of the

PatentS -lit-,Suit, far outweighs

any inc o n ve nienc e to

JohnsonFoils from the imposition of the requested protective order pursuant to Fed. R. Civ. P.
26(c)(7) ("Rule

26 (c)( 7)"). R u le

26(c)(7)

expre ssly authorizes

this

Court to

enter a

pr otective

order, for good cause shown, "that a trade secret or other confidential research, development, or commercial information not be revealed or be revealed only in a designated way." See Fed. R.

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Civ. P. 26(c)(7); Leucaclia, Inc. v. Applied Extrusion Techs., Inc., 998 F.2d 157, 166 (3d Cir. 1993); R.R. Donnellev ck Sons Co. v. Quark, Inc., No. CIVA 06-032 JJF, 2007 WL 61885 (D. Del. 2007); Uotorola, Inc. v. Interdigital Tech. Coil)., 1994 U.S. Dist. LEXIS 20714 (D. Del. 1994); Safe Flight Instrument Coq). v. Sundstrand Data Control, Inc., 682 F.Supp. 20, 21 (D. Del. 1988). "[T]here is good cause [for entry of a protective order prrsuant to Rule 26(c)] when a party shows that disclosure will result in a clearly defined, specific and serious injury." Shingcira v. Skiles, 420 F.3d 301, 306 (3d Cir. 2005) (citing Pansv v. Borough of Stroudsbu)-gh, 23 F.3d 772, 786 (3d Cir. 1994)); Leucadia, 998 F.2d at 166 (good cause shown by party demonstrating a specific need for protection). Voith has easily established the required "good cause" showing in this case by identifying the clearly defined, specific, and serious injury associated with the disclosure of Voith's CBI to individuals involved in competitive business practices, including competitive patent prosecution, on behalf of JohnsonFoils. As explained in the Declaration of Kurt F. Brandauer, Voith's Executive Vice President and General Manager, the disclosure of Voith's technical CBI to individuals involved in competitive research, development, and patent prOSCCUtio1, would either provide JohnsonFoils with uncamed results of a competitor's research, or, worse, enable JohnsonFoils to target the products of a competitor with more certainty than would otherwise be possible. See Declaration of Kurt F. Brandauer. Similarly, the disclosure of Voith's business and financial CBI to JohnsonFoils would, inter ilia, risk that JohnsonFoils' estimate of Voith's bids would improperly benefit from the disclosed information. Id. These risks are specific and scrious.

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B.

Protective Orders Are Especially Warranted In Patent Litigation Disputes Between Private Litigants In Which Limitations on the Disclosure of Confidential Information is Consistent With the Public Interest

In this patent litigation dispute between private litigants, the public interest is best served by entering a protective order protecting the confidential information of the litigants. Because of potential of overly broad protective orders to unduly limit the public's cons ttrtionally protected access to the courts, finding "good cause" for entry of a protective also involves "balancing the interests of the public and the parties ...." Shingara, 420 F.3d at 306 (citing Pfau),, 23 1~.3d at 789). This balancing is performed by considering the following factors, among others: "(1) whether disclosure will violate any privacy interests; (2) whether the information is being sought for a legitimate put-pose or for an improper purpose; (3) whether disclosure of the information will cause a party embarrassment; (4) whether confidentiality is being asserted over information being sought; (5) whether the sharing of information among litigants will promote fairriess and efficiency; (6) whether a party benefitting from the order of confidentiality is a public entity or official; and (7) whether the case involves issues important to the public" ("the Shrngara-Pansy Factors"). Id (citing Glenniede Trust Co. v. Thompson, 56 F.3d 476 (3d Cir. 1995) (citing Pansy, 23 F.3 )d at 787-91)). The Shingara-Pansy factors have been found to favor issuing a protective order in commercial disputes between private litigants. See Damiano v. Sonu illusic Entertainment, Inc., 165 F.R.D. 455, 459-93 (D.N.J. 1996) (applying Shingura-Pansy, factors and concluding that a protective order is warranted). In general, patent litigation between private litigants does not present issues of public importance that would override the need to protect the proprietary information of private business litigants. In fact, it is generally important to the public that innovators, such as Voith, are able to assert their intellectual property rights without having to

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publicly disclose their trade secrets and other confidential information , and thereby confer an undeserved benefit on its competitors. Specifically, with respect to the first factor , in view of the measures taken to protect the confidentiality of Voith's confidential business information, the privacy interest factor weighs heavily in favor of imposing a protective order. As to the second factor, the risk that Voith's confidential information will be used, inadvertently or not, for an improper purpose unrelated to this litigation and to Voith's detriment, weighs in favor of issuing a protective order. ,lohnsonFoils has admitted that this risk is real, ever going so far as to state that "this is a risk that Voith understood when it asserted the patents." See Email from Anthony S. Volpe to Neal Goldberg, dated November ?G, 2007.
As to the third factor, Voith does not contend that disclosing its CBI Will result in "embarrassment." However, to the extent that this factor encompasses adverse competitive consequences to Voith from the unrestricted disclosure of Voith's CBI, this factor also weighs in favor of imposing a protective order. As to the fourth factor, that all of the docu ments at issue are confidential weighs in favor of imposing a protective order. As to the fifth factor, that there are no additional parties with related causes of action with whom Voith' s confidential information might be properly shared for the purpose of judicial economy weighs in favor of imposing a protective order. As to the sixth factor, because the confidential information at issue is not information relating to a "public entity or official," this factor also weighs in favor of imposing of a protective order. Finally, although it is important to the public that intellectual property rights remain enforceable , and the outcome of the this litigation may have some effect on the right to provide important paper machine rebuilding services, Voith's confidential information need not be disclosed to the public in order to satisfy any public interest. Indeed,

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requiring patentees to forego any right to maintain confidential information as a consequence of asserting their rights in patent cases is likely to hanll the public by discouraging investment in intellectual property. Hence this factor also weighs in favor of imposing a protective order. Thus, in all respects, this patent litigation case between private litigants easily satisfies the Pans)--Shingwra factors for imposing, a protective order.

C.

The Disclosure of Voith's CBI to Individuals Involved in Competitive Business Practices For or On Behalf Of JohnsonFoils Would Result in a Serious Risk of Harm to Voith Which Outweighs Any Inconvenience to JohnsonFoils From the Imposition of a Protective Order

Iii addition to satisfying the Shingara-Pansi, factors .for issuance of a protective order, as explained further below, Voith's Proposed Protective Order also properly balances the risk of harill to Voith against any inconvenience to JohilsonFoils. 1. Johnson Foils ' status as a direct competitor of Voith in the wet-end rebuild market poses an unacceptable risk that Voith' s CBI would be unacceptably disclosed or used.

For approximately four years, JohnsonFoils has directly competed with Voith in the wetend paper- forming machine rebuild market. See Declaration of Kurt F. Brandauer,116. In addition , JohnsonFoils competes with Voith for intellectual property in the papermaking machine area. See United States Patent Application Publication No . 2007/026716 4. Both competitive bidding and competitive intellectual property development are activities in which knowledge of a competitor' s confidential information is especially useful. Declaration of Kurt F. Brandauer, 1178. Competitive activities, by definition, always include consideration of a competitors ' activities and ]flans. ICI. However, because such infonllation is kept confidential, such considerations involve a considerable amount of speculation . Id. Having p