United States District Court, M.D. North Carolina
FONTEM VENTURES B.V., a Netherlands company; and FONTEM HOLDINGS 1 B.V., a Netherlands company, Plaintiffs,
R.J. REYNOLDS VAPOR COMPANY, a North Carolina company, Defendant.
MEMORANDUM OPINION AND ORDER
Catherine C. Eagles, District Judge.
Ventures has filed four suits against R.J. Reynolds Vapor
Company claiming that Reynolds is infringing fifteen Fontem
patents used in the manufacture and design of electronic
cigarettes. The parties have largely agreed on a protective
order to cover the scope of discovery and the exchange of
confidential information, but they disagree on whether the
Court should impose a patent prosecution bar. The Court
concludes that the parties are entitled to a protective order
governing the use of designated confidential information
during the litigation process, but that Reynolds has not
shown good cause for a patent prosecution bar.
Protective Orders Generally
good cause, a court may issue a protective order that limits
the scope of discovery, for instance by prescribing a
particular discovery method, prohibiting inquiry into certain
subjects, limiting how confidential information can be used,
or designating who may see confidential business or technical
information. Fed.R.Civ.P. 26(c)(1). To obtain a protective
order to protect confidential information, “[t]he
proponent must show that the information is confidential and
that its disclosure would create a risk of harm to the
party's interests, ” and that the risk of harm from
disclosure outweighs the harm of restricting discovery.
Biazari v. DB Indus., LLC, No. 5:16-CV-49, 2017 WL
1498122, at *2 (W.D. Va. Apr. 26, 2017); see also In re
Violation of Rule 28(D), 635 F.3d 1352, 1357-58 (Fed.
Cir. 2011); In re Wilson, 149 F.3d 249, 252 (4th
Cir. 1998). Technical information in patent cases is
ordinarily entitled to “a heavy cloak of judicial
protection because of the threat of serious economic injury
to the discloser of scientific information.”
Valencell, Inc. v. Apple, Inc., No. 5:16-CV-1-D,
2016 WL 7217635, at *2 (E.D. N.C. Dec. 12, 2016) (quotation
parties agree that a protective order is appropriate to
protect confidential, proprietary, or private information
subject to discovery. See Doc. 72 at ¶ 2; Docs.
75-2, 72-1. They further agree on a process for
designating such information, who can see such information,
how such information can be used, and a process for bringing
disputes over confidentiality designations before the Court.
See Docs. 75-2, 72-1. The Court finds good cause for
entry of a protective order along the lines proposed by the
parties. See In re Deutsche Bank Trust Co. Ams., 605
F.3d 1373, 1378 (Fed. Cir. 2010) (noting that protective
orders “specifying that designated confidential
information may be used only for purposes of the current
litigation . . . are generally accepted as an effective way
of protecting sensitive information while granting trial
counsel limited access to it for purposes of the
litigation”). Such an order will be entered separately.
The Request for a Patent Prosecution Bar
patents at issue in this case are part of the extensive
“Hon patent portfolio” concerning e-cigarettes
and vapor technology. Doc 72 at ¶¶ 7-8; see
also Fontem Ventures B.V. v. R.J. Reynolds Vapor Co.,
No. 17-CV-175, Doc. 24 at 5 (M.D. N.C. Apr. 24, 2017). The
Hon patent portfolio is still growing and Fontem has at least
seven pending patent applications before the United States
Patent and Trademark Office (PTO) related to patents asserted
in this case. Doc. 72 at ¶ 8.
2007, Perkins Coie, the law firm representing Fontem in this
case, has prosecuted the Hon patent portfolio before the PTO
by preparing patent applications, amending claims, and
participating in office actions, among other things.
Id. at ¶ 11; see also Docs. 72-6,
72-7. Perkins Coie has also represented Fontem and its
predecessor, Ruyan Investment Holdings Limited, in other
litigation on the Hon patent portfolio. Doc. 72 at
¶¶ 12-13; Doc. 72-8; see also Doc. 75-1 at
identifies four lawyers, Michael Wise, Joseph Hamilton, Ken
Ohriner, and Lara Dueppen, who have been particularly
involved with both the prosecution and litigation of the Hon
patent portfolio for a number of years. See Doc.
75-1 at ¶¶ 3-6, 9-12. Mr. Wise, Mr. Hamilton, and
Ms. Dueppen are counsel of record in these consolidated
cases. E.g., Doc. 1 at 1. Mr. Wise, Mr. Hamilton,
and Mr. Ohriner prosecuted several of the patents-in-suit
before the PTO. Doc. 75-1 at ¶ 9.
Nature of the Dispute
asks the Court to include a patent prosecution bar in the
protective order to preclude anyone who reviews certain
confidential information from then participating in patent
prosecution for the Hon patent portfolio or otherwise
relating to aerosol or vapor electronic cigarette technology.
Doc. 70; see Univ. of Va. Patent Found. v. Gen. Elec.
Co., No. 3:14-CV-00051, 2016 WL 379813, at *1 n.1 (W.D.
Va. Jan. 29, 2016) (explaining that a patent prosecution bar
“restricts the patent-related activities of an
individual who receives confidential information from a party
during litigation, or limits the receipt of such information
if the individual has already engaged in certain
Reynolds' proposed prosecution bar would prevent
“any Outside Counsel or Expert who accesses”
designated confidential documents “that reflect or
contain technical information concerning current or future
aerosol or vapor electronic cigarette technology” from
then “be[ing] involved in prosecution of patents or
patent applications relating to aerosol or vapor electronic
cigarette technology, ” including the patents in this
case and patents related to those asserted in this case. Doc.
72-1 at ¶ 7.5.The proposed bar would last “from the
date of access until expiration of two years from the final
disposition of this action.” Id. Reynolds does
not identify specific counsel who should be subject to the
bar, but asks that the bar be triggered as to any outside
counsel or experts who access the designated documents.
asserts that Reynolds has not met its burden to show that a
prosecution bar is warranted and that such a bar is not
necessary. Doc. 75; see Doc. 75-2. As to the accused
products, Fontem contends that the relevant technical
information is publicly available and subject to reverse
engineering, meaning the information is already available to
attorneys involved in patent prosecution. See Docs.
75-11, 75-12 (noting physical aspects of claimed components
and accused products that can be visually inspected and
identified). As to Reynolds' future products and
technology, Fontem asserts that Reynolds claimed that the
information is not relevant, meaning Reynolds does not need
to produce the information in discovery. See Doc.
75-10 at 8-9 (contesting Fontem's production request as
over broad and ...