Decurtis LLC v. Carnival Corp.

• Decision Date: 05 January 2021
• Docket Number: Case No. 20-22945-Civ-SCOLA/TORRES
• Parties: DECURTIS LLC, Plaintiff, v. CARNIVAL CORPORATION, Defendant. CARNIVAL CORPORATION, Plaintiff, v. DECURTIS CORPORATION and DECURTIS LLC, Defendant.
• Court: U.S. District Court — Southern District of Florida

DECURTIS LLC, Plaintiff, v. CARNIVAL CORPORATION, Defendant.

CARNIVAL CORPORATION, Plaintiff, v. DECURTIS CORPORATION and DECURTIS LLC, Defendant.

Case No. 20-22945-Civ-SCOLA/TORRES

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA

January 5, 2021

ORDER ON DECURTIS'S MOTION TO AMEND A PROTECTIVE ORDER

This matter is before the Court on DeCurtis LLC's ("DeCurtis") motion to amend [D.E. 77] a protective order [D.E. 44] that the Court entered on July 23, 2020. Carnival Corporation ("Carnival") responded to the motion on October 9, 2020 [D.E. 80] to which DeCurtis replied on October 16, 2020. [D.E. 83]. Therefore, DeCurtis's motion is now ripe for disposition. After careful consideration of themotion, response, reply, relevant authority, and for the reasons discussed below, DeCurtis's motion to amend is GRANTED.¹

I. BACKGROUND

DeCurtis is an Orlando-based technology company that designs and manufactures systems using wireless communications, small portable devices, and custom software to assist businesses in improving guest experiences. Carnival, on the other hand, is the creator and owner of a groundbreaking technology platform known as the One Cruise Experience Access Network, which combines a first-of-its-kind wearable device with a network of servers, sensors, readers, and software to deliver guest engagement and personal service to guests on Carnival's ships.

The founder of DeCurtis, David DeCurtis ("Mr. DeCurtis") has a history of designing and developing guest engagement systems for more than a decade. Mr. DeCurtis made his mark developing successful systems for Disney Cruise Lines. John Padgett ("Mr. Padgett"), an executive at Disney, brought Mr. DeCurtis into a project to develop guest engagement systems, and Disney subsequently applied for patents on some of these systems. Mr. Padgett later started working at Carnival, where he was charged with developing a guest engagement system for Carnival's cruise ships, and he brought Mr. DeCurtis into assist in the development of a guest engagement system.

Mr. DeCurtis left the project and created a new product for cruise lines that was built using his knowledge of general principles in the industry. He purportedlydeveloped the system without any source code, technical documents, or other written materials from Carnival. In 2017, Carnival began filing applications and obtained several patents related to guest engagement systems. DeCurtis claims that Carnival obtained these patents via fraud on the U.S. Patent and Trademark Office (the "Patent Office") when Carnival failed to identify Mr. DeCurtis as an inventor of these patents and concealed prior art that was material to patentability.

DeCurtis filed this action in the Middle District of Florida and, two days later, Carnival sued DeCurtis separately in the Southern District of Florida. Before this action was consolidated on July 29, 2020, the parties began negotiations over a protective order with a model sample that is commonly used in the Northern District of California as a starting point.² The parties exchanged several drafts over the ensuing months and agreed on almost all the terms of the protective order except a single clause (italicized below) on whether counsel could draft or advise any amendments or alterations to any patent claims in post-grant proceedings before the Patent Office:

Prosecution Bar: Absent written consent from the producer, any individual who receives access to Highly Confidential or Highly Confidential - Source Code material comprising technical information (a "Barred Person") shall not be involved in the prosecution of patents or patent applications relating to providing automated engagement with guests of a facility using wireless sensing technology, including, without limitation, the patents asserted in this action and any patent or application claiming priority to or otherwise related to the patents asserted in this action, before any foreign or domestic agency, including the United States Patent and Trademark Office ("the Patent Office"). For purposes of this paragraph, "prosecution" includes directly or indirectly drafting, amending, advising, or otherwise affecting the scope or maintenance of patent claims. To avoid any doubt, "prosecution" as used in this paragraph does not include representing a party, whether the patent owner, the patent challenger, or a third party, in a proceeding involving a challenge to a patent before a domestic or foreign agency (including, but not limited to, a reissue protest, post-grant review, ex parte reexamination or inter partes review), but Barred Persons (including counsel for the receiver) may not participate, directly or indirectly, in drafting or advising on any amendments or alterations to any patent claim(s) in such proceedings. This Prosecution Bar shall begin when access to Highly Confidential or Highly Confidential - Source Code comprising technical information is first received by the affected individual and shall end two (2) years after final termination of this action.

[D.E. 77 at 7 (emphasis added) (hereinafter referred to as the "IPR Amendment")].³ The parties could not reach an agreement on the language of the prosecution bar, resulting in the motion for protective order that is now ripe for disposition.

II. APPLICABLE PRINCIPLES AND LAW

Federal Circuit law governs the determination of whether a patent prosecution bar is necessary. See In re Deutsche Bank Trust Co. Americas, 605 F.3d 1373, 1378 (Fed. Cir. 2010). A "prosecution bar" is a prophylactic provision that may be included in a protective order where there is a risk that the recipient of confidential information, whom is in a competitive position, may inadvertently disclose information received during discovery. See id. ("[T]here may be circumstances in which even the most rigorous efforts of the recipient of such information . . . may not prevent inadvertent compromise.").

The party seeking to include a prosecution bar carries the burden of establishing good cause for its inclusion. Id. This burden requires that the requesting party prove that opposing counsel is involved in "competitive decisionmaking" for its client. Id. The requesting party must also establish that the proposed prosecution bar is reasonable in scope. Id. at 1381 ("[A] party seeking imposition of a patent prosecution bar must show that the information designated to trigger the bar, the scope of activities prohibited by the bar, the duration of the bar, and the subject matter covered by the bar reasonably reflect the risk presented by the disclosure of proprietary competitive information."). Even if the court is satisfied that a risk of inadvertent disclosure exists, the court must weight that risk against the potential injury to the party deprived of its counsel of choice. Id. at 1380. "In balancing these conflicting interests the district court has broad discretion to decide what degree of protection is required." Id. (citing Seattle TimesCo. v. Rhinehart, 467 U.S. 20, 36, 104 S. Ct. 2199, 81 L.Ed.2d 17 (1984); Brown Bag Software v. Symantec Corp., 960 F.2d 1465, 1470 (9th Cir. 1992)).

If the requesting party meets its burden to show that the opposing counsel is a competitive decision maker, and that the prosecution bar is reasonable, then the burden shifts to the party opposing the prosecution bar to establish that it should be exempt. See In re Deutsche Bank, 605 F.3d at 1379. The party seeking an exemption must show on a counsel-by-counsel basis:

(1) that counsel's representation of the client in matters before the PTO does not and is not likely to implicate competitive decisionmaking related to the subject matter of the litigation so as to give rise to a risk of inadvertent use of confidential information learned in litigation, and (2) that the potential injury to the moving party from restrictions imposed on its choice of litigation and prosecution counsel outweighs the potential injury to the opposing party caused by such inadvertent use.

Id.

III. ANALYSIS

The pending motion to amend the Court's protective order concerns a dispute over confidentiality protections and an IPR Amendment to prevent lawyers in this case from participating in drafting or advising on amendments or alterations to patent claims before the Patent Office. The parties agree that a prosecution bar should be included in this case. The parties also agree on almost all of the terms of the protective order. The only dispute is whether the prosecution bar should preclude the lawyers from advising or participating in potential claim amendments sought for an existing patent in a parallel invalidity proceeding.

DeCurtis says that, as a general matter, it does not seek to prohibit all of Carnival's lawyers from participating in the defense of a post-grant proceeding. DeCurtis also claims that it does not seek to bar an entire team from Carnival's litigation counsel, Orrick Herrington Sutcliffe ("Orrick"), from accessing DeCurtis's highly confidential technical information. Instead, DeCurtis only asks that the specific attorneys at Orrick who work on this matter and access DeCurtis's highly confidential technical information be barred from affecting the scope of any claims in a post-grant proceeding. This is necessary, in DeCurtis's view, because Orrick could "use knowledge of DeCurtis's highly confidential information, gained through the litigation process, in order to inform the drafting of new patent rights claiming an earlier priority date." [D.E. 77 at 2].

Carnival opposes the relief sought because, if adopted, the IPR Amendment would harm its ability to defend the validity of its patents and give DeCurtis an unfair tactical advantage. Carnival is concerned that DeCurtis would use the protective order to attack Carnival's patents in an adversarial process before the Patent Office and that DeCurtis, unlike Carnival, could use any counsel that it desires. Carnival also claims that any request to modify the Court's protective...