Patent Acquisition Bar Precluding Plaintiff's Counsel from Advising Any Clients on the Acquisition of Patents Granted Where Defendant Was Disclosing "Crown Jewel" Technology

August 14, 2013

In this patent infringement action, Defendant Sirius XM Radio, Inc. ("Sirius") sought a "patent acquisition bar" against plaintiff's counsel from Freitas Tseng & Kaufman, LLP ("Freitas"). In seeking the bar, Sirius asserted that the Freitas attorneys who would gain access to Sirius' confidential technical information should be barred from advising any clients in the "acquisition of patents involving satellite radio signal processing for the purpose of asserting them against" Sirius for two years after the conclusion of the litigation, including any appeals. Freitas objected to the patent acquisition bar.

The district court agreed that a patent acquisition bar was appropriate. "In modern litigation, the disclosure of confidential, "crown jewel" technology to opposing counsel is a burden to which parties must submit. It is not, however, without consequences. Consistent with widespread practice, the model protective order in this district contains a straightforward clause barring use of disclosed confidential information for non-litigation purposes. As Freitas concedes, this clause already includes using such confidential information to advise third parties on the acquisition of patents to assert against the disclosing party. The patent acquisition bar requested by Sirius adds an additional layer of protection by prohibiting not just disclosure and use, but also advising. It thus prevents attorneys from -- inadvertently or otherwise -- relying on the confidential information when they advise other parties anticipating litigation against Sirius. This order concludes that such a quid pro quo is reasonable."

Freitas also argued that a patent acquisition bar would be redundant and unnecessary given the bar on using confidential information noted above. The district court did not agree with this argument as well. "Without impugning the integrity of plaintiff's counsel, an attorney who has learned the intricacies of Sirius' secret technologies will be hard-pressed not to rely on that knowledge in a subsequent suit against Sirius. The two-year patent acquisition bar allows time for the limitations of human memory to run their course or for the information to become largely stale."

Freitas also objected to the phrase "satellite radio signal processing" as vague. The district court disagreed with that position as well but ordered both sides to "meet-and-confer and adopt a mutually agreeable definition of the technological scope of the proposed patent acquisition bar."

Catch A Wave Technologies, Inc. v. Sirius XM Radio, Inc., Case No. C 12-05791 WHA (N.D. Cal. Aug 6, 2013)

The authors of www.PatentLawyerBlog.com are patent trial lawyers at Jeffer Mangels Butler & Mitchell LLP. We represent inventors, patent owners and technology companies in patent licensing and litigation. Whether pursuing patent violations or defending infringement claims, we are aggressive and effective advocates for our clients. For more information contact Stan Gibson at 310.201.3548 or SGibson@jmbm.com.