District Court Orders Modification of Protective Order to Allow Plaintiff to Use Defendant's Confidential Information in Opposing Inter Partes Review ("IPR")

December 6, 2016

Defendant Baker Hughes Incorporated ("Baker Hughes") filed five inter partes review ("IPR") proceedings before the Patent Trial and Appeal Board ("PTAB") asserting that the plaintiff Lubrizol's patents were invalid because of obviousness. Baker Hughes and a third-party, Flowchem LLC ("Flowchem") had previously produced documents in the underlying case that they designated "Confidential" or "Highly Confidential" under the district court's Protective Order.

Lubrizol asserted that the confidential documents would refute Baker Hughes's obviousness argument in the IPR proceedings and sought a modification of the district court's Protective Order to allow Lubrizol to use the confidential documents in the IPR proceedings. In particular, Lubrizol asserted that the Baker Hughes documents would reveal evidence of copying, which would refute any contention that the patents were obvious.

To begin its analysis, the district court stated: Whether to modify a protective order is a decision committed to the sound discretion of the district court. See Abraham v. Intermountain Health Care Inc., 461 F.3d 1249, 1268 (10th Cir. 2006); In re "Agent Orange" Prod. Liab. Litig., 821 F.2d 139, 147 (2d Cir. 1987). "[P]rotective orders should generally be modified to allow discovery in other actions . . .." Stack v. Gamill, 796 F.2d 65, 68 (5th Cir. 1986). Access should be permitted "when litigants seek to use discovery in aid of collateral litigation on similar issues" because such access "materially eases the tasks of courts and litigants and speeds up what may otherwise be a lengthy process." Phillips Petroleum Co. v. Pickens, 105 F.R.D. 545, 550-51 (N.D. Tex. 1985).

The district court then noted that "[t]his case presents a highly unusual situation. Baker Hughes, which instituted the IPR proceedings in an attempt to invalidate Lubrizol's patents, seeks to designate as confidential certain of its own documents that are relevant to Lubrizol's copying argument and thereby prevent Lubrizol from using the evidence to defend itself against Baker Hughes's obviousness argument."

As a result, the district court determined that it was appropriate to modify the protective order and allow the confidential documents to be used in the IPR. "The Court has considered all relevant arguments, legal and equitable. The Court has also considered applicable legal authorities. The Court concludes that the Protective Order in this case should be modified to protect Lubrizol's right to defend itself in the IPR proceedings instituted by Baker Hughes."

Lubrizol Specialty Products, Inc. v. Baker Hughes Inc., Case No. H-15-2915 (S.D. Tex. Nov. 22, 2016)

The authors of www.PatentLawyerBlog.com are patent trial lawyers at Jeffer Mangels Butler & Mitchell LLP. For more information about this case, contact Stan Gibson at 310.201.3548 or SGibson@jmbm.com.