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Plaintiff’s Violation of Protective Order Results in $40,000 in Sanctions for Disclosing Confidential Information from U.S. Litigation in a Lawsuit in China

SIMO Holdings Inc. (“SIMO”) prevailed on its patent infringement claims against defendant Hong Kong uCloudlink Network Technology Limited (“uCloudlink”) at trial. SIMO asked the district court twice to use confidential uCloudlink documents produced in pretrial discovery in a trade secret misappropriation lawsuit in Shenzhen, China between SIMO subsidiary Skyroam Shenzhen and a uCloudlink subsidiary (the “Chinese lawsuit”).

As explained by the district court, when it made the request to disclose the confidential information in the Chinese lawsuit, SIMO informed the district court for the first time that “[i]n late November 2018” plaintiff’s counsel at K&L Gates LLP “made the . . . uCloudlink Confidential Documents available to the [King & Wood Mallesons] attorneys” who at that time represented Skyroam Shenzhen in a related Chinese patent infringement lawsuit and who now represent Skyroam Shenzhen in the Chinese lawsuit. Defendants not only opposed disclosure but also requested that the district court impose sanctions for the unauthorized disclosure to King & Wood Mallesons.

The district court found it significant that SIMO admitted that it shared the uCloudlink confidential documents with four King & Wood Mallesons attorneys in late November 2018. The district court noted that paragraph 5(c) of the Protective Order prohibits disclosure of confidential discovery material except to court personnel, stenographers, “counsel retained specifically for this action,” and those “retained by a party to serve as an expert witness or otherwise provide specialized advice to counsel in connection with this action.”

The district court concluded that “[i]t is obvious that King & Wood Mallesons was not ‘retained specifically for this action.’ SIMO is represented in this action by K&L Gates LLP. As SIMO admits, King & Wood Mallesons was retained by SIMO subsidiary Skyroam Shenzhen to represent Skyroam, a nonparty to this action, in a Chinese patent litigation lawsuit. King & Wood Mallesons also represents Skyroam Shenzhen in the ongoing Chinese trade secret misappropriation lawsuit. There is no indication in the record that the King & Wood Mallesons attorneys to whom K&L Gates provided the uCloudlink confidential documents were even licensed to practice law outside of China.”

The district court also disagreed that King & Wood Mallesons was “retained to provide specialized advice to counsel in connection with this action.” SIMO claimed that King & Wood Mallesons’ preexisting representation of SIMO in the Chinese patent litigation case “expanded so that it could provide specialized advice” on the interplay between the U.S. action and the Chinese patent and trade secret cases. The district court disagreed with this position as well, finding that it would undermine the protective order: “[i]f individuals providing ‘specialized advice’ in one lawsuit can include attorneys identifying potential bases and defendants for another lawsuit — or attorneys assessing whether one lawsuit might affect another — Paragraph 5(c)’s limitation to lawyers retained in ‘this action’ becomes meaningless.”

As a result, the district court found that given SIMO’s clear violation of the Protective Order, $40,000 in sanctions (i.e., $10,000 for each of the four documents wrongly disclosed) would be awarded.

Simo Holdings Inc. v. Hong Kong uCloudlink Network Technology Limited, Case No. 18-cv-5427 (JSR) (S.D.N.Y. Dec. 7, 2020)


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