# Philips North America LLC v. KPI Healthcare, Inc. > District Court, C.D. California · January 8, 2021 URL: https://www.frixlaw.com/law-library/cases/10039894 ## Case - **Court:** District Court, C.D. California - **Decided:** January 8, 2021 - **Opinion:** 100trialcourt - **Cited by:** 0 later opinions in the Frix Law Library ## Citator (automated) - No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases. - Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10039894 ## Opinion text 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 SOUTHERN DIVISION 11 PHILIPS NORTH AMERICA LLC, a Case No.: 8:19-cv-01765-JVS-JDEx 12 Delaware Company, KONINKLIJKE PHILIPS N.V., a Company of the [DISCOVERY MATTER] 13 Netherlands, and PHILIPS INDIA, LTD., an Indian Company, Magistrate Judge John D. Early 14 Plaintiffs, AMENDED PROTECTIVE ORDER 15 vs. REGARDING CONFIDENTIAL INFORMATION 16 KPI HEALTHCARE INC., a California Corporation; KPI HEALTHCARE First Amended Filed: December 3, 2019 17 ECOMMERCE, INC., a California Second Amended Answer and Corporation; and DOES 1-10, Counterclaims Filed: May 15, 2020 18 inclusive, Defendants. 19 KPI HEALTHCARE INC., a California Corporation; KPI HEALTHCARE 20 ECOMMERCE, INC., a California Corporation, 21 Counterclaimants, vs. 22 PHILIPS NORTH AMERICA LLC, a 23 Delaware Company, and KONINKLIJKE PHILIPS N.V., a 24 Company of the Netherlands, and DOES 1-9, inclusive, 25 Counter-Defendants. 26 27 28 1 1. INTRODUCTION 2 1.1 PURPOSE AND LIMITS OF THIS ORDER 3 Discovery in this action is likely to involve confidential, proprietary, or private 4 information requiring special protection from public disclosure and from use for any 5 purpose other than this litigation. Thus, the Court enters this Amended Protective 6 Order. This Order does not confer blanket protections on all disclosures or responses 7 to discovery, and the protection it gives from public disclosure and use extends only to 8 the specific material entitled to confidential treatment under the applicable legal 9 principles. This Order does not automatically authorize the filing under seal of 10 material designated under this Order. Instead, the parties must comply with L.R. 79- 11 5.1 if they seek to file anything under seal. This Order does not govern the use at trial 12 of material designated under this Order. 13 1.2 GOOD CAUSE STATEMENT 14 The parties in this case are direct competitors in the ultrasound systems sales 15 business. The complaint alleges that the defendants are liable for trademark 16 infringement, trade secret misappropriation, and unfair competition, among other 17 things. This action will necessarily involve the exchange of confidential commercially 18 sensitive information. Accordingly, the special protection of this confidential 19 commercial and financial information from public disclosure and from use for any 20 purpose other than prosecution of this action is warranted. See Fed. R. Civ. P. 21 26(c)(1)(G) (“The court may, for good cause, issue an order to protect a party or 22 person…[,] requiring that a trade secret or other confidential research, development, 23 or commercial information not be revealed or be revealed only in a specified way.”). 24 Such alleged confidential information includes, among other things, source code, 25 proprietary or confidential business or financial information, information regarding 26 confidential business practices, customer and potential customer lists, or other 27 confidential commercial and/or trade secret information otherwise generally 28 unavailable to the public, or which may be privileged or otherwise protected from 1 disclosure under state or federal statutes, court rules, case decisions, or common law 2 and disclosure of which to another Party or Non-Party would create a substantial risk 3 of serious harm. 4 Additionally, there is a need for a three-tiered protective order that allows 5 designation of certain material as “HIGHLY CONFIDENTIAL - ATTORNEYS’ 6 EYES ONLY” or “HIGHLY CONFIDENTIAL - SOURCE CODE” as this action 7 involves allegations that Defendants misappropriated certain trade secrets and/or other 8 confidential or proprietary information and because discovery in this matter may seek 9 highly confidential trade secrets, including source code, of the Parties. See Elements 10 Spirits, Inc. v. Iconic Brands, Inc., Civ. No. CV 15-02692 DDP(AGRx), 2016 WL 11 2642206, at *1–*2, 2016 U.S. Dist. LEXIS 61222, at *4 (C.D. Cal. May 9, 2016) 12 (holding that protective order with attorneys’ eyes only designation was warranted to 13 protect party’s confidential information) (citing Nutratech, Inc. v. Syntech Int’l, Inc., 14 242 F.R.D. 552, 555 (C.D. Cal. 2008); Brown Bag Software v. Symantec Corp., 960 15 F.2d 1465, 1470 (9th Cir. 1992)). The unauthorized or otherwise improper use of a 16 Party’s confidential, proprietary, or trade secret information gained through discovery 17 in this action is likely to cause grave and irreparable harm to the other Party. Thus, a 18 three-tiered designation system is warranted to protect the parties’ confidential, 19 proprietary, and trade secret information, including, without limitation, any 20 proprietary technology, from improper disclosure and the attendant risk of grave 21 competitive harm. 22 2. DESIGNATING PROTECTED MATERIAL 23 2.1 Over-Designation Prohibited. Any party or non-party who designates 24 information or items for protection under this Order as “CONFIDENTIAL,” 25 “HIGHLY CONFIDENTIAL – ATTORNEY EYES ONLY,” or “HIGHLY 26 CONFIDENTIAL – SOURCE CODE” (a “designator”) must only designate specific 27 material that qualifies under the appropriate standards. To the extent practicable, only 28 those parts of documents, items, or oral or written communications that require 1 protection shall be designated. Designations with a higher confidentiality level when a 2 lower level would suffice are prohibited. Mass, Indiscriminate, or routinized 3 designations are prohibited. Unjustified designations expose the designator to 4 sanctions, including the Court’s striking all confidentiality designations made by that 5 designator. Designation under this Order is allowed only if the designation is 6 necessary to protect material that, if disclosed to persons not authorized to view it, 7 would cause competitive or other recognized harm. Material may not be designated if 8 it has been made public, or if designation is otherwise unnecessary to protect a secrecy 9 interest. If a designator learns that information or items that it designated for 10 protection do not qualify for protection at all or do not qualify for the level of 11 protection initially asserted, that designator must promptly notify all parties that it is 12 withdrawing the mistaken designation. 13 2.2 Manner and Timing of Designations. Designation under this Order 14 requires the designator to affix the applicable legend (“CONFIDENTIAL,” “HIGHLY 15 CONFIDENTIAL – ATTORNEY EYES ONLY,” or “HIGHLY CONFIDENTIAL – 16 SOURCE CODE”) to each page that contains protected material. For testimony given 17 in deposition or other proceeding, the designator shall specify all protected testimony 18 and the level of protection being asserted. It may make that designation during the 19 deposition or proceeding, or may invoke, on the record or by written notice to all 20 parties on or before the next business day, a right to have up to 21 days from receipt of 21 the transcript of the deposition or proceeding to make its designation. 22 2.2.1 A party or non-party that makes original documents or materials 23 available for inspection need not designate them for protection until after the 24 inspecting party has identified which material it would like copied and produced. 25 During the inspection and before the designation, all material shall be treated as 26 HIGHLY CONFIDENTIAL – ATTORNEY EYES ONLY. After the inspecting party 27 has identified the documents it wants copied and produced, the producing party must 28 designate the documents, or portions thereof, that qualify for protection under this 1 Order. 2 2.2.2 2.2.2 Parties shall give advance notice if they expect a deposition or 3 other proceeding to include designated material so that the other parties can ensure 4 that only authorized individuals are present at those proceedings when such material is 5 disclosed or used. The use of a document as an exhibit at a deposition shall not in any 6 way affect its designation. Any transcript that is prepared before the expiration of the 7 21-day period for designation shall be treated during that period as if it had been 8 designated HIGHLY CONFIDENTIAL – ATTORNEY EYES ONLY unless 9 otherwise agreed. After the expiration of the 21-day period, the transcript shall be 10 treated only as actually designated. Notwithstanding the foregoing, the parties should 11 strive to appropriately designate testimony during the deposition. If the Designating 12 Party determines that any portion of a transcript designated during the deposition as 13 CONFIDENTIAL or HIGHLY CONFIDENTIAL – ATTORNEY EYES ONLY need 14 not be treated as CONFIDENTIAL or HIGHLY CONFIDENTIAL – ATTORNEY 15 EYES ONLY, the Designating Party shall notify all other parties that the designation 16 is withdrawn, and specify the portions of the deposition transcript about which a 17 designation is being withdrawn. 18 If a Party challenges a designation in accordance with Section 3 of this Order, 19 all Parties agree to treat the deposition transcript and testimony as so designated until 20 an appropriate Court Order is entered or the Parties otherwise both agree to the 21 removal of a designation. 22 2.3 Inadvertent Failures to Designate. An inadvertent failure to designate 23 does not, standing alone, waive protection under this Order. Upon timely assertion or 24 correction of a designation, all recipients must make reasonable efforts to ensure that 25 the material is treated according to this Order. 26 3. CHALLENGING CONFIDENTIALITY DESIGNATIONS 27 All challenges to confidentiality designations shall proceed under L.R. 37-1 28 through L.R. 37-4. 1 4. ACCESS TO DESIGNATED MATERIAL 2 4.1 Basic Principles. A receiving party may use designated material only for 3 this litigation. Designated material may be disclosed only to the categories of persons 4 and under the conditions described in this Order. 5 4.2 Disclosure of CONFIDENTIAL Material Without Further Approval. 6 Unless otherwise ordered by the Court or permitted in writing by the designator, 7 a receiving party may disclose any material designated CONFIDENTIAL only to: 8 4.2.1 The receiving party’s outside counsel of record in this action and 9 employees of outside counsel of record to whom disclosure is reasonably 10 necessary; 11 4.2.2 The officers, directors, and employees of the receiving party to 12 whom disclosure is reasonably necessary, and who have signed the Agreement 13 to Be Bound (Exhibit A); 14 4.2.3 Experts retained by the receiving party’s outside counsel of record 15 and their employees to whom disclosure is reasonably necessary, and who have 16 signed the Agreement to Be Bound (Exhibit A); 17 4.2.4 The Court and its personnel; 18 4.2.5 Outside court reporters and their staff, professional jury or trial 19 consultants, and professional vendors to whom disclosure is reasonably 20 necessary, and 21 who have signed the Agreement to Be Bound (Exhibit A); 22 4.2.6 During their depositions, witnesses in the action to whom 23 disclosure is reasonably necessary and who have signed the Agreement to Be 24 Bound (Exhibit A); 25 4.2.7 The author or recipient of a document containing the material, or a 26 custodian or other person who otherwise possessed or knew the information. 27 4.3 Disclosure of HIGHLY CONFIDENTIAL – ATTORNEY EYES 28 ONLY and HIGHLY CONFIDENTIAL – SOURCE CODE Material Without 1 Further Approval. 2 Unless permitted in writing by the designator, a receiving party may disclose 3 material designated HIGHLY CONFIDENTIAL – ATTORNEY EYES ONLY or 4 HIGHLY CONFIDENTIAL – SOURCE CODE without further approval only to: 5 4.3.1 The receiving party’s outside counsel of record in this action and 6 employees of outside counsel of record to whom it is reasonably necessary to 7 disclose the information; 8 4.3.2 The Court and its personnel; 9 4.3.3 Outside court reporters and their staff, professional jury or trial 10 consultants, and professional vendors to whom disclosure is reasonably 11 necessary, and who have signed the Agreement to Be Bound (Exhibit A); and 12 4.3.4 The author or recipient of a document containing the material, or a 13 custodian or other person who otherwise possessed or knew the information. 14 4.4 Procedures for Approving or Objecting to Disclosure of HIGHLY 15 CONFIDENTIAL – ATTORNEY EYES ONLY or HIGHLY CONFIDENTIAL 16 –SOURCE CODE Material to In-House Counsel or Experts. 17 Unless agreed to in writing by the designator: 18 4.4.1 A party seeking to disclose to in-house counsel any material designated 19 HIGHLY CONFIDENTIAL – ATTORNEY EYES ONLY must first make a written 20 request to the designator providing the full name of the in-house counsel, the city and 21 state of such counsel’s residence, and such counsel’s current and reasonably 22 foreseeable future primary job duties and responsibilities in sufficient detail to 23 determine present or potential involvement in any competitive decision-making. In- 24 house counsel are not authorized to receive material designated HIGHLY 25 CONFIDENTIAL – SOURCE CODE. 26 4.4.2 A party seeking to disclose to an expert retained by outside counsel of 27 record any information or item that has been designated HIGHLY CONFIDENTIAL 28 – ATTORNEY EYES ONLY or HIGHLY CONFIDENTIAL – SOURCE CODE 1 must first make a written request to the designator that (1) identifies the general 2 categories of HIGHLY CONFIDENTIAL – ATTORNEY EYES ONLY or HIGHLY 3 CONFIDENTIAL – SOURCE CODE information that the receiving party seeks 4 permission to disclose to the expert, (2) sets forth the full name of the expert and the 5 city and state of his or her primary residence, (3) attaches a copy of the expert’s 6 current resume, (4) identifies the expert’s current employer(s), (5) identifies each 7 person or entity from whom the expert has received compensation or funding for work 8 in his or her areas of expertise (including in connection with litigation) in the past five 9 years, and (6) identifies (by name and number of the case, filing date, and location of 10 court) any litigation where the expert has offered expert testimony, including by 11 declaration, report, or testimony at deposition or trial, in the past five years. If the 12 expert believes any of this information at (4) - (6) is subject to a confidentiality 13 obligation to a third party, then the expert should provide whatever information the 14 expert believes can be disclosed without violating any confidentiality agreements, and 15 the party seeking to disclose the information to the expert shall be available to meet 16 and confer with the designator regarding any such confidentiality obligations. 17 4.4.3 A party that makes a request and provides the information specified in 18 paragraph 4.4.1 or 4.4.2 may disclose the designated material to the identified in- 19 house counsel or expert unless, within seven days of delivering the request, the party 20 receives a written objection from the designator providing detailed grounds for the 21 objection. 22 4.4.4 All challenges to objections from the designator shall proceed under L.R. 23 37-1 through L.R. 37-4. 24 5. SOURCE CODE 25 5.1 Designation of Source Code. If production of source code is necessary, 26 a party may designate it as HIGHLY CONFIDENTIAL – SOURCE CODE if it is, or 27 includes, confidential, proprietary, or trade secret source code. 28 5.2 Location and Supervision of Inspection. Any HIGHLY 1 CONFIDENTIAL – SOURCE CODE produced in discovery shall be made available 2 for inspection, in a format allowing it to be reasonably reviewed and searched, during 3 normal business hours or at other mutually agreeable times, at an office of the 4 designating party’s counsel or another mutually agreeable location. The source code 5 shall be made available for inspection on a secured computer in a secured room, and 6 the inspecting party shall not copy, remove, or otherwise transfer any portion of the 7 source code onto any recordable media or recordable device. The designator may 8 visually monitor the activities of the inspecting party’s representatives during any 9 source code review, but only to ensure that there is no unauthorized recording, 10 copying, or transmission of the source code. 11 5.3 Paper Copies of Source Code Excerpts. The inspecting party may 12 request paper copies of limited portions of source code that are reasonably necessary 13 for the preparation of court filings, pleadings, expert reports, other papers, or for 14 deposition or trial. The designator shall provide all such source code in paper form, 15 including Bates numbers and the label “HIGHLY CONFIDENTIAL – SOURCE 16 CODE.” Within five business days of receiving a request for paper copies, the 17 designator may challenge the amount of source code requested in hard copy form 18 under L.R. 37-1 through L.R. 37-4. Requests for continuous blocks of source code 19 totaling up to 50 pages and requests totaling up to 500 pages of source code are 20 presumed reasonable. Requests for continuous blocks of source code exceeding 50 21 pages and requests exceeding 500 total pages of source code are presumed 22 unreasonable, but the requesting party may overcome the presumption by presenting 23 good cause. It is the requesting party’s burden to obtain such relief. These 24 restrictions and presumptions shall not apply to the limited portions of redacted source 25 code provided to the Copyright Office pursuant to its deposit requirements for 26 copyrights at issue in this action. 27 5.4 Access Record. The inspecting party shall maintain a record of any 28 individual who has inspected any portion of the source code in electronic or paper 1 form, and shall maintain all paper copies of any printed portions of the source code in 2 a secured, locked area. 3 The inspecting party shall not convert any of the information contained in the 4 paper copies into any electronic format other than for the preparation of a pleading, 5 exhibit, expert report, discovery document, deposition transcript, or other Court 6 document. Any paper copies used during a deposition shall be retrieved at the end of 7 each day and must not be left with a court reporter or any other unauthorized 8 individual. 9 7. PROTECTED MATERIAL SUBPOENAED OR ORDERED PRODUCED 10 IN OTHER LITIGATION 11 7.1 Subpoenas and Court Orders. This Order in no way excuses non- 12 compliance with a lawful subpoena or court order. The purpose of the duties described 13 in this section is to alert the interested parties to the existence of this Order and to give 14 the designator an opportunity to protect its confidentiality interests in the court where 15 the subpoena or order issued. 16 7.2 Notification Requirement. If a party is served with a subpoena or a 17 court order issued in other litigation that compels disclosure of any information or 18 items designated in this action as CONFIDENTIAL, HIGHLY CONFIDENTIAL – 19 ATTORNEY EYES ONLY, or HIGHLY CONFIDENTIAL – SOURCE CODE, that 20 party must: 21 7.2.1 Promptly notify the designator in writing. Such notification shall 22 include a copy of the subpoena or court order; 23 7.2.2 Promptly notify in writing the party who caused the subpoena or 24 order to issue in the other litigation that some or all of the material covered by 25 the subpoena or order is subject to this Order. Such notification shall include a 26 copy of this Order; and 27 7.2.3 Cooperate with all reasonable procedures sought by the designator 28 whose material may be affected. 1 7.3 Wait For Resolution of Protective Order. If the designator timely 2 seeks a protective order, the party served with the subpoena or court order shall not 3 produce any information designated in this action as CONFIDENTIAL, HIGHLY 4 CONFIDENTIAL – ATTORNEY EYES ONLY or HIGHLY CONFIDENTIAL – 5 SOURCE CODE before a determination by the court where the subpoena or order 6 issued, unless the party has obtained the designator’s permission. The designator shall 7 bear the burden and expense of seeking protection of its confidential material in that 8 court. 9 8. UNAUTHORIZED DISCLOSURE OF DESIGNATED MATERIAL 10 If a receiving party learns that, by inadvertence or otherwise, it has disclosed 11 designated material to any person or in any circumstance not authorized under this 12 Order, it must immediately (1) notify in writing the designator of the unauthorized 13 disclosures, (2) use its best efforts to retrieve all unauthorized copies of the designated 14 material, (3) inform the person or persons to whom unauthorized disclosures were 15 made of all the terms of this Order, and (4) use reasonable efforts to have such person 16 or persons execute the Agreement to Be Bound (Exhibit A). 17 9. INADVERTENT PRODUCTION OF PRIVILEGED OR OTHERWISE 18 PROTECTED MATERIAL 19 When a producing party gives notice that certain inadvertently produced 20 material is subject to a claim of privilege or other protection, the obligations of the 21 receiving parties are those set forth in Federal Rule of Civil Procedure 26(b)(5)(B). 22 This provision is not intended to modify whatever procedure may be established in an 23 e-discovery order that provides for production without prior privilege review pursuant 24 to Federal Rule of Evidence 502(d) and (e). 25 10. FILING UNDER SEAL 26 Without written permission from the designator or a Court order, a party may 27 not file in the public record in this action any designated material. A party seeking to 28 file under seal any designated material must comply with L.R. 79-5.1. Filings may be 1 made under seal only pursuant to a court order authorizing the sealing of the specific 2 material at issue. The fact that a document has been designated under this Order is 3 insufficient to justify filing under seal. Instead, parties must explain the basis for 4 confidentiality of each document sought to be filed under seal. Because a party other 5 than the designator will often be seeking to file designated material, cooperation 6 between the parties in preparing, and in reducing the number and extent of, requests 7 for under seal filing is essential. If a receiving party’s request to file designated 8 material under seal pursuant to L.R. 79-5.1 is denied by the Court, then the receiving 9 party may file the material in the public record unless (1) the designator seeks 10 reconsideration within four business days of the denial, or (2) as otherwise instructed 11 by the Court. 12 11. MISCELLANEOUS 13 11.1 Right to Further Relief 14 11.1.1. Nothing in this Order abridges the right of any person to seek its 15 modification by the Court in the future. 16 11.1.2 Right to Assert Other Objections. By entry of this Protective Order, no 17 Party waives any right it otherwise would have to object to disclosing or producing 18 any information or item on any ground not addressed in this Amended Protective 19 Order. Similarly, no Party waives any right to object on any ground to use in 20 evidence of any of the material covered by this Protective Order. 21 12. FINAL DISPOSITION 22 Within 60 days after the final disposition of this action, each party shall return 23 all designated material to the designator or destroy such material, including all copies, 24 abstracts, compilations, summaries, and any other format reproducing or capturing 25 any designated material. The receiving party must submit a written certification to the 26 designator by the 60-day deadline that (1) identifies (by category, where appropriate) 27 all the designated material that was returned or destroyed, and (2) affirms that the 28 receiving party has not retained any copies, abstracts, compilations, summaries, or any 1 || other format reproducing or capturing any of the designated material. This provision 2 || shall not prevent counsel from retaining an archival copy of all pleadings, motion 3 || papers, trial, deposition, and hearing transcripts, legal memoranda, correspondence, A || deposition and trial exhibits, expert reports, attorney work product, and consultant and 5 || expert work product, even if such materials contain designated material. Any such 6 || archival copies remain subject to this Order. 7 || 13. NON-PARTY DESIGNATIONS 8 Any Information that may be produced by a non-Party or non-Party witness in 9 || discovery in the Proceeding pursuant to subpoena or otherwise may _ be 10 || designated by such non-Party or non-Party witness as “CONFIDENTIAL” or 11 | “HIGHLY CONFIDENTIAL — ATTORNEY EYES ONLY” under the terms of this 12 || Amended Protective Order, and any such designation by a non-Party or non-Party 13 || witness shall have the same force and effect, and create the same duties and 14 || obligations on the Parties, as if made by one of the undersigned Parties hereto. 15 16 7 FOR GOOD CAUSE SHOWN (see Dkt. 46-1 to 46-7, 49, 50, 132-1 to 132-6), ig || IT IS SO ORDERED. 19 20 || Dated: January 08, 2021 EL. 1G D. EARLY : nited States Magistrate Judge 22 23 24 25 26 27 28 1 EXHIBIT A 2 ACKNOWLEDGMENT AND AGREEMENT TO BE BOUND 3 4 I, [print or type full name], of 5 [print or type full address], declare under penalty of perjury that I have 6 read in its entirety and understand the Amended Protective Order that was issue by the 7 United States District Court for the Central District of California on January 8, 2021 8 in the case of Philips North America, LLC, et al. v. KPI Healthcare Inc., et. al., 8:19- 9 cv-01765-JVS-JDE. I agree to comply with and to be bound by all the terms of this 10 Amended Protective Order and I understand and acknowledge that failure to so 11 comply could expose me to sanctions and punishment in the nature of contempt. I 12 solemnly promise that I will not disclose in any manner any information or item that is 13 subject to this Amended Protective Order to any person or entity except in strict 14 compliance with the provisions of this Order. 15 I further agree to submit to the jurisdiction of the United States District Court 16 for the Central District of California for the purpose of enforcing the terms of this 17 Amended Protective Order, even if such enforcement proceedings occur after 18 termination of this action. I hereby appoint [print or type 19 full name] of [print or type full address and telephone 20 number] as my California agent for service of process in connection with this action or 21 any proceedings related to enforcement of this Amended Protective Order. 22 Date: 23 City and State where sworn and signed: 24 Printed Name: 25 Signature: 26 27 28 --- Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10039894. Public record. Not legal advice.