Trademark discovery requests, interrogatories, document requests

The Rules of Civil Procedure allow a party to send discovery requests to another party in litigation to which the other party must respond. However, the other party may not wish to respond for various reasons. One of the most common reasons (at least in trademark law) is that the party who must answer will assert that the asking party is seeking proprietary and/or confidential information.

In the case of C. A. Muer Corp. v. Big River Fish Co., (1998), the United States Federal Court for the Eastern District of Pennsylvania considered just such an argument. Both of the parties to the case were in the seafood restaurant business. BRFC sought discovery from CAM. CAM objected to disclosing the following items to BRFC in the litigation: 1) Financial reports, namely, income reports; profit reports; loss reports; expenditure reports; 2) Budget-restaurant operation; 3) Media budgets; 4) Advertising budgets; 5) Marketing budgets; 6) Operations forecasts, namely, future business and expansion plans; 7) Media and advertising schedules; and 8)Sales forecasts.

Under Rule 26(c)(7) of the Federal Rules of Civil Procedure, a court may, upon motion of a party and a showing of good cause, issue a court order protecting a trade secret or other confidential research, development, or commercial information from disclosure. Fed. R. Civ. P. 26(c)(7). See also, Smith v. Bick Corp., 869 F.2d 194 at 199 (3rd Cir. 1989). Commercial information such as marketing strategies and documents related to corporate structure have been protected by courts pursuant to Federal Rule of Civil Procedure 26(c) where “good cause” was demonstrated that a party faced competitive injury should the commercial information be released to competitors. See Metro Auto, Inc. v. American Honday Motor Co., Inc., 1995 WL 222050 (E.D. Pa. April 13, 1995).

“Good cause is established on a showing that disclosure will work a clearly defined and serious injury to the party seeking closure. The injury must be shown with specificity.” Publicker Indus., Inc. v. Cohen, 733 F.2d 1059, at 1071 (3rd Cir. 1984). But you have to be specific. “Broad allegations of harm, unsubstantiated by specific examples or articulated reasoning,” do not support a showing of “good cause.” Cipollone v. Liggett Group, Inc., 785 F.2d 1108 at 1121 (3rd Cir. 1986) cert. denied, 484 U.S. 976, 108 S.Ct. 487 98 L.Ed.2d 485 (1987).

The best practice is to be as specific as possible in identifying what you don’t want disclosed and the reasons why for each such document. The burden of justifying the confidentiality of each and every document sought to be covered by a protective order remains on the party seeking the order. Id. at 1122. However, sometimes, there are just too many documents being argued over. “[I]n cases involving large-scale discovery, the court may construct a broad umbrella protective order upon a threshold showing by the movant of good cause.” Pansy v. Borough of Stroudsburg, 23 F.3d 772 at 787 note 17 (3rd Cir. 1994) (citing Cippolone, 785 F.2d at 1122).

“After delivery of the documents, the opposing party would have the opportunity to indicate precisely which documents it believed not to be confidential, and the party seeking to maintain the seal would have the burden of proof with respect to those documents.” Id.

In considering whether “good cause” exists for a protective order, the district court “must balance the requesting party’s need for information against the injury that might result if uncontrolled disclosure is compelled. When the risk of harm to the owner of [a] trade secret or confidential information outweighs the need for discovery, disclosure [through discovery] cannot be compelled …” Pansy, 23 F.3d at 787 (quoting Arthur R. Miller, Confidentiality, Protective Orders, and Public Access to the Courts, 105 Harv.L.REv. 427 at 432-33 (1991).

In Pansy, the Third Circuit identified a number of factors to be considered by the district court when it conducts its balancing test, including:

(1) the privacy interests of the party seeking protection;

(2) whether the information is being sought for a legitimate purpose or for an improper purpose;

(3) whether a party benefitting from the order of confidentiality is a private litigant or a public entity or official;

(4) whether the case involves issues important to the public;

(5) whether confidentiality is being sought over information important to public health and safety; and

(6) whether the sharing of information among litigants would promote fairness and efficiency. Id. at 787-89.

“The district court has wide discretion in weighing these factors and deciding whether to grant a motion for a protective order.” Farley v. Cessna Aircraft Co., 1994 WL 396479 (E.D. Pa. 1994) at *2 (referencing the standard applied in Pansy, 23 F.3d at 787.) To this end, the court in Pansy noted that, “if a case involves private litigants, and concerns matters of little legitimate public interest, that should be a factor weighing in favor of granting or maintaining an order of confidentiality.” Pansy, 23 F.3d at 788.

The district court also has flexibility in the construct of the protective order itself. “The most common kind of order allowing discovery on conditions is an order limiting the persons who are to have access to the information disclosed and the use to which these persons may put the information.” Id. (quoting 8 Charles Alan Wright and Arthur R. Miller, Federal Practice and Procedure Section 2043 at 205 (1970).