Commercial Litigation and Arbitration

Protective / Confidentiality Orders — Factors Governing In-House Counsel’s Access to Highly Confidential Trade Secrets Disclosed in Discovery

From Biovail Labs., Inc. v. Anchen Pharms., Inc., 463 F. Supp. 2d 1073, 1084 (C.D. Cal. 2006):

Finally, the Court must consider whether Biovail 's new general counsel, Wendy Kelley, may review Anchen's confidential documents without executing a declaration stating she would not be involved in competitive decision-making at Biovail, as her predecessor had done.... However, Biovail has not fully explained why Ms. Kelley needs access to Anchen's confidential documents, what confidential documents she needs to review, and how Anchen can be protected from disclosure of its trade secrets to a competitive decision-making person like Ms. Kelley. In other words, it appears to the Court that Anchen's opposition to Ms. Kelley reviewing its confidential trade secrets unless she executes a declaration regarding her specific job duties and role in competitive, decision-making by Biovail is eminently reasonable. Thus, Biovail 's motion to modify the Protective Order to allow review of confidential documents by Ms. Kelley also should be DENIED. See Brown Bag Software v. Symantec Corp., 960 F.2d 1465, 1471-72 (9th Cir.) (affirming protective order limiting newly hired in-house counsel's access to other party's trade secrets), cert. denied, 506 U.S. 869, 113 S. Ct. 198, 121 L. Ed. 2d 141 (1992); U.S. Steel Corp. v. United States, 730 F.2d 1465, 1467 (Fed. Cir. 1984)("In a particular case, e.g., where in-house counsel are involved in competitive decision-making, it may well be that a party seeking access should be forced to retain outside counsel or be denied the access recognized as needed."); Andrx Pharms., LLC, 236 F.R.D. at 586-87 (denying in-house counsel who actively engages in competitive decision-making access to other party's confidential: information); Intel Corp. v. VIA Techs., Inc., 198 F.R.D. 525, 527-32 (N.D. Cal. 2000) (in-house counsel's need for access to all information learned through discovery to direct litigation is insufficient to modify protective order when in-house counsel is engaged in competitive decision-making and represents an unacceptable risk of inadvertent disclosure).

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