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United States v. Cytogel Pharma, LLC

United States District Court, E.D. Louisiana

November 1, 2017

UNITED STATES OF AMERICA, ET AL.
v.
CYTOGEL PHARMA, LLC

         SECTION: “E” (1)

          SUSIE MORGAN JUDGE.

          ORDER AND REASONS

          Janis Van Meerveld United States Magistrate Judge.

         Before the Court is the Motion for Entry of Protective Order filed by plaintiff the Administrators of the Tulane Educational Fund (“Tulane”), and joined by plaintiff the United States acting through its Department of Veterans Affairs (the “United States” or “VA” and with Tulane, the “Plaintiffs”) (Rec. Doc. 102). For the following reasons, the Motion is GRANTED in part and DENIED in part. The Parties shall submit by ex parte motion a new proposed Protective Order in accordance with the Court's ruling herein, within 7 days. Oral argument scheduled for November 1, 2017, is CANCELLED.

         Background

         This lawsuit was filed by the Plaintiffs against defendant Cytogel Pharma, LLC (“Cytogel”) seeking a ruling that Plaintiffs are the sole owners of U.S. Patent No. 8, 716, 436 (the “436 Patent”) and related patent applications and that counter-claim defendant Dr. James E. Zadina (“Dr. Zadina”) and his colleague Dr. Laszlo Hackler are the true inventors of the 436 Patent. In its counterclaim, Cytogel alleges that Tulane, the United States, and Dr. Zadina misappropriated its trade secrets and confidential information. Cytogel alleges that Tulane licensed its patented opioid-peptide technology to Cytogel and that Cytogel retained Dr. Zadina, a Tulane professor, as a consultant regarding the development of opioid compounds. Cytogel alleges that the 436 Patent was developed by Dr. Zadina using confidential Cytogel information. Cytogel seeks a declaratory judgment that it is the owner of the 436 Patent and also asserts claims for breach of contract, infringement of other patents, misappropriation of trade secrets and other state law claims.

         Discovery Issue

         The parties agree that a protective order is appropriate in this case to protect confidential documents. However, they have come to an impasse regarding certain provisions of a protective order.

         The proposed Protective Order provides for two types of confidential information: “Protected Information” and “Protected Information - Attorneys' Eyes Only.” Paragraph 7 of the proposed order lists the persons to whom “Protected Information” may be disclosed. Paragraph 8 lists the persons to whom “Protected Information - Attorneys' Eyes Only” may be disclosed by reference to the subparagraphs of Paragraph 7 that refer to “outside counsel, ” “consultant or independent expert, ” “litigation support services, ” “witnesses in any deposition or other proceeding in this Action, ” and “the Court.” Although Protected Information can be disclosed to “in-house counsel” and “designated employees, ” Protected Information-Attorneys' Eyes Only cannot be disclosed to these categories of persons. Cytogel proposes to use the term “Designated Information” to refer to both Protected Information and Protected Information-Attorneys' Eyes Only.

         1. Outside Counsel

         The first issue the parties dispute is the description of “outside counsel” for purposes of Paragraph 7 and 8. Tulane proposes the following: “outside attorneys for the Parties in the Action.” Cytogel proposes instead “outside counsel of record for Parties in this Action” and “outside counsel whom the Parties may consult regarding this Action who have executed an agreement in the form of Exhibit A attached hereto.” A correlating change proposed by Cytogel in Paragraph 9 would require that the designating party be provided with notice and an executed copy of Exhibit A for outside counsel covered by its proposed subparagraph (ii). If the other party objects, Paragraph 9 requires that the party object within five business days and that the party attempt to negotiate the issue prior to coming to court.

         Tulane complains that Cytogel's proposal would allow any attorney to review the protected materials, even a Cytogel board member[1] or competitor as long as that person was an attorney. Tulane further complains that the proposed change would allow disclosure of Plaintiffs' information without ever telling the Plaintiffs or allowing them an opportunity to object. They point out that the proposed Protective Order provides a procedure for disclosure of Attorneys' Eyes Only information to individuals not listed in Paragraph 8. That procedure requires that prior to disclosure to a consultant, the party must provide the other parties with notice and an opportunity to object. The notice must include the person's name and title, present employer, a curriculum vitae, and a copy of Exhibit A.

         Cytogel responds that it must be allowed to consult with other outside counsel of its choosing about the litigation. Cytogel points out that its proposal would not result in disclosure without anyone “ever telling Plaintiffs” since its change to Paragraph 9 would require notice to the designating party. Cytogel adds that it would agree to incorporate a waiting period of 2 business days between notice and disclosure so each proposed person can be considered between the parties on a case by case basis. Cytogel adds that Tulane improperly references the mechanism for disclosing Designated Information to people who are not covered explicitly by the Protective Order. Cytogel points out that this provision only applies to consultants, and Tulane has taken the position that consulting attorneys would not be covered.

         Both parties present reasonable concerns. The Court finds the best resolution is that non-record outside counsel be included in the Protective Order, but that such outside counsel who is not counsel of record be subject to the Paragraph 9 procedure for consultants (that is, prior notice with an opportunity to object). Accordingly, it appears this could be achieved by (1) incorporating Cytogel's proposed changes to the definition of outside counsel, and (2) deleting Cytogel's ...


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