IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF NORTH CAROLINA

ASHEVILLE DIVISION
CIVIL CASE NO. 1:19-cv-00009-MR

NEXUS TECHNOLOGIES, INC., )

DANIEL CONTI, and BENJAMIN )
BOMER, )
)
Plaintiffs, )
)
vs. )
)
UNLIMITED POWER, LTD., and )
CHRISTOPHER J. PETRELLA, )
)
Defendants, )
________________________________ ) MEMORANDUM OF
) DECISION
UNLIMITED POWER, LTD., and )
CHRISTOPHER J. PETRELLA, )
)
Counterclaim-Plaintiffs, )
)
vs. )
)
NEXUS TECHNOLOGIES, INC., )
DANIEL CONTI, BENJAMIN BOMER, )
and EDWARD PRATHER, )
)
Counterclaim-Defendants. )
)
________________________________ )

THIS MATTER is before the Court on the parties’ Joint Motion for Entry

of Consent Protective Order [Doc. 31].

Case 1:19-cv-00009-MR Document 47 Filed 09/24/20 Page 1 of 16

I. BACKGROUND

On April 2, 2019, the Plaintiffs Nexus Technologies, Inc. (“Nexus”),

Daniel Conti (“Conti”), and Benjamin Bomer (“Bomer” and collectively the

“Plaintiffs”) filed this civil action against the Defendants Unlimited Power,

Ltd., (“Unlimited Power”) and Christopher J. Petrella (“Petrella” and

collectively the “Defendants”) for patent infringement pursuant to 35 U.S.C.

§ 271. [Doc. 1].1

On April 23, 2020, the parties filed the present Joint Consent Motion

for Protective Order. [Doc. 31]. In that Motion, the parties jointly moved for

the entry of a protective order under Federal Rule of Civil Procedure 26(c).

[Id.]. The parties included a patent prosecution bar2 in their proposed

protective order, which states that:

During the pendency of this case, including any

appeals, and for two years after its conclusion, any
recipient of "HIGHLY CONFIDENTIAL --
PROSECUTION BAR" information, documents
and/or other materials shall not participate in, aide in,
advise, or counsel the drafting of the disclosure

1The Defendants later filed counterclaims against Nexus, Conti, Bomer, and Edward
Prather (“Prather”) for: (1) negligent misrepresentation, (2) breach of contract, (3) unjust
enrichment/quantum meruit, (4) conversion, (5) constructive fraud, (6) unfair and
deceptive trade practices, and (7) civil conspiracy. [Doc. 16].
2 A patent prosecution bar “restricts the patent-related activities of an individual who
receives confidential information from a party during litigation, or limits the receipt of such
information if the individual has already engaged in certain activities.” Univ. of Va. Patent
Found. v. Gen. Elec. Co., No. 3:14-CV-00051, 2016 WL 379813, at *1 n.1 (W.D. Va. Jan.
29, 2016).
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 (written description or drawings) or claim language in
connection with the preparation, filing, and/or
prosecution of a patent application in any country
concerning portable renewable energy systems or
otherwise [sic] the non-public, technical product
features, information and/or other things disclosed in
the materials or documents designated "HIGHLY
CONFIDENTIAL – PROSECUTION BAR[.]

[Doc. 31-1 at 18-19]. The prosecution bar applies to

extremely sensitive ‘Confidential Information or

Items’ representing computer code and associated
comments and revision histories, formulas,
engineering specifications, schematics, CAD
documents, or other technical information that define
or otherwise describe the technical design and
operation of the Parties’ respective portable
renewable energy systems, disclosure of which to
another Party or Non-Party would create a
substantial risk of serious harm that could not be
avoided by less restrictive means.

[Id. at 3-4].

On April 29, 2020, the Court entered an Order directing the parties to

submit supplemental briefs on three issues. [Doc. 34]. First, the parties were

directed to address whether the information that will trigger the prosecution

bar is relevant to the preparation and prosecution of patent applications

before the PTO and whether the scope of activities prohibited by the bar, the

duration of the bar, and the subject matter covered by the bar reasonably

reflect the risk presented by the disclosure of proprietary competitive

information. [Id. at 2-4]. Second, the parties were directed to address

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whether North Carolina Rule of Professional Conduct 5.6 prohibits the

proposed prosecution bar. [Id. at 4]. Finally, the parties were directed to

address whether they had any objections to the Court’s proposed

modifications to the proposed protective order. [Id.].

On May 13, 2020 the Plaintiffs filed their supplemental brief, [Doc. 35],

which referenced and incorporated the positions that Nexus, Conti, and

Prather took in a brief regarding an identical order from the Court in a related

case. [RavenSafe, LLC, v. Nexus Technologies, Inc. et al., 1:19-cv-00105-

MR (W.D.N.C. 2019) at Doc. 39]. That brief argues that the information

subject to the proposed prosecution bar is relevant to the preparation and

prosecution of patents before the PTO; that the scope and subject-matter

covered by the proposed prosecution bar is reasonable; and that the

proposed prosecution bar does not violate North Carolina Rule of

Professional Conduct 5.6. [Id. at 5-12]. That brief also states that the

Plaintiffs agree with the Court’s proposed modifications to the proposed

protective order. [Id. at 5].

On May 13, 2020, the Defendants filed their supplemental brief. [Doc.

36]. In that brief, the Defendants state that they no longer believe the

protective order should include a prosecution bar. [Id. at 1-2]. The

Defendants also state that if the Court finds that a prosecution bar is

Case 1:19-cv-00009-MR Document 47 Filed 09/24/20 Page 4 of 16

necessary, it should not use the “overly-broad language” from the proposed

protective order because doing so would violate North Carolina Rule of

Professional Conduct 5.6. [Id. at 2-4]. The Defendants further state that they

have no issue with the Court’s proposed modifications to the protective order.

[Id. at 1].3

II. STANDARD OF REVIEW

Rule 26(c) of the Federal Rules of Civil Procedure provides that the

court may, for good cause, issue a protective order to protect a party's trade

secrets or other confidential research, development, or commercial

information. Fed. R. Civ. P. 26(c)(1)(G). To obtain a protective order to

protect confidential information, “[t]he proponent must show that the

information is confidential and that its disclosure would create a risk of harm

to the party’s interests,” as well as that the risk of harm from disclosure

outweighs the harm of restricting discovery. Biazari v. DB Indus., LLC, No.

5:16-CV-49, 2017 WL 1498122, at *2 (W.D. Va. Apr. 26, 2017). Technical

information in patent cases is ordinarily entitled to “a heavy cloak of judicial

protection because of the threat of serious economic injury to the discloser

3On May 15, 2020, the Plaintiffs filed a “Response to Defendants’ Supplemental Brief in
Support of Protective Order.” [Doc. 37]. The Court’s Order directing the parties to file
supplemental briefing did not allow for responses. [Doc. 34]. As such, the Court has not
considered the Plaintiffs’ May 15, 2020 filing for the purposes of this Order.
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of scientific information.” Valencell, Inc. v. Apple, Inc., No. 5:16-CV-1-D,

2016 WL 7217635, at *2 (E.D.N.C. Dec. 12, 2016) (quotation omitted). A

party moving for a protective order has the burden of making a particularized

showing of why discovery should be denied. Smith v. United Salt Co., No.

1:08CV00053, 2009 WL 2929343, at *5 (W.D. Va. 9 Sept. 2009). Whether

to grant or deny a motion for a protective order is generally left within the

district court’s broad discretion. Lone Star Steakhouse & Saloon, Inc. v.

Alpha of Va., Inc., 43 F.3d 922, 929 (4th Cir. 1995).

III. DISCUSSION

A. Protective Order

The parties agree that a protective order is appropriate to protect

confidential, proprietary, or private information that may be subject to

discovery in this case. [Doc. 31 at 1-2]. They further agree on a process for

designating such protected information, how that information can be used,

and a process for challenging confidentiality designations before the Court.

[Doc. 31-1]. As such, the Court finds good cause for the entry of a protective

order in this case. See In re Deutsche Bank Trust Co. Ams., 605 F.3d 1373,

1378 (Fed. Cir. 2010) (noting that protective orders “specifying that

designated confidential information may be used only for purposes of the

current litigation . . . are generally accepted as an effective way of protecting

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sensitive information while granting trial counsel limited access to it for

purposes of the litigation.”).

B. Prosecution Bar

Nevertheless, the parties now disagree as to whether the protective

order should include a prosecution bar. The Defendants argue that

prosecution bars are generally unnecessary because patent applicants are

already prevented from filing applications for subject matter they did not

invent. [Doc. 36 at 2]. The Defendants further argue that the prosecution

bar in the proposed protective order would violate North Carolina Rule of

Professional Conduct 5.6 by restricting the post-litigation employment of a

lawyer. [Id at 3].

The Plaintiffs argue that a prosecution bar is appropriate here because

Douglas Kim is representing the Defendants in this litigation while also

serving as the lead patent prosecution counsel for RavenSafe before the

PTO. [RavenSafe, LLC, v. Nexus Technologies, Inc. et al., 19-cv-00105-MR

(W.D.N.C. 2019) at Doc. 39 at 6]. The Plaintiffs further argue that the

Defendants are incorrect that prosecution bars are generally unnecessary

because attorneys may “amend or insert claims intended to cover a

competitor’s product the applicant’s attorney has learned about during the

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prosecution of a patent application.” [Id. at 4 (quoting Kingsdown Med.

Consultants, Ltd. v. Hollister Inc., 863 F.2d 867, 874 (Fed. Cir. 1988))].

“On a showing of good cause and in appropriate circumstances, the

court can impose a patent prosecution bar to preclude those who view the

confidential information from participating in proceedings before the PTO.”

Fontem Ventures B.V. v. R.J. Reynolds Vapor Co., No. 1:16-CV-1255, 2017

WL 2266868, at *3 (M.D.N.C. May 23, 2017) (citing Deutsche, 605 F.3d at

1378-79). “The party seeking the protection of a prosecution bar bears the

burden of demonstrating good cause to impose the restriction[,]” Id. at *3,

and “must show that the information designated to trigger the bar, the scope

of activities prohibited by the bar, the duration of the bar, and the subject

matter covered by the bar reasonably reflect the risk presented by the

disclosure of proprietary competitive information.” Deutsche, 605 F.3d at

1381. A party seeking an exemption from a patent prosecution bar must

show on a counsel-by-counsel basis: (1) that

counsel's representation of the client in matters
before the PTO does not and is not likely to implicate
competitive decisionmaking related to the subject
matter of the litigation so as to give rise to a risk of
inadvertent use of confidential information learned in
litigation, and (2) that the potential injury to the
moving party from restrictions imposed on its choice
of litigation and prosecution counsel outweighs the
potential injury to the opposing party caused by such
inadvertent use.

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Id.

1. Burden for Imposing Prosecution Bar and Exemptions

District courts are split on how to apply the moving party’s initial burden

under this test. Front Row Techs., LLC. v. NBA Media Ventures, LLC, 125

F. Supp. 3d 1260, 1277 (D.N.M. 2015). A majority require the movant to

show that the bar reasonably reflects the risk of inadvertent disclosure of

proprietary competitive information and that the bar as applied to specific

counsel will prevent the risk of inadvertent disclosure. Id. (citing, e.g.,

NeXedge, LLC v. Freescale Semiconductor, Inc., 820 F. Supp. 2d 1040,

1043 (D. Ariz. 2011)). A minority require the movant to show only that a

patent prosecution bar is reasonable, before shifting the burden to the party

seeking an exemption from the proposed prosecution bar to demonstrate

that the specific counsel's role will not likely implicate competitive

decisionmaking and that the potential injury from the restrictions imposed on

its choice of counsel outweighs the other party's potential injury resulting

from its inadvertent use of protected information. Id. at 1278 (citing, e.g.,

Eon Corp. IP Holdings, LLC v. AT&T Mobility LLC, 881 F. Supp. 2d 254, 257

(D.P.R. 2012)).

As the District of New Mexico explained in Front Row, the minority

approach is more consistent with the test laid out in Deutsche than the

Case 1:19-cv-00009-MR Document 47 Filed 09/24/20 Page 9 of 16

majority approach. Applying the majority approach would require the

Plaintiffs to prove that the Defendants’ counsel is a competitive

decisionmaker. The Plaintiffs, however, are “unlikely to have the benefit of

any discovery” and “[i]t is difficult for a party without any information on

opposing counsel beyond their website biographies to demonstrate, on a

‘counsel-by-counsel basis, that the opposing counsel engage in competitive

decisionmaking.’” Front Row Techs., 125 F. Supp. 3d 1260, 1288 (D.N.M.

2015) (citing Eon Corp. IP Holdings, 881 F. Supp. 2d at 25). Because the

Defendants possess the relevant facts regarding their counsel’s status, it

should have the burden of showing that its counsel are not competitive

decisionmakers. Id. (“The courts should place the burden to produce this

information on the party that possesses it.”).

Moreover, the majority rule is inconsistent with the test in Deutsche

because it would force the Court to “complete the same competitive

decisionmaking inquiry twice.” Id. at 1287. The Court would first, “as a

threshold matter, evaluate each counsel's involvement in competitive

decisionmaking.” Id. The Court “would then have to apply the same analysis

to the same attorneys if the nonmovant were to request an exemption from

the protective order.” Id. As such, under the majority rule “there would be

no need for an exemption procedure.” Id. at 1287-88 (citing Eon Corp. IP

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Holdings, 881 F.Supp.2d at 256–57). The Federal Circuit, however,

specifically fashioned an exemption procedure in Deutsche. 605 F.3d at

1381. As such, the Court finds that that the minority approach is more

consistent with the test laid out by the Federal Circuit in Deutsche and will

apply that approach here. Accordingly, the Plaintiffs must show only that a

patent prosecution bar is reasonable under the circumstances present here

before the burden shifts to the Defendants to show that an exemption to the

prosecution bar is appropriate.

2. Plaintiffs’ Request for a Prosecution Bar

Under Deutsche, the Plaintiffs must first show that the information

designated to trigger the bar is relevant to the preparation and prosecution

of patent applications. 605 F.3d at 1381. Here, the information that will

trigger the bar is “extremely sensitive ‘Confidential Information or Items’

representing computer code and associated comments and revision

histories, formulas, engineering specifications, schematics, CAD

documents, or other technical information that define or otherwise describe

the technical design and operation of the Parties’ respective portable

renewable energy systems.” [Doc. 31-1 at 3-4]. That kind of information is

the kind of proprietary and confidential information that is often at issue in

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patent prosecutions. As such, the information designated to trigger the bar

is relevant to the preparation and prosecution of patent applications.

Second, the Plaintiffs must show that the information that will trigger

the prosecution bar is reasonably related to the risk presented by the

disclosure of proprietary competitive information. Deutsche, 605 F.3d at

1381. The prosecution bar applies solely to patent prosecution related to

portable renewable energy systems, which limits the most harmful risks of

disclosure while still allowing other activities. Moreover, “[i]n contrast with

financial data or business information, confidential technical information,

including source code, is clearly relevant to a patent application and thus

may pose a heightened risk of inadvertent disclosure.” See Applied Signal

Tech., Inc. v. Emerging Markets Commc'ns, Inc., No. C-09-02180 SBA DMR,

2011 WL 197811, at *2 (N.D. Cal. Jan. 20, 2011) (citing Deutsche, 605 F.3d

at 1381). As such, the prosecution bar reasonably reflects the risk presented

by the disclosure of proprietary competitive information.

Third, the Plaintiffs must show that the duration of the prosecution bar

reasonably reflects the risk presented by the disclosure of proprietary

competitive information. Deutsche, 605 F.3d at 1381. “Courts routinely hold

that prosecution bars with two-year durations are reasonable.” Front Row

Techs., LLC v. NBA Media Ventures, LLC, 125 F. Supp. 3d 1260, 1283

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(D.N.M. 2015); see also Applied Signal Tech., 2011 WL 197811, at *2;

Ameranth, Inc. v. Pizza Hut, Inc., No. 3:11-CV-01810-JLS, 2012 WL 528248,

at *2 (S.D. Cal. Feb. 17, 2012); Kelora Sys., LLC v. Target Corp., No. C 10-

04947 CW LB, 2011 WL 6000759, at *3 (N.D. Cal. Aug. 29, 2011);

Telebuyer, LLC v. Amazon.com, Inc., No. 13-CV-1677, 2014 WL 5804334,

at *7 (W.D. Wash. July 7, 2014). Moreover, the parties previously agreed

that two years was a reasonable duration and the Defendants do not now

argue that two years is an unreasonable period. As such, the duration

“reasonably reflect[s] the risk presented by the disclosure of proprietary

competitive information.” Deutsche, 605 F.3d at 1381.

Finally, the Plaintiffs must show that the subject matter covered by the

prosecution bar reasonably reflects the risk presented by the disclosure of

proprietary competitive information. Id. The Plaintiffs only seek a

prosecution bar regarding access to “highly sensitive technical and design

information pertaining to portable renewable energy systems” that is “directly

related to RavenSafe’s pending patent application for a ‘portable renewable

energy system,’ as well as continuation applications that may stem from

same.” [RavenSafe, LLC, v. Nexus Technologies, Inc. et al., 19-cv-00105-

MR (W.D.N.C. 2019) at Doc. 39 at 3]. The patent prosecution before the

PTO implicates this subject matter. Moreover, the prosecution bar

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reasonably reflects the risk of disclosure because it does not involve other

irrelevant information like confidential financial, sales, or marketing

information. As such, the subject matter covered by the prosecution bar

reasonably reflects the risk presented by the disclosure of proprietary

competitive information.

Because the information designated to trigger the bar, the scope of

activities prohibited by the bar, the duration of the bar, and the subject matter

covered by the bar reasonably reflect the risk presented by the disclosure of

proprietary competitive information, the Court finds good cause for the

imposition of a prosecution bar here. See Deutsche, 605 F.3d at 1381.

3. Defendants’ Request for an Exemption

To obtain an exemption from the prosecution bar, the Defendants must

show that their specific counsel's role will not likely implicate competitive

decisionmaking and that their potential injury from the restrictions imposed

on their choice of counsel outweigh the Plaintiffs’ potential injury resulting

from the inadvertent use of protected information. Id. The Defendants,

however, have not provided the Court with an affidavit, declaration, or any

other form of evidence related to the proposed protective order or the

proposed prosecution bar. Therefore, the Court has no evidentiary basis to

determine the relationship between the Defendants’ attorneys and

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RavenSafe, the scope of those attorneys’ representation of RavenSafe, who

those attorneys advise or consult with at RavenSafe, or any other grounds

by which the Court could gauge the risk of inadvertent disclosure of

confidential information. Without such evidence, the Defendants have not

shown that their attorneys are not involved in competitive decisionmaking or

that an exemption from the prosecution bar should be granted. Intellect

Wireless, Inc. v. T–Mobile USA, Inc., No. 08C1215, 2010 WL 1912250, at *2

(N.D. Ill. May 12, 2010). As such, the Court will not exempt any of the

Defendants’ attorneys from the prosecution bar.

Lastly, the Court concludes that in light of Defendants’ counsel’s

resistance to the imposition of the prosecution bar, and based on the good

faith arguments presented by the Defendants, that the actions of Defendants’

counsel do not run afoul of Rule 5.6 of the North Carolina Rules of

Professional Responsibility. In addition, the Court concludes that the

prosecution bar as set forth in the accompanying protective order is the least

restrictive means for accomplishing the objectives allowing this case to

proceed in a fair and expeditious manner.

For these reasons, the Court will enter the protective order with a

prosecution bar and the Court’s proposed modifications. SmithKline

Beecham Corp. v. Synthon Pharms., Ltd., 210 F.R.D. 163, 166 (M.D.N.C.

15

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2002). (stating that “[c]ourts have the inherent power to modify protective

orders, including protective orders arising from a stipulation by the parties.”).

IT IS, THEREFORE, ORDERED that the parties’ Joint Motion for Entry

of Consent Protective Order [Doc. 31] is GRANTED and the Court hereby

enters a protective order contemporaneously herewith.

IT IS SO ORDERED.

Signed: September 23, 2020

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