[00:00:00] Speaker 03:
to our final case this morning, number 21-2303, static media LLC versus leader accessories LLC.

[00:00:09] Speaker 03:
Okay, Mr. Davis.

[00:00:11] Speaker 04:
Good morning, your honor.

[00:00:13] Speaker 04:
May it please the court, counsel?

[00:00:17] Speaker 04:
In this case, there were two categories of information that were shared by my client, Mr. Lee, with Mr. Heck.

[00:00:24] Speaker 04:
And the first category was non-confidential information concerning non-infringement invalidity

[00:00:30] Speaker 04:
and other defenses on the merits about which both attorneys and their clients had a joint interest.

[00:00:37] Speaker 04:
It is undisputed that this first category of information was the subject of most of the information that was shared as part of this joint defense agreement.

[00:00:47] Speaker 04:
It is also undisputed that the non-confidential information related primarily to leaders' motion for summary judgment

[00:00:54] Speaker 04:
of non-infringement and invalidity against static media.

[00:00:58] Speaker 04:
In fact, all the summary judgment submissions were publicly filed by both sides.

[00:01:04] Speaker 04:
Both Lee and Hecht testified that their primary focus of the Joint Defense Communications was this summary judgment motion.

[00:01:14] Speaker 04:
Now, the second category of information that was shared by Lee to Hecht was very limited and was also undisputed that it was the only static media confidential information

[00:01:25] Speaker 04:
that was shared.

[00:01:26] Speaker 04:
And that was the royalty rate information that Static Media charged for the licensing of its design patent at issue.

[00:01:35] Speaker 04:
Mr. Lee had a legitimate reason to disclose that information to Mr. Hecht and did so under the terms of the protective order.

[00:01:42] Speaker 04:
There was nothing in the protective order.

[00:01:44] Speaker 01:
I'm sorry, what was the legitimate reason?

[00:01:47] Speaker 04:
so that they could collaborate on what a reasonable royalty should be in this case.

[00:01:52] Speaker 01:
Doesn't that suggest, and I think the other side suggests in its brief, that that collaboration acknowledges awareness, either actual or constructive awareness on Mr. Lee's part, that Mr. Hecht would be using it in his defense in the parallel litigation?

[00:02:16] Speaker 04:
Well, I think we've got two different agreements that are being, or I guess documents, that are being conflated into one.

[00:02:25] Speaker 04:
One is the Joint Defense Agreement, which talks about communications that are remaining privileged or confidential between two parties that have a joint interest.

[00:02:33] Speaker 04:
The other is the Protective Order.

[00:02:35] Speaker 01:
which talks about... Right, but I guess I'm thinking in particular of, what is it, Appendix 98, Paragraph 11, where Mr. Lee, that's the supplemental declaration, I think, the second declaration of Mr. Lee, where he says, I gave this to Mr. Hecht for use in the joint defense, or I forget the exact language.

[00:02:58] Speaker 04:
Yes, he said, I sent to Sam the deposition transcripts in the instant action for more effective joint defense consultation discussion.

[00:03:06] Speaker 01:
And if the standard, at least for the civil contempt, just whether there can be civil contempt finding, is, as I think the Supreme Court said and Taggart,

[00:03:19] Speaker 01:
whether there was a reasonable basis for thinking that the conduct was not a violation, which I think here turns into a reasonable basis for thinking that the information would be used only for the current lawsuit.

[00:03:40] Speaker 01:
Why can the district court not legitimately have found that just was not reasonable in the context, which is I think what the district court said.

[00:03:48] Speaker 04:
Yeah, there's one thing to say about this particular sentence that we're citing to about the deposition transcripts is that most of those deposition transcripts were not confidential.

[00:03:58] Speaker 01:
Well, most doesn't take care of the problem.

[00:04:01] Speaker 04:
I agree, most.

[00:04:02] Speaker 04:
But there was, he's saying deposition transcripts for the effective joint defense and consultation, which these were the things that were cited in the summary judgment motion.

[00:04:12] Speaker 04:
But there is, as you say, there was a portion of that

[00:04:16] Speaker 04:
that was confidential.

[00:04:17] Speaker 04:
And that's where the protective order comes into play and to say, you, you, Mr. Hecht, if you're going to get this information and you're going to use it for purposes of this case, that's okay.

[00:04:26] Speaker 04:
But you can't take that information and then try it off to the South Florida action and use it in that case.

[00:04:32] Speaker 03:
If you want to... Can we just back up one second?

[00:04:34] Speaker 03:
Sure.

[00:04:34] Speaker 03:
Because I'm not sure what the magistrate judge and the district judge were saying here.

[00:04:38] Speaker 03:
I mean, there seems to be two possible interpretations of those decisions.

[00:04:43] Speaker 03:
One, that the lawyers for static media were responsible for what Heck did in the Florida case.

[00:04:54] Speaker 03:
that is, his improper disclosure of this information.

[00:04:58] Speaker 03:
That seems to me to be a very questionable finding to the extent that it's there.

[00:05:04] Speaker 03:
The other possibility is that the district court, I'm not sure how you're saying, the mere fact that you supply information

[00:05:13] Speaker 03:
to another party for developing a joint defense strategy is in and of itself a violation of the protective order, a use within the meaning of the protective order.

[00:05:28] Speaker 03:
Which of those or both do you understand the ruling to be?

[00:05:34] Speaker 04:
Yes.

[00:05:34] Speaker 04:
I would say that the second one is what the court is saying, in and of itself by Mr. Lee giving it to Mr. Heck for

[00:05:43] Speaker 04:
whatever purpose is wrong.

[00:05:46] Speaker 03:
It was given to develop a joint defense strategy, which doesn't necessarily seem to imply that the information was going to be disclosed.

[00:05:59] Speaker 03:
in the other suit, but it was going to be used for developing a joint defense strategy.

[00:06:04] Speaker 03:
So if that's what the ruling is here, we have to decide whether that's a violation of the protective order.

[00:06:12] Speaker 03:
In other words, what is meant by use within the meaning of the protective order?

[00:06:17] Speaker 03:
And that's not a question that is entirely clear to me.

[00:06:24] Speaker 03:
use for developing a joint strategy is a use for other than this action, or whether use contemplates some sort of disclosure of the information, which your clients argue they're not responsible for.

[00:06:42] Speaker 04:
Yes, and I think if we go to the purpose of use, or what does use mean, it's certainly anything that

[00:06:51] Speaker 04:
leader and Mr. Lee had prevailed on in this particular suit could conceivably help Mr. Hecht and his client in his case.

[00:07:00] Speaker 04:
So, I mean, the idea that that's true of any other company that could ever be sued by Static Media on this patent, anything positive or if there was an invalidity holding or a certain royalty was established, that could conceivably help any number of other companies down the road who had nothing to do with

[00:07:21] Speaker 04:
the confidential information.

[00:07:24] Speaker 04:
So it could be, I think, under the terms of the protective order, Mr. Heck could collaborate with Mr. Lee and talk about what is a reasonable royalty.

[00:07:33] Speaker 03:
They never actually got to that point of needing to do that because the summary judgment ruling was... In other words, developing a strategy as to what a reasonable royalty is without disclosing this information.

[00:07:45] Speaker 03:
Right.

[00:07:45] Speaker 03:
And your argument is that that would be permissible within the scope of the NDA.

[00:07:52] Speaker 04:
And in the protective order.

[00:07:55] Speaker 04:
And in the protective order.

[00:07:58] Speaker 04:
And so to that end, so there's a more, again, there's more kind of a general, we're going to collaborate on some issues, which is the Joint Defense Agreement.

[00:08:07] Speaker 04:
And then there's the specific, the protective order, which talks about, on the other hand,

[00:08:16] Speaker 04:
separate from the Joint Defense Agreement specifically apply to how the confidential information from this case was and was not to be used.

[00:08:24] Speaker 04:
So it could be used for purposes of this case, but had Mr. Lee, for example, been flouting or disregarding the terms of the protective order in favor of the Joint Defense Agreement saying, well, that's all I need.

[00:08:37] Speaker 04:
I don't need this protective order.

[00:08:39] Speaker 04:
He wouldn't have specifically referenced the order

[00:08:42] Speaker 04:
uh... and only that word in his emails to mister heck when he was disclosing the confidential information he didn't say here's the here's the uh... confidential information you know our joint defense agreement keep it uh... keep it secret between us he pointed mister heck on both occasions the only two occasions in which there was a a sharing of that confidential information remember the protective order remember the terms of that

[00:09:09] Speaker 04:
abide by that.

[00:09:10] Speaker 04:
In fact, he had Mr. Heck sign the written assurance that Mr. Heck would follow the protective order, and that one of the terms of both the protective order and the written assurance itself is that that information was only going to be used for purposes of this case.

[00:09:25] Speaker 04:
Mr. Lee testified... Can I ask you this?

[00:09:27] Speaker 01:
Yes.

[00:09:28] Speaker 01:
I guess getting back to Judge Dyck's question, did you make an argument either

[00:09:33] Speaker 01:
here in your brief or to the district court, not that Mr. Lee acted in good faith and all that, but that the mere use by Mr. Hecht to formulate his own strategy for dealing with the Florida case is simply not an impermissible use under the protective order.

[00:10:00] Speaker 01:
Yeah, I don't think him... My question is, did you make that argument?

[00:10:05] Speaker 04:
Sure.

[00:10:07] Speaker 04:
Yes.

[00:10:09] Speaker 04:
You have to, you know, Mr. Heck could look at that and say, well, you know, how could this benefit me, I suppose, in some other purpose?

[00:10:16] Speaker 04:
But to use that information, he had to go, as Mr. Lee testified and the District Court noted, Mr. Heck would have to go and

[00:10:26] Speaker 04:
asked Discovery in the South Florida case to get that information so that he could use it.

[00:10:31] Speaker 04:
Oftentimes, attorneys are tasked with having information that they can only use for particular purposes or in a particular context.

[00:10:40] Speaker 04:
It happens in trial, it happens during discovery, people they can share it with, people they can't share it with, purposes they can use it for and not use it for.

[00:10:48] Speaker 04:
And that was Mr. Heck's responsibility to if he wanted to go in his Florida case and use that information

[00:10:54] Speaker 04:
and bring that out in evidence, he needed to ask the discovery and get it.

[00:10:59] Speaker 04:
And that would have been perfectly permissible.

[00:11:00] Speaker 04:
And that is exactly what Mr. Lee expected that Mr. Heck would do.

[00:11:11] Speaker 01:
Am I right in remembering that either the magistrate judge or the district court or both said that that would be a permissible use?

[00:11:22] Speaker 01:
That is, to decide what discovery to request?

[00:11:26] Speaker 04:
Yes.

[00:11:27] Speaker 04:
In fact, I believe it was, if we're thinking about the same thing here,

[00:11:39] Speaker 01:
I'm not sure that they did, actually.

[00:11:43] Speaker 04:
I'm looking at Appendix 22.

[00:11:45] Speaker 04:
The defendant could have shared its discovery request with OJ Commerce's counsel.

[00:11:50] Speaker 01:
Discovery requests.

[00:11:51] Speaker 04:
Yes.

[00:11:53] Speaker 04:
Yes.

[00:11:53] Speaker 04:
Who would have been free to obtain the same confidential information as part of that lawsuit.

[00:11:58] Speaker 04:
He could have done that.

[00:12:00] Speaker 04:
And yes, he was free to go and

[00:12:06] Speaker 04:
asked for that information for purposes of use in that case.

[00:12:09] Speaker 01:
But at least at that page, the district court did not say Mr. Hecht could have, consistent with the protective order, heard this confidential information, received it, and used his understanding of that information to formulate discovery requests.

[00:12:31] Speaker 04:
That's not what he said there.

[00:12:32] Speaker 04:
I would agree with that.

[00:12:33] Speaker 01:
I don't remember your arguing.

[00:12:36] Speaker 04:
Right.

[00:12:37] Speaker 04:
What we're saying is, yes, he could have asked discovery for that information in the South Florida case if he wanted to use that information in the South Florida case.

[00:12:48] Speaker 02:
He could have sought to amend the protective order.

[00:12:50] Speaker 04:
Could have done that too, if he wanted to use that in the South Florida case.

[00:12:54] Speaker 03:
Okay.

[00:12:55] Speaker 03:
But I guess to me, the question here is not

[00:12:58] Speaker 03:
whether it was foreseeable that Mr. Heck would use the information in the South Florida case, because it strikes me there's very little evidence that that expectation existed, but whether he would use it together with Mr. Lee to develop a joint defense strategy applicable to both cases.

[00:13:23] Speaker 03:
And the question is whether it is a permissible use

[00:13:27] Speaker 03:
under this protective order to use information without disclosing it, in the other case, to develop a joint defense strategy.

[00:13:37] Speaker 03:
And I don't know the answer to that.

[00:13:39] Speaker 03:
What I do know is that this is a pretty common form of protective order, and the joint defense agreements are pretty common also.

[00:13:50] Speaker 03:
I'm not aware of any authority saying that using

[00:13:55] Speaker 03:
information to develop a joint strategy is an impermissible use, which seems to me a difficult question.

[00:14:06] Speaker 04:
I agree, and I think that it is a permissible use, and in particular not just because I think it, because the protective order itself talks about it authorizes disclosure of confidential information to persons furnishing

[00:14:20] Speaker 04:
a consulting service in this action, which is Mr. Heck talking with Mr. Lee about a strategy.

[00:14:26] Speaker 02:
Does it restrict the release of the information to persons that are not signatories or part of the protective order?

[00:14:37] Speaker 04:
Could you repeat that?

[00:14:38] Speaker 04:
I'm sorry.

[00:14:39] Speaker 02:
doesn't want me out my expression with protective orders administrative protectors it uses the language that says you cannot disclose this information to third parties period well no it talks about there are certain protective there are certain parties that you can't... where is the protective order?

[00:14:58] Speaker 02:
is it in the record?

[00:14:59] Speaker 04:
yes yes it is Hector was the signatory to the protective order yes he was this protective order was from appendix 42

[00:15:10] Speaker 04:
through 51.

[00:15:12] Speaker 04:
50 and 51 include the Notice of Adherence to Protective Order, which Mr. Hecht signed.

[00:15:21] Speaker 04:
So he was one of the permitted third parties that could obtain this information.

[00:15:27] Speaker 04:
And in that Notice of Adherence to Protective Order, he's saying, I'm only going to use it for purposes of this action under this protective order.

[00:15:38] Speaker 04:
Again, if he wanted to go and use it somewhere else for some other purpose, then he would need to go and ask those discovery requests, which were certainly not laborious to do.

[00:15:49] Speaker 04:
Or if he wanted to use it before he got to that point, he could have made a motion into this case and asked for permission to use it for, for example, the settlement discussions that he was going to have.

[00:16:02] Speaker 04:
Either way, Mr. Lee, who has ended up being

[00:16:08] Speaker 04:
sanction in this case and his client didn't do anything wrong with respect to the protective order.

[00:16:15] Speaker 04:
They followed the steps outlined by the protective order.

[00:16:19] Speaker 04:
They attempted to substantially comply with it.

[00:16:23] Speaker 04:
They went through the steps.

[00:16:26] Speaker 04:
One of the things that one of the judges had said below was Mr. Lee acted serendipitously.

[00:16:32] Speaker 04:
And again, I don't see how he did that because he actually gave the protective order to Mr. Heck, had him sign it.

[00:16:40] Speaker 04:
It's not like he was slipping him some information and saying, you know, don't tell anyone I gave you this.

[00:16:46] Speaker 04:
He was following the terms of the protective order.

[00:16:48] Speaker 04:
And every time he sent the confidential information, which was only twice, he reminded Mr. Heck about his obligations to follow the protective order.

[00:16:58] Speaker 01:
Can I ask you one question about the $1,000 issue?

[00:17:01] Speaker 01:
Yes.

[00:17:02] Speaker 01:
OK.

[00:17:03] Speaker 01:
Do you agree that at least on the seventh circuit press, it's obviously now assumed that the civil contempt was proper.

[00:17:10] Speaker 01:
And now we're just talking about your separate objection to the $1,000 sanction against Mr. Lee, particularly.

[00:17:20] Speaker 01:
Do you agree that if that $1,000 were to go to the court and not too static, that that would be permissible at least under Seventh Circuit, like Baghdadi?

[00:17:37] Speaker 04:
I would say no, because there's really two categories for a sanction.

[00:17:41] Speaker 04:
And one is to be compensatory.

[00:17:43] Speaker 04:
And I briefed that extensively.

[00:17:45] Speaker 04:
If we went to a coercive,

[00:17:47] Speaker 04:
Like a coercive.

[00:17:49] Speaker 01:
Bag date approves $1,000 to compensate the court for the extra time that the court had to put into this because of the underlying violation.

[00:18:00] Speaker 04:
Well, the coercion is what the Seventh Circuit talks about.

[00:18:04] Speaker 01:
It's not coercion.

[00:18:05] Speaker 04:
This has nothing to do with coercion.

[00:18:06] Speaker 04:
Well, that is one of the things to be taken into consideration.

[00:18:09] Speaker 04:
I'm trying to get you to comply with the order.

[00:18:12] Speaker 01:
But that's not what's going on here.

[00:18:15] Speaker 01:
And that wasn't in bag date, was it?

[00:18:17] Speaker 04:
In backdate?

[00:18:18] Speaker 01:
Ag-date.

[00:18:19] Speaker 04:
Oh, right.

[00:18:20] Speaker 04:
Right.

[00:18:21] Speaker 01:
I think it doesn't that expressly approve a payment to the court as a deterrence sanction.

[00:18:27] Speaker 01:
So it's not compensatory to the other party.

[00:18:30] Speaker 01:
It is sort of compensatory to the court, I guess.

[00:18:36] Speaker 01:
Why would that not equally be true here if this were revised to re-route the money?

[00:18:42] Speaker 04:
Well, I think when they say deterrent, I mean, you're talking about trying to deter somebody from... The answer has to be yes.

[00:18:47] Speaker 04:
That happens all the time.

[00:18:48] Speaker 03:
Well, sure, I understand that.

[00:18:49] Speaker 04:
When you do discovery sanctions, they're payable to the court.

[00:18:51] Speaker 04:
There's nothing wrong with that.

[00:18:52] Speaker 04:
No, I understand that.

[00:18:53] Speaker 04:
But as a broader answer, it's yes, absolutely.

[00:18:57] Speaker 04:
But with respect to the particular facts of this case, this is a disclosure that took place two years before the fine came into effect.

[00:19:05] Speaker 04:
So there isn't anything to deter Mr. Lee from or try to stop him from doing anything.

[00:19:11] Speaker 04:
this is something that happened long ago.

[00:19:13] Speaker 04:
To the extent that, you know, Mr. Heck was to be deterred or something like that, then that certainly would be permissible.

[00:19:20] Speaker 04:
But the problem is that it was applied to Mr. Lee in a situation when there wasn't any sort of threat of ongoing competency.

[00:19:29] Speaker 03:
Thank you, Mr. Davis.

[00:19:30] Speaker 03:
I'll give you two minutes for rebuttal.

[00:19:32] Speaker 03:
Thank you.

[00:19:34] Speaker 03:
Mr. Miners?

[00:19:36] Speaker 00:
Good morning.

[00:19:37] Speaker 00:
May it please the court, I appear on behalf of Static Media, LLC, the plaintiff, and the appellee in this matter.

[00:19:44] Speaker 00:
I'd like to jump right in.

[00:19:47] Speaker 03:
So in part,

[00:19:49] Speaker 03:
The magistrate judge and the district judge seemed to find that Mr. Lee was responsible for Mr. Hecht's violation of the protective order by disclosing this material in the Florida action.

[00:20:03] Speaker 03:
And I'm having great difficulty with that.

[00:20:05] Speaker 03:
How is it that Mr. Lee could be found in contempt for misconduct that Mr. Hecht undertook in Florida?

[00:20:16] Speaker 03:
respectfully your honor I don't think that that's what the district judge was doing would you agree that that would not be sustainable if that's what the district court were doing I would agree that it would not be sustainable if the district court were sanctioning someone for conduct by a third party so the question here is whether a use within the meaning of the protective order here is permissible

[00:20:46] Speaker 03:
when there is a disclosure of the information to another lawyer for use in developing a joint defense strategy without disclosing the information, is that a permissible use of the information under the

[00:21:01] Speaker 03:
under the protective order.

[00:21:02] Speaker 03:
Let me give you an example.

[00:21:04] Speaker 03:
Suppose we have lawyer Smith, who has this case in Wisconsin, and he's also the counsel for the Florida action.

[00:21:12] Speaker 03:
And he secures the information.

[00:21:14] Speaker 03:
In his own mind, he uses that information to develop a strategy for the Florida action.

[00:21:21] Speaker 03:
But he doesn't disclose the information to anybody.

[00:21:24] Speaker 03:
Is that a violation of the protective order?

[00:21:28] Speaker 00:
Well, Your Honor, if we're talking about the same attorney in both actions, as a practical matter, there's no way for that counsel to get information out of his head.

[00:21:40] Speaker 00:
So I don't see how one would say that that would be a violation of a protective order.

[00:21:47] Speaker 00:
But the situation before the court is very different.

[00:21:50] Speaker 03:
And actually, for the... Well, the only difference really is that Mr. Hecht

[00:21:56] Speaker 03:
and Mr. Lee are two separate counsel working together to develop a joint defense strategy.

[00:22:01] Speaker 03:
And if the information is just used to develop a joint defense strategy, is that impermissible?

[00:22:08] Speaker 03:
under the protective order?

[00:22:09] Speaker 00:
The action that static media contends is impermissible under the protective order is the very act of giving the information to Attorney Hecht.

[00:22:19] Speaker 03:
It's not the use of it to develop a... Why is that impermissible?

[00:22:24] Speaker 03:
Hecht signed the protective order, and he was told to abide by the protective order, and he was working together with Mr. Lee to develop a joint defense strategy.

[00:22:36] Speaker 03:
Why

[00:22:37] Speaker 03:
is it impermissible that they would share information about the documents produced in discovery in the Wisconsin Avenue and the Wisconsin action for that purpose?

[00:22:50] Speaker 00:
It's the third piece of what Your Honor just said that makes it impermissible.

[00:22:53] Speaker 00:
It's the fact that the attorney for leader knew that Attorney Hecht, the counsel for the third party, OJ Commerce, that

[00:23:03] Speaker 00:
that that person was involved in a separate case, was not involved in the static media action.

[00:23:08] Speaker 00:
Basically, what the leader is trying to do is say, you can separate the role of Attorney Hecht as consultant for a leader in the static media action in Wisconsin.

[00:23:20] Speaker 00:
You can separate that role from his role as counsel in another case for another party.

[00:23:26] Speaker 03:
No, I don't think that's true.

[00:23:28] Speaker 03:
I think what it is saying is that you can't give the information to Hecht

[00:23:32] Speaker 03:
to develop a joint strategy for the two actions together.

[00:23:37] Speaker 00:
And you can't, because if you're developing a strategy for the two actions together, you are in part developing a strategy outside of this case.

[00:23:48] Speaker 00:
And that is impermissible under the protective order, which requires the confidential information to be used solely for this case.

[00:23:54] Speaker 03:
But the purpose of the protective order is explicitly stated in the protective order itself.

[00:24:00] Speaker 03:
is to prevent disclosure of the information to the public, right?

[00:24:06] Speaker 03:
And using the information for joint defense purposes doesn't fall within the stated purpose of the protective order.

[00:24:14] Speaker 03:
If you look at the protective order at page 41, I think it is, 42,

[00:24:28] Speaker 03:
If you look at paragraph two of the protective order, it tells us what the purpose of the protective order is.

[00:24:35] Speaker 03:
That is to avoid public dissemination and disclosure of confidential or highly confidential information.

[00:24:43] Speaker 03:
That purpose is not implicated if there's no public disclosure and it's just by conversations between signatories to the protective order about a joint defense strategy, correct?

[00:24:57] Speaker 00:
I would disagree, Your Honor, because for the purposes of Static Media's case against Leader, O.J.

[00:25:03] Speaker 00:
Commerce is a member of the public.

[00:25:05] Speaker 00:
They're a third party to this case.

[00:25:07] Speaker 00:
They're a non-party in this case.

[00:25:08] Speaker 00:
He's a senator to the protective order.

[00:25:11] Speaker 03:
The detective?

[00:25:13] Speaker 00:
Yes, he is.

[00:25:14] Speaker 00:
But he's also counsel for another party engaged in litigation with Static Media.

[00:25:21] Speaker 00:
We would have no issue whatsoever if what happened here was leader giving information designated as confidential under the protective order to an outside consulting expert who signed off and signed on to the stipulated protective order as required and wasn't a counsel for another party

[00:25:43] Speaker 00:
in another action against static media.

[00:25:45] Speaker 00:
That would be no problem at all.

[00:25:47] Speaker 00:
We also would have no problem here if Leader had only shared with Attorney Hecht non-confidential information.

[00:25:55] Speaker 00:
That's also allowed.

[00:25:56] Speaker 00:
But that's not what happened.

[00:25:58] Speaker 00:
Instead, Leader shared with an outside attorney information that was designated confidential and was to be used only for purposes of this action.

[00:26:07] Speaker 00:
And that

[00:26:10] Speaker 00:
transaction, that conduct, in sharing this information with Attorney Hecht, was a use of this information for something other than the purposes of this action?

[00:26:20] Speaker 03:
I guess the question is whether a use here means using it in the sense that it is disclosed outside of the signatories to the protective order.

[00:26:29] Speaker 03:
What I'm suggesting to you is that perhaps paragraph two

[00:26:33] Speaker 03:
of the protective order, talking about the purposes of the protective order, suggests that a use that's entirely internal to people who are signatories to the protective order is not a violation of the protective order.

[00:26:47] Speaker 03:
Do you understand what I'm saying?

[00:26:48] Speaker 00:
I understand, and I respectfully disagree.

[00:26:51] Speaker 00:
I think that the proper definition or the proper construction of the word use under the protective order includes giving it to others who are not involved in this action.

[00:27:01] Speaker 00:
I derived that definition from paragraph 3 to the protective order, which is at page 43.

[00:27:06] Speaker 00:
It says, use solely for the purposes of this action, and then goes on to talk about an inability to transfer it to others.

[00:27:15] Speaker 00:
So I think that the proper construction of the word use in the protective order includes a prohibition on giving it to someone who is not involved in this action.

[00:27:29] Speaker 03:
But Heck is involved in this action in the sense that he's helping to develop a joint strategy for the two actions.

[00:27:35] Speaker 00:
You're correct about that.

[00:27:36] Speaker 00:
I should have said someone who's not involved in this action and is, as leader knows, going to use it for a purpose other than this action.

[00:27:46] Speaker 01:
Did the magistrate judge or district judge say anything on this very last point that I think you just acknowledged that Mr.

[00:27:56] Speaker 01:
Heck was, in fact, one of the people under 4F.

[00:28:02] Speaker 00:
I believe that the district court acknowledged that.

[00:28:07] Speaker 00:
The district court was aware that Attorney Heck had signed on to the protective order and agreed to be bound by it.

[00:28:16] Speaker 00:
It doesn't change the analysis, though, Your Honor, because

[00:28:21] Speaker 00:
As I was trying to describe before when I referenced your hypothetical, the bell can't be unrung.

[00:28:27] Speaker 00:
Once attorney Hecht gets this information, it's in his head.

[00:28:31] Speaker 00:
It can't fly out of his head when he's dealing with the case in Florida.

[00:28:38] Speaker 01:
Can I ask?

[00:28:40] Speaker 01:
Judge Dyke suggested before that there are lots of protective orders and lots of joint defense agreements, which has led me to wonder, isn't there a literature out there, whether it's a professional guidance literature or more cases than we have seen that address this situation that say when you'd have a joint defense agreement, know that you may not

[00:29:09] Speaker 01:
get information subject to a protective order in the case in which you are not directly appearing or vice versa.

[00:29:19] Speaker 01:
So you can, as long as you don't use it for any other purpose than to try to develop common joint defenses, I guess.

[00:29:32] Speaker 00:
Unfortunately, your honor, I don't have any case law to cite to you that describes that particular

[00:29:38] Speaker 00:
scenario or answers that particular question.

[00:29:41] Speaker 01:
Then let me ask you this question.

[00:29:43] Speaker 01:
So under the Supreme Court Taggart decision about civil contempt, the Supreme Court said, based on earlier decisions, but perhaps more clearly than it had previously done, that there should not be and cannot be civil contempt

[00:30:02] Speaker 01:
not on the coercive side, but on the other side, unless it is objectively unreasonable to conclude that the conduct was not a violation.

[00:30:18] Speaker 01:
Why isn't the discussion we've been having here an indicator that maybe it's not objectively unreasonable to conclude that the only thing Mr. Lee knew

[00:30:32] Speaker 01:
Um, was, uh, he, he, he couldn't have, um, known that Mr. Hecht was actually going to disclose it outside.

[00:30:41] Speaker 01:
Um, why isn't this a case of, um, objective reasonableness, even if you think the better reading of the protective order, um, should prohibit this.

[00:30:55] Speaker 00:
Your honor, I think it's objectively unreasonable because what Leader did know

[00:30:59] Speaker 00:
You're correct.

[00:31:00] Speaker 00:
They couldn't have known exactly what Attorney Heck was going to do with it or whether he would bring it up in settlement communications later.

[00:31:08] Speaker 00:
But what they did know is that he was counsel for another party that was involved in an action against static media.

[00:31:16] Speaker 00:
And what they did know is that the protective order clearly states that information designated as confidential should be used solely for purposes of this action.

[00:31:26] Speaker 00:
I think it's helpful to consider how it is that Leader and its trial counsel came to be tied to Attorney Hecht in this joint defense arrangement.

[00:31:41] Speaker 00:
It was Attorney Hecht who reached out to Leader and did so because of a cease and desist letter and search patent filings and discovered the Wisconsin action and reached out to Leader.

[00:31:53] Speaker 00:
And in his declaration, Attorney Hecht describes how even before the Joint Defense Agreement was actually executed, they were already talking about defense strategies for OJ Commerce, not for Static Media.

[00:32:06] Speaker 00:
So this whole relationship between Leader and OJ Commerce started as being about OJ Commerce and not about Static Media.

[00:32:15] Speaker 00:
And I think it's objectively unreasonable for Leaders Council to have believed

[00:32:20] Speaker 00:
that by just getting attorney Hecht to sign onto the protective order that they could provide whatever confidential information they wanted to attorney Hecht when they knew that he was representing another party, not in this action against static media.

[00:32:39] Speaker 03:
Okay, but that sounds very much like the argument that in the beginning you said wouldn't stand up, that Lee should have known that HEC would misuse the information by disclosing it in the Florida action.

[00:32:53] Speaker 03:
I don't think there's any basis for that, and I thought in your earlier argument you agreed that the order can't be sustained on that basis.

[00:33:01] Speaker 03:
We're talking about the question of whether disclosing it to HEC

[00:33:05] Speaker 03:
for use in developing a joint defense strategy is a clear violation of the protective order.

[00:33:14] Speaker 03:
And the argument is that no, it's not because it's not being publicly disclosed in the Florida action.

[00:33:22] Speaker 03:
It's just being used in the minds of these two people to develop a joint defense strategy which isn't contrary to the stated purpose of the protective order.

[00:33:33] Speaker 03:
That's the argument.

[00:33:35] Speaker 00:
Yes, and my argument is, and maybe I'm inartfully saying it, I am not contending that its, that Leader and its trial counsel can be held to account for Attorney Heck's ultimate use of the information.

[00:33:51] Speaker 00:
I'm saying that they violated the protective order the instant they transferred that information to him, because they knew at the time that he was not involved, that he was involved in this other action.

[00:34:04] Speaker 03:
Well, that would always be the case where it's a joint defense strategy.

[00:34:07] Speaker 03:
You're talking about two lawyers representing parties in different actions getting together.

[00:34:14] Speaker 00:
Well, as the district court noted, there are not... Leader was not without alternative ways of dealing with this.

[00:34:23] Speaker 00:
So, as the district court said, and this was the district judge, not the magistrate judge,

[00:34:28] Speaker 00:
um... said that there were another a number of different avenues for leader to be able to share this information with attorney hecked without running a foul of the protective order this is on appendix page twenty two supposedly it's and said well you better uh... in your action use

[00:34:49] Speaker 03:
the same discovery request that we use here because there's interesting information that you'd like to get by doing that.

[00:34:55] Speaker 03:
Is that permissible?

[00:34:56] Speaker 03:
Could it?

[00:34:57] Speaker 00:
Yeah, absolutely.

[00:34:57] Speaker 00:
It could have done that because that's not giving the confidential information to attorney heck.

[00:35:05] Speaker 00:
That's just strategizing.

[00:35:06] Speaker 00:
Hey, this is the discovery request I made.

[00:35:09] Speaker 00:
You should think about making the same request.

[00:35:13] Speaker 00:
That is, that's permissible.

[00:35:15] Speaker 00:
And that's one of the things that the district court said that leader could have done, but did not.

[00:35:21] Speaker 01:
I think the hypothetical had a little bit more, which was you really ought to look at it.

[00:35:25] Speaker 01:
There's gold there.

[00:35:29] Speaker 01:
Did you say that?

[00:35:30] Speaker 00:
Yeah.

[00:35:31] Speaker 00:
I mean, you can give your opinion.

[00:35:33] Speaker 00:
It's not, it's not disclosing the confidential information.

[00:35:36] Speaker 02:
The confidential information was the royalty rates.

[00:35:39] Speaker 02:
How can that be?

[00:35:40] Speaker 02:
That's using confidential information.

[00:35:43] Speaker 02:
to even if you're a lawyer and you have access to confidential information and you're having a strategy session with counsel in another case, how is it that the use of that information to say, you should go pursue this angle or don't pursue that particular route of negotiation, how can that be appropriate?

[00:36:08] Speaker 00:
Is that to your argument?

[00:36:18] Speaker 00:
That was the district court's suggestion for how a leader could have gone about conferring with Attorney Hecht without running afoul of the protective order.

[00:36:30] Speaker 00:
I hear what you're saying that there's got to be a line at which you're offering too much flavor

[00:36:37] Speaker 00:
of the confidential information without expressly disclosing it that you might, you know, you might be crossing the line.

[00:36:44] Speaker 00:
I don't think that the district court's suggestion would be crossing that line.

[00:36:48] Speaker 00:
All the district court said was they could share their discovery requests and that would have been fine.

[00:36:57] Speaker 03:
Okay.

[00:36:58] Speaker 03:
Unless my colleagues have further questions, I think we're out of time.

[00:37:01] Speaker 03:
Thank you, Ms.

[00:37:01] Speaker 03:
Moynihan.

[00:37:01] Speaker 00:
Thank you very much.

[00:37:07] Speaker 04:
I think Your Honor's single person analogy was certainly very appropriate.

[00:37:13] Speaker 04:
What Static Media's counsel repeatedly said is that Lee knew that HECT was involved in a separate case.

[00:37:21] Speaker 04:
And by her very, and stressing that as essentially therefore per se giving the information to HECT was a violation of protective order.

[00:37:32] Speaker 04:
But then that would make a situation as brought up in the single person

[00:37:36] Speaker 04:
analogy that then Mr. Hecht couldn't have, or Mr. Lee couldn't have represented OJ Commerce.

[00:37:43] Speaker 04:
Let's say Hecht wasn't even in the picture.

[00:37:45] Speaker 04:
It was just Mr. Lee's client was sued, then OJ Commerce gets sued.

[00:37:50] Speaker 04:
They contact Mr. Lee and says, hey, we want, you know, you're dealing with this patent, why don't you represent us?

[00:37:55] Speaker 04:
But it would preclude Mr. Lee, who had this confidential information, for them representing OJ Commerce.

[00:38:02] Speaker 04:
We know that can't be the case because there's scores of cases in which, you know, a single attorney will represent different defendants in cases.

[00:38:12] Speaker 02:
But there's also ethics in rule of professional responsibility.

[00:38:17] Speaker 02:
I mean, that sounds like a good example of a conflict of interest.

[00:38:25] Speaker 02:
we have an attorney who gains information from representing this client and then goes and uses it in representation of that client.

[00:38:34] Speaker 04:
Well, no, and that's where the protective order would come into place.

[00:38:36] Speaker 04:
It's not that

[00:38:37] Speaker 04:
Mr. Lee could then go over to represent OJ Commerce and just carte blanche start using on the confidential.

[00:38:44] Speaker 04:
They still have to go through the process of having the protective order in place and signing off just like Mr. Heck did.

[00:38:51] Speaker 02:
What about the line in the protective order that says that the protective order, its parameters is limited to that particular action or that particular state?

[00:39:03] Speaker 04:
Yes, I think that's, that's true.

[00:39:06] Speaker 04:
If you're, if you're, Mr. Heck wasn't using the confidential.

[00:39:10] Speaker 02:
You sold it for the purpose of this action.

[00:39:12] Speaker 02:
What, what action are they talking about?

[00:39:14] Speaker 04:
They're talking about the case here.

[00:39:16] Speaker 02:
Yes.

[00:39:16] Speaker 04:
Okay.

[00:39:19] Speaker 02:
So that means that anyone who's a party to this cannot disclose, which means just give any of the information that they obtained under the protective order to somebody outside of this action.

[00:39:34] Speaker 04:
that would use it, that is going to use it for something else other than this.

[00:39:39] Speaker 04:
It does say that.

[00:39:40] Speaker 04:
It sure does.

[00:39:40] Speaker 02:
It says it shall be used solely for the purpose of this action.

[00:39:45] Speaker 02:
So this protective order only governs the release of confidential information, the maintenance of confidential information for purposes of one action, Wisconsin.

[00:39:56] Speaker 04:
Yes, and that there's permissible people who can have this information disclosed to them.

[00:40:01] Speaker 02:
Well, no, that's, you can disclose to those permissible people as long as it's within the section.

[00:40:07] Speaker 04:
Right, I agree.

[00:40:08] Speaker 02:
And Mr. Hex, using it... It doesn't say you can disclose, you can disclose it to, you know, to anybody else.

[00:40:14] Speaker 04:
Well, I don't think he's disclosing it to anybody else.

[00:40:17] Speaker 04:
He's disclosing it to Heck for purposes of use in this action.

[00:40:20] Speaker 04:
If Mr. Heck wants to use it for purposes of another action, then he has to go into that action and get a protection board or a company.

[00:40:28] Speaker 02:
You think that that's okay?

[00:40:30] Speaker 02:
I mean, that's... Yes.

[00:40:32] Speaker 04:
In fact, there's no case that I've ever been able to find that says that receiving information as part of a joint defense, under a joint defense agreement,

[00:40:43] Speaker 04:
when it's protected by a protective order, per se violates the protective order.

[00:40:47] Speaker 04:
And that's what the district court said, is that just the act of receiving the information, before you even use it in the other action, is per se a violation.

[00:40:57] Speaker 04:
And there's no case that holds that.

[00:41:01] Speaker 02:
That may be the case, but that's my experience with protective order information.

[00:41:04] Speaker 02:
Just my giving it to somebody, or even my leaving it open on a desk where people can walk

[00:41:13] Speaker 02:
past that, whether they can see it or not, that's deemed to be a disclosure.

[00:41:18] Speaker 04:
Well, and that would be a situation in which, you know, the person walking by, for example, or if you left it out recklessly or, you know, something to that effect, that person has no obligation

[00:41:30] Speaker 04:
to keep it confidential under the protective order.

[00:41:33] Speaker 04:
Mr. Heck did.

[00:41:35] Speaker 04:
And Mr. Lee took steps to make sure that Mr. Lee is going to abide by this protective order, not the South Florida protective order.

[00:41:43] Speaker 01:
Can I see this question?

[00:41:44] Speaker 01:
Sure.

[00:41:44] Speaker 01:
This, I guess, goes back to the Mr. Smith has two cases example.

[00:41:50] Speaker 01:
Yes.

[00:41:50] Speaker 01:
And he said, oh, that sort of thing happens all the time.

[00:41:53] Speaker 01:
lawyer and defense number one when defendant number two comes up in a different case.

[00:41:59] Speaker 01:
Defendant number two calls that lawyer and same representative.

[00:42:03] Speaker 01:
If that's common, is it also common, and all these cases have protective orders, let's assume, is it common for the lawyer to go to the district court in case number one and say, I need a modification of the protective order or

[00:42:21] Speaker 01:
not because obviously everything I know from this case is going to be in my head when I represent defendant number two in case.

[00:42:30] Speaker 04:
Yeah, I think it would probably depend on the procedural standpoint of it.

[00:42:34] Speaker 04:
Like, are they, you know, in the same, happening literally at the same time in the same status?

[00:42:39] Speaker 04:
Or, you know, in this situation, the O.J.

[00:42:41] Speaker 04:
Commerce case was much further behind it.

[00:42:44] Speaker 04:
It was actually stayed for a period of time waiting for the summary judgment decision.

[00:42:48] Speaker 04:
So there was no particular need.

[00:42:50] Speaker 04:
It's not like Mr. Hecht had some immediate need for the use of this information in that case because it was ongoing.

[00:42:59] Speaker 04:
But I think if both were happening at the same time, let's say they're both on a parallel track, then that would be one avenue for Mr. Heck to take or Mr. Smith, I guess.

[00:43:08] Speaker 01:
Right.

[00:43:10] Speaker 01:
My question is whether you said the phenomenon of same lawyer representing defendants in two cases that overlap is common.

[00:43:20] Speaker 01:
So I guess my question is, is it common in that situation, one way or the other, for the lawyer

[00:43:27] Speaker 01:
to take measures to expand the original protective order.

[00:43:33] Speaker 04:
Like I said, I think if the procedure was such that that would be advisable to do it.

[00:43:38] Speaker 03:
The answer is if he's going to use the information in the other action by disclosing it in the other action, he has to get permission to do that.

[00:43:44] Speaker 03:
Right.

[00:43:44] Speaker 04:
Either from the court that has the original protective order or get one from the new case.

[00:43:49] Speaker 04:
One or the other.

[00:43:50] Speaker 03:
The question is if he's not going to disclose it in the other action, he's just going to use it in his head.

[00:43:55] Speaker 03:
Would he go back and get a modification of the protective order to allow him to think in a particular way?

[00:44:03] Speaker 04:
No, I don't think so.

[00:44:03] Speaker 04:
I don't think we control the thoughts.

[00:44:05] Speaker 04:
But as far as, like, if I'm going to present it as evidence or I'm going to use it as a deposition or I'm going to do something like that, I need to have that... I can't just start using it in the other case and say, well, I have this other case, what's the big deal?

[00:44:18] Speaker 04:
that the protective order prescribes exactly who can use it and for what purpose.

[00:44:23] Speaker 04:
And Mr. Lee followed that guidance.

[00:44:26] Speaker 04:
Mr. Heck did not.

[00:44:27] Speaker 04:
And Mr. Lee should not be held for the sins of Mr. Heck.

[00:44:30] Speaker 04:
There isn't any case that holds that he would.

[00:44:34] Speaker 04:
And I believe that counsel had agreed to that point.

[00:44:38] Speaker 01:
Is Mr. Heck, by virtue of his being a consultant on this case, subject to the Wisconsin court's jurisdiction?

[00:44:46] Speaker 04:
I believe he is.

[00:44:47] Speaker 04:
I think that's part of the written assurance.

[00:44:49] Speaker 01:
Is that happened?

[00:44:51] Speaker 01:
Anything happened in that regard?

[00:44:52] Speaker 04:
No.

[00:44:55] Speaker 04:
No.

[00:44:55] Speaker 04:
All right.

[00:44:56] Speaker 04:
With that, I just request reversal and on the contempt finding.

[00:45:00] Speaker 04:
And thank you very much for your time.

[00:45:02] Speaker 04:
Thank you, Mr. Davis.

[00:45:03] Speaker 04:
Thank you, Mr. Miners.

[00:45:04] Speaker 04:
The case is submitted.

[00:45:05] Speaker 03:
That concludes our session for this morning.