Lego v. Best-Lock Construction Toys Inc.
To protect confidential discovery material from the potential of misuse by competitors, a court can order the parties to disclose the particular worker to whom specific information will be disclosed, prior to the disclosure, and to permit the opponent time to object. In an intellectual property dispute, the plaintiff, Lego, recommended a broad protective order, to permit disclosure of nonpublic, confidential or proprietary discovery material to current employees, if, and only if, "counsel reasonably believes that disclosure to such persons may assist in the prosecution or defense." The defendant, Best-Lock Construction, proposed a narrower protective order, requiring the parties to disclose the names of the particular workers who will receive specific information, prior to disclosure, and the opportunity for the opponent to object. "Where a party seeks a protective order restricting the scope of discovery of technical, proprietary information, the court should balance the interests of full disclosure of relevant information and reasonable protection from economic injury," pursuant to Infosint S.A. v. H. Lundbeck A.S., a 2007 decision of the Southern District of New York. Considering the parties' rights to broad discovery and to protect confidential materials from misuse by competitors, the District Court approved Best-Lock's recommendation. The District Court also approved Lego's recommendation to permit disclosure of "highly confidential" discovery information to inside counsel. "Lego's ability to conduct effective litigation," wrote the District Court, "will be enhanced by the contribution of its [inside] counsel, who would need to be informed in order to contribute." The District Court was unwilling to assume that inside counsel would violate the protective order.