Luminati Networks Ltd. v. Uab Tesonet

MOTION to Disqualify Consultant by Luminati Networks Ltd.

Eastern District of Texas, txed-2:2018-cv-00299

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1 PageID #: 1321 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS MARSHALL DIVISION LUMINATI NETWORKS LTD. § § v. § Case No. 2:18-CV-0299-JRG § UAB TESONET § LUMINATI NETWORKS LTD.'S MOTION TO DISQUALIFY CONSULTANT 1 1 PageID #: 1322 Plaintiff Luminati Networks, Ltd. files this motion to disqualify Dr. Mindaugas Kiškis, Defendant's outside Lithuanian counsel, as an outside consultant under the Protective Order (Dkt. 39). Without disclosing a pending action filed in Lithuania, Defendant UAB Teso Lt ("Teso") asserted the then unnamed Lithuanian outside counsel qualifies as outside counsel of record under paragraph 5(a) and later as an outside consultant under paragraph 5(e) of the Protective Order. Permitting Dr. Kiškis to access Luminati's protected material is improper under either provision of the Protective Order and should be prohibited consistent with Luminati's timely objection. The parties held a telephonic meet and confer on May 9, 2019 followed by the identification of Dr. Kiškis on May 15, 2019 and Luminati's written objection on May 24, 2019. I. Factual Background Plaintiff Luminati filed a complaint on July 19, 2018 and subsequent amended complaint on December 12, 2018 asserting patent claims and a number of related non-patent claims including (a) intentional unauthorized access of Luminati's protected computer system under 18 U.S.C. §1030(g); (b) misappropriation of trade secrets; (c) tortious interference with Luminati's business relationships; and (d) false advertising. Amended Complaint (Dkt. 15) at ¶¶ 61-82. On May 6, 2019, Teso served a letter (Ex. A) stating that Defendant "believes that Paragraph 5(a) of the PO identifying outside counsel of record, to also encompass foreign outside counsel retained by a Party for purposes of this litigation" and requesting Luminati's response "so that we may promptly meet and confer on the issue and move the court for modification of the PO if necessary." On May 8, 2019, Luminati promptly responded in an email (Ex. B) objecting to this interpretation stating that paragraph 5(a) of the Protective Order "refers to 'outside counsel of record'" and asking "[w]hat is Defendant's basis for interpreting this provision to include outside counsel who are not of record?" (emphasis in original). 1 1 PageID #: 1323 A meet and confer was held on May 9, 2019, during which counsel for Teso confirmed that the unnamed outside Lithuanian counsel is not licensed to practice law in the United States, but noted that Lithuanian counsel had been involved in this case from the beginning. Wielkopolski Declaration at ¶ 5; Ex. C. Regardless, Teso now asserted that it intended to identify the unnamed outside Lithuanian counsel as an "outside consultant" under paragraph 5(c) of the Protective Order. Luminati objected to the use of the unnamed Lithuanian outside counsel as a consultant and Teso agreed to submit his curriculum vitae under paragraph 5(c) to give Teso an opportunity to formally object and file the present motion. Following the May 9, 2019 meet and confer, counsel for Luminati discovered that Teso had filed but not served one or more pending complaint(s) in Lithuania against Luminati at some point prior to the meet and confer. At no time during the May 9, 2019 meet and confer nor in the preceding communications did counsel for Teso disclose this action in Lithuania. Wielkopolski Declaration at ¶ 6. On May 15, 2019, Teso served the curriculum vitae (Ex. D) and protective order appendix (Ex. E) for the newly identified Dr. Kiškis. The curriculum vitae identified Dr. Dr. Kiškis as an attorney admitted to the Bar of the Republic of Lithuania. Ex. D at 1. On May 16, 2019, counsel for Luminati served a letter (Ex. C) on counsel for Teso notifying Teso that counsel had become aware of a suit in Lithuania suit and expressly directing Teso to the restrictions in paragraph 1 of the Protective Order as follows: "'Protected Material obtained by any party pursuant to discovery in this litigation may be used only for the purposes of: (1) this litigation; and (2) any proceeding before the United States Patent and Trademark Office ("USPTO") or Patent Trial and Appeal Board ("PTAB") of a patent asserted in this litigation that was requested by Defendant or names Defendant as a petitioner or real-party-in-interest ("Related Proceeding") to the extent authorized by the PTAB.' Protective Order at 1. The Protective Order includes no such provision permitting use of Protected Material in any other litigation, including any litigation in Lithuania." -2- 1 PageID #: 1324 On May 24, 2019, counsel for Luminati served an email (Ex. F) objecting to the May 15, 2019 disclosure of Dr. Kiškis, specifically noting the pending Lithuanian actions, restrictions in the Protective Order barring the use of Protected Materials in other litigation, and Luminati's concerns regarding the enforceability of the protective order in the event of breach by third parties outside the United States. On May 28, 2019, counsel for Teso served a responsive letter (Ex. G), stating that "Mr. Kiskis in not counsel of record or otherwise involved in the action filed by Defendant against Plaintiff in Lithuania" while denying that counsel withheld highly pertinent information regarding the Lithuanian Action during the meet and confer. Teso has yet to provide any basis for asserting that Dr. Kiškis is a consultant in this action. II. Argument The Court has the inherent power to disqualify expert consultants and prohibiting them from accessing Protected Materials under the Protective Order. Lake Cherokee Hard Drive Techs., LLC v. Bass Computers, Inc., 2012 U.S. Dist. Lexis 28475 at *11 (E.D. Tex. 2012). Dr. Kiškis is not qualified to access Protected Materials as a outside counsel of record under paragraph 5(a) or as an outside consultant under paragraph 5(e) of the Protective Order. (a) Dr. Kiškis Is Not Permitted to Access Protected Material as Lithuanian Counsel Because the Protective Order Limits Outside Counsel to Counsel of Record Pursuant to paragraph 5(a), "'CONFIDENTIAL' documents, information and material may be disclosed only to … outside counsel of record in this Action or Related Proceedings for the Parties…." Protective Order at 5(a). There is no dispute that Dr. Kiškis is not counsel of record in this Action and counsel for Teso has represented that Dr. Kiškis is not licensed to practice law in the United States. -3- 1 PageID #: 1325 Related Proceedings are limited to "any proceeding before the United States Patent and Trademark Office ("USPTO") or Patent Trial and Appeal Board ("PTAB") of a patent asserted in this litigation that was requested by Defendant or names Defendant as a petitioner or real-party- in-interest ("Related Proceeding") to the extent authorized by the PTAB." Protective Order at 1. As of the filing of this motion, Luminati is unaware of any Related Proceedings and Dr. Kiškis's curriculum vitae does not represent that he is a patent agent entitled to participate in such Related Proceedings. Consequently, Dr. Kiškis is not entitled to access Protected Material under the Protective Order under paragraph 5(a) and should be barred from accessing this material under this provision of the Protective Order. (b) Dr. Kiškis Is Not Permitted to Access Protected Material as Outside Counsel Because the Protective Order Prohibits Consultants Retained for Purposes Other than this Action or Related Proceeding Pursuant to paragraph 5(e), "'CONFIDENTIAL' documents, information and material may be disclosed only to … outside consultants or experts (i.e., not existing employees or affiliates of a Party or an affiliate of a Party) retained for the purpose of this litigation or Related Proceedings, provided that: (1) such consultants or experts are not presently employed by the Parties hereto for purposes other than this Action or Related Proceedings…." Protective Order at 5(e). Having promptly objected to treating Dr. Kiškis as counsel of record in this case, Defendant immediately designated him as a "consultant" under this paragraph without providing any rationale for why Lithuanian outside counsel Dr. Kiškis is a consultant or what Dr. Kiškis would be consulting Teso with regard to this litigation. Luminati has only recently become aware that one or more complaints have been filed, but not served, in Lithuania. While withholding this highly pertinent information, Defendant has sought to designate Dr. Kiškis as a "consultant," which would permit him to access Protected -4- 1 PageID #: 1326 Material designated "CONFIDENTIAL," "RESTRICTED – ATTORNEYS' EYES ONLY," and even "RESTRICTED CONFIDENTIAL SOURCE CODE" under provisions 5(e), 9, and 10(e) of the Protective Order. As admitted by Defendant, Dr. Kiškis is not admitted to practice law in the United States and Plaintiff is aware of no rationale to permit Dr. Kiškis to serve as an outside consultant. Luminati already accepted two technical experts under paragraph 5(e) of the Protective Order without objection, one of whom has already accessed Luminati's source code. Moreover, Teso's attempt to characterize Dr. Kiškis as a consultant is disingenuous, given that this purported consultancy only arose when Teso's counsel was informed that as outside counsel not of record he is not permitted to view documents under the protective order. This issue first arose specifically because Teso's counsel represented that he is foreign outside counsel, not a consultant. See Ex. A. Teso has not explained the nature of Dr. Kiškis's consulting or provided any rationale for why he would need access to Luminati's most highly protected information. While counsel for Teso has stated that Dr. Kiškis is not currently counsel of record in the filed actions in Lithuania, Luminati has a good faith reasonable basis to believe that Dr. Kiškis is or will be involved in the Lithuanian action in the future. Such involvement would clearly be prohibited under paragraph 5(e) of the Protective Order. In addition, experts and consultants have been disqualified where the consultant had a past confidential relationship with the opposing party and access to opposing party's confidential information regarding the case. Lake Cherokee, 2012 U.S. Dist. Lexis 28475 at *7-11. Courts also should consider the public interest in making such determinations, which can include favoring disqualification where there is a potential conflict of interest. Sensormatic Elecs. Corp. v. WG Sec. Prods., 2006 U.S. Dist. LEXIS 97108 at *10-11 (E.D. Tex. 2006). In this case, if permitted to be an outside consultant, Dr. Kiškis would enter into -5- 1 PageID #: 1327 a confidential relationship with Luminati regarding its Protected Material, with the looming potential conflict that Dr. Kiškis is or will be involved in the Lithuanian action(s), which would create the same conflict raised in Lake Cherokee. As addressed below, this concern is further compounded as Dr. Kiškis is located outside the United States beyond the jurisdiction of this Court in the event of breach. Consequently, Dr. Kiškis is not entitled to access Protected Material under the Protective Order under paragraph 5(e) and should be barred from accessing this material under this provision of the Protective Order. (c) Being Located Outside the Jurisdiction of the United States, Plaintiff Has Legitimate Concerns that this Court Will Be Unable to Enforce the Protective Order Against Dr. Kiškis in the Event of Breach As addressed above, Defendant is seeking to provide Dr. Kiškis, Lithuanian counsel located in Lithuania, the ability to access Luminati's most highly protected confidential information in this case including Protected Material designated "CONFIDENTIAL," "RESTRICTED – ATTORNEYS' EYES ONLY," and even "RESTRICTED CONFIDENTIAL SOURCE CODE." Given the nature of the claims, including claims involving the unauthorized access of Luminati's computer system and mi