Court filing
Memorandum in Support regarding 70 MOTION for Protective Order With "Highly Confidential… — Blueacorn Beringer (Dkt. 71)
No. 5:21-cv-00251-BO · Doc. 71 · Docket on CourtListener
Summary
The plaintiff's memorandum of law in support of its motion for a protective order with a "Highly Confidential – Attorneys' Eyes Only" designation, filed January 24, 2022 as Document 71 in Beringer Commerce, Inc., d/b/a Blue Acorn iCi v. Fin Cap, Inc., No. 5:21-cv-00251-BO, in the U.S. District Court for the Eastern District of North Carolina. It states the suit was brought on June 10, 2021 with claims including trademark infringement, cybersquatting and copyright infringement. The memorandum says the defendants' discovery requests seek the plaintiff's customer list, business and marketing plans, and financial statements and tax returns from 2018 to present. It argues that a two-tier order under Rule 26(c) would prevent competitive harm without prejudicing the defendants. It is signed by John C. Scheller of Michael Best & Friedrich LLP.
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IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
WESTERN DIVISION
No. 5:21-CV-251-BO
BERINGER COMMERCE, INC., d/b/a )
BLUE ACORN iCi, )
)
Plaintiff, )
)
v. ) PLAINTIFF’S MEMORANDUM OF
) LAW IN SUPPORT OF PLAINTIFF’S
FIN CAP, INC. d/b/a ) MOTION FOR PROTECTIVE ORDER
“BLUEACORN.CO,” BLUE ACORN ) WITH “HIGHLY CONFIDENTIAL –
PPP, LLC, and BLUE OAK FOREST, ) ATTORNEYS’ EYES ONLY”
LLC, ) DESIGNATION
)
Defendants.
Pursuant to Federal Rule of Civil Procedure 26(c), the Court should enter the
protective order proposed by Plaintiff Beringer Commerce, Inc., d/b/a Blue Acorn iCi
(“Plaintiff”), which appropriately sets forth a protocol for ensuring the confidentiality of
commercially sensitive information via “Highly Confidential – Attorneys’ Eyes Only”
Designations.
STATEMENT OF THE CASE
Plaintiff brought this suit on June 10, 2021, alleging claims for trademark
infringement, unfair competition, cybersquatting, copyright infringement, and unfair
and deceptive trade practices. (Dkt. 1, Complaint.) Each party has served a set of written
discovery, including interrogatories and requests for production, and Plaintiff has served
its responses to Defendants’ discovery requests and produced its first set of documents
Case 5:21-cv-00251-BO Document 71 Filed 01/24/22 Page 1 of 10
to Defendants. The parties agree that a protective order is needed but disagree as to
certain provisions.
On January 12, 2022, counsel for Plaintiff sent a proposed protective order to
Defendants’ counsel, which provided for two-tiers of confidentiality (“Confidential” and
“Highly Confidential – Attorneys’ Eyes Only”) in light of Defendants’ requests for highly
sensitive and confidential commercial information. (See Plaintiff’s Motion for Protective
Order with “Highly Confidential – Attorneys’ Eyes Only” Designation, Ex. A1 (Plaintiff’s
Proposed Protective Order); Ex. C at 2.)
The next day, Defendants’ counsel responded that Defendants do not agree that a
two-tier protective order is necessary based on their view that the parties conduct
business in different spaces and are not direct competitors. (See Ex. C at 1.) Defendants’
counsel also indicated that the “Highly Confidential – Attorneys’ Eyes Only” designation
would hamper its ability to review Plaintiff’s documents with its client in order to defend
this case. (Id.) On January 19, Defendants provided a copy of their proposed protective
order, which eliminates the “Highly Confidential – Attorneys’ Eyes Only” designation.
(See Ex. B.) The parties met and conferred on January 20 but were unable to reach an
agreement.
1
All exhibits referenced herein are attached to Plaintiff’s Motion for Protective Order
with “Highly Confidential – Attorneys’ Eyes Only” Designation which is filed
contemporaneously with this Memorandum.
2
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As demonstrated below, the Court should enter Plaintiff’s proposed protective
order because it best protects its confidential business and financial information from
harmful disclosure without unduly hampering Defendants’ ability to litigate this case.
STATEMENT OF THE FACTS
This case arises out of Defendants’ blatant infringement of Plaintiff’s Blue Acorn
intellectual property. Plaintiff is a leading digital technology consulting company that
assists businesses with planning and developing online digital consumer experiences for
its clients. (Compl. ¶ 14.) Plaintiff also offers payment processing services to its clients.
(Id. ¶ 15.) Plaintiff offers these services through various internet channels of commerce,
including its website located at https://www.blueacornici.com/. (Id. ¶ 16)
Plaintiff, through its predecessors in interest, has used the Blue Acorn brand
(consisting of the Blue Acorn name and stylized blue acorn) since at least as early as 2007
in connection with its services. (Id. ¶¶ 21, 25-26.) Plaintiff also owns U.S. Registration No.
6,272,484 for the mark BLUE ACORN ICI for, among other things, “[a]ssistance, advisory
services and consultancy with regard to business planning [and] business management.”
(Id. ¶ 30.) Additionally, Plaintiff owns the copyright to its Blue Acorn Logo:
(Id. ¶ 46.)
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In 2020, Defendants established a business purporting to assist small businesses
and contractors in obtaining loans through the Paycheck Protection Program (“PPP”). (Id.
¶ 58.) In doing so, Defendants registered multiple websites which utilize Plaintiff’s Blue
Acorn name, including https://blueacorn.co/ and https://getblueacorn.com/. (Id. ¶ 62.)
Defendants also began deliberately infringing Plaintiff’s intellectual property by using a
nearly identical Blue Acorn mark and an exact replica of Plaintiff’s Blue Acorn Logo in
its marketing materials. (Id. ¶¶ 66-84.)
Defendants’ egregious misconduct has caused consumers to mistakenly believe
that Plaintiff is associated with Defendants or is providing Defendants’ PPP loan services.
(Id. ¶¶ 85-86.) Defendants, nevertheless, continue to use Plaintiff’s Blue Acorn intellectual
property in marketing its services to new potential clients and have also indicated they
do not intend to stop using Plaintiff’s Blue Acorn marks and brand once the PPP program
ends—apparently leaving the door open for an expansion of their service offerings.
(Geaslen Decl., ¶ 8.)
On November 16, 2021, Defendants served on Plaintiff their first set of
interrogatories and first set of requests for production. (Exs. D and E.) Defendants’
discovery requests seek confidential and highly sensitive business and financial
information including:
The identity of the “‘the over 169’ clients of BCI and the average revenue
for BCI per client” (Ex. D, Interrogatory No. 1);
Copies of “BCI’s financial statements (including balance sheets, and income
statements) and state and federal income tax returns, including all
schedules and forms from 2018 to present” (Ex. E, RFP No. 19);
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Copies of “all business plans relating to BCI’s services” (Id., RFP No. 24);
Copies of “all marketing plans relating to BCI’s services” (Id., RFP No. 25);
and
“[A] customer list and any and all documents evidencing, referring, or
relating to the type or class of purchaser of the [sic] BCI’s services” (Id., RFP
No. 27).
Because Defendants’ discovery requests will require production of confidential
and highly sensitive information, Plaintiff seeks a two-tier protective order to prevent
disclosure of such information to Defendants directly. Permitting Defendants to have
access to such confidential information—especially when Defendants’ infringing conduct
is ongoing and Defendants have indicated they do not intend to stop using Plaintiff’s
Blue Acorn intellectual property once the PPP program ends—will cause competitive
harm to Plaintiff by allowing Defendants to have access to Plaintiff’s client lists and
marketing and business plans. The potential for harm is further escalated given the
serious allegations concerning Defendants’ processing of fraudulent and ineligible PPP
loan applications. (See Ex. F.)
Accordingly, Plaintiff respectfully requests the Court enter a two-tier protective
order permitting the parties to identify such confidential and highly sensitive information
as “Highly Confidential – Attorneys’ Eyes Only.”
ARGUMENT
Rule 26(c) provides that any party “from whom discovery is sought may move for
a protective order” and that “[t]he court may, for good cause, issue an order to protect a
party or person from annoyance, embarrassment, oppression, or undue burden or
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expense.” Fed. R. Civ. P. 26(c)(1). This includes requiring that “confidential . . .
commercial information not be revealed or be revealed only in a specified way.” Fed. R.
Civ. P. 26(c)(1)(G). “The party seeking the protective order must make a particularized
request with specific facts in support of the request.” Country Vintner of N.C. v. E.&J. Gallo
Winery, 2010 U.S. Dist. LEXIS 160937, at *3 (E.D.N.C. Jan. 20, 2010). Where the party
seeking protection under Rule 26 is a business, “it must show that disclosure would cause
significant harm to its competitive and financial position.” Deford v. Schmid Prods. Co., 120
F.R.D. 648, 653 (D. Md. 1987).
Courts have routinely held that commercial information, such as that contained in
financial records and customer lists are subject to protection under a protective order. See
Country Vintner of N.C., 2010 U.S. Dist. LEXIS 160937, at *4 (granting motion for protective
order where discovery requests sought, among other things, business strategies and
contract and business arrangements); Massey Coal Servs., Inc. v. Victaulic Co. of Am., 249
F.R.D. 477, 483 (S.D. W. Va. 2008) (collecting cases that grant protective orders to keep
such commercial information confidential); Chesa Int’l, Ltd. v. Fashion Assocs., Inc., 425 F.
Supp. 234, 237 (S.D.N.Y. 1977) (customer list); Vollert v. Summa Corp., 389 F. Supp. 1348,
1351 (D. Hawaii 1975) (financial records detailing capitalization, net worth, and annual
income); Corbett v. Free Press Assoc., 50 F.R.D. 179, 180 (D. Vt. 1970) (profit and gross
income data).
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I. Producing the Requested Confidential Information Without an “Attorney’s
Eyes Only” Designation Would Significantly Harm Plaintiff’s Competitive
and Financial Position.
The information sought by Defendants in this case would require disclosure of
sensitive, confidential, and proprietary information and records related to Plaintiff’s
business. Defendants’ discovery requests seek Plaintiff’s complete customer list and the
revenue for each of Plaintiff’s customers. (Ex. D, Interrogatory No. 1; Ex. E, RFP No. 27.)
Such information is not only highly confidential, but Plaintiff would also need the
permission of each of its clients to disclose such information absent a protective order
with the appropriate confidentiality designations. (Geaslen Decl., ¶¶ 4-5.)
Additionally, Defendants’ requests require Plaintiff to produce highly confidential
and sensitive commercial information, including all of Plaintiff’s marketing and business
plans. (Ex. E, RFP Nos. 24 and 25.) Defendants’ requests even go so far as to seek
Plaintiff’s highly confidential financial statements, including balance sheets, income
statements, and state and federal income tax returns from 2018 to the present. (Ex. E, RFP
No. 19.) Except as authorized by its parent company, Infosys Limited, Plaintiff does not
make public filings disclosing such information and considers this information and
considers its marketing and business plans to be highly sensitive and confidential.
(Geaslen Decl., ¶¶ 6-7.)
Requiring Plaintiff to disclose such information absent a sufficient protective order
would harm Plaintiff competitively as Defendants expand their service offerings under
Plaintiff’s intellectual property. (Geaslen Decl., ¶ 8.) Moreover, unless the Court enters a
protective order with a “Highly Confidential – Attorneys’ Eyes Only” designation, there
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is an inherent risk that the highly sensitive commercial information Plaintiff provides
may be disseminated in the event Defendants’ officers and employees leave and join
Plaintiff’s competitors. These risks are amplified given the serious fraud allegations being
lodged against Defendants. (See Ex. F.) As a result, Plaintiff’s motion for a protective order
should be granted.
II. Defendants Will Not Be Unfairly Prejudiced by a “Highly Confidential –
Attorneys’ Eyes Only” Designation Protocol.
Defendants’ counsel has argued that it will need to review and evaluate the
information Plaintiff provides in discovery with its client and that a two-tier protective
order with a “Highly Confidential – Attorneys’ Eyes Only” designation will hamper
Defendants’ ability to defend the claims in this case. (Ex. C at 1.) But that is simply untrue.
Indeed, Plaintiff’s proposed protective order provides counsel the ability to discuss
protected documents with its client in a general way, as long as the advice rendered does
not disclose the specific contents of any protected documents produced under the
protective order. (Ex. A, ¶ 32.) Moreover, the protective order provides an opportunity
to challenge the designation of discovery materials if a party feels the information has
been incorrectly designated. (Id. ¶12.) Finally, as courts in this District have noted,
“[c]ounsel for Defendant and Plaintiff [are] bound by the Rules of Professional
Responsibility [and] must act reasonably in engaging in discovery. Therefore, the Court
assumes that [the designating party] will categorize as “Attorneys’ Eyes Only,” only
those documents that require such limited review.” Country Vintner of N.C., 2010 U.S.
Dist. LEXIS 160937, at *7. The same obligation applies to counsel here. Accordingly, any
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assertion that a “Highly Confidential – Attorneys’ Eyes Only” designation will harm
Defendants is unfounded.
CONCLUSION
For the foregoing reasons, Plaintiff respectfully requests the Court grant its motion
and enter its proposed protective order with a “Highly Confidential – Attorneys’ Eyes
Only” confidentiality designation protocol.
Respectfully submitted this 24th day of January, 2022.
By: /s/ John C. Scheller
John C. Scheller
(WI State Bar No.1031247)
Kenneth M. Albridge III
(WI State Bar No. 1078384)
MICHAEL BEST & FRIEDRICH LLP
One South Pinckney Street, Suite 700
Madison, WI 53703
Telephone: 608.257.3501
Facsimile: 608.283.2275
jcscheller@michaelbest.com
kmalbridge@michaelbest.com
J. Ryan Gray
(N.C. State Bar No. 55152)
MICHAEL BEST & FRIEDRICH LLP
2501 Blue Ridge Road, Suite 390
Raleigh, NC 27607
Telephone: 984.220.8750
Facsimile: 877.398.5240
jrgray@michaelbest.com
Local Civil Rule 83.1(d) Counsel for
Plaintiff
Attorneys for Plaintiff
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CERTIFICATE OF SERVICE
The undersigned attorney hereby certifies that the foregoing MEMORANDUM
OF LAW IN SUPPORT OF PLAINTIFF’S MOTION FOR PROTECTIVE ORDER has been
filed with the Clerk for the United States District Court, Eastern District of North
Carolina, using the electronic filing system of the Court. The electronic case filing system
will send a “Notice of Electronic Filing” to all attorneys of record who have consented to
accept service by electronic means.
This 24th day of January, 2022.
/s/ John C. Scheller
John C. Scheller
Counsel for Plaintiff
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