For Your Eyes Only: IP Atty’s Who Misuse Confidential Documents Face Sanctions, Discipline

Patent and other high technology litigation invariably involves the disclosure of highly confidential technical and financial information.  One of the first orders usually entered in such cases is a protective order, which enables parties to designate and disclose to a limited universe of people what the producing party considers to be confidential information.  Typically, protective orders prohibit the receiving party from using the producing party’s confidential or highly confidential information for purposes other than the litigation in which the material is produced. A recent decision serves as a stark reminder of the importance of honoring protective orders in patent cases–and the risks that await those who violate such orders by misusing another party’s confidential information.

Sanctions for Violating Protective Order

In Errant Gene Therapeutics, LLC v. Sloan-Kettering Institute for Cancer Research, the parties were subject to a protective order that provided

Confidential and Attorneys’ Eyes Only information shall be used by the Receiving Party solely for the purposes of preparation for trial, pretrial proceedings, and trial of actions and proceedings in the above-captioned action and not for any business, commercial, regulatory, competitive, personal or any other action.

During discovery, Sloan-Kettering produced documents to plaintiff (EGT) designated as “attorneys’ eyes only.”

In November 2016, Sloan-Kettering filed a motion to enforce the Protective Order and sanction EGT and its counsel for allegedly violating the Protective Order (the “First Sanctions Motion”).   According to the First Sanctions Motion, EGT improperly used Sloan-Kettering’s confidential and highly confidential information in connection with its filing of a state court lawsuit in Illinois against a different entity (Bluebird Bio, Inc.).  EGT voluntarily dismissed the Illinois case, evidently based on the alleged protective order violation and out of an “abundance of caution.”  The First Sanctions Motion requested an injunction to prevent further misuse of Sloan-Kettering’s confidential materials, attorneys’ fees, and revocation of the pro hac vice admission of the allegedly culpable attorneys (patent attorneys from the law firm Vitale Vickery Niro & Gasey LLP, a successor to the Niro Law Firm).

In February 2017, Sloan-Kettering filed a second motion seeking sanctions and alleging that EGT and its counsel again violated the Protective Order (the “Second Sanctions Motion”).  According to the Second Sanctions Motion, EGT improperly used Sloan-Kettering’s confidential and highly confidential information in connection with its filing of a state court lawsuit in New York.  The Second Sanctions Motion requested holding EGT in contempt, dismissal of the New York state complaint, and an award of attorneys’ fees.

On June 5, 2017, a federal judge in New York issued an Order granting-in-part Sloan-Kettering’s First and Second Sanctions Motions.  See EGT Sanctions Order

The district court held that “use of protected information alone, even without disclosure, is a violation of the Protective Order.”   The court found that using protective order information obtained in one case to file another action violated the Protective Order.  This was true, according to the Court, even where the party using the protected information redacts that information from the complaint filed in the other action, since filing a redacted complaint is still an impermissible use of the protected information.

In granting the First Sanctions Motion, the district court awarded Sloan-Kettering its attorneys fees.  However, since the underlying lawsuit had been terminated, the court denied as moot the other remedies sought.

In the Second Sanctions Motion, EGT argued that the information utilized in the New York state court complaint was independently obtained without the use of Sloan-Kettering’s confidential information.   The district court rejected this argument and found that EGT had “a heavy burden” to prove this contention, and that “this heavy burden cannot be satisfied merely through EGT’s own attestation.”  According to the court, “independently verifiable information is necessary” to substantiate EGT’s claims.

Notably, the court cites to no case law to support its proposition either regarding the weight of evidence required to, in essence, prove the negative (i.e. that EGT did not violate the Protective Order).  Nor does the court explain why the court must have “independently verifiable information” to substantiate EGT’s claim that it obtained the information that was allegedly confidential from other than protective order sources.

In granting the Second Sanctions motion, the district court also awarded Sloan-Kettering its attorneys fees AND it ordered that EGT “must refrain from further misuse” of the confidential information that was obtained in this case.  While the district court refused to order dismissal of the New York state court case (and it is unclear how, exactly, a federal district court judge would have jurisdiction to dismiss a complaint filed in state court), the district court noted that “continuing to prosecute the New York action while avoiding further violation of this action’s Protective Order would be impractical if not impossible.”

Ethical Discipline for Violating Protective Order in USPTO Prosecution and PTAB Proceedings

Sanctions are not the only thing a litigator must be mindful of if they violate a protective order.  Such violations also could lead to professional discipline.

Indeed, the district court in EGT acknowledged that violations of a court’s protective order may also violate the Rules of Professional Conduct.  In particular, ABA Model Rule 8.4(c) and USPTO Ethics Rule 37 C.F.R. Section 11.804(c) prohibit attorneys from engaging in “conduct involving dishonesty, fraud, deceit, or misrepresentation.”  The New York court acknowledged that, “violations of a protective order have been found to constitute a violation of Rule of Processional Conduct 8.4.” (citing Peters v. Comm. on  Grievances for US. Dist. Court for S. Dist. Of New York, 748 F.3d 456, 459, 461-62 (2d Cir. 2014)).  Although the Court did not refer the matter to disciplinary counsel, there is no apparent reason why Bar Counsel could not at least investigate whether the violations of the protective order were a violation of any of the attorneys’ ethical duties.

In the past, the USPTO’s Office of Enrollment and Discipline has taken a keen interest in patent practitioners who are accused of violating a tribunal’s protective order.  For more on this issue, see our March 3, 2016 post here – “PTAB and District Court Litigators Risk USPTO Ethical Discipline for Protective Order Violations.”

As we previously noted, the USPTO has publicly disciplined, patent practitioners who filed documents or information in the USPTO in violation of a protective order. See, e.g., In the Matter of Janka, Proceeding No. D2011-57 (USPTO Dir. Nov. 21, 2011); In the Matter of Bollman, Proceeding No. D2010-40 (USPTO Dir. Oct. 18, 2011).

In Janka, for example, a patent practitioner was publicly reprimanded by the USPTO for disclosing confidential information protected by a protective order in an Information Disclosure Statement. The USPTO has a procedure (MPEP Section 724.02) for filing confidential documents under seal.  The practitioner failed to protect the confidential nature of the documents, which became available for public inspection.

Protective Order issues also may arise in PTAB trial proceedings. Indeed, pursuant to 37 C.F.R. § 42.54, a party may move for entry of the Board’s “Default Protective Order” set forth in the “Patent Trial Practice Guide.” See 77 Fed. Reg. 48756, 48771 (Aug. 14, 2012). In RPX Corp. v. Applications in Internet Time LLC, IPR2015-01750, IPR2015-01751 and IPR2015-01751, for example, the parties entered into the Default Protective Order. On December 21, 2015, RPX filed a motion for sanctions with the PTAB, alleging that the patentee improperly disclosed RPX-designated confidential information to unauthorized persons, in violation of the PTAB protective order. The patentee opposed the motion.  On July 1, 2016, the PTAB agreed with RPX and awarded the patent aggregator $13,500 in attorneys’ fees based on the violation of the protective order (Order here).


As these matters make clear, IP practitioners must use extreme care in protecting confidential information.  As in the district court case recently decided in New York, even the use, without disclosure, of protective order information may violate the terms of a protective order.  Whether such a ruling is fair or not is beyond the scope of this article.  Needless to say, special duties arise when a practitioner receives information that a court has ordered to be used and protected in a limited manner, and violations of a court order can raise problems for practitioner both in litigation as well as before Bar Counsel.


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