Given Rule 194 disclosures are now due within 30 days after the first answer is filed, protection of valuable and competitively sensitive information takes center-stage at the outset of a case. Although management of this confidential information is at the heart of many business disputes, attorneys often rely on “one-size-fits-all” forms rather than crafting protective orders tailored to the dispute. To avoid future headaches, attorneys should carefully review and modify form protective orders before submitting them to the court for entry.
Enter Protective Orders Early
Rule 194.2 requires parties to produce, within 30 days after the first answer is filed, a copy—or a description by category and location—of all documents they may use to support their claims or defenses. In commercial and trade secret litigation, this requirement fast-tracks the disclosure of sensitive documents, either through production with a party’s initial disclosures or through subsequent requests for production directed to the categories described in the disclosures. To facilitate expedited production of confidential information, attorneys should consider entry of a protective order—agreed or otherwise—at the outset of a case.
Tailor Definitions to the Dispute
While protective orders govern almost every phase of a business case, attorneys can get stuck with drafter’s remorse by overlooking seemingly innocuous but key provisions. One is the definition of confidential information. It should generally be broad enough to contemplate the categories of confidential information discoverable in the case, but narrow enough to warrant the requested protection. Using Texas Rule of Evidence 507’s definition of “trade secret,” for example, may be too narrow in some cases because the confidential information may not qualify as trade secret.
On the other hand, defining confidential information broadly to mean all non-publicly available information, for example, may allow an unwarranted carte blanche designation. This balancing act applies equally to defining what constitutes “attorneys’ eyes only” information in multi-tiered protective orders, which often award additional protection to information a party deems “highly sensitive.” And it is especially important when sensitive source code is involved. To avoid (or at least limit) over-designation disputes, drafters should contextualize these definitions early on for the immediate matter, and tailor them to the types of information that may apply to both parties.
Address Retroactive and Non-Party Designations
The designation procedure for protected material, including considerations for inadvertent failure to designate and for designation of non-party documents is another key provision attorneys should not overlook. The protective order should address retroactive designation, when and how such late designation becomes effective, and any waiver concerns. It should also account for the possibility that non-parties will produce documents in the case. This calls for consideration of how non-parties will be informed of the protective order, whether and how they are afforded the protections of the protective order (e.g., signing an undertaking), and whether documents they produce should be protected for a set period to allow the parties time to designate them if applicable.
Specify Procedures for Challenging Designations
Attorneys drafting tailored protective orders should also pay close attention to the procedure for challenging designations, as it is likely to be invoked at some point. Protective orders typically allow the receiving party to notify the producing party that it challenges a designation, and then gives the producing party a specified number of days to respond before the issue may be presented to the court. Drafters should specify when, how, and who (receiving or producing party) should seek an order on the disputed designation and should account for how contested designations are treated pending a ruling. These procedures may also require adjustment to account for any local or court rules, including any meet-and-confer requirements.
Define Permissible Use of Confidential Information
It seems simple, but protective orders should also have specific, permissible uses for protected materials. Many protective orders allow use of protected materials only in the immediate litigation. But given some business disputes involve ancillary litigation, ongoing business relationships, or related entities, the parties should consider whether broadening the scope of permissible uses makes sense.
Protective orders can be a hassle down the road if they are poorly drafted. While later modification is an option, squaring away this necessary and vital tool in business litigation from the start is best practice. Attorneys should take a critical review of their current forms and prepare to enter tailored orders at the initial disclosure phase of a case.
Griffith Barbee PLLC
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