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Advanced Tactical Ordnance Systems, LLC v. Real Action Paintball, Inc.

United States District Court, N.D. Indiana

April 17, 2015

ADVANCED TACTICAL ORDNANCE SYSTEMS, LLC, an Indiana limited liability company, (d/b/a PepperBall Technologies), Plaintiff,
v.
REAL ACTION PAINTBALL, INC., and K.T. TRAN, Defendants.

OPINION AND ORDER

JOSEPH S. VAN BOKKELEN, District Judge.

Plaintiff, Advanced Tactical Ordnance Systems, LLC, ("ATO") sued Real Action Paintball, Inc. ("RAP"), and K.T. Tran (and others who have now been dismissed) in the Northern District of Indiana alleging trademark infringement and various state law violations. In August 2014, the Court of Appeals for the Seventh Circuit dismissed Plaintiff's case for lack of personal jurisdiction. Plaintiff then re-filed its case in the Northern District of California. The Court now addresses several motions related to the dismissal and re-filing of this case.

A. Defendant's Motion for Transfer of Preliminary Injunction Security

Defendant first argues that the $10, 000 cash security being held by the clerk of the Northern District of Indiana should be transferred to the Northern District of California. Neither party has cited case law in arguing why the Court should or should not grant Defendant's motion, but instead argue judicial economy. But as the clerk for the Northern District of California where this case is now pending has rejected Defendant's motion to accept the bond, the issue is moot, and the Court denies Defendant's motion to transfer the $10, 000 security.

B. Defendant's Motion to Seal

Defendants argue in favor of sealing and redacting two lines of Plaintiff's Memorandum in Support of Second Amended Motion for a Preliminary Injunction. (DE 324). The two lines in question pertain to Plaintiff's sales of irritant powder projectiles over a six-year period.

"Documents that affect the disposition of federal litigation are presumptively open to public view." In re Specht, 622 F.3d 697, 701 (7th Cir.2010). The reason for this right of public access to the judicial record is to enable interested members of the public, including lawyers, journalists, and government officials, to know who's using the courts, to understand judicial decisions, and to monitor the judiciary's performance of its duties. Jessup v. Luther, 277 F.3d 926, 928 (7th Cir.2002). The presumption can be rebutted. A litigant is allowed, for example, to conceal trade secrets. See, e.g., Doe v. City of Chi., 360 F.3d 667, 669 (7th Cir. 2004). And the presumption of public access "applies only to the materials that formed the basis of the parties' dispute and the district court's resolution"; other materials that may have crept into the record are not subject to the presumption. Baxter Int'l, Inc. v. Abbott Labs., 297 F.3d at 548 (7th Cir. 2002).

Secrecy is fine at the discovery stage, before the material enters the judicial record. See Seattle Times Co. v. Rhinehart, 467 U.S. 20, 104 S.Ct. 2199 (1984). But those documents, usually a small subset of all discovery, that influence or underpin the judicial decision are open to public inspection unless they meet the definition of trade secrets or other categories of bona fide long-term confidentiality. See, e.g., Grove Fresh Distribs., Inc. v. Everfresh Juice Co., 24 F.3d 893 (7th Cir.1994). A secrecy agreement alone does not warrant maintaining documents under seal. Baxter Int'l, Inc. v. Abbot Labs., 297 F.3d 544 (7th Cir. 2002).

In determining whether the information Plaintiffs seek to shield is a trade secret or a proprietary business interest entitled to protection under Rule 26(c)(7), the Court looks to the Indiana Uniform Trade Secret Act (IUTSA) for guidance. The IUTSA defines a "trade secret" as:

"information, including a formula, pattern, compilation, program, device, method, technique, or process that:
(1) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and
(2) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy."

Burk v. Heritage Food Service Equipment, Inc., 737 N.E.2d 803, 813 (Ind.Ct.App. 2000), citing Ind. Code ยง 24-2-3-2. Thus, in Indiana, a "protectable trade secret" has four characteristics: "(1) information; (2) which derives independent economic value; (3) is not generally known or readily ascertainable by proper means by other persons who can obtain economic value from its disclosure or use; and (4) the subject of efforts reasonable under the circumstances to maintain its secrecy." Ackerman v. Kimball Int'l, Inc., 634 N.E.2d 778, 783 (Ind.Ct.App.1994), vacated in part, adopted in part, 652 N.E.2d 507 (Ind.1995).

As the Supreme Court held in Grove Fresh, dispositive documents in any litigation enter the public record notwithstanding any earlier secrecy agreement made to expedite discovery. Much of Defendant's argument hinges on the discovery agreement between the two ...


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