08
Oct
By Eric Schweibenz
On October 2, 2010, Chief ALJ Paul J. Luckern issued the public version of Order No. 55 (dated August 17, 2010) in Certain DC-DC Controllers and Products Containing the Same (Inv. No. 337-TA-698).  Respondent uPI Semiconductor Corp. (“uPI”) moved for sanctions against counsel for Complainants Richtek Technology Corp. and Richtek USA, Inc. (“Richtek”) for alleged violations of the Protective Order issued in the investigation.  In Order No. 55, ALJ Luckern found no violation of the protective order or the Commission Rules and declined to impose sanctions against Richtek.

On April 16, 2010, Richtek commenced the deposition of a uPI witness in Investigation No. 337-TA-698 (“the ITC investigation”).  At counsel for uPI’s request, the deposition transcript of the uPI witness was marked as containing “Confidential Business Information Subject to Protective Order.”  Pursuant to this designation, uPI’s counsel permitted the deponent to give four days of testimony in response to Richtek’s questions, with the understanding that uPI’s confidential business information would be protected from disclosure.

On July 1, 2010, counsel for Richtek filed a second amended complaint in a parallel litigation pending against uPI and others in the Northern District of California (“the district court litigation”).  uPI alleged that Richtek’s publically-available amended complaint contained factual representations apparently taken directly from the confidential deposition of uPI’s witness, in contravention of the Protective Order issued in the ITC investigation.  Then, on July 7, 2010, Richtek filed a motion to withdraw its second amended complaint from the docket in the district court litigation, acknowledging that the amended complaint arguably contained information that may be designated as confidential under the ITC investigation Protective Order.  On July 8, 2010, the district court judge ordered that Richtek’s second amended complaint be removed from the court’s public docket.  Subsequently, Richtek’s counsel sent uPI correspondence seeking to de-designate several excerpts of the deposition transcript from the confidential record, but uPI informed Richtek that it believed the deposition had appropriately been designated as confidential.

On July 15, 2010, counsel for uPI notified counsel for Richtek that it believed Richtek had an obligation under Commission Rule 210.34(b) to promptly bring the apparent violation of the Protective Order to the attention of the Commission for investigation.  When Richtek failed to do so by July 21, 2010, uPI moved, pursuant to Commission Rules 210.25 and 210.34(c), for sanctions against counsel for Richtek for violations of the ITC Protective Order.  In deciding the motion, ALJ Luckern noted that a motion for sanctions for violation of a Protective Order, as a form of civil contempt, requires the movant to demonstrate the alleged contemnor violated the order by clear and convincing evidence.  Here, ALJ Luckern found that uPI failed to make such a showing.

Specifically, ALJ Luckern determined that uPI’s memorandum in support of its motion for sanctions did not reveal a single instance where uPI identified what specific confidential information Richtek allegedly disclosed in the second amended complaint.  ALJ Luckern noted that although uPI provided a chart allegedly showing examples of the alignment between Richtek’s amended complaint and its de-designation efforts, it did not include the actual deposition transcript as an exhibit or any supporting declaration.  ALJ Luckern noted that unsworn attorney argument is not evidence.  ALJ Luckern found that while uPI’s chart may indicate a violation of the Protective Order, it was insufficient to carry the clear and convincing burden necessary to impose sanctions.  In addition, although ALJ Luckern acknowledged that uPI, in its reply brief, did point to specific instances where its alleged confidential information was included in Richtek’s second amended complaint, those instances were not considered in the disposition of the motion for sanctions because new arguments raised in reply are not proper.

ALJ Luckern found it significant that Richtek filed declarations in support of its opposition from the Manager of the Legal and Intellectual Property Department for Richtek, Richtek’s lead counsel in the ITC investigation, and Richtek’s counsel in the district court litigation, swearing under penalty of perjury that the information in the second amended complaint was obtained from employees at Richtek and other publically available sources outside of the ITC investigation.  ALJ Luckern further noted that uPI neither challenged the declarations nor argued that the information contained in the amended complaint could be obtained only through confidential sources.  Because the uncontroverted Richtek declarations established that the potentially confidential information in the second amended complaint was obtained from public sources, ALJ Luckern found that uPI failed to show that Richtek disclosed confidential business information in violation of the protective order issued in the ITC investigation.

With respect to uPI’s argument that Richtek violated the Protective Order and Commission Rules by failing to notify the Commission of the alleged breach, ALJ Luckern stated that both the Protective Order and Commission Rule 210.34(b) require notice only in the event of an actual breach of confidential information.  Thus, in light of uPI’s failure to show that Richtek disclosed confidential information in violation of the Protective Order, ALJ Luckern found that a technical violation of the Protective Order or Commission Rules had not been established.

Nevertheless, ALJ Luckern determined that Richtek’s actions involving the subject matter of the motion for sanctions were not in the spirit of the Protective Order and/or the Commission Rules.  ALJ Luckern noted that any violation of a Protective Order is an extremely serious matter and that protection of confidential information is crucial to the Commission’s ability to carry out its statutory responsibilities.  ALJ Luckern found that the undisputed evidence shows that Richtek’s counsel was concerned that the second amended complaint arguably contained confidential business information, that upon becoming concerned they contacted the district court to request that the pleading be withdrawn, and then undertook an internal investigation to determine whether or not the information disclosed in the second amended complaint was obtained in violation of the Protective Order issued in the ITC investigation.  Based on these facts, ALJ Luckern determined that Richtek should have first immediately disclosed the alleged breach to both uPI and the ALJ at the time its counsel contacted the district court, and when it was discovered that certain information was not confidential business information, it should have immediately informed uPI and the ALJ of that finding and the basis for the finding.  ALJ Luckern also acknowledged to being troubled by the fact that even after determining that the information in the amended complaint was known to it from public sources outside the ITC investigation, Richtek did not subsequently move to de-classify the information in the amended complaint and/or deposition transcript.  Although no violation of the Protective Order or the Commission Rules was found, ALJ Luckern admonished counsel for Richtek for their handling of the incident leading up to uPI’s filing of the motion for sanctions.
Share