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Axanar Lawsuit Warps Into Discovery Process

Both sides want to protect confidential documents, trade secrets

The two sides in the copyright infringement battle over an "independent" fan-film might not agree on a settlement, but it looks like they've cleared one hurdle facing discovery.

David Grossman, the attorney representing Paramount Pictures and CBS Corp. in their lawsuit against Axanar Productions and its principal Alec Peters, has filed what is known as a stipulated protective order intended to keep some information collected in discovery confidential. Discovery, of course, the process where both sides collect information from each other in order to help support their positions in a legal dispute.

This particular order, which was signed by both Grossman and Axanar attorney Erin Ranahan on Tuesday, is intended to keep discovery moving at a fast pace, putting in place a pre-approved procedure on how to treat what one side might label as confidential information.

"The parties anticipate that the exchange of information in this case may include documents that constitute non-public, highly sensitive financial information regarding revenues, expenses and profits generated in connection with the motion picture works at issue, the disclosure of which could cause competitive harm to the parties in this action," Grossman wrote in the proposed order. "The parties also anticipate that the exchange of information in this case will include non-public drafts of scripts, screenplays and other creative and artistic material, including unreleased portions or versions of the films at issue, which works, if disclosed, may cause competitive harm to the parties in this action."

Such protective orders are common in complex business litigation such as this copyright infringement lawsuit.

"They are often a necessity for defendants and plaintiffs alike due to the enormously important need to protect sensitive information, such as trade secrets and other confidential financial information, from the public eye and competitors," attorneys from the North Carolina law firm of Smith Moore Leatherwood — who are not associated with the Axanar lawsuit — wrote in a 2013 blog post on these types of protective orders in federal court.

"Confidentiality and protective orders recognize this need, and prevent parties from sacrificing the privacy of their proprietary information simply because they have filed or been named in a lawsuit."

In the Axanar suit, the protective order would allow either side to declare confidential a variety of material, including responses, testimony, deposition transcripts and any other document connected to the case that either side "reasonably" believes to contain trade secrets, confidential or proprietary business information, personal information protected by a right of privacy, or non-public drafts or unreleased versions of creative and artistic material.

Anything deemed confidential could then only be disclosed to "qualified persons." They could include the actual litigants, the attorneys representing them, independent consultants and experts, witnesses being deposed who require to have that information in order to testify, and anyone who's already had access to that information before the case.

The confidentiality order would continue to be in place on those select items, even after the case ends, unless they are made public by means not associated with actually breaking the order, including becoming part of the public record at trial.

The proposed order — which still requires approval from a special magistrate assigned to help with settlement negotiations, Judge Charles Eick — has an additional clause that would limit some material to just the attorneys in the case, meaning it could not even be shared with the attorney's clients in the case. That is a practice that each side will likely have to use sparingly, the Smith Moore Leatherwood attorneys said.

"Assuming that the parties agree to include such a designation in their protective order, the party using the 'attorneys' eyes only' designation will ordinarily bear the burden of showing that each document is sensitive enough to warrant such a restriction," the North Carolina attorneys said. "Courts have threatened sanctions against parties that label documents 'attorneys eyes only' either arbitrarily or excessively."

Once the court case has ended, each side will either have to return or destroy any documents they possess labeled confidential under the order. Anyone provided with confidential information also will need to sign a non-disclosure agreement that could result in contempt of court charges if violated.

CBS and Paramount filed the suit against Axanar last December, claiming its fundraising and commercial activities surrounding their proposed film "Star Trek: Axanar" as well as a shorts known as "Prelude to Axanar" and a Vulcan scene from the larger film, violated copyrights owned by the studios. Axanar had raised $1.3 million from fans looking to produce the film. Axanar has spent the money on a costly studio space just outside Los Angeles, some set construction, travel to conventions around the world for its key players, and even salaries for some of its leaders, including at least $38,000 plus expenses to its principal Peters in 2015.

Axanar hired Ranahan and her law firm to defend them on a pro bono basis, although that likely doesn't cover extensive costs associated with discovery. Ranahan's motion to dismiss filed in March was rejected by Judge R. Gary Klausner in May.

A little more than a week later, "Star Trek: Beyond" producer J.J. Abrams told a crowd at a fan event supporting the new movie that the Axanar lawsuit was "going away." However, just four days later, Axanar filed a counterclaim against CBS and Paramount.

The copyright infringement trial is set to begin in January.

Need to catch up on the "Star Trek: Axanar" copyright infringement lawsuit? Visit our easy-reference guide to all of 1701News' coverage and commentaries by clicking here.

h/t Jody Wheeler

Source: 1701News


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