MSC Software Corp. v. Altair Eng'g, Inc.
MSC Software Corp. v. Altair Eng'g, Inc.
2008 WL 4940361 (E.D. Mich. 2008)
September 9, 2008

Hollaar, Lee A.,  Special Master

Form of Production
Special Master
Source Code
Failure to Produce
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Summary
The Court ordered Altair to provide unredacted versions of the source code repository and development twiki, as well as operation copies of the latest version of MotionSolve and MSAuto, if applicable, to MSC's outside counsel and the Special Master. The Court also superseded the source code order or agreement to permit persons who have agreed to the protective order to make copies and distribute any material covered by the protective order, and extended the date for MSC's experts' reports to compensate for the delay in the production of the MotionSolve source code repository and development twiki.
MSC SOFTWARE CORP., Plaintiff,
v.
ALTAIR ENGINEERING, INC., et al., Defendants
Civil Action No. 07-CV-12807-VAR-MKM
United States District Court, E.D. Michigan, Southern Division
September 09, 2008
Hollaar, Lee A., Special Master

REPORT AND RECOMMENDATIONS OF SPECIAL MASTER LEE A. HOLLAAR REGARDING THE PRODUCTION BY ALTAIR ENGINEERING OF THE SOURCE CODE REPOSITORY AND DEVELOPMENT TWIKI

Background
*1 In the Court's scheduling order of August 26, 2008, the parties were ordered to submit a list of outstanding discovery issues to the Special Master by August 29, 2008. Among the issues submitted by MSC was production of a current version of the source code repository and development “twiki” for MotionSolve/MSAuto (which I will refer to as collectively as MotionSolve unless there is a need to distinguish the two products). Under the scheduling order, discovery on MotionView was stayed, in part because of the problems of separating its source code repository and development twiki from other Altair products not part of this action.
While MSC had previously been provided been provided with copies of the source code for releases 8.0SR1 and 9.0 of MotionSolve and the source code repository, because there have been further releases of MotionSolve and changes made to the source code after that source code was produced, it is reasonable that MSC's experts be provided with a current and complete version of the source code repository and development twiki as they start drafting their reports, due on February 2, 2009.
In light of that, and in recognition of past technical problems with the production of source code by Altair, following the scheduling conference of September 25, I sent the following email to the parties:
In light of MotionView being removed from consideration at the present time, production of a current version of the source code repository and the twiki is considerably simplified since other products do not need to be redacted from the repository. I note, for example, that the July 2008 Perforce repository for MotionSolve and MotionAuto that I have takes approximately 10 GBytes, and the twiki for those two products takes approximately 4 GBytes.
On or before September 8, 2008, Altair will deliver complete copies of the current Perforce repository that contains the source code for MotionSolve and MotionAuto to MSC's experts McGrath, Stackpole, and Zeidman, and to the Special Master. The copy will consist of a TrueCrypt volume stored on an external hard disk or USB flash memory, at Altair's option, and the data should useable directly in Perforce and not require “unzipping” or “untarring”.
Each of MSC's experts will contact Altair by email, with a copy to the Special Master, indicating that he has received his copy of the source code repository, that it is readable, and requesting the TrueCrypt password.
Also on or before September 8, 2008, Altair will deliver complete copies (including any source code) of the current development twiki for MotionSolve and MotionAuto to MSC's experts McGrath, Stackpole, and Zeidman, and to the Special Master. The copy will consist of a TrueCrypt volume stored on an external hard disk or USB flash memory, at Altair's option, and the data should useable directly and not require “unzipping” or “untarring”. The same external hard disk or USB flash memory as for the Perforce source code repository may be used, at Altair's option.
*2 Each of MSC's experts will contact Altair by email, with a copy to the Special Master, indicating that he has received his copy of the twiki, that it is readable, and requesting the TrueCrypt password.
If Altair believes that it is necessary to redact any information from the Perforce repository or the twiki as they is currently stored on its computers, on or before September 2, 2008, it will supply the Special Master with a complete copy of the Perforce repository or twiki data, a copy with the proposed redactions, and an explanation of what was redacted and why.
MSC will remind its experts of their obligations regarding this information under the protective order and the source code agreement, and in particular that an expert “shall not make or cause to be made copies of the source code of the opposing party, or any portion thereof, other than as is necessary to perform the duties as an expert” and “shall not provide or deliver any copy of the source code of the opposing party, or any portion thereof, to any person other than his employees directly involved in performance of expert duties in this case.”
In its letter to the Special Master of August 27, MSC indicates that “In your August 25 email, you required that Altair provide Mr. Zeidman, Mr. Stackpole, and Dr. McGrath with copies of the current unredacted twiki database for MotionSolve and MotionAutomotive. No provision was made in that email for providing an updated redacted copy of the database to MSC's counsel, however. As you know, we already have the earlier redacted version.”
I replied in an email that “Not including MSC's counsel in the production requirement for the current unredacted MotionSolve/MotionAuto development twiki was an oversight on my part. Altair will also furnish a copy to MSC's counsel.”
Altair then responded in a letter on September 5, stating that “... Altair cannot be required and does not agree to provide copies of source code to any MSC employees agent or representative other than the experts who have supplied Undertakings. Altair cannot be required to supply copies of source code to MSC's counsel.” They proposed instead supplying a redacted copy of the twiki to the Special Master to compare with the unredacted copy to determine what was removed was source code.
MSC replied the same day that “Your order was clear and correct with regard to the twiki pages and require production of the entire unredacted database to us. That is what the original Stipulated Order required.” It then discussed why there is no order barring MSC's outside counsel from receiving the unredacted twiki.
I then responded by email on September 6:
I have reviewed the “Amended Stipulated Protective Order” (Docket # 93), Magistrate Judge Majzoub's order of June 10, 2008, incorporating the source code agreement (Docket # 169), and the “Stipulated Order Regarding Pending Motions” (Docket # 91), as well as the letters from counsel regarding the production of the twiki to MSC's counsel and the production of an operational version of Altair's software.
*3 First of all, let me state that nothing I have said is meant to alter or modify either the Amended Stipulated Protective Order or the Source Code Order in any respect and both remain in full force and effect in accordance with their term.
But I see nothing in those orders that does not permit MSC's outside counsel from receiving Altair's source code, and in particular source code that is included in the development twiki. Source code comes under the category of “Highly Confidential/Attorneys' Eyes Only” which, according to the protective order, is viewable “by outside Counsel”. It defies logic to say that even though MSC's outside counsel is entitled to view Altair's source code, he cannot receive a full copy of the development twiki because it contains Altair source code.
The Source Code Order does not modify the status of source code as “Highly Confidential/Attorneys' Eyes Only” under the protective order. Instead, it limits duplication and redistribution of any source code produced, requiring (in this instance) Altair producing a copy for each group of MSC's experts and for MSC's outside counsel that is entitled to review the source code under the protective order (and also a copy for the Court). This is in contrast to the more common procedure of delivering a single copy of the source code to the opposing counsel, who then provides copies as necessary to the experts that have been retained.
The Source Code Order allows Altair to keep a closer watch on who receives its source code. The trade-off is that Altair has to supply multiple copies if there are different groups entitled to view the source code. That is not an onerous burden, since the copies are identical.
Where there is a burden on Altair is when it wishes to produce a redacted version for some reason. The Court has removed that burden with respect to the source code repository for MotionView by staying that discovery request. And by furnishing the full twiki to MSC's outside counsel, Altair will be able to forgo the effort of redacting things that MSC's outside counsel is entitled to see, and could see by going to the location of one of its experts.
I believe that many of the accusations by MSC's counsel regarding production of the twiki and source code stems from the redacted versions that were provided and the suspicion that things had been hidden when they couldn't be readily located. By providing the source code repository and the twiki in its full and complete form as it is regularly used by Altair, perhaps these accusations will end.
On September 8, 2008, Altair will deliver complete copies (including any source code) of the current development twiki for MotionSolve and MotionAuto to MSC's experts McGrath, Stackpole, and Zeidman, to MSC's outside counsel, and to the Special Master, or to an express carrier for delivery to those people the next day. The copy will consist of a TrueCrypt volume stored on an external hard disk or USB flash memory, at Altair's option, and the data should useable directly and not require “unzipping” or “untarring”. The same external hard disk or USB flash memory as for the Perforce source code repository may be used, at Altair's option.
*4 While Altair continued to protest the production of the unredacted twiki to MSC's outside counsel, it said nothing about not providing the MotionSolve source code repository and unredacted development twiki to MSC's three experts (and to the Special Master). In fact, on September 5, Mr. Fayz sent email saying that because of the “extremely sensitive” nature of the material (even though it was to be shipped in a secure encrypted form), Altair would not be shipping it so that it would arrive on Monday, September 8, but would be shipping it that Monday for delivery on Tuesday, September 9, so that it would not be “left in the hands of the carrier over the weekend.” Mr. Fayz then required that the experts be available Tuesday morning to receive the shipment, with photographic identification to confirm their signature. “If the delivery requirements are not satisfied, the carrier is instructed to return the material to Altair.”
On Tuesday morning, MSC's counsel sent email asking whether the experts would be receiving anything by courier, since they were required by Altair to be available for the delivery whenever it might occur. Altair's response was to suggest a stipulated order that would not provide any material until five days after it is entered, leaves the question of providing the source code portions of the development twiki unresolved, and did not indicate whether or not anything had been shipped on Monday.
It wasn't until I enquired by email whether MSC's experts had received anything that Mr. Fayz indicated that Altair had not shipped anything on Monday.
Discussion
Much of the difficulty regarding the production of the source code repository and the development twiki for MotionSolve results from the “Source Code Order” found starting on page 4 of Magistrate Judge Majzoub's order of June 10, 2008 (Docket # 169), which is copied from the “Agreement Regarding Copying or Dissemination of Source Code” signed by the parties (available as Docket # 131-3).
The order and the agreement both limit MSC's experts from duplicating any source code except as necessary for their work. It further prevents them from disseminating any source code to a person not the employee of the expert, even if that person has agreed to the protective order by signing the Undertaking.
In that respect, the source code order or agreement goes well beyond the protective order. In contrast to the normal situation where the material would be provided to MSC's outside counsel, to be redistributed to the experts who have agreed to the protective order by that outside counsel as necessary, the source code order requires that Altair provide individual copies to each team of MSC's experts. And none of those experts can provide a copy to MSC's outside counsel, even though the classification of source code as “Highly Confidential/Attorneys' Eyes Only” under the protective order clearly contemplates that outside counsel be able to see such material. Unless Altair furnishes a copy to MSC's outside counsel (which they are refusing to do for source code that is part of the development twiki database), the only way for MSC's outside counsel to see the material to which he is entitled is to travel to one of MSC's experts location and view it there. (And perhaps Altair would object to that.)
*5 It is clear to me that the source code order or agreement simply complicates discovery and provides no meaningful protection of the source code beyond the protective order, which limits the viewing of “Highly Confidential/Attorneys' Eyes Only” material, such as source code, to “outside Counsel and their expert witnesses and expert consultants retained by Counsel who have executed an original of the Undertaking.” Furthermore, under the protective order “All Confidential Information and Material shall be handled in the manner set forth in this order and shall not be used for any business purpose, or any purpose other than the prosecution, defense, or settlement of this action, unless and until such designation is removed by the Producing Party or by order of this Court. This obligation shall survive the termination or settlement of these proceedings and shall continue after this Court ceases exercising jurisdiction over the parties.”
In addition, “counsel for the parties shall keep all Confidential Information and documents which are received under this Order secure within their exclusive possession and shall place such documents in a secure area. Counsel shall endeavor to collect all confidential documents from those persons who were provided copies of said documents after said persons' involvement in the litigation of this matter is concluded.”
That should be sufficient protection if the parties abide by the protective order, and if not, the source code order will likely be ignored, too.
MSC's experts have the heavy burden of identifying any misappropriations of fifty different trade secrets by examining a vast amount of source code and its repository metadata and the development twiki. Since evidence may be in the form of additions or deletions made after they original source code productions, they should have current information as they do the analysis leading to their expert reports.
In addition, I have recommended that Altair provide MSC's experts with an operational version of the programs as commercially distributed or supplied to customers for testing. On September 7, I wrote:
I have reviewed the letters from counsel regarding MSC's request that Altair provide MSC's experts with an operational copy of the latest commercial release of MotionSolve and MSAuto.
Altair contends that there has not been a commercial release of MSAuto, although MSC contends that a “complete development copy of that product has been shared with at least Toyota Motor company for over 18 months.”
Altair also contends that having to support MSC's experts in their installation of the programs and development and testing of the models needed to use the programs would be an unwarranted burden and could further delay the preparation of MSC's experts' reports.
I believe MSC's request is reasonable. In similar litigation where I have been an expert, I regularly made such a request, finding having a running copy of the program gives me a better perspective of the program whose source code I am examining.
*6 Therefore, on or before September 22nd, Altair will deliver a copy of the latest version of MotionSolve and its documentation as it is provided to Altair's customers to MSC's outside counsel, and an additional copy to the Special Master.
Unless Altair can provide a convincing reason why a program that they distribute to customers “constitutes a trade secret or other highly confidential research, development or commercial information, the disclosure of which to the other party or public would cause the producing party competitive harm,” the programs will be considered Confidential Information under the protective order, may not be used for purposes other than this action, and must be returned or destroyed at the conclusion of this action. Furthermore, it does not appear that the programs are covered by the source code order, and MSC's counsel may deliver copies of the program and its documentation to persons who have signed the protective order undertaking.
Altair will have no obligation to assist MSC in the installation or testing of the program. If there are problems installing or testing of the programs, MSC will contact the Special Master to aid in their resolution. MSC's difficulties in installing or testing the program will not be grounds for extending the deadline for MSC's experts' reports unless, in the opinion of the Special Master, the problems reported to the Special Master and their time for resolution work an undue hardship on MSC's experts.
If Altair has supplied any customer with a test version of MSAuto, it will also deliver a copy of the latest test version and its documentation as it was provided to a customer to MSC's outside counsel on or before September 22nd, and an additional copy to the Special Master. If Altair has not supplied such a test version to a customer, it will indicate that to the Special Master.
Because of the difficulties getting Altair to produce the source code repository and the development twiki, I am concerned that there may be similar problems getting the operational programs to MSC's experts on September 22.
Recommendations
I recommend that the Court issue an order that:
• Directs Altair to provide an unredacted version of the source code repository and development twiki for MotionSolve to MSC's outside counsel by September 15, 2008, in the form that it is normally kept with no encryption or other transformations, and to the Special Master in that form or as a TrueCrypt volume.
• Directs Altair to provide operation copies of the latest version of MotionSolve as distributed to customers, including all documentation, and of the latest version of MSAuto if it has been provided to any customer, to MSC's outside counsel and to the Special Master by September 22, 2008.
• Supersedes the source code order or agreement, which provide that they are effective “Unless or until an Order is entered by the Court” to permit persons who have agreed to the protective order to make copies and distribute any material covered by the protective order, and in particular “Highly Confidential/Attorneys Eyes Only” material such as source code, to any other person who has agreed to the protective order, and confirming that those permitted to view material under the protective order may discuss it among themselves.
*7 • Extends the date for MSC's experts' reports to February 16, 2009, to compensate for the delay in the production of the MotionSolve source code repository and development twiki. All other dates should remain the same.
• Has Altair arrange with the Special Master to visit the site or sites having the MotionSolve source code repository and development twiki to confirm that the copies produced to MSC represent all the information as they are kept in the usual course of business, with the Special Master's time and expenses paid solely by Altair.