*1 Plaintiff James P. Richard (“Richard”) brings this personal injury action alleging negligence, strict products liability, and breach of warranty claims against Ravin Crossbows, LLC (“Ravin”), and Velocity Outdoor, Inc. (collectively, “Defendants”) for injuries sustained when a Ravin crossbow unexpectedly fired. ECF No. 1. Because complete diversity exists among the parties, and the amount in controversy exceeds $75,000, the Court has jurisdiction pursuant to 28 U.S.C. § 1332.

Presently before the Court is Defendants’ Motion for Entry of Non-Sharing Protective Order, ECF No. 29, that seeks to preclude non-party access to all documents designated by Ravin as confidential to be produced during discovery. ECF No. 29-3. As made evident by the pending motion and response in opposition, the parties are unable to agree on the necessity and parameters of Defendants’ proposed protective order. ECF No. 29 at 1, ECF No. 31. For the following reasons, the motion is denied without prejudice.

I. RELEVANT BACKGROUND

The proposed protective order permits Defendants to unilaterally classify records produced during discovery as “Confidential” and “Protected Documents.” ECF No. 29-3. The contents of Protected Documents may not be disclosed or shared with any third-party for any purpose with the limited exception of Richard's counsel, any expert retained by him for this case, and witnesses identified in discovery. The proposed order provides that “[t]o be designated as ‘Confidential,’ the Defendants are making a representation that the document is comprised of confidential research and development; constitutes a trade secret; or contains subject matter that is not publicly known and/or is of technical or commercial advantage to the possessor of the document, in accordance with Fed. R. Civ. P. 26(c)(1)(G); or constitutes other information required by law or agreement to be kept confidential.” Id. The only records excluded are those containing advertising materials or materials which Defendants have previously made available to the general public. Id. Once Defendants identify a document as “Confidential”, Richard may disclose the existence or contents of the document only with Defendants’ written permission or if Richard moves for and obtains a Court order determining that the document is not protected. Defendants characterize the motion as routine and necessary to prevent disclosure of “constitutionally protected” trade secrets regarding the design and performance of its crossbow and component parts.[1] Id.

*2 In support of the Motion, Defendants present the Declaration of Roland R. Schindler II, counsel for Ravin. ECF No. 29-1. Schindler states that the documents intended to be produced in discovery include records related to design plans, quality control methods, testing, and results, safety related changes, and “other documents which are created by Defendant to give it a competitive advantage.” Id. Schindler states that the documents are held in confidence by Ravin, and if publicly released could be used to Ravin's “substantial economic detriment.” Id.

In his response in opposition, Richard acknowledges that Rule 26(c) of the Federal Rules of Civil Procedure provides for the entry of a protective order where good cause is shown but contends that Defendants, who properly bear the burden of persuasion, have not set forth grounds for a blanket protective order that precludes disclosure of non-trade secret items to other litigants with claims related to Ravin's crossbow. ECF No. 31 at 3-4. Richard asserts that the Federal Rules of Civil Procedure do not preclude collaboration among litigants, and that orders such as that proposed by Defendants are employed to discourage claims alleging that a product is defective or to conceal alleged defects in a product. Id. at 1. Moreover, any risk of competitive harm is lessened to the degree the design and composition of Ravin's crossbow can be obtained by a competitor through reverse engineering, or by accessing patent-related documents publicly available through the United States Patent Trademark Office. Id. at 4. Thus, any potential harm resulting from sharing technical information with other litigants is outweighed by the promotion of efficiency and serves public health and safety interests. ECF No. 31 (citing Pansy v. Borough of Stroudsburg, 23 F.3d 772, 786-87 (3d Cir. 1994)). Id. at 3.

Richard proposes an alternative order in the event the Court holds that a protective order is warranted. ECF No. 31-1. The proposed order protects from public disclosure documents that “would place [Defendants] at a competitive disadvantage” and not merely expose them to liability to other plaintiffs or prospective plaintiffs. ECF No. 31 at 6. Richard proposes, however, that he be permitted to disclose confidential documents to “similarly situated litigants, their counsel, and/or experts,” provided that any such person agrees to the abide by the terms of Richard's proposed Order. ECF No. 31-1 ¶ 6(c).

II. DISCUSSION

The Court considers the pending motion mindful of the breadth of permissible discovery under the Federal Rules of Civil Procedure. Rule 26(b) provides that parties “may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to relevant information, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit. Information within this scope of discovery need not be admissible in evidence to be discoverable.” Fed. R. Civ. P. 26.

Discovery is not unlimited. Under Federal Rule of Civil Procedure 26(c), the Court may, for good cause, issue a protective order “to shield a party from annoyance, embarrassment, oppression, or undue burden or expense” during discovery. Fed. R. Civ. P. 26(c)(1); see also Pansy, 23 F.3d at 786. To that end, “[a] protective order is ‘intended to offer litigants a measure of privacy, while balancing against this privacy interest the public's right to obtain information concerning judicial proceedings.’ Pansy, 23 F.3d at 786. A protective order may apply to all litigation materials—not just those filed in court—because ‘[c]ourts have inherent power to grant orders of confidentiality over materials not in the court file.’ Id. at 785.” In re Avandia Mktg., Sales Pracs. & Prod. Liab. Litig., 924 F.3d 662, 670–71 (3d Cir. 2019).

*3 The law is well-settled as to the burden of persuasion and factors governing the issuance of protective orders.

Avandia, 924 F.3d at 671. With anticipated discovery, “ ‘the court may construct a broad umbrella protective order upon a threshold showing by the movant of good cause.’ Once a party challenges the protective order, however, ‘the party seeking to maintain the seal’ must justify the continued sealing of those documents. Id. At that point, the district court must conduct a document-by-document review.’ ” Id. at 671 n.5.

In this case, Defendants claim that the documents intended to be produced are confidential trade secrets and thus a broad order is warranted. In Smith v. BIC Corp., 869 F.2d 194 (3d Cir. 1989), the United States Court of Appeals for the Third Circuit noted that “[a]s a general rule courts ‘have not given trade secrets automatic and complete immunity against disclosure, but have in each case weighed their claim to privacy against the need for disclosure.’ ” Id. at 199 (citing Notes of Advisory Committee on Rules, Fed. R. Civ. P. 26(c)).

The Court applies the law of Pennsylvania to determine whether a document falls within the definition of trade secret. Id. A trade secret may consist of “any formula, pattern, device or compilation of information which is used in one's business, and which gives him an opportunity to obtain an advantage over competitors who do not know or use it. It may be a ... process of manufacturing, ... a pattern for a machine or other device, or a list of customers.” Id. (quoting Restatement of Torts § 757 (1939) and citing SI Handling Systems, Inc. v. Heisley, 753 F.2d 1244, 1255 (3d Cir. 1985)). Claims that an item may be reverse engineered or obtained from patent information in the public domain cannot be relied upon to preemptively deny a protective order as to all design information, as aspects of a design may not be readily discovered. Smith v. BIC Corp, 869 F.2d at 200-01. Safety or quality tests and results also may qualify as a “compilation of information which is used in one's business” and considered a trade secret. Id. However, as the Third Circuit has observed “[f]ederal courts should not provide a shield to potential claims by entering broad protective orders that prevent public disclosure of relevant information. The sharing of information among current and potential litigants is furthered by open proceedings.” Glenmede Trust Co. v. Thompson, 56 F.3d476, 485 (3d Cir. 1995). Thus, documents that may cause injury to a company's public image or expose it to additional liability in other lawsuits are not entitled to the court's protection based solely on Defendants’ classification as confidential. See Mine Safety Appliances Co. v. North River Ins. Co., 73 F. Supp. 3d 544, 580-l(W.D. Pa. 2014).

*4 In this case, neither the Defendants’ proposed order nor Richard's alternative follow established guidelines in this Circuit. The proposed order leaves it to Defendants to unilaterally determine the confidentiality of unspecified documents and places the burden on Richard to justify why the protective order should not apply. Richard's proposed order similarly fails to address whether disclosure to other litigants will violate legitimate privacy interests and competitive advantage. See, e.g., Cipollone v. Liggett Grp., Inc., 785 F.2d 1108, 1121 (3d Cir. 1986)(Rule 26(c) protects against the dissemination of trade secrets or documents that will cause a significant harm to a protected financial position or competitive advantage).

Accordingly, the pending Motion for Protective Order is denied without prejudice. Defendants may file a renewed motion with a proposed protective order that complies with the settled law in this Circuit and initially protects “all documents that the producing party designated in good faith as confidential.” Id. at 1122.[2] Any proposed order should acknowledge that Richard “may indicate precisely which documents ... believed to be not confidential.” Id. At that point, Defendants “would have the burden of proof in justifying the protective order with respect to those documents. The burden of proof would be at all times on the movant; only the burden of raising the issue with respect to certain documents would shift to [Richard].”

In accordance with the Magistrate Judges Act, 28 U.S.C. § 636(b)(1), and Rule 72.C.2 of the Local Rules of Court, the parties are allowed fourteen (14) days from the date of this Order to file an appeal to the District Judge which includes the basis for objection to this Order. Any appeal is to be submitted to the Clerk of Court, United States District Court, 700 Grant Street, Room 3110, Pittsburgh, PA 15219. Failure to file a timely appeal will constitute a waiver of any appellate rights.

So ordered, this 8th day of September 2021.