eDiscovery Daily Blog

• August 24, 2017

In Congoo, LLC v. Revcontent LLC, et al, No. 16-401 (MAS) (D.N.J. Aug. 10, 2017), New Jersey Magistrate Judge Tonianne J. Bongiovanni, finding that the plaintiff “has not met its burden of demonstrating that production of the source code is relevant and necessary”, denied the plaintiff’s Motion to Compel the inspection and production of the defendants’ source code.

Case Background

In this case the plaintiff alleged that the defendant (its competitor) published or caused to be published false and misleading “native advertising” (i.e., integrated online advertising in published content on various internet news and information sites).  The plaintiff stated that the source code was highly relevant because it pertained to a central issue in the case, that is, whether the defendants were involved in the creation of the content in false and misleading ads and asserted that production of the source code was necessary to prove their claim.  The defendants argued that requiring it to produce its source code to a competitor would cause irreparable harm to its business and stated that it has provided the plaintiff with evidentiary support concerning the few software functions that are relevant to its claims.

In February 2017, a discovery conference was held to discuss the issue of production of the source code and the Court stated that the parties should make their full submission to the Court on the issue.  Then, in March, the plaintiff filed the instant motion to compel inspection and production of the defendants’ source code.

Judge’s Ruling

Judge Bongiovanni, noting that “[t]he Court has broad discretion in deciding discovery issues such as that raised by the parties here”, indicated that “[i]n order for the production of source code to be compelled, Plaintiff must prove that it is relevant and necessary to the action.”  In that regard, Judge Bongiovanni stated that:

“The Court is not convinced that an understanding of the Defendants’ influence on or creation of the ads requires production of the technology, i.e., the source code, utilized by the Defendants. Rather, the Court is persuaded that through witness testimony an understanding of the functionality of the software algorithm as it relates to issues in this case, e.g., selection of higher paying Content Recommendations, can be adequately addressed.”

Judge Bongiovanni also found that the source code’s “highly confidential nature is such that it cannot be adequately safeguarded by a Discovery Confidentiality Order and therefore outweighs the need for production”, pointing to the declaration of the defendant’s Chief Product Officer, which pointed to an investment of 7 to 10 million dollars in the development of the software and the fact that neither the defendant’s “in-house lawyers nor any of our outside counsel is permitted to access and/or view Revcontent’s highly proprietary Source Code.”

As a result, Judge Bongiovanni found that the plaintiff “has not met its burden of demonstrating that production of the source code is relevant and necessary” and denied the plaintiff’s Motion to Compel the inspection and production of the defendants’ source code.

So, what do you think?  Should there be special considerations for producing source code or other intellectual property?  Please share any comments you might have or if you’d like to know more about a particular topic.

Case opinion link courtesy of eDiscovery Assistant.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.