Unreported / Non-Citable
Background
Chongqing Qiulong Technology Corporation Limited, doing business as Surron, is the plaintiff in an action against E Ride Pro Inc., Ningbo Engineering Imp & Exp Co., Ltd., and Ningbo Yingfu Technology Development Co., Ltd. The case is pending in the Central District of California as No. 8:26-cv-00067-MRA-DFMx. The order identifies United States Design Patent No. D854,456 as the patent in suit, but it does not decide infringement, validity, or any other merits question.
The parties jointly requested protection because they described themselves as direct competitors and expected discovery to involve trade secrets and valuable research, development, commercial, financial, technical, and proprietary information. Their examples included customer and pricing lists, marketing strategy, product design, costs, and profits. They also acknowledged that the order would not confer blanket protection and that only information entitled to confidential treatment under applicable legal principles would be covered.
Counsel stipulated to the order on October 9, 2026, and United States Magistrate Judge Douglas F. McCormick entered it on October 14, 2026, stating that good cause had been shown. The filing is Document 73. Its operative terms govern the handling of discovery rather than resolve the underlying patent dispute.
The Court’s Holding
The court approved two confidentiality tiers: CONFIDENTIAL and HIGHLY CONFIDENTIAL – OCEO. Both cover material qualifying for protection under Federal Rule of Civil Procedure 26(c) and the order's good-cause statement. The higher tier excludes the receiving party's officers, directors, employees, and house counsel. Confidential material may be shared with specified outside counsel, necessary company personnel who sign Exhibit A, experts, court personnel, vendors, and other expressly listed recipients. Protected material generally may be used only to prosecute, defend, or settle this action.
Designations must be limited to material that actually qualifies for protection; mass, indiscriminate, or routinized designations are prohibited. A party may challenge a designation at any time, but must give written notice identifying each challenged designation and its basis, participate in the required meet-and-confer process, and submit any court challenge through a joint stipulation under Local Rule 37-2. The designating party bears the burden of persuasion, while the existing protection remains in place until the court rules unless the designation is waived or withdrawn.
The order separately restricts uploading protected material to generative, analytical, or large-language-model AI tools unless contractual safeguards prohibit training on inputs and unauthorized third-party disclosure, permit deletion, and are documented in writing. It also imposes a prosecution bar on specified recipients of another party's highly confidential nonpublic technical information, lasting until two years after final disposition, subject to an ethical-wall framework and stated patent-office proceeding exceptions. Sealing is not automatic: Local Civil Rule 79-5 and the applicable good-cause or compelling-reasons standards still apply.
Key Takeaways
- The order governs discovery confidentiality and does not adjudicate infringement or validity of Design Patent No. D854,456.
- HIGHLY CONFIDENTIAL – OCEO material cannot be disclosed to the receiving party's officers, directors, employees, or house counsel under the ordinary disclosure provision.
- A confidentiality designation alone does not justify filing material under seal; the parties must satisfy Local Civil Rule 79-5 and the applicable evidentiary and legal standards.
- AI use is permitted only under the order's contractual conditions concerning model training, third-party disclosure, deletion, and retained written documentation.
- Within 60 days after final disposition, receiving parties must return or destroy protected material and certify compliance, although counsel may retain specified archival materials that remain protected.
Why It Matters
The decision supplies a detailed framework for exchanging commercially sensitive information in a design-patent case while preserving challenges to overdesignation. Its express rejection of blanket confidentiality and automatic sealing reinforces that stipulated protection does not displace the public-access standards governing court records.
The AI provision and prosecution bar address risks beyond ordinary discovery disclosure. They regulate how protected technical information may be processed and how certain recipients may participate in later patent prosecution, while leaving trial use, future modification, other discovery objections, and the merits of the patent claims open.