WATM LLC v. Payment Alliance International Inc
2:24-cv-00405
W.D. Wash.Jun 13, 2025Background
- Payment Alliance International (PAI) provides ATM management tools and services; WATM provides ATM and payment services to merchants and contracts with PAI for processing services.
- The dispute centers on "scrip" terminals (cashless ATMs) allegedly prohibited on PAI's platform because they may violate Visa’s network rules by miscoding transactions.
- PAI claims merchants circumvent rules by changing terminal codes; PAI has developed confidential methods to detect such masked scrip terminals.
- During discovery, PAI produced documents outlining these detection methods and designated some as "Attorneys' Eyes Only" (AEO), restricting access.
- WATM objected, arguing the restriction would prevent its expert (also a company principal) from effective review, increasing litigation costs.
- PAI moved for a protective order to maintain the AEO designation; the court considered whether PAI's detection methods qualify for such protection.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether PAI’s detection methods are trade secrets | Not trade secrets, easy to identify | Methods are trade secrets, protected | Methods are trade secrets |
| Appropriateness of AEO designation | AEO is too restrictive, burdensome | Needed to prevent competitive harm | AEO designation warranted |
| Whether expert access is necessary | Expert needs access to opine fairly | Topics do not require AEO documents | No need for expert’s access to AEO docs |
| Effect of prior disclosure in other litigation | Info is already public | Prior disclosure was inadvertent | No waiver, info remains confidential |
Key Cases Cited
- Seattle Times Co. v. Rhinehart, 467 U.S. 20 (protective order discretion and standard)
- Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 1122 (good cause for protective orders)
- In re Roman Cath. Archbishop of Portland in Oregon, 661 F.3d 417 (trade secret test for protective orders)
- Beckman Indus., Inc. v. Int’l Ins. Co., 966 F.2d 470 (specific harm required for protective orders)
- Nutratech, Inc. v. Syntech (SSPF) Int’l, Inc., 242 F.R.D. 552 (elements for trade secret protection)