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finding "compelling reasons" for sealing where the documents detailed "sensitive financial terms, royalty agreements . and confidential licensing negotiations" and noting that the "good cause" standard is easier to satisfy than the "compelling reasons" standard
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Case No. 3:17-CV-00108-GPC-MDD C/w 3:17-CV-01010-GPC-MDD
02-21-2019
IN RE: QUALCOMM LITIGATION
ORDER GRANTING Motions to Seal
[ECF Nos. 787, 790, 794, 795, 798, 800, 806, 809, 810, 811, 817, 819, 821, 827, 830, 833, 835, 836, 843, 846, 853, 855, 858, 863, 866, 871, 872, 880]
Before the Court are numerous requests to seal portions of the parties' motions in limine, Daubert motions, expert witness reports in support of pre-trial motions, motions for determination pursuant to Federal Rule of Civil Procedure 44.1, and joint pretrial brief identifying disputed contract provisions and the parties' position on each disputed provision in Case No. 3:17-cv-00108-GPC-MDD, ECF Nos. 787, 790, 794, 795, 798, 800, 806, 809, 810, 811, 817, 819, 821, 827, 830, 833, 835, 836, 843, 846, 853, 855, 858, 863, 866, 871, 872, 880. No oppositions have been filed. Upon review of the moving papers, the information to be sealed, the applicable law, and for the following reasons, the Court GRANTS each of the motions in their entirety.
LEGAL STANDARD
There is a presumptive right of public access to court records based upon the common law and the first amendment. See Nixon v. Warner Commc'ns, Inc., 435 U.S. 589, 597 (1978); Phillips ex rel. Estates of Byrd v. General Motors Corp., 307 F.3d 1206, 1212-13 (9th Cir. 2002). Nonetheless, access may be denied to protect sensitive confidential information. Courts are more likely to protect information covered by Rule 26(c) of the Federal Rules of Civil Procedure, but are not limited by items listed in protective orders. See KL Group v. Case, Kay, & Lynch, 829 F.2d 909, 917-19 (9th Cir. 1987) (letter to client from attorney); Kalinauskas v. Wong, 151 F.R.D. 363, 365-67 (D. Nev. 1993) (confidential settlement agreement).
"Unless a particular court record is one traditionally kept secret, a strong presumption in favor of access is the starting point." Kamakana v. City & Cty. of Honolulu, 447 F.3d 1172, 1178-80 (9th Cir. 2006) (citing Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 1122, 1135 (9th Cir. 2003)). "In order to overcome this strong presumption, a party seeking to seal a judicial record must articulate justifications for sealing that outweigh the historical right of access and the public policies favoring disclosure." Id. at 1178-79.
Parties seeking to seal documents in a dispositive motion must meet the high threshold requiring "compelling reasons" with specific factual findings to support a sealing. Kamakana, 447 F.3d at 1178-80 (9th Cir. 2006). However, for non-dispositive motions, the parties must show a lesser "particularized showing" under the "good cause" standard pursuant to Federal Rule of Civil Procedure 26(c). Id. at 1180. The "compelling reasons" test requires showing more than just "good cause." Id. Documents filed under seal will be limited to only those documents, or portions thereof, necessary to protect such sensitive information.
Although the "Ninth Circuit has yet to specify whether a party seeking to seal a complaint . . . must meet the 'compelling reasons' or 'good cause' standard," see Harrell v. Cal. Forensic Med. Grp., Inc., 2015 WL 1405567, *1 (E.D. Cal. Mar. 26, 2015), district courts generally conclude that the "compelling reasons" standard applies because the complaint initiates the civil action. See, e.g., Baldwin v. U.S., 732 F. Supp. 2d 1142, 1145 (D.N. Mar. 1, 2010); Robert Half Int'l v. Ainsworth, 2015 WL 4394805, *3 n.2 (S.D. Cal. July 15, 2015); In re NVIDIA Corp. Deriv. Litig., 2008 WL 1859067 (N.D. Cal. Apr. 23, 2008). Accordingly, and especially considering the public's interest in being able to access civil actions filed in the courts, the Court will apply the "compelling reasons" standard to the parties' requests to seal portions of the complaint and other pleadings. The Court will also apply the "compelling reasons" standard to Qualcomm's motions for injunction and related briefing as those submissions are "more than tangentially related to the underlying cause of action." Ctrs. for Auto Safety v. Chrysler Grp., 809 F.3d 1092, 1099 (9th Cir. 2016).
Compelling reasons for sealing information exist "when such 'court files might have become a vehicle for improper purposes,' such as the use of records to gratify private spite, promote public scandal, circulate libelous statements, or release trade secrets." Kamakana, 447 F.3d at 1179 (quoting Nixon, 435 U.S. at 598). Trade secrets "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 advantage over competitions who do not know or use it." Restatement (First) of Torts § 757 cmt. b. Because trade secrets concern proprietary and sensitive business information not available to the public, sealing may be warranted where disclosure would harm a litigant's competitive standing. Nixon, 425 U.S. at 598.
The Ninth Circuit has explicitly recognized that compelling reasons exist for the sealing of "pricing terms, royalty rates, and guaranteed minimum payment terms" of license agreements. See In re Elec. Arts, Inc., 298 F. App'x 568, 569 (9th Cir. 2008). Courts in this circuit have also recognized that information subject to confidentiality agreements may also meet the "compelling reasons" standard when accompanied by a particularized factual showing. See Foltz, 331 F.3d at 1137-38.
DISCUSSION
The overwhelming majority of information that the parties seek to seal constitutes confidential business information of the parties, including trade secrets, proprietary business records, discussions of internal strategy, company dealings, and materials designated as "Highly Confidential." For the reasons that follow, the Court concludes that the parties have demonstrated that compelling reasons exist for sealing the information subsumed by these categories.
First, the Court is convinced that good cause exists to seal the unredacted portions of the motions in limine and requisite exhibits that detail sensitive financial terms, royalty agreements, proprietary business strategies, and confidential licensing negotiations. Each of the parties has articulated that public disclosure of the information they seek to seal would harm their competitive standing by concurrently releasing such information to market competitors. Additionally, the parties have submitted declarations providing the Court with a factual basis for their claims of undue prejudice through competitive harm. Furthermore, the parties' proposed sealings hew to the lines that the Court has drawn in prior orders granting the parties' motions to file under seal, especially with respect to documents and testimony designated as Highly Confidential. (See ECF Nos. 580, 561, 768.) As such, the Court is satisfied that there is sufficient factual basis to justify the conclusion that compelling reasons exist for sealing the material at issue.
Second, each of the parties has narrowly tailored its requests to the protectable portions of the filings that advance confidential business information. The majority of the redacted materials are comprised of limited excerpts of exhibits and sentences of the full reports that implicate the parties' confidential, non-public information. Moreover, the basis for these respective motions do not rest on the disclosure of the more detailed, specific, and confidential information that the parties seek to protect. The primary issues within these reports are stated publicly in the motion papers and accompanying redacted exhibits.
Accordingly, the Court finds that the requests to seal are narrowly tailored and sufficiently particularized such that they do not impede upon the public's ability to understand the nature of the proceedings and the factual basis for the parties' claims. As such and in the light of the aforementioned compelling reasons justifying sealing, the Court GRANTS each of the motions to seal or file redacted versions identified by the following table in its entirety.
IT IS SO ORDERED. Dated: February 21, 2019
/s/_________
Hon. Gonzalo P. Curiel
United States District Judge
| ECF No. | Movant | Document to be Sealed |
|---|---|---|
| 3:17-cv-00108-GPC-MDD | ||
| 787 | Apple | Unredacted portions of Apple and the CMs'Memorandum of Points and Authorities inSupport of Their Apportionment DaubertMotion, Appendices A and B to theApportionment Daubert Brief, Exhibits A-O toApple's and the CMs' Appendix of Exhibits |
| 790 | Apple | Unredacted portions of Apple and the CMs'Memorandum of Points and Authorities inSupport of the Unwilling Licensee DaubertMotion, Exhibits A, B, C, D, E, F, GH, I, J, K,and M |
| 794 | Qualcomm | Unredacted portions of Qualcomm's ComparableLicense Daubert Motion and the Denning Decl.Exhibits |
| 795 | Apple | Unredacted portions of Memorandum of Pointsand Authorities in Support of Apple Inc. and theContract Manufacturers' Daubert Motion toExclude Qualcomm Expert Oliver Hart, andExhibits 1 and 2 to the Declaration of Lauren A.Degnan |
| 798 | Qualcomm | Unredacted portions of Daubert Motion No. 2 toExclude Portions of the Expert Report of Paul K.Meyer and to Forbid Improper Extrapolation ofDr. Valenti's Opinions ("Daubert Motion No.2"), Exhibits 1-17 to the February 17, 2019Declaration of Nathan E. Denning in Support ofQualcomm's Foreign Exhaustion DaubertMotion ("Denning Dec. Exhibits"), andunredacted portions of the Foreign ExhaustionDaubert Motion |
| 800 | Apple | Unredacted portions of Memorandum of Pointsand Authorities in Support of Apple Inc. and theCMs' Daubert Motion to Exclude QualcommExpert Testimony Regarding its 243 StandardEssential and Non-Standard Essential Patentsand Exhibits 9-16, 19 to the Declaration of SethM. Sproul |
| 806 | Qualcomm | Unredacted portions of Daubert Motion No. 3 toExclude the Opinions and Testimony of Dr.Jeffrey Leitzinger Concerning Royalty"Overcharges", Exhibits 1, 2 and 4-8 to theFebruary 14, 2019 Declaration of Nathan E.Denning in Support of Qualcomm's DaubertMotion No. 3 |
|---|---|---|
| 809 | Qualcomm | Unredacted portions of Daubert Motion No. 4 toExlude Expert Testimony Regarding Exhaustionand "Substantial Embodiment," Exhibits 1 to 28to the Feburary 14, 2019 Declaration of NathanE. Denning in Support of Qualcomm's DaubertMotion No. 4 |
| 810 | Qualcomm | Unredacted portions of Daubert Motion No. 5and Motion in Limine to Exclude TestimonySuggesting a Required Component-LevelRoyalty Base, Exhibits 1 to 10 to the February14, 2019 Declaration of Nathan E. Denning inSupport of Qualcomm's Daubert Motion No. 5 |
| 811 | Apple | Certain Documents Offered in Support ofApple's and the CMs' Daubert Motion ToExclude Regression Analysis of QualcommExpert Professor Aviv Nevo ("Nevo DaubertMotion") |
| 817 | Qualcomm | Unredacted Daubert Motion to Exclude CertainOpinions and Testimony of Rémy Libchaber andStephen Wicker ("Sixth Daubert Motion"),Exhibits 3 and 4 to the February 14, 2019Declaration of Nathan E. Denning in Support ofQualcomm's Sixth Daubert Motion ("DenningDecl. Exhibits") |
| 819 | CompalElectronics,Inc., andothers(collectively,the "CMs") | Exhibits attached to the Declaration of SamuelD. Eisenberg in support of Apple Inc. ("Apple")and the CMs' Daubert motion to excludeQualcomm Incorporated ("Qualcomm") expertDr. Jonathan Putnam |
| 821 | Qualcomm | Unredacted Daubert Motion No. 7 to Excludethe Opinions and Testimony of FriedhelmRodermund ("Daubert Motion No. 7"), Exhibits1, 3, 4, 7, 8 and 11 to the February 14, 2019 |
| Declaration of Nathan E. Denning in Support ofQualcomm's Daubert Motion No. 7 ("DenningDecl. Exhibits"), and unredacted versions ofExhibits 5 and 6 to the Declaration of Nathan E.Denning in Support of Qualcomm's DaubertMotion No. 7 ("Denning Declaration RedactedExhibits") | ||
|---|---|---|
| 827 | Qualcomm | Unredacted Motion in Limine No. 1 to ExcludeTestimony and Argument Concerning RoyaltyStacking ("Motion in Limine No. 1"), Exhibits 1to 9 to the February 15, 2019 Declaration ofNathan E. Denning in Support of Qualcomm'sMotion in Limine No. 1 ("Denning Decl.Exhibits") |
| 830 | Qualcomm | Unredacted Motion in Limine No. 2 to ExcludeEvidence of Qualcomm's Public RelationsStrategy ("Motion in Limine No. 2"), Exhibits 1-4 to the February 15, 2019 Declaration of NathanE. Denning in Support of Qualcomm's Motion inLimine No. 2 ("Denning Decl. Exhibits") |
| 833 | Qualcomm | Exhibits 3 and 5-8 to the February 15, 2019Declaration of Nathan E. Denning in Support ofQualcomm's Motion in Limine No. 4 to ExcludeEvidence of Certain SEP Disclosures ("DenningDeclaration Sealed Exhibits"), and unredactedversions of Exhibits 1 and 2 to the February 15,2019 Declaration of Nathan E. Denning inSupport of Qualcomm's Motion in Limine No. 4to Exclude Evidence of Certain SEP Disclosures("Denning Declaration Redacted Exhibits") |
| 835 | Apple | Unredacted portions of the Memorandum ofPoints and Authorities in Support of Apple'sMotion in Limine No. 4 to Exclude Evidence orArgument Concerning Apple's Alleged Misuseof Qualcomm's Trade Secrets and Hiring ofQualcomm's Employees, and Exhibit 4 to theDeclaration of Aleksandr Gelberg |
| 836 | Apple | Unredacted portions of the Memorandum ofPoints and Authorities in Support of AppleInc.and the CMs' Motion in Limine No. 2 ToExclude Qualcomm Fact Witness Testimony |
| Regarding the Relative Value of Qualcomm'sPortfolio, and Exhibits 1-6 and 8-13 to theDeclaration of Lauren A. Degnan | ||
| 843 | Apple | Unredacted portions of Memorandum of Pointsand Authorities in Support of Apple Inc. and theContract Manufacturers' Motion in Limine No. 1to Exclude Testimony and Argument RegardingApple Non-SEP Litigation, and Exhibit 2 to theDeclaration of Seth M. Sproul |
|---|---|---|
| 846 | Apple | Unredacted portions of Apple Inc. and theContract Manufacturers' Motion In Limine No. 3to Exclude Evidence or Argument That Appleand the CMs Make, Use, Offer to Sell, Sell, orImport Qualcomm's Patented Technology, andExhibits 1-4 to the Declaration of Aamir Kazi |
| 853 | CMs | Exhibits attached to the Declaration of RyanIwahashi in support of Apple Inc. and the CMs'Motion in limine to Preclude Belatedly DisclosedEvidence |
| 855 | Qualcomm | Unredacted Motion in Limine to ExcludeHearsay Evidence from Unretained Experts("Motion in Limine No. 3"), Exhibits 1, 2, and 5through 10 to the February 15, 2019 Declarationof Nathan E. Denning in Support of Qualcomm'sMotion in Limine No. 3 ("Denning Decl.Exhibits") |
| 858 | CMs | Exhibit attached to the Declaration of RyanIwahashi in support of Apple and the CMs'Motion in limine to Exclude QualcommImproper Expert Testimony |
| 863 | Apple | Exhibits A, B, D, E, F, G, H, I, J, K, L, and M tothe Appendix of Exhibits to Apple and theContract Manufacturers' Motion in Limine No. 7To Exclude Evidence Concerning UnrelatedApple Agreements |
| 866 | Apple | Certain Documents Offered in Support ofApple's Motion in Limine No. 5 to ExcludeEvidence of 2015 Meeting |
| 871 | Apple | Certain documents in support of Apple and theCMs' Motion in Limine No. 9 To ExcludeEvidence or Argument that Competitors Who |
| Will Benefit from Remedy Are in Asia or thatQualcomm Is an Asset to National Security("Motion in Limine No. 9") | ||
|---|---|---|
| 872 | Qualcomm | Unredacted Opening Memorandum forDetermination of French Law Pursuant toFederal Rule of Civil Procedure 44.1 ("Rule 44.1Motion"), Exhibits 4, 8, 9, 19, 21-24, 27-28, 30,35-43, 52-54, 56-57, 63, and 65 to the February15, 2019 Declaration of Nathan E. Denning inSupport of Qualcomm's Rule 44.1 Motion("Denning Decl. Exhibits") |
| 880 | Qualcomm | Unredacted Joint Pretrial Brief IdentifyingDisputed Contract Provisions and the Parties'Position on Each Disputed Provision ("JointContract Brief"); Exhibits 1 - 14 to theDeclaration of Nathan E. Denning in Support ofthe Joint Contract Brief ("Contract CompendiumExhibits"); Exhibits 1, 3 - 6, 8 - 9, 11 - 17, 20 -35, 37, 39 - 40, 44 - 46 and 48 - 49 to theDeclaration of Anders Linderot in Support of theJoint Contract Brief ("Linderot Decl. Exhibits");Exhibits A - D to the Declaration of Edward H.Takashima in Support of the Joint Contract Brief("Takashima Declaration") |