United States: Public Has Minimal Interest In Parties’ Confidential Information Not Central To A Decision On The Merits And Not Necessary To The Public’s Understanding Of The Case

In Apple Inc. v. Samsung Electronics Co., Nos. 12-1600, -1606, 13-1146 (Fed. Cir. Aug. 23, 2013), the Federal Circuit reversed and remanded because the district court abused its discretion in refusing to seal the confidential information at issue in the appeals.

Apple Inc. ("Apple") sued Samsung Electronics Company, Ltd., Samsung Electronics America, Inc., and Samsung Telecommunications America, LLC (collectively "Samsung"), asserting, among other claims, that Samsung's smartphones and tablets infringed several of Apple's patents and infringed Apple's trade dress embodied in its iPhone and iPad products.  Samsung filed counterclaims, alleging that the iPhone and iPad infringed several of Samsung's patents.  The case proceeded to a jury trial.  The trial drew an extraordinary amount of attention from the public and the media.  Consistent with the extraordinary level of interest in the case, the district court explained to the parties that the whole trial was going to be open.  Consequently, the district court agreed to seal only a small number of trial exhibits.  Similarly, most exhibits attached to pretrial and post-trial motions were ordered unsealed.

The parties did not challenge many of the district court's unsealing orders on appeal.  Rather, the parties limited their appeals to a small subset of exhibits attached to pretrial and post-trial motions filed by Apple and Samsung.  First, the parties challenged the district court's August Order, which contained its rulings with respect to pretrial motions.  Second, Apple challenged the November Order, which contained the district court's rulings with respect to post-trial motions.

"We recognize the importance of protecting the public's interest in judicial proceedings and of facilitating its understanding of those proceedings.  That interest, however, does not extend to mere curiosity about the parties' confidential information where that information is not central to a decision on the merits.  While protecting the public's interest in access to the courts, we must remain mindful of the parties' right to access those same courts upon terms which will not unduly harm their competitive interest."  Slip op. at 24.

The Federal Circuit explained that the broad issue on appeal was whether the district court abused its discretion in ordering the unsealing of the documents Apple and Samsung sought to seal.  The Court began its analysis by reviewing "the common law right of access to judicial records."  Slip op. at 9 (quoting Kamakana v. City & Cnty. of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006)).  The Court noted that, in the Ninth Circuit, a party seeking to seal judicial records can overcome the strong presumption of access to court records by providing "sufficiently compelling reasons" that override the public policies favoring disclosure.  Id. at 10 (quoting In re Midland Nat'l Life Ins. Annuity Sales Practices Litig., 686 F.3d 1115, 1119 (9th Cir. 2012)).  Further, the Court explained that the Ninth Circuit has carved out an exception to the presumption of access to judicial records for such records filed under seal when attached to a nondispositive motion.  Thus, a particularized showing of "good cause" under Fed. R. Civ. P. 26(c) is sufficient to preserve the secrecy of sealed discovery documents attached to nondispositive motions.

The Court then considered whether the district court applied the correct legal standard.  The Court explained that while the district court recognized the Ninth Circuit's general rule that a party seeking to seal documents attached to a nondispositive motion need only demonstrate "good cause," the district court nevertheless applied the "compelling reasons" standard to documents attached to nondispositive motions regarding the admissibility of evidence at trial "[b]ecause the admissibility of evidence is such a closely contested issue in this trial, which has become crucial to the public's understanding of the proceedings."  Id. at 12 (alteration in original) (citation omitted).  Finding legal error, the Court stated that it was not aware of any Ninth Circuit precedent applying the "compelling reasons" standard to nondispositive motions regarding the admissibility of evidence at trial.  The Court additionally stated that the district court's reasoning did not justify departure from the Ninth Circuit's general rule.  Despite the district court's error, the Federal Circuit reviewed all of the district court's orders under the more restrictive "compelling reasons" standard and concluded that, even under that standard, the district court erred in refusing to seal the documents at issue on appeal, as discussed in more detail below.

With respect to the documents at issue in Apple's and Samsung's appeals of the August Order, the parties challenged the district court's ruling with respect to a total of twenty-six documents—fourteen Apple documents and twelve Samsung documents—filed as exhibits in connection with pretrial motions.   Notably, the parties did not seek to seal these documents in their entirety.  Instead, as the Court explained, they sought to redact limited portions of the documents containing detailed product-specific financial information, including costs, sales, profits, and profit margins.  The Court began by stating that Apple and Samsung have an interest in keeping their detailed product-specific financial information secret because they could suffer competitive harm if this information is made public, and the district court erred by concluding otherwise.  In addressing the public's interest in the parties' detailed financial information, the Court noted that, in these appeals, Apple and Samsung had limited the documents they had challenged to a small subset of the documents they had originally sought to seal.  The Court further pointed out that, even within that small subset, they sought only to redact limited portions that contained what they considered their most confidential financial information.  Moreover, because the parties agreed to rely on less-detailed financial information to prove their damages at trial, none of the documents were introduced into evidence.  Thus, the Court reasoned, the financial information at issue was not considered by the jury and is not essential to the public's understanding of the jury's damages award.  The Court continued, nor is there any indication that this information was essential to the district court's rulings on any of the parties' pretrial motions.  Accordingly, the Court concluded that the particular financial information at issue in the appeals was not necessary to the public's understanding of the case, and that the public therefore had minimal interest in that particular information.

Finally, the Court considered the documents at issue in Apple's appeal of the November Order.  Specifically, Apple challenged the district court's ruling with respect to nine Apple market research reports, which Samsung attached to its opposition to Apple's post-trial motion for a permanent injunction and enhanced damages.  The reports totaled approximately five hundred pages, only twelve of which were cited by Samsung in its briefing.  Apple agreed to make public seven of those pages and, as for the remaining five pages cited by Samsung, Apple agreed to make that information public insofar as it pertained to customer information from the United States, but sought to redact the customer information for other countries not relied on by Samsung in its briefing.  The Court found that the nine market research documents contained information that Apple's competitors could not obtain elsewhere.  The Court noted the critical distinction between Apple's competitors being able to "infer the most significant results by simply observing Apple's product releases and marketing campaigns," and being able to predict Apple's future product releases and marketing strategies.  Id. at 23 (citation omitted).  Further, the Court noted that because Apple had agreed to make public all of the information contained in these documents that was actually cited by the parties or the district court, the other information in these reports was irrelevant to the public's understanding of the judicial proceedings.  Thus, the Court concluded that the district court abused its discretion in refusing to seal the nine market research documents.

Judges: Prost (author), Bryson, O'Malley

[Appealed from N.D. Cal., Judge Koh]

This article previously appeared in Last Month at the Federal Circuit, September 2013

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Events from this Firm
17 Nov 2018, Conference, Washington, DC, United States

Finnegan partner Clare Cornell will present “Covert Trademark Use in the Internet: Licit or Illicit” at the Asian Patent Attorneys Association Conference.

20 Nov 2018, Webinar, Washington, DC, United States

As part of Strafford Publications’ webinar series, Finnegan attorneys Tom Irving, Josh Goldberg, and Cory Bell will analyze Patent Trial and Appeal Board denials and partial denials, offering take-home lessons applicable in

21 Nov 2018, Workshop, London, UK

Finnegan partner Leythem Wall will consider European claim drafting strategy and lead the Chemical Workshop during a two-day course, hosted by Management Forum.

Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions