Johnstech International Corp. v. JF Microtechnology SDN BHD

          ORDER ON MOTIONS TO SEAL RE SUMMARY JUDGMENT AND SANCTIONS RE: DKT. NOS. 113, 116, 117, 131, 144

          JAMES DONATO, UNITED STATES DISTRICT JUDGE

         In this patent action, plaintiff Johnstech International Corp. (“Johnstech”) and defendant JF Microtechnology SDN BHD (“JFM”) have filed several administrative motions to seal portions of their summary judgment and sanctions briefing under Civil Local Rule 79-5. The Court grants and denies the requests as detailed in this order.

         I. STANDARDS

         In our circuit, a party seeking to seal documents filed in connection with a dispositive motion must establish “compelling reasons” to overcome a historically “strong presumption of access to judicial records.” Kamakana v. City and County of Honolulu, 447 F.3d 1172, 1178-79 (9th Cir. 2006) (internal quotes omitted). This standard presents a “high threshold, ” and “a ‘good cause’ showing will not, without more, satisfy” it. Id. at 1180 (citations omitted). To meet the “compelling reasons” standard, a party seeking to seal material must show specific, individualized reasons for the sealing, “‘without relying on hypothesis or conjecture, ’” such as “‘whether disclosure of the material could result in improper use of the material for scandalous or libelous purposes or infringement upon trade secrets.’” See Pintos v. Pacific Creditors Ass’n, 605 F.3d 665, 679, 679 n.6 (9th Cir. 2009) (quoting Hagestad v. Tragesser, 49 F.3d 1430, 1434 (9th Cir.1995)). The Ninth Circuit has found the compelling reasons standard met by “pricing terms, royalty rates, and guaranteed minimum payment terms” in a license agreement, as these are trade secrets used in the party’s business, conferring an opportunity to obtain advantage over competitors who do not know or use them. In re Elec. Arts, Inc., 298 F. App’x 568, 569 (9th Cir. 2008); see also Apple Inc. v. Samsung Elecs. Co., 727 F.3d 1214, 1225 (Fed. Cir. 2013) (applying this standard and sealing “detailed product-specific financial information” and “profit, cost, and margin data” that “could give the suppliers an advantage in contract negotiations, which they could use to extract price increases for components”). However, “[s]imply mentioning a general category of privilege, without any further elaboration or any specific linkage with the documents, does not satisfy the burden.” Kamakana, 447 F.3d at 1184. In particular, “[a]n unsupported assertion of ‘unfair advantage’ to competitors without explaining ‘how a competitor would use th[e] information to obtain an unfair advantage’ is insufficient.” Ochoa v. McDonald’s Corp., No. 14-CV-02098-JD, 2015 WL 3545921, at *1 (N.D. Cal. Jun. 5, 2015) (quoting Hodges v. Apple, Inc., No. 13-cv-01128-WHO, 2013 WL 6070408, at *2 (N.D. Cal. Nov. 18, 2013)).

         Under Civil Local Rule 79-5, a sealing request must also “be narrowly tailored to seek sealing only of sealable material, ” and “establish[ ] that the document, or portions thereof, are privileged, protectable as a trade secret or otherwise entitled to protection under the law.” Civil L.R. 79-5(b). When ordering sealing, the district court must “articulate the rationale underlying its decision to seal.” Apple Inc. v. Psystar Corp., 658 F.3d 1150, 1162 (9th Cir. 2011).

         II. DETERMINATIONS

         Many of the requests here fail to comply with Civil Local Rule 79-5 because they were not filed with an unredacted version showing “by highlighting or other clear method, the portions of the document that have been omitted from the redacted version.” Civil L.R. 79-5(d)(1)(D). While the sealing requests could have been denied on that ground, the Court undertook the burden of comparing the unredacted and redacted copies mainly to move this case to resolution without further delay. But the parties are advised that any future motions to seal will be summarily denied if Local Rule 79-5, or the Court’s prior orders on sealing requests, are not followed to the letter.

         This table summarizes the administrative motions to seal that the Court rules on in this order:

Motion (Dkt. No.)	Documents Sought to be Sealed (by Dkt. No.)	Party Declaration in Support (by Dkt. No.)
113	113-14 to 113-22 - Exhibits B, F, G, I, J to Merrill Declaration 113-12 - Portions of Johnstech’s Summary Judgment Motion referencing these Exhibits	113-1, 113-13 114
116	116-13 to 116-22 - Exhibits 2, 4-8, 8A, 9, 14, 15 to Merrill Declaration 116-12 - Portions of Johnstech’s Opposition to JFM’s Summary Judgment Motion referencing these Exhibits	116-1130
117	117-2, -6, -8, -10 - Exhibits B, G, I, J to Hayes Declaration	117-1
131	131-5 - Exhibit E to Second Merrill Declaration 131-4 - Reply Memorandum referring to Exhibit E	131-1
144	144-4 and -6 - Exhibits B and C to Hansen Declaration in Support of JFM’s Response re Discovery Sanctions	144-1

         A. Administrative Motion to Seal Documents Filed in Support of Johnstech’s Motion for Summary Judgment (Dkt. No. 113)

         Johnstech states that it filed these documents under seal because they were designated “Confidential” or “Highly Confidential - Attorney’s Eyes Only” by JFM under the protective order in this matter. Dkt. No. 113. JFM filed a declaration with facts supporting the sealing request. Dkt. No. 114.

Document	JFM’s Basis for Sealing (Dkt. No. 114)	Ruling
113-14 (Exhibit B)	Identifies shared customers and contains confidential information on specific amounts of JFM’s business attributable to those customers over specific periods of time.	Granted. The exhibit details product-specific customer data that could be used to the company’s competitive disadvantage. See Apple, 727 F.3d at 1228.
113-15 (Exhibit F)	Identifies customers targeted by Johnstech and provides financial information that could be used by others to disadvantage JFM.	Granted. The customer information qualifies as trade secrets and the redactions are narrowly tailored to seal just this information. See In re Elec. Arts, 298 F. App’x at 569.
113-16 (Exhibit G)	Confidentiality assertion withdrawn	Denied.
113-17 to 113-21 (Exhibit I)	Expert report with nonpublic financial information about JFM’s sales and profits related to specific customers. JFM seeks to seal certain redacted portions of the report as shown in Dkt. No. 114-2, and Schedule and Appendix 1 to the report in their entirety. JFM does not seek to seal the report’s attachments. Dkt. No. 114 ¶¶ 6-10.	Granted in part. Sealed to the extent it contains detailed sales information for customers that could be used to the company’s competitive disadvantage. See Apple, 727 F.3d at 1228. The request to seal redacted portions in Dkt. No. 114-2, and Schedule and Appendix 1, is granted. The request is denied otherwise. JFM also states that is withdrawing this Exhibit and will not rely upon it further in this case.
113-22 (Exhibit J)	Confidentiality assertion withdrawn	Denied.
113-12 (Motion referencing these Exhibits)	No further response.	Granted in part. Granted to the extent that the Court has permitted sealing of the Exhibits, and denied otherwise.

         B. Johnstech’s Administrative Motion to Seal Documents Filed in Opposition of JFM’s Motion for Summary Judgment (Dkt. No. 116)

         Johnstech filed a motion to seal Exhibits 2, 4, 5, 6, 7, 8, 8A, 9, 14, and 15 to its Opposition to JFM’s summary judgment motion, and portions of its Opposition referencing them, because the Exhibit materials were designated “Confidential” or “Highly Confidential - Attorney’s Eyes Only” by JFM or third party IDI under the protective order in this matter. Dkt. ...