Finjan, Inc. v. Proofpoint, Inc. et al

Filing 339

ORDER by Judge Haywood S. Gilliam, Jr. GRANTING IN PART AND DENYING IN PART ADMINISTRATIVE MOTIONS TO FILE UNDER SEAL Re: 308 , 311 , 320 , 322 , 328 , 331 . Signed by Judge Haywood S. Gilliam, Jr. on 4/6/2016. (ndrS, COURT STAFF) (Filed on 4/6/2016)

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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 FINJAN, INC., Plaintiff, 8 v. 9 10 PROOFPOINT, INC., et al., Defendants. United States District Court Northern District of California 11 Case No. 13-cv-05808-HSG ORDER GRANTING IN PART AND DENYING IN PART ADMINISTRATIVE MOTIONS TO FILE UNDER SEAL Re: Dkt. Nos. 308, 311, 320, 322, 328, 331 12 The parties filed six administrative motions to file under seal in conjunction with the 13 parties’ motions for summary judgment. Dkt. Nos. 308, 311, 320, 322, 328, 331. No oppositions 14 to the motions to seal were filed, and the time to do so has passed. 15 I. 16 LEGAL STANDARD Courts apply a “compelling reasons” standard when considering motions to seal documents 17 like the ones at issue here. Pintos v. Pac. Creditors Ass’n, 605 F.3d 665, 678 (9th Cir. 2010). “This 18 standard derives from the common law right ‘to inspect and copy public records and documents, 19 including judicial records and documents.’” Id. “[A] ‘strong presumption in favor of access’ is the 20 starting point.” Kamakana v. City & Cnty. of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006). To 21 overcome this strong presumption, the moving party must “articulate compelling reasons supported by 22 specific factual findings that outweigh the general history of access and the public policies favoring 23 disclosure, such as the public interest in understanding the judicial process.” Id. at 1178-79 (citations, 24 internal quotation marks, and alterations omitted). The Court must “balance the competing interests of 25 the public and the party who seeks to keep certain judicial records secret. After considering these 26 interests, if the court decides to seal certain judicial records, it must base its decision on a compelling 27 reason and articulate the factual basis for its ruling, without relying on hypothesis or conjecture.” Id. 28 at 1179 (internal quotation marks omitted). 1 Civil Local Rule 79-5 further supplements the compelling reasons standard. The party seeking 2 to file a document or portions of it under seal must “establish[ ] that the document, or portions thereof, 3 are privileged, protectable as a trade secret or otherwise entitled to protection under the law. . . .The 4 request must be narrowly tailored to seek sealing only of sealable material.” Civil L.R. 79-5(b). 5 II. 6 DISCUSSION A. 7 Plaintiff’s Motion for Summary Judgment 1. 8 Plaintiff’s Administrative Motion to File Under Seal in Conjunction with its Summary Judgment Motion On February 22, 2016, Plaintiff filed an administrative motion to file under seal portions of 9 its motion for summary judgment; exhibits 6-12, 15-20, 24-30, 32, 35, 37-42 to the Declaration of 10 Paul Andre; and exhibit 21 in its entirety. Dkt. No. 308. The administrative motion covers United States District Court Northern District of California 11 12 13 information that Defendants designated as “Highly Confidential - Attorneys’ Eyes Only” or “Highly Confidential - Attorneys’ Eyes Only - Source Code.” In accordance with the local rules, Defendants filed a declaration in support of Plaintiff’s motion to seal on February 26, 2016. Dkt. 14 No. 317. 15 16 17 The Court finds that Plaintiff’s motion is narrowly tailored to confidential business and financial information and details regarding the technical operation of Proofpoint’s products (including references to source code, internal engineering ‘wiki’ documents, and other technical 18 documents). See Digital Reg of Texas, LLC v. Adobe Sys., Inc., No. C 12-1971 CW, 2014 WL 19 6986068, at *1 (N.D. Cal. Dec. 10, 2014) (holding that discussions of Adobe’s proprietary 20 technological information, licensing agreements, and trade secrets were sealable information); Apple, 21 Inc. v. Samsung Elecs. Co., No. 11-CV-01846-LHK, 2012 WL 6115623, at *2 (N.D. Cal. Dec. 10, 22 2012) (“Confidential source code clearly meets the definition of a trade secret.”). The Court concludes 23 there are compelling reasons to file portions of the summary judgment motion and exhibits 6-12, 15- 24 20, 24-30, 32, 35, 37-42 under seal. 25 Although Plaintiff also moved to file exhibits 21 and 40 under seal, the Court denies Plaintiff’s 26 motion as to these exhibits as Defendants do not contend that exhibits 21 and 40 contain 27 confidential sealable information. See Dkt. No. 317 at 3. If Plaintiff would like the Court to 28 2 1 consider exhibits 21 and 40, Plaintiff should file unredacted versions of these exhibits within four 2 days of the date of this order. 3 4 5 For the foregoing reasons, Plaintiff’s motion is GRANTED IN PART and DENIED IN PART. Dkt. No. 308. 2. 6 Defendants’ Administrative Motion to File Under Seal in Conjunction with its Opposition to Plaintiff’s Motion for Summary Judgment On March 7, 2016, Defendants moved to file under seal portions of its opposition to 7 Plaintiff’s summary judgment motion and attached exhibits H, J, K, L, M, N, P, Q, and R. Dkt. 8 No. 322. Defendants contend that these documents disclose confidential information about the 9 operation of Defendants’ products, including technical information and source code in the expert 10 reports, deposition testimony, and internal company documents. Dkt. No. 322. The documents United States District Court Northern District of California 11 12 reveal the identification, organization, and operation of Defendants’ proprietary products, and could assist competitors in recreating features of Defendants’ products. The Court finds that there 13 is a compelling reason to file this information under seal, as its disclosure could result in 14 competitive harm. Accordingly, the Court GRANTS Defendants’ motion as to the highlighted 15 portions of the opposition brief, and exhibits H, J, K, L, M, N, P, Q, and R. See Network 16 Appliance Inc. v. Sun Microsystems Inc., No. C-07-06053 EDL, 2010 WL 841274, at *3-5 (N.D. 17 Cal. Mar. 10, 2010). 18 Additionally, Defendants seek to seal exhibit Z only because it contains information 19 Plaintiff designated as confidential. Dkt. No. 322 at 2. The Court DENIES Defendants’ motion 20 to file exhibit Z under seal. Plaintiff has failed to file a declaration within four days of the filing of 21 the motion to seal, as required by Civil Local Rule 79-5(e)(1). Pursuant to Civil Local Rule 7922 5(e)(2), Defendants may file an unredacted version of the document in the public record no earlier 23 than four days and no later than ten days after the date of this Order. The Court will be unable to 24 consider exhibit Z unless Defendants timely file an unredacted version. 25 26 27 28 3. Plaintiff’s Administrative Motion to File Under Seal in Conjunction with its Reply On March 14, 2016, Plaintiff filed an administrative motion to file under seal portions of its reply brief as well as attached exhibits 1-4, 6, 8-9. Dkt. No. 328. Plaintiff contends that these 3 1 documents contain information Defendants designated as confidential. In accordance with the 2 local rules, Defendants filed a declaration in support on March 18, 2016. Dkt. No. 333. 3 Defendants’ declaration confirmed that highlighted portions of the reply brief, as well as 4 exhibits 1-4 in their entirety, contain confidential information and that Plaintiff’s request is 5 narrowly tailored. Id. The Court finds that the documents reference source code, diagrams, 6 technical information, and internal engineering documents related to Defendants’ products, and 7 that there is a compelling reason to file such information under seal. With respect to exhibit 6, the 8 Court grants Defendants’ request to tailor the redaction to the specific confidential information 9 located on pages 127 and 255. See Dkt. No. 333 at 1; Dkt. No. 334. Moreover, Defendants do not contend that exhibits 8 and 9 contain confidential information; accordingly, Plaintiff’s motion as 11 United States District Court Northern District of California 10 to these exhibits is denied. Should Plaintiff want the Court to consider exhibits 8 and 9, Plaintiff 12 must file an unredacted version with four days of this order. 13 14 15 16 17 For the foregoing reasons, Plaintiff’s motion is GRANTED IN PART and DENIED IN PART. Dkt. No. 328. B. Defendants’ Motion for Summary Judgment 1. Defendants’ Administrative Motion to File Under Seal in Conjunction with its Summary Judgment Motion On February 22, 2016, Defendants filed an administrative motion to file under seal 18 portions of its summary judgment motion and attached exhibits A, B, D, E, F, G, O, R, T, X, BB, 19 DD, and HH. Dkt. No. 311. The Court GRANTS Defendants’ motion, finding it is narrowly 20 tailored to sealable information, including product source code, the technical operation and 21 schematics of the products, and financial information relating to prices, customers, and forecasts. 22 Defendants additionally seek to seal highlighted portions of pages 14 and 23-24 of its 23 motion as well as exhibits V, Y, and AA because Plaintiff has designated them as confidential. 24 Dkt. No. 311 at 2; Dkt. No. 311-1 at 2. On February 26, 2016, Plaintiff filed a declaration in 25 support of exhibit AA only, see Dkt. No. 318. Accordingly, the Court DENIES Defendants 26 motion to file under seal exhibits V and Y, as well as portions of pages 14 and 23-24 of the 27 summary judgment motion. Should Defendants want the Court to consider exhibits V and Y, 28 4 1 Defendants should file unredacted copies within four days of this order. Additionally, Defendants 2 should file a copy of its summary judgment motion that does not redact the relevant portions of 3 page 14 and pages 23-24. With respect to exhibit AA, the Court GRANTS Plaintiff’s request to 4 file the more narrowly tailored version of exhibit AA, which redacts only the sealable information 5 as opposed to the entire document, see Dkt. No. 318. 6 2. 7 Plaintiff’s Administrative Motion to File Under Seal in Conjunction with its Opposition to Defendants’ Summary Judgment Motion On March 7, 2016, Plaintiff filed an administrative motion to file under seal portions of its 8 opposition to Defendants’ summary judgment motion, portions of exhibit 9, and exhibits 10-15, 9 19-22, 24-28, and 39 to the Hannah Declaration. Dkt. No. 320. 10 Exhibit 9 contains excerpts from the deposition of Finjan’s President and CEO Phil 11 United States District Court Northern District of California Hartstein. The Court finds that the redaction is narrowly tailored to confidential, sealable 12 information as required by the local rules. Accordingly, the Court GRANTS the motion as to 13 exhibit 9. 14 The redacted portions of the opposition, as well as exhibits 10-15, 19-22, 24-28, and 39 to 15 16 17 the Hannah Declaration, contain information Defendants designated as “Highly ConfidentialAttorneys’ Eyes Only.” Dkt. No. 320-1 at 2. On March 11, 2016, Defendants filed a declaration in support of Plaintiff’s administrative motion to file under seal. Dkt. No. 326. Defendants’ 18 declaration confirmed that the highlighted portions of the opposition as well as exhibits 10-12, 1419 15, 19-22, 25-28 contained sealable information, such as strategic business considerations and 20 confidential business information about the decision to acquire Armorize and Armorize 21 technology, analyses of other businesses and their effect on Defendants’ business strategy, and 22 information on the types of technology Defendants wanted to acquire and integrate into products. 23 With respect to exhibits 13 and 24, Defendants’ agree that the exhibits contain confidential 24 information, but request that both exhibits be further tailored to only the sealable information. 25 Specifically, the redactions on exhibit 13 should be tailored to the highlighted portions on pages 26 61, 96, and 159, and the redactions on exhibit 24 should be tailored to the highlighted portions on 27 page 127. The Court agrees that these specific portions contain confidential information and that 28 5 1 there are compelling reasons to file them under seal. Thus, the Court GRANTS the administrative 2 motion to file under seal, including the more narrowly tailored versions of exhibits 13 and 24. 3 3. 4 Defendants’ Administrative Motion to File Under Seal in Conjunction with its Reply to Plaintiff’s Opposition On March 14, 2016, Defendants filed an administrative motion to file under seal portions 5 of their reply brief, portions of the Hamstra Declaration, as well as attached exhibits PP, TT, and 6 WW. Dkt. No. 331-1. Having reviewed these documents, the Court finds that they contain 7 confidential information and that the request is narrowly tailored to the sealable information. The 8 documents contain information regarding the operation of Defendants’ products, including 9 technical information and source code. If such information were disclosed, there could be a risk 10 United States District Court Northern District of California 11 12 that competitors would reproduce or recreate features of Defendants’ products. See Nixon v. Warner Commc’ns, Inc., 435 U.S. 589, 598-99 (1978) (recognizing that access to judicial records may be denied where it “might harm a litigant’s competitive standing”). Because there is a 13 compelling reason to seal the specific portions of the reply brief and Hamstra Declaration, as well 14 as the three attached exhibits, the Court GRANTS Defendants’ motion to file under seal. Dkt. 15 No. 331. 16 17 III. CONCLUSION For the foregoing reasons, the parties’ administrative motions to file under seal are 18 GRANTED IN PART and DENIED IN PART. 19 IT IS SO ORDERED. 20 Dated: 4/6/2016 21 22 23 HAYWOOD S. GILLIAM, JR. United States District Judge 24 25 26 27 28 6

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