Johnstech International Corp. v. JF Technology Berhad et al

Filing 175

ORDER by Judge James Donato re 113 , 116 , 117 , 131 , 144 Administrative Motions to File Under Seal. (jdlc1S, COURT STAFF) (Filed on 8/2/2016)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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JOHNSTECH INTERNATIONAL CORP.,
Plaintiff,

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JF MICROTECHNOLOGY SDN BHD,

Re: Dkt. Nos. 113, 116, 117, 131, 144

Defendant.

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United States District Court
Northern District of California

ORDER ON MOTIONS TO SEAL RE
SUMMARY JUDGMENT AND
SANCTIONS

v.

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Case No. 14-cv-02864-JD

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In this patent action, plaintiff Johnstech International Corp. (“Johnstech”) and defendant JF

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Microtechnology SDN BHD (“JFM”) have filed several administrative motions to seal portions of

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their summary judgment and sanctions briefing under Civil Local Rule 79-5. The Court grants

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and denies the requests as detailed in this order.

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I.

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STANDARDS
In our circuit, a party seeking to seal documents filed in connection with a dispositive

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motion must establish “compelling reasons” to overcome a historically “strong presumption of

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access to judicial records.” Kamakana v. City and County of Honolulu, 447 F.3d 1172, 1178–79

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(9th Cir. 2006) (internal quotes omitted). This standard presents a “high threshold,” and “a ‘good

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cause’ showing will not, without more, satisfy” it. Id. at 1180 (citations omitted). To meet the

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“compelling reasons” standard, a party seeking to seal material must show specific, individualized

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reasons for the sealing, “‘without relying on hypothesis or conjecture,’” such as “‘whether

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disclosure of the material could result in improper use of the material for scandalous or libelous

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purposes or infringement upon trade secrets.’” See Pintos v. Pacific Creditors Ass’n, 605 F.3d

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665, 679, 679 n.6 (9th Cir. 2009) (quoting Hagestad v. Tragesser, 49 F.3d 1430, 1434 (9th

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Cir.1995)). The Ninth Circuit has found the compelling reasons standard met by “pricing terms,

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royalty rates, and guaranteed minimum payment terms” in a license agreement, as these are trade

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secrets used in the party’s business, conferring an opportunity to obtain advantage over

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competitors who do not know or use them. In re Elec. Arts, Inc., 298 F. App’x 568, 569 (9th Cir.

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2008); see also Apple Inc. v. Samsung Elecs. Co., 727 F.3d 1214, 1225 (Fed. Cir. 2013) (applying

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this standard and sealing “detailed product-specific financial information” and “profit, cost, and

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margin data” that “could give the suppliers an advantage in contract negotiations, which they

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could use to extract price increases for components”). However, “[s]imply mentioning a general

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category of privilege, without any further elaboration or any specific linkage with the documents,

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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

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United States District Court
Northern District of California

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th[e] information to obtain an unfair advantage’ is insufficient.” Ochoa v. McDonald’s Corp., No.

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14-CV-02098-JD, 2015 WL 3545921, at *1 (N.D. Cal. Jun. 5, 2015) (quoting Hodges v. Apple,

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Inc., No. 13–cv–01128–WHO, 2013 WL 6070408, at *2 (N.D. Cal. Nov. 18, 2013)).

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Under Civil Local Rule 79-5, a sealing request must also “be narrowly tailored to seek

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sealing only of sealable material,” and “establish[ ] that the document, or portions thereof, are

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privileged, protectable as a trade secret or otherwise entitled to protection under the law.” Civil

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L.R. 79-5(b). When ordering sealing, the district court must “articulate the rationale underlying its

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decision to seal.” Apple Inc. v. Psystar Corp., 658 F.3d 1150, 1162 (9th Cir. 2011).

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II.

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DETERMINATIONS
Many of the requests here fail to comply with Civil Local Rule 79-5 because they were not

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filed with an unredacted version showing “by highlighting or other clear method, the portions of

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the document that have been omitted from the redacted version.” Civil L.R. 79-5(d)(1)(D). While

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the sealing requests could have been denied on that ground, the Court undertook the burden of

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comparing the unredacted and redacted copies mainly to move this case to resolution without

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further delay. But the parties are advised that any future motions to seal will be summarily denied

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if Local Rule 79-5, or the Court’s prior orders on sealing requests, are not followed to the letter.

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

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order:
Motion (Dkt. No.) Documents Sought to be Sealed (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
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
117-2, -6, -8, -10 - Exhibits B, G, I, J to Hayes
Declaration
131-5 - Exhibit E to Second Merrill Declaration
131-4 - Reply Memorandum referring to Exhibit E
144-4 and -6 - Exhibits B and C to Hansen Declaration
in Support of JFM’s Response re Discovery Sanctions

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116

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117

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131

United States District Court
Northern District of California

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144

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Party Declaration in
Support (by Dkt.
No.)
113-1, 113-13
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116-1
130

117-1
131-1
144-1

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

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Johnstech states that it filed these documents under seal because they were designated

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“Confidential” or “Highly Confidential - Attorney’s Eyes Only” by JFM under the protective

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order in this matter. Dkt. No. 113. JFM filed a declaration with facts supporting the sealing

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request. Dkt. No. 114.

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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.
Identifies customers targeted by
Johnstech and provides financial
information that could be used
by others to disadvantage JFM.

Granted. The exhibit details productspecific customer data that could be
used to the company’s competitive
disadvantage. See Apple, 727 F.3d at
1228.

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113-15
(Exhibit F)

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.

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113-16
(Exhibit G)
113-17 to
113-21
(Exhibit I)

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United States District Court
Northern District of California

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113-22
(Exhibit J)
113-12
(Motion
referencing
these
Exhibits)

Confidentiality assertion
withdrawn
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.
Confidentiality assertion
withdrawn
No further response.

Denied.
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.
Denied.
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)

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Johnstech filed a motion to seal Exhibits 2, 4, 5, 6, 7, 8, 8A, 9, 14, and 15 to its Opposition

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to JFM’s summary judgment motion, and portions of its Opposition referencing them, because the

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Exhibit materials were designated “Confidential” or “Highly Confidential - Attorney’s Eyes Only”

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by JFM or third party IDI under the protective order in this matter. Dkt. No. 116 at 3. JFM filed a

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declaration addressing the sealing of all exhibits except Exhibit 2. Dkt. No. 130.

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Document

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116-13 (Exhibit 2)

JFM’s Response
(Dkt. No. 130)
No response.

Ruling

Confidentiality assertion withdrawn
Confidentiality assertion withdrawn
Confidentiality assertion withdrawn

Denied. The parties have not
provided adequate justification for
sealing this document. IDI has not
filed any declaration in support of
sealing as required by the Local
Rule.
Denied.
Denied.
Denied.

Confidentiality assertion withdrawn
Confidentiality assertion withdrawn

Denied.
Denied.

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116-14 (Exhibit 4)
116-15 (Exhibit 5)
116-16
(Exhibit 6)
116-17 (Exhibit 7)
116-18 (Exhibit 8)

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United States District Court
Northern District of California

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116-19 (Exhibit 8A) JFM requests that this document be
sealed in part because it
contains identification of JFM’s
customers and their employees.
JFM contends this is “highly
sensitive business information that
is not publicly available and could
be used by others to obtain unfair
advantage in competition and/or
negotiations with JFM.” Dkt. No.
130 ¶ 7.
116-20 (Exhibit 9)
JFM requests that this document be
sealed in its entirety because it
contains identification of JFM
customers and confidential
correspondence with a customer
targeted by Johnstech as “highly
sensitive business information that
is not publicly available and could
be used by others to obtain unfair
advantage in competition and/or
negotiations with JFM.”
116-21 (Exhibit 14) JFM requests that this document be
sealed in its entirety because it
contains identification of JFM’s
customers targeted by Johnstech
and related information
reflecting the damage to JFM’s
business caused by Johnstech’s
False Letter.
116-22 (Exhibit 15) JFM requests that this document be
sealed in its entirety because
contains identification of JFM’s
customers targeted by Johnstech
and related JFM financial
information reflecting the damage
to JFM’s business caused by
Johnstech’s False Letter.

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Granted. The proposed
redactions in Dkt. No. 30-1 are
narrowly tailored to prevent
specific identification of customers
and employees, while opening to
the public specific details on
Johnstech’s communications with
them.

Granted. The document contains
notes from specific customer visits
and competitive intelligence
gathered from them that qualifies
as trade secrets used in the party’s
business, establishing compelling
reasons to seal the document. In
re Elec. Arts, 298 F. App’x at 569.

Granted with respect to the
identities and contact
information of individuals and
otherwise denied.

Granted. The exhibit details
customer-specific sales data that
qualifies as trade secrets
information used in the party’s
business, establishing compelling
reasons to seal the document. In
re Elec. Arts, 298 F. App’x at 569.

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116-12 (Motion
referencing
abovementioned
materials)

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JFM seeks sealing of the Summary
Judgment Opposition brief to the
extent it contains and refers to
highly confidential JFM business
information, including page 20,
lines 8, 13-14, 16 and 18, as these
sections contain identification of
JFM’s customers targeted by
Johnstech’s False Letter.

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Johnstech’s request to seal the
portions of the Opposition brief
redacted in Dkt. No. 116-3 is
granted to the extent the redactions
pertain to information that the
Court has ordered sealed, and
denied otherwise.
JFM’s request to redact specific
customer names and the
percentage of business to those
customers in page 20, lines 8, 1314, 16 and 18 of the brief is
granted.

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United States District Court
Northern District of California

Granted in part. Granted to the
extent it seeks sealing of
references to Exhibits that the
Court has ordered sealed. Neither
party has provided justification for
sealing the Opposition brief more
broadly.

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C. Administrative Motion to File Under Seal Exhibits to Hayes Declaration In
Support of Defendant’s Opposition to Johnstech’s Motion for Summary
Judgment (Dkt. No. 117)

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JFM indicates that these portions of documents were filed under seal because they “contain

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and refer” to information designated highly confidential by plaintiff Johnstech or defendant JFM.

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Dkt. No. 117.
Document

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117-4 (Exhibit B)

JFM’s Argument
(Dkt. No. 117-1)
Exhibit B identifies JFM’s
customers targeted by Johnstech’s
False Letter.

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Ruling
Granted. The particular customer
information qualifies as trade
secrets that JFM has compelling
reasons to seal, and the redactions
are narrowly tailored to seal just
this information. See In re Elec.
Arts, 298 F. App’x at 569.

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117-6 (Exhibit G)

Exhibit G identifies JFM’s
customers targeted by Johnstech’s
False Letter.

117-8 (Exhibit I)

Exhibit I identifies JFM’s
customers targeted by Johnstech’s
False Letter.

117-10 (Exhibit J)

Exhibit J refers to proprietary JFM
product design information,
including product component
features unique to the Zigma
product line.

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United States District Court
Northern District of California

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Granted. The particular customer
information qualifies as trade
secrets that JFM has compelling
reasons to seal, and the redactions
are narrowly tailored to seal just
this information. See In re Elec.
Arts, 298 F. App’x at 569.
Granted. The particular customer
information qualifies as trade
secrets that JFM has compelling
reasons to seal, and the redactions
are narrowly tailored to seal just
this information. See In re Elec.
Arts, 298 F. App’x at 569.
Granted. See In re Elec. Arts,
298 F. App’x at 569.

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D. Administrative Motion to Seal Documents Filed in Support of Plaintiff’s Reply on
Summary Judgment (Dkt. No. 131)

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Johnstech states that the documents filed at Dkt. Nos. 131-4 and 131-5 were filed under

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seal because they contain material designated “Highly Confidential - Attorney’s Eyes Only” by

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JFM under the protective order in this matter. Dkt. No. 131. JFM has withdrawn its

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confidentiality assertions for these materials. Dkt. No. 137. Accordingly, the motion to seal is

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denied. The Clerk is directed to remove the confidentiality lock on the two documents and make

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them available to the public.

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E. Administrative Motion to File Under Seal Exhibits to Hansen Declaration In
Support of Defendant’s Response to Johnstech’s Motion for Discovery Sanctions
(Dkt. No. 144)

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JFM seeks to redact portions of depositions of two JFM employees that contain

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information designated highly confidential by JFM. Dkt. No. 144. JFM seeks sealing of the

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identity of certain customers and their employees who were “targeted by Johnstech’s False Letter

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and confidential information regarding changes in those customers’ purchases from JFM.” Dkt.

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No. 144-1.

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Document
144-4 (Exhibit B)

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JFM’s Argument
(Dkt. No. 144-1)
Exhibit B refers to JFM’s
customers re Johnstech’s False
Letter and customer purchases from
JFM.

Ruling
Granted. The particular customer
information qualifies as trade
secrets that JFM has compelling
reasons to seal, and the redactions
are narrowly tailored to seal just
this information See In re Elec.
Arts, 298 F. App’x at 569.
Granted. The particular customer
information qualifies as trade
secrets that JFM has compelling
reasons to seal, and the redactions
are narrowly tailored to seal just
this information See In re Elec.
Arts, 298 F. App’x at 569

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144-6 (Exhibit C)

Exhibit C refers to JFM’s
customers re Johnstech’s False
Letter and customer purchases from
JFM.

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United States District Court
Northern District of California

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CONCLUSION

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Within fourteen days of this order, the parties should file unredacted documents or

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documents with revised redactions, as necessary to comply with this order, in the public record of

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this case. If the parties do not file new copies of the affected documents by this deadline, the

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Court will unseal the versions previously filed in this matter.

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IT IS SO ORDERED.
Dated: August 2, 2016

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JAMES DONATO
United States District Judge

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