Apple Inc. v. Samsung Electronics Co. Ltd. et al

Filing 1394

*** FILED IN ERROR WITH CONFIDENTIAL INFORMATION. DOCUMENT LOCKED. *** Administrative Motion to File Under Seal filed by Qualcomm Incorporated. (Attachments: # 1 Declaration of Eric Reifschneider, # 2 Exhibit 1 to the declaration of Eric Reifschneider, # 3 Proposed Order, # 4 Certificate/Proof of Service)(Kays, David) (Filed on 7/26/2012) Modified on 7/30/2012 (fff, COURT STAFF).

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DAVID A. KAYS, ESQ. (SBN 120798)
FREEDA Y. LUGO, ESQ. (SBN 244913)
MORGAN, FRANICH, FREDKIN & MARSH
99 Almaden Boulevard, Suite 1000
San Jose, California 95113-1613
Telephone: [phone]
Facsimile: [phone]
ATTORNEYS FOR NON-PARTY
QUALCOMM INCORPORATED

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN JOSE DIVISION

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APPLE INC., a California corporation,
Case No. 11-cv-01846-LHK
Plaintiff,

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v.
SAMSUNG ELECTRONICS CO., LTD., a
Korean corporation; SAMSUNG
ELECTRONICS AMERICA, INC., a New
York corporation; and SAMSUNG
TELECOMMUNICATIONS AMERICA,
LLC, a Delaware limited liability company,

NON-PARTY QUALCOMM
INCORPORATED’S
ADMINISTRATIVE MOTION
TO SEAL CONFIDENTIAL
INFORMATION PURSUANT TO
CIVIL L. R. 7-11 & 79-5

Defendants.

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Case No.: 11-CV-01846-LHK
NON-PARTY QUALCOMM’S MOTION TO SEAL CONFIDENTIAL INFORMATION

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Pursuant to Civil L. R. 7-11 & 79-5, Non-Party Qualcomm Incorporated
(“Qualcomm”) moves to seal:
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those portions of Exhibits 3A and 3B to the Expert Report of

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David Teece dated March 22, 2012 (the “Teece Report”)

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designated as a potential trial exhibit by Defendants Samsung

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Electronics Co. et al. in Trial Exhibit 630 that disclose terms of the

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Samsung Agreements (as defined below);
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any text of any Samsung Agreement also included in or attached to
the Teece Report;

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any other document or testimony entered into evidence by either

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party to the above-captioned action that discloses the terms of the

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following agreements between Qualcomm and Samsung

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Electronics Co. Ltd. (“Samsung”) (collectively the “Samsung

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Agreements”):
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the Infrastructure and Subscriber Unit License Agreement

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dated August 31, 1993 and subsequent amendments

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thereto1;

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the Side Agreement dated August 31, 1993;

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the Strategic Agreement dated May 18, 1999; and

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the Patent Assignment dated November 27, 2009.

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Neither Plaintiff Apple, Inc. nor Defendants Samsung et al. oppose

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Qualcomm’s motion. Filed in support of this motion is the declaration of Eric

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Reifschneider, Senior Vice President and General Manager of Qualcomm Technology

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Licensing (“Reif. Decl.”).

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Agreements amending the Infrastructure and Subscriber Unit License Agreement
dated August 31, 1993 have been entered by the parties effective November 17, 1997;
March 29, 2004; December 26, 2005; October 29, 2007; and January 1, 2009.

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Case No.: 11-CV-01846-LHK
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NON-PARTY QUALCOMM’S MOTION TO SEAL CONFIDENTIAL INFORMATION

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Although Qualcomm is a stranger to this litigation, its interests

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nonetheless risk being affected by these proceedings in a serious and unfair manner

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because confidential and highly sensitive Qualcomm business information will be

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disclosed to third parties if the terms of the Samsung Agreements are entered into

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evidence before this Court in the absence of a sealing order.

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This Court has observed that notwithstanding the strong presumption of

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the law in favor of public access to judicial records, “exceptionally sensitive” information

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that forms part of the evidence at trial may “truly deserve protection” and be sealed upon

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a showing of “compelling reasons”. Order Denying Motions to Seal and Remove

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Incorrectly Filed Documents, Apple Inc. v. Samsung Electronics Co., No. 11-CV-01846-

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LHK (N.D. Cal. July 20, 2012), ECF No. 1269 at 1, 3 (quoting Oracle Am. v. Google,

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Inc., No. 10-CV-03561-WHA, ECF No. 540). In the Ninth Circuit, such compelling

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reasons “outweigh the general history of access and the public interest in understanding

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the judicial process”, and explicitly include situations “when such court files . . . become

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a vehicle for improper purposes such as the use of records to . . . release trade secrets.”

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Kamakana v. City and Cnty. of Honolulu, 447 F.3d 1172, 1179 (9th Cir. 2009) (internal

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quotation marks omitted); see also Nixon v. Warner Commc’ns. Inc., 435 U.S. 589, 598

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(1978).

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This is precisely the issue presented by Qualcomm’s motion. The

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Samsung Agreements are predominantly licenses between Qualcomm and Samsung and

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amendments to such licenses, entered over a period of nearly twenty years, through

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which each party has structured its rights to the other’s valuable intellectual property and

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secured compensation for the use of its own intellectual property. (See Reif. Decl. ¶ 2.)

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Appropriately, the law acknowledges that such license terms commonly constitute trade

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secrets, see, e.g., In re Electronic Arts, Inc., 298 Fed. App’x 568, 569 (9th Cir. 2008)

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(holding that that “pricing terms, royalty rates, and guaranteed minimum payment terms”

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found in a license agreement “plainly fall[] within the definition of trade secrets”), and

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Case No.: 11-CV-01846-LHK
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NON-PARTY QUALCOMM’S MOTION TO SEAL CONFIDENTIAL INFORMATION

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courts in this Circuit have accordingly permitted license agreements to be filed under seal

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in their entirety. See Triquint Semiconductor, Inc. v. Avago Tech. Ltd., No. 09-CV-1531-

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JAT, 2011 WL 4947343, at *2 (D. Ariz. Oct. 18, 2011) (granting a motion to seal draft

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license agreements because the “kind of information in a licensing agreement constitutes

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a trade secret that could harm a litigant’s competitive standing”).

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Qualcomm’s motion to seal the contents of the Samsung Agreements falls
squarely within the holdings of these cases.
First, the expectation of both parties to the Samsung Agreements was that

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the terms of these Agreements would be held in strict confidence precisely because they

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contain trade secrets. Indeed, the Samsung Agreements explicitly require each party to

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keep their terms confidential. (Reif. Decl. ¶¶ 2-3.) Qualcomm’s expectation of

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confidentiality would be unfairly and inappropriately defeated if the terms of the

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Samsung Agreements became available to third parties solely because its counterparty

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subsequently became involved in litigation.

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Second, a sealing order would avoid injury to the “competitive standing”

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of Qualcomm that would otherwise be occasioned by the accessibility of its confidential

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licensing information to third parties. See Nixon, 435 U.S. at 598 (“the common-law

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right of inspection has bowed before the power of a court to insure that its records are

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not . . . [used] as sources of business information that might harm a litigant’s competitive

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standing.”). As Mr. Reifschneider’s declaration details, the Samsung Agreements contain

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sensitive information the public availability of which would harm Qualcomm’s ability to

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compete in its markets, including:

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• unique “financial terms disclos[ing] the careful balancing of past,

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current, and future value exchanged in the Qualcomm-Samsung

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relationship” (Reif. Decl. ¶ 6);

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• the terms under which Qualcomm received rights to practice
Samsung’s patents (Reif. Decl. ¶ 7);

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Case No.: 11-CV-01846-LHK
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NON-PARTY QUALCOMM’S MOTION TO SEAL CONFIDENTIAL INFORMATION

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• the terms under which Samsung agreed to assign a substantial

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number of patents to Qualcomm as part of a broader agreement

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between the parties (Reif. Decl. ¶ 8);

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• the scope and duration of the Agreements (Reif. Decl. ¶ 2);

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• the conditions under which the parties may terminate certain rights

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under the Agreements (Reif. Decl. ¶ 9).
Finally, Qualcomm’s status as a stranger to this litigation attenuates any

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public interest in accessing Qualcomm’s confidential information because it increases

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substantially the likelihood that this information is merely tangential to the disposition of

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the causes of action between the parties to the litigation before this Court. See Triquint

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Semiconductor, 2011 WL 4947343, at *2 (“where, as here, the documents are only

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tangentially related to the underlying causes of action, the public need is lessened.”).

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Against this diminished public interest in access, the Court should weigh the law’s proper

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reluctance to allow public access to judicial records to result in the disclosure of trade

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secrets—which must apply a fortiori to the trade secrets of a disinterested non-party to

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litigation. The Court should also consider that the only segment of the “public” with any

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real interest in these trade secrets will be Qualcomm’s current and future competitors and

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customers, seeking an information windfall that will strengthen their own relative

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competitive or bargaining position against Qualcomm. This is at a far remove from the

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“public interest in understanding the judicial process” that underpins the general

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presumption favoring accessibility of judicial records. Kamakana, 447 F.3d at 1179.

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Because it is difficult to identify any genuine public interest in

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Qualcomm’s confidential information that outweighs Qualcomm’s interest in maintaining

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the confidentiality of its trade secrets, Qualcomm respectfully requests that the Court

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enter an order sealing any portions of documents or testimony disclosing any term of the

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Samsung Agreements entered into evidence in these proceedings. In the alternative, if

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the Court concludes that redaction of terms of the Samsung Agreements from any

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Case No.: 11-CV-01846-LHK
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NON-PARTY QUALCOMM’S MOTION TO SEAL CONFIDENTIAL INFORMATION

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document entered into evidence in these proceedings is more appropriate, Qualcomm

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respectfully requests that—given that Qualcomm has not had actual access to the Teece

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Report—2 the Court order that Qualcomm be granted access to any such document

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immediately, so that Qualcomm may propose specific redactions of Qualcomm

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confidential information.

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Dated: July 26, 2012

MORGAN, FRANICH, FREDKIN & MARSH

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By:

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/S/
DAVID A. KAYS

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Attorneys for Non-Party QUALCOMM,

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INCORPORATED.

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We observe that the only direct knowledge Qualcomm possesses that terms of the
Samsung Agreements may be entered into evidence in these proceedings is a letter from
counsel for Samsung dated July 21, 2012 (Reif. Decl. Ex. 1) and that we have no
knowledge of the contents of the Teece Report other than the text of Exhibits 3A & 3B of
that Report attached to that letter. (Reif. Decl. ¶ 1 n.1.)

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Case No.: 11-CV-01846-LHK
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NON-PARTY QUALCOMM’S MOTION TO SEAL CONFIDENTIAL INFORMATION