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

Filing 1498

Administrative Motion to File Under Seal Non-Party Siemens AG's Administrative Motion to Seal filed by Siemens AG. (Attachments: # 1 Declaration John P. Bovich, # 2 Exhibit A, # 3 Exhibit B, # 4 Declaration Frank J. Nuzzi, # 5 Exhibit A, # 6 Exhibit B, # 7 Proposed Order)(Bovich, John) (Filed on 7/30/2012)

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John P. Bovich (SBN 150688)
Email: [e-mail]
James A. Daire (SBN 239637)
Email: [e-mail]
REED SMITH LLP
101 Second Street, Suite 1800
San Francisco, CA 94105-3659
Telephone:
[phone]
Facsimile:
[phone]
Attorneys for NON-PARTY
Siemens AG

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NORTHERN DISTRICT OF CALIFORNIA

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REED SMITH LLP

UNITED STATES DISTRICT COURT

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A limited liability partnership formed in the State of Delaware

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San Jose Division

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APPLE INC., a California corporation,

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No.: 11-cv-01846-LHK (PSG)

Plaintiff,

NON-PARTY SIEMENS AG’S
ADMINISTRATIVE MOTION TO SEAL

vs.
Honorable Lucy H. Koh
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,
Defendants.

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Pursuant to Civil L.R. 7-11 and 79-5(c), and the Court’s Order of July 23, 2012 (Docket No.
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1288), non-party Siemens AG (“Siemens”) respectfully submits this administrative motion for an
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order to seal portions of a single exhibit – Trial Exhibit 77 – that contain highly confidential and
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extremely sensitive business information of Siemens’ relating to the financial terms of a license
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agreement with Samsung Electronics Co., LTD.
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Request for Relief
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Siemens seeks an order sealing the royalty rates, payment terms and consideration,
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technological scope, and duration of its Patent License Agreement with Samsung (“the Agreement”)
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Case No. 11-cv-01846-LHK (PSG)
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NON-PARTY SIEMENS AG’S ADMINISTRATIVE MOTION TO SEAL

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set forth in Trial Exhibit 77. As the Court explained during its Friday, July 27, 2012 hearing,

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confidential terms in a patent license agreement are inherently sealable under Electronic Arts, Inc. v.

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U.S. District Court for the Northern District of California, 298 Fed. Appx. 568, 569 (9th Cir. 2008)

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(“E.A.”). [Exh. C (Transcript Excerpt) p. 9:8-17.] Siemens’ narrowly tailored request to seal is

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grounded in both the Court’s reasoning during the hearing and its own compelling reasons to keep

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the confidential terms of the Agreement from unfettered public view.

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Background Facts
On July 21, 2012, trial counsel for Samsung informed Siemens that Samsung intended to use
the Agreement and a summary of its key terms as Trial Exhibit 77. This was the first time that

REED SMITH LLP

A limited liability partnership formed in the State of Delaware

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Siemens had any notice that Samsung intended to use Siemens’ highly confidential information at

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trial. Trial counsel for Samsung also told Siemens that “Samsung has not identified any compelling

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reasons” to request sealing the Agreement and summary. [Bovich Decl. ¶2, Exh. A.] Over the past

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week, including on Saturday and Sunday, Siemens has attempted to reach an agreement with

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Samsung’s trial counsel to present a redacted version of the Agreement and the summary to the jury

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and the Court. On Saturday, Siemens asked Samsung to agree to submit redacted versions of the

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Agreement and the summary for consideration by the Court and/or jury, to avoid burdening the

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Court with this issue during trial. This would have protected Siemens’ interest by preventing the

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disclosure of Siemens’ highly sensitive licensing terms. It also would have mooted the need for a

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separate motion to seal by Siemens. Trial counsel for Samsung, though, refused this arrangement

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because Samsung did want to take on the burden of treating Siemens differently from other

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intervening non-parties or of resubmitting Trial Exhibit 77 with the appropriate redactions. [Bovich

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Decl. ¶¶ 3-5] Without adequate assurances that party Samsung would act to protect the highly

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confidential license terms, non-party Siemens was forced to undertake the cost and burden of filing a

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separate administrative motion to seal at its own expense and on very short notice.

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There Are Compelling Reasons to Grant Siemens’ Proposed Order to Seal
Siemens has submitted redacted versions of Trial Exhibit 77, consisting of the Agreement

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and Samsung’s summary of the Agreement with this Motion to Seal (Exhibits A and B,

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respectively). The redacted information relates to the royalty rates, other consideration terms,
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technological scope, and duration of the Agreement. This information is extremely sensitive to non-

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party Siemens. Siemens owns one of the largest and most important patent portfolios in the world.

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To date, Siemens holds approximately 58,000 patents worldwide. The protection, utilization, and

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expansion of Siemens’ intellectual property rights are vital to Siemens’ success. Siemens is in

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constant negotiations with multiple companies regarding patent licenses, including the technology at

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issue in the Agreement. Siemens’ ability to negotiate these licenses on competitive terms would be

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severely hampered if the confidential terms of its existing license agreements were made public.

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This is especially true where, as in the Agreement here, the confidential terms relate a license

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involving unexpired patents or patents for which there remains an enforceable term, the monetary

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A limited liability partnership formed in the State of Delaware

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consideration paid for the license rights granted, and/or the technological scope of the license.

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[Nuzzi Decl. ¶¶6-7.] Siemens would thus be severely harmed should the information contained in

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Trial Exhibit 77 become public without redactions. [Id. ¶ 8.]

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The information that Siemens seeks to have sealed more than meets the “compelling reasons”

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standard of the Ninth Circuit. “[P]ricing terms, royalty rates and guaranteed minimum payment

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terms” found in licensing agreements “plainly fall[] within the definition of ‘trade secrets.’” E.A.,

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supra, 298 F. App’x at 569; see also Powertech Tec., Inc., v. Tessera, Inc., No. C 11-6121 CW, 2012

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U.S. Dist. LEXIS 75831, at *5 (N.D. Cal. May 31, 2012) (compelling reasons to seal license

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agreement). Moreover, there is very little public interest in knowing the specific licenses and

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agreements that Samsung entered into, and disclosing the information would risk substantial

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competitive harm to non-party Siemens. Network Appliance, Inc. v. Sun Microsystems Inc., No. C-

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07-06053 EDL, 2010 U.S. Dist. LEXIS 21721, at *7 (N.D. Cal. Mar. 10, 2010) (material that would

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subject third parties to competitive harm sealable).

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Indeed, this Court explained that this type of information meets the compelling reasons
standard for sealing in this case as recently as Friday, July 27, 2012, when it stated:

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THE COURT: BASED ON THE NINTH CIRCUIT'S DECISION IN

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ELECTRONIC ARTS, PRICING, ROYALTY RATES, MINIMUM PAYMENT

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TERMS OF LICENSING AGREEMENTS WILL BE SEALABLE. AND I THINK

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TO DO OTHERWISE GOT THE DISTRICT JUDGE REVERSED, SO I'M GOING
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NON-PARTY SIEMENS AG’S ADMINISTRATIVE MOTION TO SEAL

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TO FOLLOW THE NINTH CIRCUIT PRECEDENT ON THAT. NOW, THE

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NINTH CIRCUIT DECISION DID NOT ADDRESS THE DURATION OF THE

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LICENSE, BUT I WILL ALLOW THAT ALSO TO BE SEALED. [Exh. C

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(Transcript Excerpt) p. 9:8-17.]

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During the same hearing, the Court also explained that it would consider who the request was

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coming from when considering highly confidential information of non-parties who did not

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voluntarily initiate this litigation:

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THE COURT: SO AS FAR AS THE THIRD PARTIES ARE CONCERNED,

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YOUR REQUEST TO PROTECT THOSE, YOU KNOW, ROYALTY RATE AND

REED SMITH LLP

A limited liability partnership formed in the State of Delaware

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THE NO PAYMENT TERM, COMPENSATION TERM, HOWEVER IT'S

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STRUCTURED AND THE DURATION PRICING, THAT'S FINE. [Exh. C

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(Transcript Excerpt) p.27:15-19.]

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The relief requested in this motion is narrowly tailored to protect only non-party Siemens’

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extremely sensitive, competitive business information. Granting this motion will not impede the

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public’s ability to understand the substantive questions in this case. As a result, Siemens

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respectfully requests that the Court grant this motion, accept under seal unredacted versions of the

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Agreement and summary in Trial Exhibit 77, and allow only the redacted versions of the same to be

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used in a matter that would render them to become public information.

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DATED this the 30th day of July, 2012.
/s/ John P. Bovich
John P. Bovich
REED SMITH LLP
101 Second Street, Suite 1800
San Francisco, CA 94105-3659
Counsel for NON-PARTY
Siemens AG

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Case No. 11-cv-01846-LHK (PSG)
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NON-PARTY SIEMENS AG’S ADMINISTRATIVE MOTION TO SEAL

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