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

Filing 2346

Order by Hon. Lucy H. Koh granting 2204 Administrative Motion to File Under Seal.(lhklc3, COURT STAFF) (Filed on 7/24/2013)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN JOSE DIVISION

United States District Court
For the Northern District of California

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APPLE, INC., a California corporation,

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Plaintiff,
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v.
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SAMSUNG ELECTRONICS CO., LTD., a
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Korean corporation; SAMSUNG
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ELECTRONICS AMERICA, INC., a New York )
corporation; SAMSUNG
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TELECOMMUNICATIONS AMERICA, LLC, )
a Delaware limited liability company,
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Defendants.
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Case No.: 11-CV-01846-LHK
ORDER GRANTING NON-PARTY IDC
RESEARCH INC.’S ADMINISTRATIVE
MOTION TO SEAL

Before the Court is non-party IDC Research, Inc.’s (d.b.a. International Data Corporation)

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(“IDC”) administrative motion to seal Exhibit 199 to the Declaration of Michael Wagner in support

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of Samsung’s Opposition to Apple’s Motion for a Permanent Injunction and Damages

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Enhancement. See IDC’s Mot. File Under Seal (“IDC’s Mot.”), ECF No. 2204. In response,

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Samsung filed a partial opposition. See Samsung’s Partial Opp’n IDC’s Mot. (“Samsung’s Partial

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Opp’n”), ECF No. 2208. For the reasons stated below, the Court GRANTS IDC’s Motion to Seal.

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I.

LEGAL STANDARD

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As this Court has explained in its previous sealing orders, courts have recognized a “general

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right to inspect and copy public records and documents, including judicial records and documents.”

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Nixon v. Warner Commc’ns, Inc., 435 U.S. 589, 597 & n.7 (1978). “Unless a particular court

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record is one ‘traditionally kept secret,’ a ‘strong presumption in favor of access’ is the starting
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Case No.: 11-CV-01846-LHK
ORDER GRANTING NON-PARTY IDC RESEARCH INC.’S ADMINISTRATIVE MOTION TO SEAL

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point.” Kamakana v. City and Cnty. of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006) (quoting

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Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 1122, 1135 (9th Cir. 2003)).

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To overcome this strong presumption, a party seeking to seal a judicial record must

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articulate a reason for sealing that outweighs the public policies favoring disclosure. See id. at

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1178–79. Because the public’s interest in non-dispositive motions is relatively low, a party seeking

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to seal a document attached to a non-dispositive motion need only demonstrate a reason that

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constitutes “good cause.” Pintos v. Pac. Creditors Ass’n, 605 F.3d 665, 678 (9th Cir. 2010)

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(applying “good cause” standard to all non-dispositive motions, because such motions “‘are often

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unrelated, or only tangentially related, to the underlying cause of action’” (quoting Kamakana, 447

United States District Court
For the Northern District of California

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F.3d at 1179)).
In contrast, “the resolution of a dispute on the merits . . . is at the heart of the interest in

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ensuring the ‘public’s understanding of the judicial process and of significant public events.’”

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Kamakana, 447 F.3d at 1179 (quoting Valley Broadcasting Co. v. U.S. Dist. Court for Dist. of

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Nev., 798 F.2d 1289, 1294 (9th Cir. 1986)). Therefore, a party seeking to seal a judicial record

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attached to a dispositive motion must articulate “compelling reasons” in favor of sealing. See

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Kamakana, 447 F.3d at 1178.
The document that IDC seeks to seal concerns Apple’s Motion for a Permanent Injunction

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and Damages, which directly concerns the merits of the case. Moreover, Apple’s motion to

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permanently enjoin the sale of 26 Samsung products is a significant public event of which the

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public has great interest, as evidenced by the high media and general public attention to the

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preliminary injunction proceedings, the trial, and the post-trial proceedings.
Accordingly, the Court will use the “compelling reasons” standard here.

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II.

IDC’S MOTION TO SEAL
As noted above, non-party IDC seeks to seal in its entirety Exhibit 199 to the Declaration of

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Michael Wagner in support of Samsung’s Opposition to Apple’s Motion for a Permanent

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Injunction and Damages Enhancement (“Wagner PI Declaration”). Exhibit 199 consists of an

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entire IDC report and data spreadsheet of a worldwide quarterly mobile phone tracker for the

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second quarter of 2012 (the “Worldwide Quarterly Mobile Phone Tracker 2012Q2” or the
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Case No.: 11-CV-01846-LHK
ORDER GRANTING NON-PARTY IDC RESEARCH INC.’S ADMINISTRATIVE MOTION TO SEAL

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“Tracker”). See IDC’s Mot. at 1. While Samsung does not oppose IDC’s request to seal Exhibit

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199, it opposes any order that “require[s] Samsung to [] not file the tracker at all.” See Samsung’s

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Partial Opp’n at 1 (citing IDCs Mot. at 3).

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To determine whether there are “compelling reasons” to seal Exhibit 199, this Court must

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examine if “such ‘court files might . . . become a vehicle for improper purposes,’ such as the use of

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records to . . . release trade secrets.” Kamakana, 447 F.3d at 1179 (citing Nixon, 435 U.S. at 598).

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For purposes of sealing, the Ninth Circuit has adopted the definition of “trade secrets” set forth in

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the Restatement of Torts, holding that “[a] trade secret may consist of any formula, pattern, device

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or compilation of information which is used in one’s business, and which gives him an opportunity

United States District Court
For the Northern District of California

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to obtain an advantage over competitors who do not know or use it.” Clark v. Bunker, 453 F.2d

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1006, 1009 (9th Cir. 1972) (quoting Restatement of Torts § 757, cmt. b). “[P]ricing terms, royalty

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rates, and guaranteed minimum payment terms” clearly fall within the definition of “trade secrets”

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for purposes of sealing motions. See In re Electronic Arts, 298 Fed. App’x 568, 569 (9th Cir.

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2008). Additionally, “compelling reasons” may exist if sealing is required to prevent judicial

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documents from being used “‘as sources of business information that might harm a litigant’s

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competitive standing.’” Id. (citing Nixon, 435 U.S. at 598).

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The Worldwide Quarterly Mobile Phone Tracker 2012Q2 is “a massive collection of recent

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data and analysis regarding mobile phone and smartphone markets with a wide geographic scope.”

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IDC Mot. at 2 (citing Decl. Crawford Del Prete Supp. IDC’s Motion to Seal (“Del Prete Decl.”)

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¶¶3-6). To protect this valuable proprietary work product, IDC imposes strict controls on what its

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customers may do with it. Del Prete Decl. ¶ 7. If a customer wishes to distribute or otherwise use

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the Tracker, or any part of it, externally, it must first obtain IDC’s express written consent. Id. ¶ 7,

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Ex. A ¶2(d).

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Apple originally purchased the Tracker from IDC for over $400,000 under a strict

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confidentiality agreement. See id. ¶¶ 8, 15. Since its sale, IDC has not consented to Apple or

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Samsung using the Tracker in any manner that would cause it to become public information. Id.

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¶ 9. IDC only gave Apple permission to produce and use the Tracker in response to a discovery

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request from Samsung in this litigation on the express condition that the material be marked
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Case No.: 11-CV-01846-LHK
ORDER GRANTING NON-PARTY IDC RESEARCH INC.’S ADMINISTRATIVE MOTION TO SEAL

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“Highly Confidential—Attorney’s Eyes Only.” See id. ¶ 10.

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IDC contends that its overriding interest in maintaining the highly sensitive proprietary data

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and analysis that IDC features in its trackers is a compelling reason to seal the document. IDC also

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notes that Courts have routinely found a compelling interest in protecting the type of confidential

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information contained in the Tracker. IDC Mot. at 4 (citing, as an example, In re Adobe Sys., Inc.

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Sec. Litig., 141 F.R.D. 155, 161-62 (N.D. Cal. 1992)).

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As IDC’s business model revolves around gathering and selling data and reports of this

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nature, the Court agrees that public disclosure of the Tracker could cause IDC substantial

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commercial harm. First, if the Tracker were made publically available, IDC’s prospective

United States District Court
For the Northern District of California

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customers would have no need to purchase it at all. See Del Prete Decl. ¶ 15. Second, public

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disclosure of the Tracker could provide a windfall to IDC’s competitors and thereby place IDC at a

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competitive disadvantage. Id. ¶ 16. In contrast to the great potential for harm to IDC, the Court

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finds that the public’s interest in accessing the raw data contained within the spreadsheet is

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relatively low. The public’s interest in understanding the outcome of this action will be sufficiently

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satisfied by data contained in other documents derived from the Tracker, see Wagner PI Decl. Exs.

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2, 29, but which do not reveal the full extent of the vast amount of information contained within the

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Tracker itself.

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Thus, the Court finds that IDC has set forth compelling reasons to maintain the Tracker

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under seal. Accordingly, the Court GRANTS IDC’s Motion to Seal Exhibit 199 to the Wagner

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Declaration in its entirety.

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IT IS SO ORDERED.

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Dated: July 24, 2013

_________________________________
LUCY H. KOH
United States District Judge

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Case No.: 11-CV-01846-LHK
ORDER GRANTING NON-PARTY IDC RESEARCH INC.’S ADMINISTRATIVE MOTION TO SEAL