Innolux Corporation v. Applied Materials, Inc. et al

Filing 24

ORDER by Judge Lucy Koh denying 2 Administrative Motion to File Under Seal (lhklc2S, COURT STAFF) (Filed on 8/14/2015)

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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
Northern District of California

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INNOLUX CORPORATION,
Plaintiff,

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Case No. 15-CV-01777-LHK
ORDER DENYING MOTION TO SEAL

v.

Re: Dkt. No. 2

APPLIED MATERIALS, INC., et al.,
Defendants.

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Before the Court is an administrative motion to seal filed by Plaintiff Innolux Corporation

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(“Innolux”). ECF No. 2 (“Motion”). Innolux seeks to seal portions of the Complaint, as well as

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two exhibits attached thereto. Id. at 1-2.

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“Historically, courts have recognized a ‘general right to inspect and copy public records

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and documents, including judicial records and documents.’” Kamakana v. City & Cnty. of

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Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006) (quoting Nixon v. Warner Commc’ns, Inc., 435

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U.S. 589, 597 & n.7 (1978)). Accordingly, when considering a sealing request, “a strong

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presumption in favor of access is the starting point.” Id. (internal quotation marks omitted).

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Parties seeking to seal judicial records relating to dispositive motions bear the burden of
overcoming the presumption with “compelling reasons supported by specific factual findings” that
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Case No. 15-CV-01777-LHK
ORDER DENYING MOTION TO SEAL

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outweigh the general history of access and the public policies favoring disclosure. Kamakana, 447

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F.3d at 1178-79. Compelling reasons justifying the sealing of court records generally exist “when

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such ‘court files might have become a vehicle for improper purposes,’ such as the use of records to

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gratify private spite, promote public scandal, circulate libelous statements, or release trade

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secrets.” Id. at 1179 (quoting Nixon, 435 U.S. at 598). However, “[t]he mere fact that the

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production of records may lead to a litigant’s embarrassment, incrimination, or exposure to further

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litigation will not, without more, compel the court to seal its records.” Id. Where, as here, a party

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seeks to seal all or part of a complaint, the party must meet the “compelling reasons” standard. In

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re NVIDIA Corp. Derivative Litig., No. C 06-06110 SBA, 2008 WL 1859067, at *3 (N.D. Cal.
Apr. 23, 2008) (“While a complaint is not, per se, the actual pleading by which a suit may be

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United States District Court
Northern District of California

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disposed of, it is the root, the foundation, the basis by which a suit arises and must be disposed

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of.”). Courts have held that a motion to seal exhibits attached to a complaint must also meet the

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compelling reasons standard. See, e.g., Adema Technologies, Inc. v. Wacker Chemie AG, No. 5:13-

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CV-05599-PSG, 2013 WL 6622904, at *1 (N.D. Cal. Dec. 16, 2013).

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Furthermore, pursuant to Rule 26(c), a trial court has broad discretion to permit sealing of

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court documents for, inter alia, the protection of “a trade secret or other confidential research,

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development, or commercial information.” Fed. R. Civ. P. 26(c)(1)(G). The Ninth Circuit has

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adopted the definition of “trade secrets” set forth in the Restatement of Torts, holding that “[a]

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trade secret may consist of any formula, pattern, device or compilation of information which is

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used in one’s business, and which gives him an opportunity to obtain an advantage over

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competitors who do not know or use it.” Clark v. Bunker, 453 F.2d 1006, 1009 (9th Cir. 1972)

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(quoting Restatement (First) of Torts § 757 cmt. b). “Generally [a trade secret] relates to the

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production of goods. . . . It may, however, relate to the sale of goods or to other operations in the

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business. . . .” Id. (ellipses in original). In addition, the U.S. Supreme Court has recognized that

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sealing may be justified to prevent judicial documents from being used “as sources of business

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information that might harm a litigant’s competitive standing.” Nixon, 435 U.S. at 598.

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In addition, parties moving to seal documents must comply with the procedures established
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Case No. 15-CV-01777-LHK
ORDER DENYING MOTION TO SEAL

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by Civil Local Rule 79-5. Pursuant to that rule, a sealing order is appropriate only upon a request

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that establishes the document is “sealable,” or “privileged or protectable as a trade secret or

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otherwise entitled to protection under the law.” Civ. L. R. 79-5(b). “The request must be narrowly

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tailored to seek sealing only of sealable material, and must conform with Civil L.R. 79-5(d).” Id.

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Civil Local Rule 79-5(d), moreover, requires the submitting party to attach a “proposed order that

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is narrowly tailored to seal only the sealable material” and that “lists in table format each

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document or portion thereof that is sought to be sealed,” as well as an “unredacted version of the

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document” that “indicate[s], by highlighting or other clear method, the portions of the document

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that have been omitted from the redacted version.” Id.
With these standards in mind, the Court rules on the instant Motion as follows:

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United States District Court
Northern District of California

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Motion to Seal
ECF No.
2
2-4

Document to be Sealed
Unredacted version of
Complaint.

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2-5

Exhibit A to Complaint

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2-6

Exhibit B to Complaint

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Ruling
DENIED WITH PREJUDICE
because the material sought to
be sealed is not sealable.
DENIED WITHOUT
PREJUDICE because the
request is not “narrowly
tailored.” Civ. L.R. 79-5(b).
DENIED WITHOUT
PREJUDICE because the
request is not “narrowly
tailored.” Civ. L.R. 79-5(b).

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If Innolux wishes to file a renewed motion to seal, it must do so within seven (7) days of

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the date of this Order. The Court finds Innolux’s current sealing request overly broad. Innolux’s

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sealing request should be consistent with Ninth Circuit case law regarding sealing, including In re:

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Electronic Arts, Inc., 298 F. App’x 568 (9th Cir. 2008).

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IT IS SO ORDERED.

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Dated: August 14, 2015
______________________________________
LUCY H. KOH
United States District Judge

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Case No. 15-CV-01777-LHK
ORDER DENYING MOTION TO SEAL