Federal Trade Commission v. Qualcomm Incorporated

Filing 989

Order by Judge Lucy H. Koh Granting in Part and Denying in Part 959 Administrative Motion to File Under Seal and 961 Administrative Motion to File Under Seal. (lhklc4, COURT STAFF) (Filed on 12/12/2018)

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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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FEDERAL TRADE COMMISSION,

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Plaintiff,

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Case No. 17-CV-00220-LHK
ORDER GRANTING IN PART AND
DENYING IN PART
ADMINISTRATIVE MOTIONS TO
FILE UNDER SEAL

v.
QUALCOMM INCORPORATED,

Re: Dkt. Nos. 959, 961

Defendant.

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Before the Court are the parties’ joint administrative motions to file under seal materials

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filed in connection with the FTC’s oppositions to Qualcomm’s first and second motions in limine.

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Specifically, the parties seek to seal excerpts from the written testimony of third party LG

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Electronics, Inc. (“LGE”), ECF No. 959, and excerpts from the deposition testimony of third party

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Huawei Technologies, Ltd. (“Huawei”). ECF No. 961.

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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 & Cty. 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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Case No. 17-CV-00220-LHK
ORDER GRANTING IN PART AND DENYING IN PART ADMINISTRATIVE MOTIONS TO FILE UNDER
SEAL

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presumption in favor of access is the starting point.” Id. (internal quotation marks omitted).
Parties seeking to seal judicial records relating to motions that are “more than tangentially
related to the underlying cause of action,” Ctr. for Auto Safety v. Chrysler Grp., 809 F.3d 1092,

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1099 (9th Cir. 2016), bear the burden of overcoming the presumption with “compelling reasons

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supported by specific factual findings that outweigh the general history of access and the public

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policies favoring disclosure,” Kamakana, 447 F.3d at 1178–79 (internal quotation marks and

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citation omitted). 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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United States District Court
Northern District of California

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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.

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Records attached to motions that are “not related, or only tangentially related, to the merits

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of a case” are not subject to the strong presumption of access. Ctr. for Auto Safety, 809 F.3d at

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1099; see also Kamakana, 447 F.3d at 1179 (“[T]he public has less of a need for access to court

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records attached only to non-dispositive motions because those documents are often unrelated, or

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only tangentially related, to the underlying cause of action.” (internal quotation marks and citation

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omitted)). Parties moving to seal records attached to motions unrelated or only tangentially

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related to the merits of a case must meet the lower “good cause” standard of Rule 26(c) of the

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Federal Rules of Civil Procedure. Ctr. for Auto Safety, 809 F.3d at 1098–99; Kamakana, 447 F.3d

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at 1179–80. The “good cause” standard requires a “particularized showing” that “specific

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prejudice or harm will result” if the information is disclosed. Phillips ex rel. Estates of Byrd v.

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Gen. Motors Corp., 307 F.3d 1206, 1210–11 (9th Cir. 2002) (citation omitted); see Fed. R. Civ. P.

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26(c). “Broad allegations of harm, unsubstantiated by specific examples or articulated reasoning”

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will not suffice. Beckman Indus., Inc. v. Int’l Ins. Co., 966 F.2d 470, 476 (9th Cir. 1992) (citation

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omitted).

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Case No. 17-CV-00220-LHK
ORDER GRANTING IN PART AND DENYING IN PART ADMINISTRATIVE MOTIONS TO FILE UNDER
SEAL

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

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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
business . . . .” Id. (alterations in original). Furthermore, the United States Supreme Court has

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United States District Court
Northern District of California

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recognized that sealing may be justified to prevent judicial documents from being used “as sources

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

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598.

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In addition, parties moving to seal documents must comply with the procedures established

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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, 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

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narrowly tailored to seek sealing only of sealable material, and must conform with Civil [Local

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Rule] 79-5(d).” Id. Civil Local Rule 79-5(d), moreover, requires the submitting party to attach a

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

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format each document or portion thereof that is sought to be sealed,” as well as an “unredacted

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

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

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the moving party seeks to file under seal a document containing information designated

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confidential by the opposing party, “[w]ithin 4 days of the filing of the Administrative Motion to

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File Under Seal, the [opposing party] must file a declaration as required by subsection 79-

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Case No. 17-CV-00220-LHK
ORDER GRANTING IN PART AND DENYING IN PART ADMINISTRATIVE MOTIONS TO FILE UNDER
SEAL

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5(d)(1)(A) establishing that all of the designated material is sealable.” Civ. L. R. 79-5(e)(1).

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The parties acknowledge that Qualcomm’s motion in limine, which seeks to exclude

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evidence from trial, is “more than tangentially related to the underlying cause of action,” Ctr. for

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Auto Safety, 809 F.3d at 1099, and that the compelling reasons standard applies. ECF No. 959 at

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1. The Court now turns to the substance of the sealing motions, which concerns material that third

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parties LGE and Huawei have designated highly confidential. ECF No. 959 at 2; ECF No. 961 at

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2.

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In Kamakana, the Ninth Circuit held that compelling reasons exist to seal court records
when the records may be used to “release trade secrets.” 447 F.3d at 1179 (citing Nixon, 435 U.S.

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at 598). Moreover, “the common law right of inspection has bowed before the power of a court to

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United States District Court
Northern District of California

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insure that its records are not used . . . as sources of business information that might harm a

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litigant’s competitive standing.” In re Elec. Arts, Inc., 298 F. App’x 568, 569 (9th Cir. 2008)

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(quoting Nixon, 435 U.S. at 598). This Court has previously granted the parties’ motions to seal

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information pertaining to specific “patent licensing agreements or negotiations” on the basis that

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such information reveals competitive sensitive business information. ECF No. 935 at 4. To the

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extent the parties seek to seal such information, the Court agrees that compelling reasons exist to

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seal this information.

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Both motions seek to seal the entirety of exhibits attached to the FTC’s briefing on

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Qualcomm’s motion in limine. Specifically, the parties seek to seal (1) LGE’s written responses

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to the FTC’s and Qualcomm’s Letter of Request Pursuant to the Hague Convention, attached as

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Exhibit 1 to the FTC’s opposition to Qualcomm’s second motion in limine; and (2) excerpts from

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Huawei deposition testimony, attached as Exhibit 1 to the FTC’s opposition to Qualcomm’s first

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motion in limine. However, both LGE and Huawei have provided declarations in support of the

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parties’ joint sealing motions in which both LGE and Huawei declare that only specific, identified

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material in the exhibits reveals competitively sensitive business information. ECF No. 981 (LGE),

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ECF No. 982 (Huawei). For example, LGE declares that disclosure of certain LGE responses

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Case No. 17-CV-00220-LHK
ORDER GRANTING IN PART AND DENYING IN PART ADMINISTRATIVE MOTIONS TO FILE UNDER
SEAL

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reveals trade secrets relating to the “[b]usiness impact of LGE’s purchasing options in the

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baseband processor market,” which could “put LGE at a disadvantage among competitors.” ECF

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No. 981 at 3. Huawei seeks to seal information revealing “the current status and amount of

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disputed royalty payments between Huawei and Qualcomm,” and declares that public disclosure

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“will harm Huawei’s competitive standing.” ECF No. 982 at 2.
Thus, with the Ninth Circuit’s sealing case law in mind, the Court rules on the instant

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motions as follows:

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Motion to
Seal

Page/Line

LGE Written Responses to
Letter of Request, Responses
of Tony Son, ECF No. 959-4

¶¶ 12–15

959

LGE Written Responses to
Letter of Request, Responses
of Tony Son
LGE Written Responses to
Letter of Request, Responses
of Tony Son
LGE Written Responses to
Letter of Request, Responses
of Tony Son

¶¶ 17, 19–27

DENIED as to ¶ 12, but
GRANTED as to the
remainder. The answer to ¶
12 is manifest from ¶ 11,
which LGE does not seek to
seal.
GRANTED.

¶¶ 29–33

GRANTED.

¶¶ 36–42

LGE Written Responses to
Letter of Request, Responses
of Tony Son
LGE Written Responses to
Letter of Request, Responses
of Hwi-Jae Cho
LGE Written Responses to
Letter of Request, Responses
of Hwi-Jae Cho
LGE Written Responses to
Letter of Request, Responses
of Hwi-Jae Cho

¶¶ 44–107

DENIED as to ¶ 38, but
otherwise GRANTED. The
information in ¶ 38 is
revealed in ¶ 43, which LGE
does not seek to seal.
GRANTED.

¶¶ 8–16

GRANTED.

¶¶ 17, 19
(questions and
responses)
¶¶ 21–28

GRANTED.

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959

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959

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959

959

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Ruling

959

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United States District Court
Northern District of California

Document

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GRANTED.

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Case No. 17-CV-00220-LHK
ORDER GRANTING IN PART AND DENYING IN PART ADMINISTRATIVE MOTIONS TO FILE UNDER
SEAL

1

Motion to
Seal

Ruling

LGE Written Responses to
Letter of Request, Responses
of Hwi-Jae Cho
LGE Written Responses to
Letter of Request, Responses
of Hwi-Jae Cho
LGE Written Responses to
Letter of Request, Responses
of Hwi-Jae Cho
LGE Written Responses to
Letter of Request, Responses
of Hwi-Jae Cho
LGE Written Responses to
Letter of Request, Responses
of Hwi-Jae Cho
LGE Written Responses to
Letter of Request, Responses
of Hwi-Jae Cho
LGE Written Responses to
Letter of Request, Responses
of Hwi-Jae Cho

¶¶ 33–36

GRANTED.

¶ 38

GRANTED.

¶¶ 40–43

GRANTED.

¶¶ 45–47

GRANTED.

¶¶ 49–52

GRANTED.

¶¶ 54–57

GRANTED.

¶¶ 59–62

LGE Written Responses to
Letter of Request, Responses
of Hwi-Jae Cho

¶¶ 64–169

959

LGE Written Responses to
Letter of Request, Responses
of Hwi-Jae Cho
LGE Written Responses to
Letter of Request, Responses
of Hwi-Jae Cho
LGE Written Responses to
Letter of Request, Responses
of Hwi-Jae Cho
LGE Written Responses to
Letter of Request, Responses
of Hwi-Jae Cho
LGE Written Responses to
Letter of Request, Responses
of Hwi-Jae Cho

¶¶ 171–80

DENIED as to ¶ 62, but
otherwise GRANTED. ¶ 62
is identical to ¶ 30, which
LGE does not seek to seal.
DENIED as to ¶¶ 68, 90, 92,
106, 109, which are identical
to ¶ 30, which LGE does not
seek to seal. GRANTED as
to the remainder.
GRANTED.

¶¶ 183–208

GRANTED.

¶¶ 210–11

GRANTED.

¶¶ 213–30

GRANTED.

¶¶ 232–45

GRANTED.

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United States District Court
Northern District of California

Page/Line

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Document

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Case No. 17-CV-00220-LHK
ORDER GRANTING IN PART AND DENYING IN PART ADMINISTRATIVE MOTIONS TO FILE UNDER
SEAL

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Motion to
Seal

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Document

Page/Line

LGE Written Responses to
Letter of Request, Responses
of Hwi-Jae Cho
LGE Written Responses

¶¶ 247–58

GRANTED.

All other
portions

Excerpts from Deposition of
Jian Xin Ding, ECF No. 9532
Excerpts from Deposition of
Jian Xin Ding

60:15–18

DENIED. None of the
remaining information is
supported by a declaration
confirming that the
information reveals trade
secrets.
GRANTED.

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961

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961

All other
portions

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United States District Court
Northern District of California

Ruling

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DENIED. None of the
remaining information is
supported by a declaration
confirming that the
information reveals trade
secrets.

IT IS SO ORDERED.
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Dated: December 12, 2018
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______________________________________
LUCY H. KOH
United States District Judge

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Case No. 17-CV-00220-LHK
ORDER GRANTING IN PART AND DENYING IN PART ADMINISTRATIVE MOTIONS TO FILE UNDER
SEAL