VLSI Technology LLC v. Intel Corporation
Filing
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ORDER GRANTING ADMINISTRATIVE MOTIONS ( 542 , 546 as corrected by 550 ) TO CONSIDER WHETHER ANOTHER PARTYS MATERIAL SHOULD BE SEALED. Signed by Judge Beth Labson Freeman on 10/16/2023. (blflc3, COURT STAFF) (Filed on 10/16/2023)
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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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VLSI TECHNOLOGY LLC,
Plaintiff,
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v.
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United States District Court
Northern District of California
Case No. 17-cv-05671-BLF
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INTEL CORPORATION,
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Defendant.
ORDER GRANTING
ADMINISTRATIVE MOTION TO
CONSIDER WHETHER ANOTHER
PARTY’S MATERIAL SHOULD BE
SEALED
[Re: ECF Nos. 542, 546, 550]
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Before the Court are VLSI Technology LLC’s (“VLSI”) Administrative Motions regarding
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its Daubert Motion to Exclude Damages Opinions of Intel's Experts (ECF No. 544) and its
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Daubert Motion to Exclude Technical Opinions of Intel's Experts (ECF No. 545):
1. Administrative Motion to Consider Whether Another Party's Material Should Be
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Sealed re: VLSI's Motion to Exclude Damages Opinions of Intel's Experts, and
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Exhibits Thereto. ECF No. 542.
2. Administrative Motion to Consider Whether Another Party's Material Should Be
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Sealed re VLSI's Daubert Motion to Exclude Technical Opinions of Intel's Experts.
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ECF No. 546.
3. Administrative Motion to Consider Whether Another Party's Material Should Be
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Sealed (Correction of ECF No. 546). ECF No. 550.
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For the reasons described below, the Administrative Motions are GRANTED.
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I.
BACKGROUND
VLSI filed its Daubert Motion to Exclude Damages Opinions of Intel's Experts (“Damages
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Motion”) on July 25, 2023. ECF No. 544. That same day, VLSI filed an Administrative Motion
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to File Under Seal regarding VLSI’s information in the Motion. ECF No. 542. Intel Corporation
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(“Intel”) filed a declaration and exhibits in support of VLSI’s administrative motion. ECF Nos.
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618, 619. NXP Semiconductors USA, Inc., NXP Semiconductors B.V. and Freescale
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Semiconductor Inc. (collectively “NXP”) also filed a declaration in support of VLSI’s
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administrative motion. ECF No. 621. VLSI did not name NXP in ECF No. 542, but the Court
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nonetheless considers NXP’s declaration in the interest of judicial economy.
VLSI filed its Daubert Motion to Exclude Technical Opinions of Intel's Experts
United States District Court
Northern District of California
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(“Technical Motion”) on July 25, 2023. ECF No. 545. The next day, VLSI filed an
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Administrative Motion to File Under Seal regarding VLSI’s information in the Motion. ECF No.
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546. VLSI subsequently filed a correction to ECF No. 546 with updated exhibits. ECF No. 550.
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Intel filed a declaration and exhibits in support of VLSI’s Administrative Motion. ECF Nos. 620,
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622.
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II.
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LEGAL STANDARD
“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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presumption in favor of access’ is the starting point.” Id. (quoting Foltz v. State Farm Mut. Auto.
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Ins. Co., 331 F.3d 1122, 1135 (9th Cir. 2003)). Parties seeking to seal judicial records relating to
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motions that are “more than tangentially related to the underlying cause of action” bear the burden
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of overcoming the presumption with “compelling reasons” that outweigh the general history of
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access and the public policies favoring disclosure. Ctr. for Auto Safety v. Chrysler Grp., 809 F.3d
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1092, 1099 (9th Cir. 2016); Kamakana, 447 F.3d at 1178–79.
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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,” however, are not subject to the strong presumption of access. Ctr. for Auto Safety, 809
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F.3d at 1099; see also Kamakana, 447 F.3d at 1179 (“[T]he public has less of a need for access to
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court records attached only to non-dispositive motions because those documents are often
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unrelated, or only tangentially related, to the underlying cause of action.”). Parties moving to seal
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the documents attached to such motions must meet the lower “good cause” standard of Rule
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26(c). Kamakana, 447 F.3d at 1179 (internal quotations and citations omitted). This standard
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requires a “particularized showing,” id., that “specific prejudice or harm will result” if the
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information is disclosed. Phillips ex rel. Estates of Byrd v. Gen. Motors Corp., 307 F.3d 1206,
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1210–11 (9th Cir. 2002); see Fed. R. Civ. P. 26(c). “Broad allegations of harm, unsubstantiated
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by specific examples of articulated reasoning” will not suffice. Beckman Indus., Inc. v. Int'l Ins.
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Co., 966 F.2d 470, 476 (9th Cir. 1992).
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III.
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United States District Court
Northern District of California
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DISCUSSION
The documents at issue in VLSI’s motions to seal are associated with its Daubert motions.
These opinions concern infringement and invalidity of the patents at issue in the case, available
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damages for the alleged infringement, and efforts to strike or exclude expert opinions. These
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issues are “more than tangentially related to the merits of [the] case” and therefore the parties must
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provide “compelling reasons” for maintaining the documents under seal. See Ctr. for Auto Safety,
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809 F.3d at 1101; see also Finjan, Inc. v. Juniper Network, Inc., No. C 17-5659 WHA, 2021 WL
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1091512, at *1 (N.D. Cal. Feb. 10, 2021).
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A.
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ECF No. 542 (Damages Motion)
i.
Intel
Intel seeks to seal selected portions of VLSI’s Damages Motion and its exhibits. Intel
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writes that licensing information should be sealed because “[p]ublic disclosure of information
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regarding the payment terms from Intel’s license agreements, the scope of Intel’s license
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agreements and other terms from Intel’s agreements could negatively affect Intel’s future licenses
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and settlements and negotiations for such agreements.” ECF No. 618 ¶ 13. Intel adds that
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financial information should be sealed because “[d]isclosure of information regarding Intel’s
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financials and financial decisions—such as product pricing; discounts and criteria Intel uses for
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pricing; and Intel’s revenue, profits, and costs—would provide competitors and potential
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counterparties with unfair insight into Intel’s business strategies and cost/benefit analyses.” Id. ¶
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15. Intel contends that it “ has narrowly identified for redaction with yellow highlighting the
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portions of VLSI’s Daubert memorandum that reveal highly confidential licensing information.”
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Id. ¶ 17.
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The Court finds that compelling reasons exist to seal the highlighted portions of the
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document. See Finjan, Inc. v. Proofpoint, Inc., No. 13-CV-05808-HSG, 2016 WL 7911651, at *1
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(N.D. Cal. Apr. 6, 2016) (finding “technical operation of [defendant's] products” sealable under
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“compelling reasons” standard); Exeltis USA Inc. v. First Databank, Inc., No. 17-CV-04810-HSG,
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2020 WL 2838812, at *1 (N.D. Cal. June 1, 2020) (noting that courts have found “confidential
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business information” in the form of “business strategies” sealable under the compelling reasons
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standard.). The Court also finds that the request is narrowly tailored. The Court’s ruling is
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summarized below:
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ECF or
Document
Exhibit No.
VLSI’s
Memorandum
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United States District Court
Northern District of California
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Ex. 1
Excerpt from
Yellow
the transcript of highlighted
the deposition portions
of Patrick Fay
Ex. 2
Excerpt from
Yellow
June 1, 2023
highlighted
Rebuttal Expert portions
Report of
Patrick Fay
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Portion(s) to
Seal
Yellow
highlighted
portions
Ruling
Granted, as yellow highlighted portions of
VLSI’s memorandum on page 11 reveals
highly confidential licensing information
regarding payment terms. Selwyn Decl. ¶ 17.
Granted, as yellow highlighted portions of
Exhibit 1 on page 34 reveals highly
confidential technical information regarding
design details and/or operation of accused
features in Intel’s products. Selwyn Decl. ¶ 18.
Granted, as yellow highlighted portions of
Exhibit 2 on pages 85-92 reveals highly
confidential technical information regarding
design details and/or operation of accused
features in Intel’s products. Selwyn Decl. ¶
19a.
Furthermore, yellow highlighted portions of
Exhibit 2 on pages 282-83, 289, 293, 304, 314,
324, 333, 339, 374, 422, and 447 reveal highly
confidential information regarding Intel’s
licenses, including payment terms from Intel’s
license agreements, the scope of Intel’s license
agreements, and other confidential licensing
information. Selwyn Decl. ¶ 19b. Intel also seeks
to seal the names of the counterparties to these
agreements in Exhibit 2 because the names of
counterparties to Intel’s agreements are
maintained in confidence by Intel, and Intel is
under confidentiality obligations to the
counterparties not to reveal that information.
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Ex. 4
Excerpt from
Yellow
June 1, 2023
highlighted
Rebuttal Expert portions
Report of
Lauren
R. Kindler
Public disclosure of these counterparties could
provide competitors and potential counterparties
to licensing, acquisition, and settlement
agreements with an unfair insight into Intel’s
business strategies. Id. Likewise, public
disclosure of the patents covered by a license
agreement could reveal confidential information
about the scope of the patent license and provide
insight into the structure of Intel’s licenses and
licensing strategy. Id.
Granted, as yellow highlighted portions of
Exhibit 4 on pages 67 (paragraph 145), 75
(paragraph 157), 95 (paragraph 186), 121
(paragraph 222, fn. 457) reveal highly
confidential technical information regarding
design details and/or operation of accused
features in Intel’s products. Selwyn Decl. ¶
20a.
United States District Court
Northern District of California
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Furthermore, yellow highlighted portions of
Exhibit 4 on pages 66 (paragraph 143.d,
fn.198), 73-74 (paragraph b, fn.235), 80
(paragraph 166.b, fn.264), 87 (paragraph 175.f,
fn.302), 94 (paragraph 184.d, fn.334), 106-7
(paragraph 202.b, fn. 390), 112-13 (paragraph
211.b, fn. 416), 120 (paragraph 220.e, fn.450),
126 (paragraph 229.a, fn. 480) reveal highly
confidential information regarding Intel’s sales.
Selwyn Decl. ¶ 20b.
Furthermore, yellow highlighted portions of
Exhibit 4 on pages 65-67, 73-75, 79-81, 86-88,
93-95, 106-108, 112-114, 118-121, and 126127 reveal highly confidential information
regarding Intel’s licenses, including payment
terms from Intel’s license agreements, the scope
of Intel’s license agreements, and other
confidential licensing information. Selwyn
Decl. ¶ 20c. Intel also seeks to seal the names of
the counterparties to these agreements in
Exhibit 4 because the names of counterparties
to Intel’s agreements are maintained in
confidence by Intel, and Intel is under
confidentiality obligations to the counterparties
not to reveal that information. Public disclosure
of these counterparties could provide
competitors and potential counterparties to
licensing, acquisition, and settlement
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Ex. 6
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Excerpt from
Yellow
June 1, 2023
highlighted
Rebuttal Expert portions
Report of M.
Ray Perryman
agreements with an unfair insight into Intel’s
business strategies. Id. Likewise, public
disclosure of the patents covered by a license
agreement could reveal confidential information
about the scope of the patent license and
provide insight into the structure of Intel’s
licenses and licensing strategy. Id. Moreover,
public disclosure of the patents covered by a
license agreement in conjunction with the
expert’s analysis of those patents could provide
competitors with insight into the technical
functionality of Intel’s products. Id.
Granted, as yellow highlighted portions of
Exhibit 6 on page 65 (paragraph 136, fn. 243,
fn. 244) reveal highly confidential technical
information regarding design details and/or
operation of accused features in Intel’s
products. Selwyn Decl. ¶ 21a.
United States District Court
Northern District of California
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Furthermore, yellow highlighted portions of
Exhibit 6 on pages 58, 59, 64, and
65 (paragraph 134) reveal highly confidential
information regarding Intel’s financial
decisions including Intel’s strategy for pricing
and the criteria Intel uses for pricing, and
Intel’s revenue, profits, and costs. Selwyn
Decl. ¶ 21b.
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Ex. 8
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Furthermore, yellow highlighted portions of
Exhibit 8 on page 48 (paragraph 94) reveal
highly confidential information regarding
Intel’s licensing negotiation strategy. Selwyn
Decl. ¶ 22b.
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Excerpt from
Yellow
June 22, 2023
highlighted
Reply Report of portions
Ryan Sullivan
Furthermore, yellow highlighted portions of
Exhibit 6 on page 29 reveal highly confidential
information regarding Intel’s licensing
negotiation strategy. Selwyn Decl. ¶ 21c.
Granted, as yellow highlighted portions of
Exhibit 8 on pages 48 (paragraph 95), 49, 50,
74, and 81-84 reveal, or could be used to
derive, highly confidential information
regarding Intel’s financial decisions, including
Intel’s strategy for pricing and the criteria
Intel uses for pricing, and Intel’s revenue,
profits, and costs and sales volume. Selwyn
Decl. ¶ 22a.
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ii.
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NXP seeks to seal selected portions of VLSI’s Damages Motion and its exhibits. NXP
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United States District Court
Northern District of California
NXP
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writes that the information should be sealed because “the exhibits that NXP seeks to seal all relate
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to highly-confidential information regarding its past and current intellectual property licensing and
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monetization practices, activities, capabilities, and efforts. Public disclosure of this information
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would provide NXP’s competitors with sensitive information regarding NXP’s internal business
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practices, as well as its relationships with other companies in the semiconductor industry and the
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patent licensing industry, thus disadvantaging NXP in future business and contract negotiations. It
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would also adversely affect NXP’s efforts to enter into intellectual property arrangements with
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other companies.” ECF No. 621 ¶¶ 7-11. NXP contends that it “narrowly tailored its proposed
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redactions only to information that maintains in confidence in the regular course of its business.”
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Id. ¶ 6.
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The Court finds that compelling reasons exist to seal the highlighted portions of the
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document. See Finjan, Inc. v. Proofpoint, Inc., No. 13-CV-05808-HSG, 2016 WL 7911651, at *1
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(N.D. Cal. Apr. 6, 2016) (finding “technical operation of [defendant's] products” sealable under
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“compelling reasons” standard); Exeltis USA Inc. v. First Databank, Inc., No. 17-CV-04810-HSG,
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2020 WL 2838812, at *1 (N.D. Cal. June 1, 2020) (noting that courts have found “confidential
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business information” in the form of “business strategies” sealable under the compelling reasons
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standard.). The Court also finds that the request is narrowly tailored. The Court’s ruling is
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summarized below:
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ECF or
Exhibit No.
ECF 542-5
Ex. 4 to
VLSI’s
Motion to
Exclude
Damages
Opinions
Document
Portion(s) to
Seal
Excerpts from Blue-boxed
the June 1, 2023 portions in ¶¶
Rebuttal Expert 91- 92, 143,
Report of
154-155, 157.
Lauren Kindler
Ruling
Granted, as the document identifies and
describes (1) confidential patent agreements
entered into between NXP/Freescale and other
parties, (2) confidential intellectual property
licensing and monetization practices, activities,
capabilities, and efforts by NXP and Freescale,
and (3) confidential testimony from current
and former employees of NXP and Freescale
regarding its intellectual property practices.
See infra ¶¶ 6-11.
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United States District Court
Northern District of California
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ECF 542-7
Ex. 6 to
VLSI’s
Motion to
Exclude
Damages
Opinions
Excerpts from
the June 1,
2023 Rebuttal
Expert Report
of Dr. M. Ray
Perryman
Blue-boxed
portions in ¶¶
68-69.
Granted, as the document identifies and
describes confidential intellectual property
licensing and monetization practices, activities,
capabilities, and efforts by NXP and Freescale.
See infra ¶¶ 6, 8.
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B.
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Intel seeks to seal selected portions of VLSI’s Technical Motion and its exhibits. Intel
ECF No. 546 (Technical Motion)
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writes that licensing information should be sealed because “[m]aintaining the confidentiality of
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technical information about Intel’s product design and operation, including for proposed designs,
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and manufacturing processes is critical to Intel’s business. Knowledge of this information by third
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parties would put Intel at a competitive disadvantage in future product development and in its
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business dealings as its competitors could incorporate that information into their own development
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strategies and products to gain an unfair advantage over Intel in the market.” ECF No. 620 ¶ 11.
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Intel contends that it “ narrowly tailored to the design details, operation and manufacturing
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processes of accused product features and certain Intel product prior art.” Id. ¶ 15.
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The Court finds that compelling reasons exist to seal the highlighted portions of the
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document. See Finjan, Inc. v. Proofpoint, Inc., No. 13-CV-05808-HSG, 2016 WL 7911651, at *1
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(N.D. Cal. Apr. 6, 2016) (finding “technical operation of [defendant's] products” sealable under
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“compelling reasons” standard); Exeltis USA Inc. v. First Databank, Inc., No. 17-CV-04810-HSG,
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2020 WL 2838812, at *1 (N.D. Cal. June 1, 2020) (noting that courts have found “confidential
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business information” in the form of “business strategies” sealable under the compelling reasons
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standard.). The Court also finds that the request is narrowly tailored. The Court’s ruling is
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summarized below:
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ECF or
Exhibit No.
Document
Portion(s) to
Seal
VLSI’s Motion Yellow
to Strike Certain highlighted
Portions of
portions
Intel’s Technical
Expert Reports
Ruling
Granted, as yellow highlighted portions contain
highly confidential technical information
regarding design details, operation and
manufacturing processes of accused product
features. Selwyn Decl. ¶¶ 13, 15.
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1
Ex. 6
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3
4
Ex. 8
5
Excerpt of
Rebuttal Expert
Report of
Patrick Fay,
Ph.D.
Excerpt of
Expert Report of
Patrick Fay,
Ph.D.
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7
Yellow
highlighted
portions
Granted, as yellow highlighted portions contain
highly confidential technical information
regarding design details, operation and
manufacturing processes of accused product
features. Selwyn Decl. ¶¶ 13, 15.
Granted, as yellow highlighted portions contain
highly confidential technical information
regarding design details, operation and
manufacturing processes of certain Intel
product prior art. Selwyn Decl. ¶¶ 14-15.
ORDER
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For the foregoing reasons, IT IS HEREBY ORDERED that:
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1. VLSI’s Administrative Motion (ECF No. 542) is GRANTED.
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United States District Court
Northern District of California
IV.
Yellow
highlighted
portions
2. VLSI’s Administrative Motion (ECF No. 546, as corrected by ECF No. 550) is
GRANTED.
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Dated: October 16, 2023
______________________________________
BETH LABSON FREEMAN
United States District Judge
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