Lifenet Health v. Lifecell Corporation
Filing
437
OPINION AND ORDER Denying 425 Motion to Seal. Signed by District Judge Henry C. Morgan, Jr and filed on 1/9/15. Copies distributed to all parties 1/9/15. (ldab, )
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
Norfolk Division
LIFENET HEALTH,
Plaintiff,
v.
Civil Action No. 2:13cv486
LIFECELL CORPORATION,
Defendant.
OPINION AND ORDER
This matter is before the Court upon Defendant LifeCell Corp.'s ("Defendant") Motion to
Seal Portions of the Trial Transcripts Containing Defendant's Trade Secrets and Third Party
Confidential Information ("Motion"). Doc. 425.
For the reasons stated herein, the Court
DENIES the Motion at this time.
1.
BACKGROUND
On September 6,2013, Plaintiff LifeNet Health ("Plaintiff or "LifeNet") filed a one-count
Complaint, alleging that Defendant infringed U.S. PatentNo. 6,569,200 ("the'200 Patent"). Doc.
1. An eleven-day jury trial commenced on November 3,2014. On November 18,2014, thejury
returned a verdict in favor of Plaintiff, finding that certain of Defendant's products infringed
claims 1,2,3,4,7, 8,and 10 of the '200 Patent, and that said claims were not invalid asanticipated,
obvious, or for lack of enablement. Doc. 369. The jury found that Plaintiff was entitled to a
lump sum royalty of $34,741,871. ]d. On November 20, 2014, judgment was entered in that
amount, in addition to Plaintiffs costs of action.
Doc. 395.
Prior to trial, Defendant moved on October 30, 2014, to seal documents and close the
courtroom during the presentation of confidential material at trial. Doc. 318. The Court denied
the Motion at that time, unable to "make the determination that the presence oftrade secrets and
financial information outweighs the public's First Amendment right to access court proceedings."
Doc. 325 at 2. However, upon the showing of a need for sealing, the Court ultimately sealed
certain trial exhibits admitted into evidence during the course of the trial. Doc. 410. While the
Court never closed the courtroom during the course ofthe proceedings, the Court placed observers
under the Court's previously entered protective order.1 Doc. 426 at 1; see ajso Doc. 390 at 34.
The instant Motion was filed on December 19, 2014. Doc. 426. No opposition has been
filed by Plaintiff.
2.
LEGAL STANDARD
"Trial exhibits, including documents previously filed under seal, and trial transcripts will
not befiled under seal except upon a showing of necessity demonstrated tothe trial judge." Local
R. of Civ. P. 5(H). Any motion for a protective order providing prospectively for filing of
documents under seal shall be accompanied by a non-confidential supporting memorandum, a
notice that identifies the motion as a sealing motion, and a proposed order." Id. 5(C).
While there is a general common law right of public access to judicial proceedings, the
United States Supreme Court has recognized that such right is "not absolute." Nixon v. Warner
Commc'ns. Inc. , 435 U.S. 589, 598 (1978). One of the recognized exceptions is when a party
seeks to protective commercially sensitive information, such as trade secrets, from public
disclosure. Id.
The Fourth Circuit has approved of partial sealing of court proceedings when
trade secrets will be disclosed, but such sealing should be limited to "only those portions necessary
1 When the Court took this action during the trial, it noted that the only observers up to that point had been court
personnel, who are already under a duty ofconfidentiality, attorneys, witnesses, and party representatives. Doc. 390
at 34. This remained constant throughout the course of the trial. Moreover, when the Court asked if any observers
objected to being placed under the protective order, no one objected. Id.
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to prevent the disclosure oftrade secrets." Woven Elecs. Corp. v. Advance Group, Inc., 930 F.2d
913, 1991 WL 54118, at *6 (table disposition).
3.
DISCUSSION
In Woven Electronics, although an unpublished decision, the Fourth Circuit joined other
circuits in finding that the presence oftrade secrets can warrant the closing ofcourt to the public.
Woven Elecs., 1991 WL 54118, at *6. The Fourth Circuit, however, was clear that it was "not
announcing a blanket rule that the presence of trade secrets will in every case and at all events
justify the closure of a hearing or trial. In these sensitive situations courts must proceed
cautiously and with due regard tothe unique facts involved ineach case." Id. This isbecause the
First Amendment right of access extends to civil trial. American Civil Liberties Union v. Holder.
673 F.3d 245, 252 (4th Cir. 2011).
The Fourth Circuit in Woven Electronics further instructed that in a case involving trade
secrets, that the record should "be sealed to the extent necessary to prevent the release of trade
secrets." Woven Elecs.. 1991 WL 54118, at *6. However, this does not warrant "a blanket
sealing of the record;" rather, the Court shall "seal only those portions necessary to prevent the
disclosure of trade secrets." IcL (quoting In re Iowa Freedom of Information Council, 724 F.2d
658, 663-64 (8th Cir. 1983)). "Such a partial sealing strikes an appropriate balance between the
public's right of access tojudicial records and proceedings andthe parties' legitimate interest in the
protection of sensitive proprietary information." Id.
Mindful ofthe delicate balance between ensuring public access and Defendant's right to the
protection of its trade secrets, the Court has taken numerous actions short of closing the entire
courtroom. It placed observers under the protective order in this case, sealed exhibits admitted
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into evidence during the course of trial, sealed exhibits submitted in support of the numerous
pre-trial motions, and redacted Court orders to limit the disclosure ofsensitive information. The
four areas of information that Defendant wishes redacted from the transcript, which covers its
preservation technology, its manufacturing processes, information subject to third-party
confidentiality agreements, and information concerning ongoing research and development
projects, are consistent with the type of information that the Court has previously sealed or
redacted, and is further consistent with the case law.
See^ e^j., Nixon. 435 U.S. at 598
(considering "sources of business information that might harm a litigant's competitive standing to
be an interest outweighing the right to public access) Woven Electronics. 1991 WL 54118, at *3
(finding plaintiffs manufacturing process involved atrade secret); ResScan. Inc. v. Bureau ofNat.
Affairs. Inc.. No. I:llcvll29, 2011 WL 5239221, at *3 (E.D. Va. Nov. 1, 2011) (finding that
protection oftrade secrets can override the First Amendment right to access incertain instances).
In the instant Motion, Defendant has identified one hundred and thirty-eight (138) sections
of the transcript that it wishes to redact. The problem with the request as currently presented to
the Court is that the majority of the requests are not sufficiently narrowly tailored to remove only
the confidential information. One passage is illustrative of this problem. Defendant asks the
Court to redact the portion of the transcript from page 583, line 23 to page 584, line 3. This
particular passage contains the identity of four plasticizers that Defendant wishes redacted.
However, in this passage the Court is asking counsel about an important exhibit that showed
removal of plasticizer from one of the accused skin grafts. The removal of plasticizer from the
skin graft was one of the more important issues in the case. While the Court is inclined to redact
the specific identity of the plasticizers, redacting the entirety of this important passage, and others
like it, does not give the public an opportunity to truly understand the issues in this case.
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Moreover, a less drastic alternative to complete redaction of some of these terms exists.
Instead of complete redaction of the specific plasticizers that Defendant wishes redacted, a
placeholder such as"plasticizer" or "additive" can beused. Thus, public access is protected in the
sense that the public can gain a greater understanding of the case, while protecting Defendant's
trade secrets that show the specific amount or specific cocktail of ingredients in its products.
Thus, the Court will DENY the Motion to Seal at this time. If Defendant wishes to redact
portions of the transcript, it must provide the Court with more specific, targeted proposed
redactions. Such proposed redactions must include copies of pages highlighting the specific
redactions that Defendant wishes or key words or phrases that can be redacted. Defendant shall
provide placeholder terms to substitute for confidential information where it is redacted. The
Court recognizes that technology may exist that allows Defendant to engage in such activity in a
much more efficient manner than the present filing before the Court. To the extent that Defendant
can utilize such technology in conjunction with the court reporters, Defendant is encouraged to
coordinate with them for these purposes.
4.
Conclusion
Accordingly, the Court DENIES the Motion, Doc. 425.
The Clerk is REQUESTED to deliver a copy of this Order to all counsel of record.
It is so ORDERED.
Is!
Henry Coke Morgan, Jr.
Senior United States District Judge^ f^ /a ^
HENRY COKE MORGAN, JR
SENIOR UNITED STATES DISTRICT JUDGE
Norfolk, VA (=^Date: January _7_, 2015
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