Intellectual Property Law Knowledge Center

Flimsy Sealing Order Request Results in the Disclosure of ‘Confidential’ Information

July 9th, 2020

By Philip L. Hirschhorn

The Federal Circuit today affirmed a district court’s denial of a motion for reconsideration of an intervenor’s opposition to a motion to seal.  In Uniloc 2017 LLC v. Apple, Inc., 2019-1922 (Fed. Cir. Jul. 9, 2020), Uniloc had moved to seal the briefing and record associated with Apple’s motion to dismiss premised on a defect in Uniloc’s ownership rights due to a loan default.  The request covered two categories of documents: (1) company confidential materials and (2) third-party confidential materials.  Non-party Electronic Frontier Foundation intervened to obtain public access to the supposedly confidential documents.  The Federal Circuit noted that Uniloc filed three short declarations in support of its sealing request.  The declaration did not address the confidentiality and trade secret status of individual documents, and rather painted with a broad brush.  With respect to the third-party information, some of the third-parties submitted declarations seeking to have their information sealed.  The district court denied the sealing requests finding that Uniloc had failed to provide a compelling reason justifying sealing.  The district court noted that the sealing requests included an astonishing amount of material and quotations and cites from Federal Circuit case law.  Uniloc then sought reconsideration, conceding production of ninety percent of the material and providing specific rationale for the remaining request to seal and/or redact.  The district court denied the reconsideration request.

After addressing and confirming the Federal Circuit’s jurisdiction under the collateral order doctrine, the Court rejected Uniloc’s appeal regarding the company confidential materials.  Finding that public access to court records is strongly presumed, the Court then examined the district court’s interpretation of its local rules.  The applicable local rule required that requests to seal “must be narrowly tailored to seek sealing of only sealable material.” Slip op. at 10 (citing N.D. Cal. Civ. Local R. 79-5(b)).  In support, the party seeking to seal “must file a declaration . . . establishing that all of the designated material is sealable.”  Slip op. at 11 (citing N.D. Cal. Civ. Local R. 79-5(e)(1)).  The opinion suggests that Uniloc effectively conceded that its initial declarations failed to meet this standard, but the offer in reconsideration cured this problem.  The Court disagreed, finding instead that by having failed to make the required showing in the first instance, Uniloc could not overcome the district court’s discretionary denial of reconsideration to protect its own records.

The Court then turned to the third-party information, including licensee materials.  The Federal Circuit reversed the district court’s order with respect to these materials because there had been an insufficient record made.  According to the Court, “we conclude that the district court failed to make findings sufficient to allow us to adequately assess whether it properly balanced the public’s right of access against the interest of third-parties in shielding their financial and licensing information from the public view.”  Slip op. at 20.

The Uniloc 2017 decision highlights the importance at the first opportunity of making the case for sealing in accordance with the local rules of the jurisdiction.  Patent litigators are often working swiftly to produce documents and respond to motions, but significant client and third-party rights can be lost by offering broad-brush confidentiality and trade secret assertions.  Courts are willing to grant the sealing orders, but the obligation of the patent litigator is to provide them a basis for the right result that overcomes the public’s right of access to court proceedings.

If you have questions about motions to seal or other issues in patent litigation, please contact me or another one of the IP attorneys at Panitch Schwarze at 888.291.5676.

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