Apple Inc. v. Samsung Electronics Co., Ltd. , 727 F.3d 1214 ( 2013 )

United States Court of Appeals
for the Federal Circuit
______________________
APPLE INC.,
Plaintiff-Appellant,
v.
SAMSUNG ELECTRONICS CO., LTD., SAMSUNG
ELECTRONICS AMERICA, INC., AND SAMSUNG
TELECOMMUNICATIONS AMERICA, LLC,
Defendants-Cross Appellants.
______________________
2012-1600, -1606, 2013-1146
______________________
Appeals from the United States District Court for the
Northern District of California in No. 11-CV-1846, Judge
Lucy H. Koh.
______________________
Decided: August 23, 2013
______________________
WILLIAM F. LEE, Wilmer Cutler Pickering Hale and
Dorr LLP, of Boston, Massachusetts, argued for plaintiff-
appellant. With him on the brief were MARK C. FLEMING,
LOUIS W. TOMPROS and ANDREW J. DANFORD; RACHEL L.
WEINER, of Washington, DC; and MARK D. SELWYN, of
Palo Alto, California. Of counsel on the brief were
HAROLD J. MCELHINNY and MICHAEL A. JACOBS, Morrison
& Foerster LLP, of San Francisco, California.
2 APPLE INC. v. SAMSUNG ELECTRONICS CO., LTD.
VICTORIA F. MAROULIS, Quinn Emanuel Urquhart &
Sullivan, LLP, of Redwood Shores, California, argued for
defendants-cross appellants. With her on the brief were
WILLIAM B. ADAMS and KATHLEEN M. SULLIVAN, of New
York, New York.
GREGG P. LESLIE, The Reporters Committee for Free-
dom of the Press, of Arlington, Virginia, for amicus curiae
The Reporter Committee for Freedom of the Press, et al.
With him on the brief was BRUCE D. BROWN.
WILLIAM R. STEIN, Hughes Hubbard & Reed LLP, of
Washington, DC, for amicus curiae The First Amendment
Coalition, of Washington, DC. With him on the brief was
ERIC S. PARNES.
______________________
Before PROST, BRYSON, and O’MALLEY, Circuit Judges.
PROST, Circuit Judge.
In these consolidated appeals, Apple Inc. and Sam-
sung Electronics Company, Ltd., Samsung Electronics
America, Inc., and Samsung Telecommunications Ameri-
ca, LLC (collectively “Samsung”) challenge orders of the
U.S. District Court for the Northern District of California
denying requests to seal various confidential exhibits
attached to pre-trial and post-trial motions. See Apple,
Inc. v. Samsung Electronics Co., No. 11-CV-01846, 2012
WL 3283478 (N.D. Cal. Aug. 9, 2012) (“August Order”);
Apple, Inc. v. Samsung Electronics Co., No. 11-CV-01846,
2012 WL 5988570 (N.D. Cal. Nov. 29, 2012) (“November
Order”) (collectively “Unsealing Orders”). Because the
district court abused its discretion in refusing to seal the
confidential information at issue in the appeals, we re-
verse and remand.
APPLE INC. v. SAMSUNG ELECTRONICS CO., LTD. 3
BACKGROUND
Apple sued Samsung on April 15, 2011, asserting
among other claims that Samsung’s smartphones and
tablets infringed several of Apple’s patents and infringed
Apple’s trade dress embodied in its iPhone and iPad
products. Samsung filed counterclaims, alleging that the
iPhone and iPad infringed several of Samsung’s patents.
The case was tried to a jury beginning on July 30, 2012.
On August 24, 2012, the jury returned a verdict substan-
tially in Apple’s favor, awarding Apple more than $1
billion in damages.
The trial drew an extraordinary amount of attention
from the public and the media, leading some to dub it
“The Patent Trial of the Century.” 1 Consistent with the
extraordinary level of interest in the case, the press was
given extraordinary access to the judicial proceedings.
Unlike many patent trials, which often contain mountains
of sealed exhibits and occasionally have closed courtroom
proceedings, the district court explained to the parties
before the trial that “the whole trial is going to be open.”
J.A. 3. Consequently, the district court agreed to seal
only a small number of trial exhibits. And shortly after
the close of business each day, the parties, by order of the
court, provided the press with electronic copies of every
exhibit used at trial that day. Similarly, most exhibits
attached to pre-trial and post-trial motions were ordered
unsealed.
1 See, e.g., Ashby Jones & Jessica E. Vascellaro,
Apple v. Samsung: The Patent Trial of the Century, WALL
ST. J., July 24, 2012, http://online.wsj.com/article/SB1000
0872396390443295404577543221814648592.html; August
Order at *4 (“[T]his trial is especially unusual in the
extraordinary public interest it has generated.”).
4 APPLE INC. v. SAMSUNG ELECTRONICS CO., LTD.
On appeal, the parties do not challenge many of the
district court’s unsealing orders. Rather, the parties limit
their appeals to a small subset of exhibits attached to pre-
trial and post-trial motions filed by Apple and Samsung.
The district court’s August Order contains its rulings with
respect to pre-trial motions, and the November Order
contains its ruling with respect to post-trial motions.
Below, we recount some of the procedural background
relating to the August and November Orders, respective-
ly.
I
In the months leading up to trial, Apple and Samsung
filed numerous pre-trial motions and exhibits containing
information designated as confidential. Each time they
filed confidential information, the parties also filed ad-
ministrative motions seeking to have the confidential
information sealed. Neither party opposed the other’s
motions to seal, but nonparty Reuters America LLC
intervened and filed an opposition. On July 17, 2012, the
district court denied the motions to seal without preju-
dice. The court granted the parties leave to file renewed
motions to seal, but ordered the parties to carefully scru-
tinize the documents they sought to seal, explaining that
only “exceptionally sensitive information” would be
sealed. J.A. 3.
On July 24, 2012, Apple and Samsung filed renewed
motions to seal. At a hearing on July 27, 2012, the dis-
trict court provided additional guidance on the types of
information it viewed as sealable, and invited the parties
to submit revised versions of their renewed motions.
On July 30, 2012, Apple and Samsung filed another
set of renewed motions, limiting their requests to a frac-
tion of the hundreds of documents that had been the
subject of the parties’ initial requests. In particular,
Apple moved to seal forty-six proposed trial exhibits,
thirty-one exhibits to prior motions filed in the case, one
APPLE INC. v. SAMSUNG ELECTRONICS CO., LTD. 5
brief, and one declaration. The information Apple sought
to seal fell within four categories: (1) confidential financial
information; (2) confidential source code and schematics;
(3) proprietary market research reports; and
(4) confidential licensing information. In most instances,
rather than asking to seal documents in their entirety,
Apple sought only to redact certain information. In
support of its motions to seal, Apple submitted declara-
tions from several Apple employees. The declarations
individually addressed each document Apple sought to
seal, explaining the measures Apple takes to maintain
each document’s confidentiality and describing the com-
petitive harm Apple would suffer from disclosure.
Samsung moved to seal twelve proposed trial exhibits,
thirteen exhibits to prior motions filed in the case, and
two briefs. Samsung sought to seal information falling
within the categories of: (1) confidential financial infor-
mation; (2) confidential source code; (3) future business
plans; and (4) information disclosing its tax accounting
procedures. Like Apple, in most instances, Samsung
sought only to redact certain information from the docu-
ments. And also like Apple, Samsung submitted declara-
tions that explained the measures Samsung takes to
maintain each document’s confidentiality and that de-
scribed the competitive harm Samsung would suffer from
disclosure.
On August 6, 2012, the parties filed a joint stipulation
in which they agreed, among other things, to make public-
ly available certain financial data underlying their dam-
ages calculations. Each party agreed not to challenge the
sufficiency of the evidence to support the other party’s
damages calculations on the ground that the calculations
were not based on more detailed financial information.
They also agreed not to offer into evidence certain docu-
ments containing more detailed financial information that
were the subject of the parties’ motions to seal.
6 APPLE INC. v. SAMSUNG ELECTRONICS CO., LTD.
On August 9, 2012, the district court granted-in-part
and denied-in-part the parties’ motions to seal. In gen-
eral, the court sealed information about the parties’
production and supply capacities, confidential source code,
third-party market research reports, and the pricing
terms of licensing agreements. However, the court or-
dered unsealed documents disclosing the parties’ product-
specific profits, profit margins, unit sales, revenues, and
costs, as well as Apple’s own proprietary market research
reports and customer surveys and the non-price terms of
licensing agreements.
The district court ordered the parties to take an im-
mediate appeal. Thus, on August 13, 2012, Apple and
Samsung appealed the August Order and moved the
district court to stay its order pending appeal. This court
consolidated the two appeals and designated Apple as the
appellant and Samsung as the cross-appellant.
On August 15, 2012, the district court granted a stay
pending the filing and resolution of motions to stay in this
court. The parties filed such motions, which this court
granted on September 18, 2012. Accordingly, the August
Order has been stayed pending appeal.
II
After trial, on September 21, 2012, Apple moved for a
permanent injunction and enhanced damages for Sam-
sung’s adjudicated willful infringement. In opposing
Apple’s motion, Samsung submitted various exhibits
containing information designated by Apple as confiden-
tial. Samsung filed an administrative motion to seal the
material that Apple had designated as confidential, and
Apple filed a brief and two declarations in support of
Samsung’s motion. The various documents the parties
sought to seal contain confidential capacity information,
license agreements, confidential financial information,
and Apple and third-party consumer research reports.
APPLE INC. v. SAMSUNG ELECTRONICS CO., LTD. 7
On November 29, 2012, the district court largely de-
nied Samsung’s motion to seal. See November Order at
*5. The district court, however, stayed its order pending
appeal. See id. at *6.
Apple timely appealed the district court’s November
Order. This court consolidated the appeal (No. 2013-
1146) with the parties’ appeals from the August Order
(Nos. 2012-1600, -1606).
III
These appeals are unique in that neither the appel-
lant, Apple, nor the cross-appellant, Samsung, opposes
the other party’s requested relief. In addition, Reuters,
which intervened in the proceedings below, chose not to
participate in the appeals.
The First Amendment Coalition (“Coalition”), whose
members include print and broadcast media organizations
such as the Los Angeles Times, Associated Press, and
Wired.com, moved to intervene in the appeals so that it
could represent its members’ interests and provide view-
points in favor of the Unsealing Orders. This court denied
the Coalition’s motion to intervene but granted leave to
file a brief amicus curiae. We also granted leave to the
Reporters Committee for Freedom of the Press, American
Society of News Editors, Bloomberg L.P., Dow Jones &
Company, Inc., Gannett Co., Inc., The New York Times
Company, Society of Professional Journalists, and The
Washington Post (collectively “Reporters Committee”) to
file a brief amicus curiae. The Coalition and the Report-
ers Committee (collectively “Amici Curiae”) later moved
for leave to participate in oral argument, which we also
granted.
8 APPLE INC. v. SAMSUNG ELECTRONICS CO., LTD.
DISCUSSION
I
We first consider whether we have jurisdiction to en-
tertain these appeals. Courts of appeals have jurisdiction
of appeals from “final decisions of the district courts.” 28
U.S.C. § 1291. Here, the Unsealing Orders are interlocu-
tory orders, which ordinarily would not be immediately
appealable. Apple and Samsung assert, however, that we
have jurisdiction under the collateral order doctrine. See
Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541(1949).
The collateral order doctrine is a “narrow exception”
to the final judgment rule that permits the appeal of “trial
court orders affecting rights that will be irretrievably lost
in the absence of an immediate appeal.” Richardson-
Merrell, Inc. v. Koller, 472 U.S. 424, 430-31 (1985). “To
fall within the exception, an order must at a minimum
satisfy three conditions: It must [1] ‘conclusively deter-
mine the disputed question,’ [2] ‘resolve an important
issue completely separate from the merits of the action,’
and [3] ‘be effectively unreviewable on appeal from a final
judgment.’” Id. at 431 (quoting Coopers & Lybrand v.
Livesay, 437 U.S. 463, 468 (1978)).
We agree with Apple and Samsung that these three
conditions are satisfied. First, the Unsealing Orders
conclusively determined that Apple’s and Samsung’s
confidential information will be made public. Second, the
Unsealing Orders present an important issue because
they address the important balance between the public’s
interest in understanding judicial proceedings and the
parties’ right to access the courts without being unduly
required to disclose confidential information. And all
argue that the propriety of sealing court documents is an
issue which is wholly separate from the merits of the
action. Third, the Unsealing Orders would be effectively
unreviewable on appeal from a final judgment because
APPLE INC. v. SAMSUNG ELECTRONICS CO., LTD. 9
once the parties’ confidential information is made publicly
available, it cannot be made secret again. See, e.g., Ame-
ziane v. Obama, 620 F.3d 1, 5 (D.C. Cir. 2010); In re
Copley Press, Inc., 518 F.3d 1022, 1025 (9th Cir. 2008).
II
Where, as here, an appeal does not involve substan-
tive issues of patent law, we apply the law of the regional
circuit in which the district court sits. In re TS Tech USA
Corp., 551 F.3d 1315, 1319 (Fed. Cir. 2008). In this case,
that is the Ninth Circuit. When reviewing a district
court’s order sealing or unsealing judicial records, the
Ninth Circuit reviews de novo whether the district court
used the correct legal standard. In re Midland Nat’l Life
Ins. Co. Annuity Sales Practices Litig., 686 F.3d 1115,
1119 (9th Cir. 2012). The district court’s decision to seal
or unseal judicial records is reviewed for abuse of discre-
tion. Id. A district court abuses its discretion if it “bases
its decision on an erroneous legal standard or clearly
erroneous findings of fact,” Earth Island Inst. v. Carlton,
626 F.3d 462, 468 (9th Cir. 2010), or if the reviewing court
“has a definite and firm conviction that the court below
committed a clear error of judgment in the conclusion it
reached upon a weighing of the relevant factors.” Smith
v. Jackson, 84 F.3d 1213, 1221 (9th Cir. 1996).
III
The broad issue before us is whether the district court
abused its discretion in ordering the unsealing of the
documents Apple and Samsung seek to seal. We begin by
reviewing “the common law right of access to judicial
records.” Kamakana v. City & Cnty. of Honolulu, 447
F.3d 1172, 1178 (9th Cir. 2006). After that, we address
the legal standard applied by the district court. We then
consider whether the documents at issue in Apple’s and
Samsung’s appeals of the August Order are subject to the
common law right of access, followed by a similar analysis
10 APPLE INC. v. SAMSUNG ELECTRONICS CO., LTD.
for the documents at issue in Apple’s appeal of the No-
vember Order.
A
“Historically, courts have recognized a ‘general right
to inspect and copy public records and documents, includ-
ing judicial records and documents.’” Id. (quoting Nixon
v. Warner Commc’ns, Inc., 435 U.S. 589, 597 (1978)).
“This right extends to pretrial documents filed in civil
cases.” Id.Although the common law right of access is not abso-
lute, the Ninth Circuit “start[s] with a strong presump-
tion in favor of access to court records.” Foltz v. State
Farm Mut. Auto. Ins. Co., 331 F.3d 1122, 1135 (9th Cir.
2003). “A party seeking to seal judicial records can over-
come the strong presumption of access by providing
‘sufficiently compelling reasons’ that override the public
policies favoring disclosure.” In re Midland, 686 F.3d at
1119 (quoting Foltz, 331 F.3d at 1135). “That is, the party
must articulate compelling reasons supported by specific
factual findings that outweigh the general history of
access and the public policies favoring disclosure, such as
the public interest in understanding the judicial process.”
Kamakana, 447 F.3d at 1178-79 (alterations omitted)
(internal quotation marks omitted). When ruling on a
motion to seal court records, a “court must conscientiously
balance the competing interests of the public and the
party who seeks to keep certain judicial records secret.”
Id. at 1179.
One factor that weighs in favor of sealing documents
is when the release of the documents will cause competi-
tive harm to a business. For example, the Supreme Court
explained in Nixon that “the common-law right of inspec-
tion has bowed before the power of a court to insure that
its records” do not “serve as . . . sources of business infor-
mation that might harm a litigant’s competitive stand-
ing.” Nixon, 435 U.S. at 598. Relying on Nixon, the Ninth
APPLE INC. v. SAMSUNG ELECTRONICS CO., LTD. 11
Circuit has stated that “[i]n general, ‘compelling reasons’
sufficient to outweigh the public’s interest in disclosure
and justify sealing court records exist when such ‘court
files might have become a vehicle for improper purposes,’
such as the use of records to . . . release trade secrets.”
Kamakana, 447 F.3d at 1179 (emphasis added) (quoting
Nixon, 435 U.S. at 598); see also Apple Inc. v. Psystar
Corp., 658 F.3d 1150, 1162 (9th Cir. 2011) (“The publica-
tion of materials that could result in infringement upon
trade secrets has long been considered a factor that would
overcome this strong presumption.”). The Ninth Circuit
has adopted the Restatement’s definition of “trade secret.”
Clark v. Bunker, 453 F.2d 1006, 1009 (9th Cir. 1972); see
also In re Elec. Arts, Inc., 298 F. App’x 568, 569-70 (9th
Cir. 2008) (nonprecedential). According to the Restate-
ment, “[a] trade secret may consist of any formula, pat-
tern, device or compilation of information which is used in
one’s business, and which gives him an opportunity to
obtain an advantage over competitors who do not know or
use it.” Restatement (First) of Torts § 757, cmt. b. Con-
sequently, in In re Electronic Arts, for example, the Ninth
Circuit held that a district court had abused its discretion
in refusing to seal “pricing terms, royalty rates, and
guaranteed minimum payment terms” found in a license
agreement because such information “plainly falls within
the definition of ‘trade secrets.’” 298 F. App’x at 569.
In addition, the Ninth Circuit has “carved out an ex-
ception to the presumption of access to judicial records”
for “judicial records filed under seal when attached to a
non-dispositive motion.” In re Midland, 686 F.3d at 1119
(internal quotation marks omitted). “Under the excep-
tion, the usual presumption of the public’s right of access
is rebutted. Thus, a particularized showing of ‘good cause’
under Federal Rule of Civil Procedure 26(c) is sufficient to
preserve the secrecy of sealed discovery documents at-
tached to non-dispositive motions.” Id. The reason for the
Ninth Circuit’s distinction between dispositive and non-
12 APPLE INC. v. SAMSUNG ELECTRONICS CO., LTD.
dispositive motions is that “the public has less of a need
for access to court records attached only to non-dispositive
motions because those documents are often unrelated, or
only tangentially related, to the underlying cause of
action.” Kamakana, 447 F.3d at 1179 (internal quotation
marks omitted).
B
With these principles in mind, we turn first to the
question of whether the district court used the correct
legal standard in ruling on the parties’ motions to seal.
The district court recognized the Ninth Circuit’s general
rule that a party seeking to seal documents attached to a
non-dispositive motion need only demonstrate “good
cause.” Nevertheless, the court applied the “compelling
reasons” standard to documents attached to non-
dispositive motions regarding the admissibility of evi-
dence at trial “[b]ecause the admissibility of evidence is
such a closely contested issue in this trial, which has
become crucial to the public’s understanding of the pro-
ceedings.” August Order at *7.
This was legal error. There may be exceptions to the
Ninth Circuit’s general rule that the “good cause” stand-
ard applies to documents attached to motions that are
nominally non-dispositive. Indeed, in In re Midland, the
Ninth Circuit applied the “compelling reasons” standard
to a Daubert motion because it “may be effectively disposi-
tive of a motion for summary judgment.” 686 F.3d at
1119 (internal quotation marks omitted). However, we
are not aware of any Ninth Circuit precedent applying the
“compelling reasons” standard to non-dispositive motions
regarding the admissibility of evidence at trial. The
district court’s reasoning—that the admissibility of evi-
dence was a closely contested issue—does not justify
departure from the Ninth Circuit’s general rule. Indeed,
evidence which a trial court rules inadmissible—either as
APPLE INC. v. SAMSUNG ELECTRONICS CO., LTD. 13
irrelevant or inappropriate—seems particularly unneces-
sary to the public’s understanding of the court’s judgment.
Despite this error, for the sake of simplicity, we have
reviewed all of the district court’s orders under the more
restrictive “compelling reasons” standard. As discussed in
the following sections, we conclude that even under that
standard the district court erred in refusing to seal the
documents at issue on appeal.
C
Next, we turn to the parties’ appeals (Nos. 2012-1600
and -1606) from the district court’s August Order. In
these appeals, Apple and Samsung challenge the district
court’s ruling with respect to a total of twenty-six docu-
ments—fourteen Apple documents and twelve Samsung
documents—filed as exhibits in connection with pre-trial
motions. The parties do not seek to seal these documents
in their entirety. Instead, they seek to redact limited
portions of the documents containing detailed product-
specific financial information, including costs, sales,
profits, and profit margins. See Appellant’s Br. 14-17
(tables listing fourteen documents at issue in Apple’s
appeal); Cross-Appellants’ Br. 8-10 (table listing twelve
documents at issue in Samsung’s appeal); see also ECF
No. 99 (letter from Apple “clarify[ing] which materials
from the district court record Apple seeks to seal”); ECF
No. 103 (similar letter from Samsung).
A majority of the twenty-six documents at issue in
these appeals—eleven of Apple’s and six of Samsung’s—
were filed as exhibits in support of or in opposition to
Samsung’s Daubert motions to exclude the opinions of
certain of Apple’s experts, in large measure by the non-
producing party. In addition, Apple and Samsung both
appeal the district court’s ruling on a report from Sam-
sung’s damages expert, which Samsung filed in support of
its own motion to strike Apple’s expert opinions. Sam-
sung also challenges the district court’s ruling on an
14 APPLE INC. v. SAMSUNG ELECTRONICS CO., LTD.
exhibit filed by Apple in opposition to Samsung’s motions
in limine. The remaining documents—two Apple docu-
ments and four Samsung documents—were submitted by
Apple in opposition to Samsung’s motion for summary
judgment.
We provide some additional background regarding the
district court’s ruling on these particular documents,
followed by our analysis.
1
Before the district court, Apple and Samsung filed
declarations from employees in support of their requests
to seal these documents. The declarations explained the
measures the two companies take to keep their product-
specific financial information confidential. For example,
Apple filed a declaration from its Vice President of Finan-
cial Planning & Analysis, who explained:
The material is stamped confidential, and only
certain individuals at Apple are authorized to
view Apple’s nonpublic financial information on a
need to know basis. Apple restricts system access
to its nonpublic financial information to a small
list of individuals who have been approved by my-
self or one of the other Vice-Presidents of Finance.
The list is reviewed at least every quarter and re-
vised as appropriate to ensure that Apple employ-
ees who no longer require access do not receive
the information. Apple further protects against
the disclosure of nonpublic financial information
to third parties, such as vendors. On the rare oc-
casions Apple is required to share nonpublic fi-
nancial data with third parties, Apple will only
allow them to view this information under very
restrictive nondisclosure agreements or protective
orders.
APPLE INC. v. SAMSUNG ELECTRONICS CO., LTD. 15
J.A. 3628 ¶ 3. Likewise, Samsung filed a declaration from
a Senior Manager in its Mobile Communications Division,
who explained that “[e]ven within Samsung’s financial
and accounting groups, this information can only be
accessed by certain financial personnel on a very restrict-
ed need-to-know basis.” J.A. 4617 ¶ 4.
The parties’ declarations also described the harm they
would suffer if their product-specific financial information
were made public and therefore available to their compet-
itors and suppliers. For example, Apple’s representative
explained that “[d]isclosure of this information would
allow competitors to tailor their product offerings and
pricing to undercut Apple. Competitors would be able to
determine exactly what price level would make a given
product unprofitable to Apple, and target their product
offerings at exactly that price.” J.A. 3630 ¶ 8. As for
Apple’s suppliers, he explained that they could use Ap-
ple’s profit and cost information to obtain higher prices
during negotiations. See id. Similarly, Samsung’s repre-
sentative explained that “[d]isclosure of per product
revenues, pricing, and costs will permit competitors to
undercut Samsung’s pricing, and allow business partners
to gain leverage against Samsung in business and supply
agreement negotiations,” and that “[d]isclosure of specific
cost information and bills of materials will allow competi-
tors and business partners to use this information to gain
leverage against Samsung in business and supply agree-
ment negotiations.” J.A. 4618 ¶¶ 6-7.
Despite the parties’ declarations, the district court
concluded that the parties had failed to articulate “com-
pelling reasons” to seal their financial information. 2 The
district court rejected the parties’ arguments that provid-
2 The district court first analyzed Apple’s docu-
ments and then applied the same analysis to Samsung’s
documents. See August Order at *3-4, *9.
16 APPLE INC. v. SAMSUNG ELECTRONICS CO., LTD.
ing their competitors with access to profit and cost infor-
mation would allow them to undercut the parties on
pricing. The district court concluded that this argument
relied on “two critical assumptions” for which the parties
had not provided support: (1) it assumes that their prod-
ucts are “perfectly interchangeable” with those of their
competitors, such that they would be forced to match their
competitors’ prices; and (2) it assumes that their “compet-
itors could profitably maintain this critical price point,
since it is well known that ‘predatory pricing schemes are
rarely tried, and even more rarely successful.’” August
Order at *3 (quoting Matsushita Elec. Indus. Co. v. Zenith
Radio Corp., 475 U.S. 574, 589 (1986)). In addition, the
district court did not see “how past profit and unit sales
data can be used to meaningfully predict . . . future busi-
ness plans.” August Order at *3-4. As for the public
interest, the district court found that the public had a
“substantial interest in full disclosure” of the information
the parties sought to seal because it was “essential to each
party’s damages calculations.” Id. at *4.
2
Apple and Samsung argue that the district court
abused its discretion in refusing to seal their confidential
financial information. The parties assert that their
detailed product-specific information concerning such
things as costs, sales, profits, and profit margins qualifies
as trade secrets. They reiterate the extensive measures
they take to keep this information confidential, as well as
the harms they will suffer if their competitors gain access
to this information. The parties also argue that because
of the way they tried this case, the public has only a
minimal interest in these documents. In particular,
because they agreed not to present this detailed financial
information at trial, and instead to rely on less-detailed
financial data to prove their damages, the public does not
need access to this information to understand the outcome
of the trial.
APPLE INC. v. SAMSUNG ELECTRONICS CO., LTD. 17
The First Amendment Coalition responds that Apple
and Samsung have failed to establish that these docu-
ments contain trade secrets because, for the reasons
stated by the district court, the parties have not shown
that they will suffer competitive harm from public disclo-
sure. On the other side of the scale, the Coalition asserts
that the public has a strong interest in the financial
information in question. In addition to the reasons relied
on by the district court, the Coalition cites declarations
submitted to the district court by Reuters and the Elec-
tronic Frontier Foundation (“EFF”). For example, a
Reuters representative explained that major media out-
lets were closely following “the case’s strategic impact on
the companies, including financial risks for shareholders.”
Coalition Br. 22. And an EFF representative explained
that the financial data surrounding the “development,
sale, and production” of smartphones and tablets “provide
powerful tools to many groups, including EFF, who work
diligently to ensure those consumer’s interests are taken
into account in manufacturing and pricing decisions.” Id.
We begin our analysis by considering whether Apple
and Samsung have an interest in keeping their detailed
product-specific financial information secret. See Nixon,
435 U.S. at 598; Kamakana, 447 F.3d at 1178-79. We
conclude that Apple and Samsung have such an interest
because they could suffer competitive harm if this infor-
mation is made public, and the district court erred by
concluding otherwise. In particular, it seems clear that if
Apple’s and Samsung’s suppliers have access to their
profit, cost, and margin data, it could give the suppliers
an advantage in contract negotiations, which they could
use to extract price increases for components. See J.A.
3630 ¶ 8. This would put Apple and Samsung at a com-
petitive disadvantage compared to their current position.
Significantly, although the district court recognized this
part of the parties’ argument, it failed to discuss the
argument in its analysis. See August Order at *3-4.
18 APPLE INC. v. SAMSUNG ELECTRONICS CO., LTD.
Thus, we conclude that Apple and Samsung have a signif-
icant interest in preventing the release of their detailed
financial information. 3
We now consider the public’s interest in the parties’
detailed financial information. 4 There is no doubt that
this case generated an extraordinary amount of public
interest. But it does not necessarily follow that the public
has a legally cognizable interest in every document filed.
In these appeals, Apple and Samsung have limited
the documents they challenge to a small subset of the
3 We think it likely that the detailed financial in-
formation Apple and Samsung seek to seal would meet
the Restatement’s relatively broad definition of “trade
secret”—“any . . . compilation of information which is used
in one’s business, and which gives him an opportunity to
obtain an advantage over competitors who do not know or
use it.” However, the district court did not make a formal
determination of whether these are trade secrets, and we
do not believe we need to either. That is because docu-
ments may be sealed merely if they are “sources of busi-
ness information that might harm a litigant’s competitive
standing.” Nixon, 435 U.S. at 598.
4 Even if we were to conclude definitively that Ap-
ple’s and Samsung’s confidential financial information
qualified as trade secrets, it would not necessarily end the
analysis. We do not read Ninth Circuit precedent as
creating a blanket rule that the “compelling reasons”
standard is necessarily met whenever a document con-
tains a trade secret. Rather, the court still must weigh
the interests of the party who wishes to seal the trade
secret against the interests of the public. See Kamakana,
447 F.3d at 1179 (explaining that “[i]n general,” the
release of trade secrets provides “‘compelling reasons’
sufficient to outweigh the public interest in disclosure and
justify sealing court records” (emphases added)).
APPLE INC. v. SAMSUNG ELECTRONICS CO., LTD. 19
documents they originally sought to seal. Even within
that small subset, they seek only to redact limited por-
tions that contain what they consider their most confiden-
tial financial information. Moreover, because the parties
agreed to rely on less-detailed financial information to
prove their damages at trial, none of the documents were
introduced into evidence. Thus, the financial information
at issue was not considered by the jury and is not essen-
tial to the public’s understanding of the jury’s damages
award. Nor is there any indication that this information
was essential to the district court’s rulings on any of the
parties’ pre-trial motions. In light of all of these consider-
ations, we conclude that the particular financial infor-
mation at issue in these appeals is not necessary to the
public’s understanding of the case, and that the public
therefore has minimal interest in this information.
The First Amendment Coalition’s reliance on state-
ments by Reuters and EFF representatives to demon-
strate public interest is misplaced. The presumption in
favor of public access to court documents is based on
“promoting the public’s understanding of the judicial
process and of significant public events.” Valley Broad.
Co. v. U.S. Dist. Court for Dist. of Nev., 798 F.2d 1289,
1294 (9th Cir. 1986). Shareholders’ interests in determin-
ing financial risks and consumers’ interests in manufac-
turing and pricing decisions simply are not relevant to the
balancing test. In fact, if anything, by highlighting, for
example, consumers’ interests in such things as pricing
decisions, it further underscores the potential harm that
Apple and Samsung could face if their detailed financial
information becomes public.
Considering the parties’ strong interest in keeping
their detailed financial information sealed and the pub-
lic’s relatively minimal interest in this particular infor-
mation, we conclude that the district court abused its
discretion in ordering the information unsealed. We
recognize that, unlike the district court, we have the
20 APPLE INC. v. SAMSUNG ELECTRONICS CO., LTD.
benefit of hindsight—we now know that these exhibits
were not introduced at trial and thus did not form the
basis for the jury’s damages award. We also have the
benefit of the parties’ decision to narrow the number of
documents they seek to seal on appeal. Nevertheless, for
the small number of documents at issue, we conclude that
the district court abused its discretion in ordering that
they be unsealed.
D
We now turn to Apple’s appeal (No. 2013-1146) from
the district court’s November Order. In this appeal, Apple
challenges the district court’s ruling with respect to nine
Apple market research reports. 5 Samsung attached these
reports to its opposition to Apple’s post-trial motion for a
permanent injunction and enhanced damages. The
reports total approximately five hundred pages (Supple-
mental App. 55-553), only twelve of which were cited by
Samsung in its briefing. As Apple explained in a letter
filed with this court before oral argument, it “does not
seek to seal any material actually cited and discussed by
the parties before the district court.” ECF No. 99. Thus,
it has agreed to make public seven pages (Supplemental
App. 73, 322, 357, 368, 397, 402, and 548) in their entire-
ty. As for the remaining five pages cited by Samsung
(Supplemental App. 79, 168, 242, 291, and 447), they
contain customer information from both the United States
and from other countries. Samsung relied only on the
U.S. customer information in its briefing, and Apple has
agreed to make that information public, but it seeks to
redact the customer information for other countries.
Beyond these twelve pages, Apple seeks to seal the re-
mainder of the market research reports, which were not
relied on by either party or by the district court. We
5 Neither Samsung nor Amici Curiae filed a brief in
this appeal.
APPLE INC. v. SAMSUNG ELECTRONICS CO., LTD. 21
again provide some additional background regarding the
district court’s ruling on these particular documents,
followed by our analysis.
1
Before the district court, Apple filed a declaration
from Greg Joswiak, a Vice President in its Product Mar-
keting department, in support of the motion to seal its
market research documents. See Supplemental App. 14-
19. Mr. Joswiak explained that Apple conducts regular
surveys of its customers concerning how its customers
value certain product features, whether they considered
products sold by competitors like Samsung, and how
satisfied they are with different product features. Id. at
15 ¶¶ 3-4. He further explained that Apple compiles the
results into monthly and quarterly market research
reports, which show what product features most influ-
enced customers’ purchasing decisions on a country-by-
country basis. Id. The market research reports contain
the specific questions Apple asks its customers, the data
collected from its customers, as well as the conclusions
Apple draws from the data. Id. at 16 ¶ 6.
Mr. Joswiak’s declaration explained the measures
Apple takes to keep its market research reports confiden-
tial. For example, “[t]he documents are stamped as
confidential on a ‘need to know’ basis,” and the survey
results cannot be distributed to anyone “outside a small,
select group of Apple executives” without his express
permission. Id. at 16 ¶ 7. Even when he does approve
further distribution, “it is almost always on a survey
question-by-survey question basis.” Id.Mr. Joswiak’s declaration also described the benefit
its competitors would obtain if its market research reports
were unsealed. For example, he explained that “[n]o
competitor has access to [Apple’s] customer base to con-
duct the type of in-depth analysis contained in [its] buyer
surveys and tracking studies,” so “a competitor who is
22 APPLE INC. v. SAMSUNG ELECTRONICS CO., LTD.
trying to take away Apple market share can only specu-
late as to the importance that Apple’s customers place” on
various features. Id. at 15 ¶ 5. In addition, he asserted
that “[e]ven if Apple’s competitors could reliably survey
Apple’s current customers (they cannot) to determine
their preferences today, they certainly cannot reliably
reconstruct what Apple customer’s [sic] preferences were
in the past. Accordingly only Apple has access to the
extremely valuable time series of information that shows
how customer preferences have evolved.” Id. at 18 ¶ 11.
The district court denied the request to seal Apple’s
market research reports, quoting its ruling on similar
documents in its August Order:
Apple’s desire to protect its own market surveys
reporting on its consumers’ usage habits, buying
preferences, and demographics is not sufficient to
meet the “compelling reason” standard required
for sealing at this stage. See Kamakana, 447 F.3d
at 1179. While Apple is presumably correct that
its consumer base is different than Samsung’s,
Apple’s claim that Samsung could not replicate
the analysis contained in these exhibits is not
convincing. Surveys about consumer preferences
are commonplace, and Apple has not argued con-
vincingly that similar data is not already availa-
ble to its competitors. Moreover, because Apple
claims that these surveys inform its future prod-
uct and marketing plans, it stands to reason that
its competitors may infer the most significant re-
sults by simply observing Apple’s product releases
and marketing campaigns.
November Order at *5 (quoting August Order at *5).
APPLE INC. v. SAMSUNG ELECTRONICS CO., LTD. 23
2
Apple argues that the district court abused its discre-
tion in refusing to seal the nine market research docu-
ments. We agree.
These market research reports contain information
that Apple’s competitors could not obtain anywhere else.
It may be true, as the district court indicated, that Apple’s
competitors could perform their own surveys of Apple
customers and replicate much of the data. However, they
would never know the exact questions Apple chooses to
ask or the conclusions that Apple has drawn from the
responses. Perhaps more importantly, there is a critical
distinction between Apple’s competitors being able to
“infer the most significant results by simply observing
Apple’s product releases and marketing campaigns” and
being able to predict Apple’s future product releases and
marketing strategies. Id. Apple obtains a competitive
advantage by being the first company to introduce prod-
ucts with new features. Giving Apple’s competitors a
head-start could provide them with an enormous bene-
fit—to Apple’s detriment. Thus, Apple has a strong
interest in keeping its market research reports confiden-
tial.
Of course, we must weigh Apple’s interest in sealing
these documents against the public’s interest. However,
Apple has agreed to make public all of the information
contained in these documents that was actually cited by
the parties or the district court. The other information in
these reports is irrelevant to the public’s understanding of
the judicial proceedings. For example, data concerning
Apple’s customers outside of the United States would not
assist the public’s understanding of Apple’s damages in
the United States—the only damages at issue in this case.
Nor would materials that were neither cited nor discussed
before the district court assist the public in understanding
the proceedings in this case.
24 APPLE INC. v. SAMSUNG ELECTRONICS CO., LTD.
Apple has clearly demonstrated that it could suffer
competitive harm if the pages it seeks to seal are made
available to the public. In addition, these pages will not
aid the public’s understanding of the process. We there-
fore conclude that the district court abused its discretion
in ordering that Apple’s nine market research reports be
unsealed.
CONCLUSION
We recognize the importance of protecting the public’s
interest in judicial proceedings and of facilitating its
understanding of those proceedings. That interest, how-
ever, does not extend to mere curiosity about the parties’
confidential information where that information is not
central to a decision on the merits. While protecting the
public’s interest in access to the courts, we must remain
mindful of the parties’ right to access those same courts
upon terms which will not unduly harm their competitive
interest. For the reasons set forth above, we hold that the
district court abused its discretion in refusing to seal the
particular documents that Apple and Samsung challenge
in these appeals.
REVERSED AND REMANDED