Cypress Semiconductor Corporation v. Fujitsu Semiconductor Limited ( 2020 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 NORTHERN DISTRICT OF CALIFORNIA 10 SAN JOSE DIVISION 11 12 CYPRESS SEMICONDUCTOR Case No. 20-CV-00193-LHK CORPORATION, 13 ORDER GRANTING IN PART AND Plaintiff, DENYING IN PART 14 ADMINISTRATIVE MOTION TO v. SEAL 15 FUJITSU SEMICONDUCTOR LIMITED, Re: Dkt. No. 7 16 et al., 17 Defendants. 18 On January 9, 2020, Plaintiff Cypress Semiconductor Corporation (“Cypress”) filed an ex 19 parte application for a temporary restraining order and preliminary injunction (“TRO 20 Application”). ECF No. 8. On the same day, Cypress filed an administrative motion to seal 21 certain exhibits filed in support of Cypress’s TRO Application. ECF No. 7. Pursuant to Civil 22 Local Rule 79-5(d)(1)(A), Cypress’s sealing motion is supported by a declaration from Michael R. 23 Headley. ECF No. 7-1 (“Headley Decl.”). 24 For the reasons below, the Court GRANTS in part and DENIES in part Cypress’s 25 administrative motion to file under seal. 26 I. LEGAL STANDARD 27 1 “Historically, courts have recognized a ‘general right to inspect and copy public records 2 and documents, including judicial records and documents.’” Kamakana v. City & Cty. of 3 Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006) (quoting Nixon v. Warner Commc’ns, Inc., 435 4 U.S. 589, 597 & n.7 (1978)). Accordingly, when considering a sealing request, “a strong 5 presumption in favor of access is the starting point.” Id. (internal quotation marks omitted). 6 Within the Ninth Circuit, documents that are more than “tangentially related . . . to the underlying 7 cause of action” are not sealable unless the Court agrees that “compelling reasons” exist to 8 overcome the presumption of access. See Kamakana, 447 F.3d at 1179. 9 Here, Defendants wish to seal judicial records related to a TRO Application, which is a 10 more than “tangentially related” to the cause of action. See Kamakana, 447 F.3d at 1179. 11 Defendants must therefore overcome the presumption of public access by offering “compelling 12 reasons supported by specific factual findings that outweigh the general history of access and the 13 public policies favoring disclosure.” Kamakana, 447 F.3d at 1178–79 (internal quotation marks 14 and citation omitted). Compelling reasons justifying the sealing of court records generally exist 15 “when such ‘court files might have become a vehicle for improper purposes,’ such as the use of 16 records to gratify private spite, promote public scandal, circulate libelous statements, or release 17 trade secrets.” Id. at 1179 (quoting Nixon, 435 U.S. at 598). However, “[t]he mere fact that the 18 production of records may lead to a litigant’s embarrassment, incrimination, or exposure to further 19 litigation will not, without more, compel the court to seal its records.” Id. 20 In our district, in addition to meeting the applicable standard under Kamakana, all parties 21 requesting sealing must comply with Civil Local Rule 79–5, including that rule’s requirement that 22 the request must “establish . . . that the document, or portions thereof, are privileged, protectable 23 as a trade secret or otherwise entitled to protection under the law.” Civ. L.R. 79-5(b). The sealing 24 request must also “be narrowly tailored to seek sealing only of sealable material.” Id. 25 II. DISCUSSION 26 Here, although the Court agrees that some of the information Cypress seeks to seal is in 27 fact sealable, the Court finds that Cypress’s request is entirely overbroad. For example, Cypress 1 seeks to seal specific pricing information with regard to its expected cost of recreating equipment 2 at issue in this case. See ECF No. 7-4 (“Croll Decl.”) at 4. “[P]ricing terms, royalty rates, and 3 guaranteed minimum payment terms” may be sealable business information. In re Elec. Arts, Inc. 4 298 F. App’x 568, 569 (9th Cir. 2008). Cypress’s request to seal this exhibit is narrowly tailored, 5 and thus the Court GRANTS Cypress’s request to seal as to this exhibit. 6 On the other hand, Cypress also seeks to seal other contractual terms, which it argues 7 “could be used by customers in negotiations with Cypress.” Headley Decl. at 1–3. Courts in this 8 Circuit have agreed that certain contract terms may be sealable. W. Air Charter, Inc. v. Sojitz 9 Corp., No. CV 18-7361 JGB (KSX), 2019 WL 4509304, at *5 (C.D. Cal. May 2, 2019). Courts 10 reason that information putting the movant “at a disadvantage in future negotiations” with existing 11 and future customers is sealable because it could harm the movant’s competitive standing. See, 12 e.g., Icon-IP Pty Ltd., No. 12-CV-03844-JST, 2015 WL 984121, at *3 (N.D. Cal. Mar. 4, 2015). 13 However, that a contract contains certain confidential terms does not itself justify sealing 14 of the entire contract, in light of Civil Local Rule 79-5(b), which requires that the sealing request 15 be “narrowly tailored to seek sealing only of sealable material.” Thus, requests to seal entire 16 contracts are frequently overbroad and fail to comply with Civil Local Rule 79-5(b) where the 17 requested sealing includes boilerplate terms and conditions contained within these documents, as 18 well as the parties’ definition of terms, none of which can reasonably be said to reveal any 19 confidential information. See, e.g., Dominion Assets LLC v. Masimo Corp., 2014 WL 12606653, 20 at *2 (N.D. Cal. May 9, 2014) (“[E]ven though the Court recognizes that portions of these 21 agreements are likely sealable, the Court is not persuaded that each agreement is sealable in its 22 entirety, as each appears to contain boilerplate contract language.”). 23 As a result, the Court finds that much of Cypress’s request is entirely overbroad because it 24 covers information that could not possibly implicate Cypress’s future negotiating position. For 25 example, in Exhibit L to the Croll Declaration, Cypress seeks to seal the parties’ definition of 26 “process” technology. Croll Decl., Ex. L at 5. Cypress’s assertion that this term from an 27 assignment agreement, which merely defines a contract term, “could be of value to parties 1 negotiating with Cypress in the future” is conclusory and is thus DENIED without prejudice. See 2 Headley Decl. at 1. 3 For other exhibits pertaining to Cypress’s contractual relationships, Cypress has failed to 4 provide compelling reasons to seal information such as term definitions within contracts and other 5 generic, boilerplate language. “Simply mentioning a general category of privilege, without any 6 further elaboration or any specific linkage with the documents, does not satisfy the burden.” 7 Kamakana, 447 F.3d at 1184. Similarly, “[a]n unsupported assertion of ‘unfair advantage’ to 8 competitors without explaining ‘how a competitor would use th[e] information to obtain an unfair 9 advantage’ is insufficient.” Hodges v. Apple, Inc., No. 13–cv–01128–WHO, 2013 WL 6070408, 10 at *2 (N.D. Cal. Nov. 18, 2013) (quoting Dunbar v. Google, Inc., No. 12–CV–003305–LHK, 2012 11 WL 6202719, at *4–5 (N.D. Cal. Dec. 12, 2012)). Accordingly, as to the remaining exhibits, 12 Cypress’s administrative motion to seal is DENIED without prejudice. 13 Pursuant to Civil Local Rule 79-5, Cypress should narrowly tailor any sealing request to 14 only seek sealing of information that is sealable under this Circuit’s case law. Relatedly, in any 15 supporting declaration, Cypress should provide specific facts, rather than conclusory assertions, as 16 needed to support a claim of potential competitive harm. See Kamakana, 447 F.3d at 1178–79. 17 Any renewed motion to seal this material must be filed by March 6, 2020. 18 In sum, the Court rules on Cypress’s sealing motion as follows: 19 Document Portion(s) to Seal Disposition Cost information on page 4, 20 Croll Declaration GRANTED line 4 21 Ex. L to the Croll Page 5 DENIED without Declaration prejudice 22 Exhibit 1 to Cypress’s Application for Ex Parte Temporary DENIED without 23 Restraining Order and Preliminary Entire exhibit prejudice Injunction 24 Ex. C to the DENIED without Entire exhibit 25 Croll Declaration prejudice Ex. H to the DENIED without 26 Croll Declaration Entire exhibit prejudice Ex. I to the DENIED without 27 Entire exhibit Croll Declaration prejudice Portions) to Seal Ex. J to the . ws DENIED without 3 Ex. K to the . ws DENIED without Croll Declaration Entire exhibit prejudice 4 Exhibit A to Proposed Temporary . ue: DENIED without 5 Restraining Order (“TRO” Entire exhibit prejudice Exhibit B to Proposed Temporary . ue: DENIED without 6 Restraining Order (“TRO” Entire exhibit prejudice 4 IT IS SO ORDERED. 8 9 Dated: February 26, 2020 10 Suey Hp LUCY @. KOH 11 United States District Judge 12 13 15 16 = 17 Z 18 19 20 21 22 23 24 25 26 27 28 Case No. 20-CV-00193-LHK