Vishkin v. Pintuitive, Inc. ( 2021 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 NORTHERN DISTRICT OF CALIFORNIA 10 SAN JOSE DIVISION 11 12 UZI VISHKIN, Case No. 21-CV-01432-LHK 13 Plaintiff, ORDER DENYING MOTION TO SEAL WITHOUT PREJUDICE 14 v. Re: Dkt. No. 36 15 PINTUITIVE, INC., et al., 16 Defendants. 17 18 Before the Court is an administrative motion to seal filed by Pintuitive, Inc.; Xingzhi Wen; 19 Gang Li; Beijing ESWIN Smart Technology Group Co., Ltd.; and Panyi Technology, Inc. 20 (collectively, “Defendants”). Defendants seek to seal a patent license agreement between Plaintiff 21 Uzi Vishkin and Defendant Pintuitive, Inc., which Defendants attached as an exhibit to 22 Defendants’ motion to dismiss Plaintiff’s complaint, ECF No. 37-2 (“Exhibit 1”). ECF No. 36. 23 For the reasons explained below, the Court DENIES without prejudice Defendants’ motion to seal. 24 “Historically, courts have recognized a ‘general right to inspect and copy public records 25 and documents, including judicial records and documents.’” Kamakana v. City & Cty. of 26 Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006) (quoting Nixon v. Warner Commc’ns, Inc., 435 27 U.S. 589, 597 & n.7 (1978)). Accordingly, when considering a sealing request, “a strong 1 presumption in favor of access is the starting point.” Id. (internal quotation marks omitted). 2 Parties seeking to seal judicial records relating to motions that are “more than tangentially 3 related to the underlying cause of action,” Ctr. for Auto Safety v. Chrysler Grp., 809 F.3d 1092, 4 1099 (9th Cir. 2016), bear the burden of overcoming the presumption with “compelling reasons 5 supported by specific factual findings that outweigh the general history of access and the public 6 policies favoring disclosure,” Kamakana, 447 F.3d at 1178–79 (internal quotation marks and 7 citation omitted). Compelling reasons justifying the sealing of court records generally exist “when 8 such ‘court files might have become a vehicle for improper purposes,’ such as the use of records to 9 gratify private spite, promote public scandal, circulate libelous statements, or release trade 10 secrets.” Id. at 1179 (quoting Nixon, 435 U.S. at 598). However, “[t]he mere fact that the 11 production of records may lead to a litigant’s embarrassment, incrimination, or exposure to further 12 litigation will not, without more, compel the court to seal its records.” Id. 13 By contrast, records attached to motions that are “not related, or only tangentially related, 14 to the merits of a case” are not subject to the strong presumption of access. Ctr. for Auto Safety, 15 809 F.3d at 1099; see also Kamakana, 447 F.3d at 1179 (“[T]he public has less of a need for 16 access to court records attached only to non-dispositive motions because those documents are 17 often unrelated, or only tangentially related, to the underlying cause of action.” (internal quotation 18 marks and citation omitted)). Parties moving to seal records attached to motions unrelated or only 19 tangentially related to the merits of a case must meet the lower “good cause” standard of Rule 20 26(c) of the Federal Rules of Civil Procedure. Ctr. for Auto Safety, 809 F.3d at 1098–99; 21 Kamakana, 447 F.3d at 1179–80. The “good cause” standard requires a “particularized showing” 22 that “specific prejudice or harm will result” if the information is disclosed. Phillips ex rel. Estates 23 of Byrd v. Gen. Motors Corp., 307 F.3d 1206, 1210–11 (9th Cir. 2002) (citation omitted); see Fed. 24 R. Civ. P. 26(c). “Broad allegations of harm, unsubstantiated by specific examples or articulated 25 reasoning” will not suffice. Beckman Indus., Inc. v. Int’l Ins. Co., 966 F.2d 470, 476 (9th Cir. 26 1992) (citation omitted). 27 Pursuant to Rule 26(c), a trial court has broad discretion to permit sealing of court 1 documents for, inter alia, the protection of “a trade secret or other confidential research, 2 development, or commercial information.” Fed. R. Civ. P. 26(c)(1)(G). The Ninth Circuit has 3 adopted the definition of “trade secrets” set forth in the Restatement of Torts, holding that “[a] 4 trade secret may consist of any formula, pattern, device or compilation of information which is 5 used in one’s business, and which gives him an opportunity to obtain an advantage over 6 competitors who do not know or use it.” Clark v. Bunker, 453 F.2d 1006, 1009 (9th Cir. 1972) 7 (quoting Restatement (First) of Torts § 757 cmt. b). “Generally [a trade secret] relates to the 8 production of goods . . . . It may, however, relate to the sale of goods or to other operations in the 9 business . . . .” Id. (alterations in original). Furthermore, the Supreme Court has recognized that 10 sealing may be justified to prevent judicial documents from being used “as sources of business 11 information that might harm a litigant’s competitive standing.” Nixon, 435 U.S. at 598. 12 In addition, parties moving to seal documents must comply with the procedures established 13 by Civil Local Rule 79-5. Pursuant to that rule, a sealing order is appropriate only upon a request 14 that establishes the document is “sealable,” or “privileged, protectable as a trade secret or 15 otherwise entitled to protection under the law.” Civ. L. R. 79-5(b). “The request must be narrowly 16 tailored to seek sealing only of sealable material, and must conform with Civil [Local Rule] 79- 17 5(d).” Id. Civil Local Rule 79-5(d), moreover, requires the submitting party to attach a “proposed 18 order that is narrowly tailored to seal only the sealable material” and that “lists in table format 19 each document or portion thereof that is sought to be sealed,” as well as an “unredacted version of 20 the document” that “indicate[s], by highlighting or other clear method, the portions of the 21 document that have been omitted from the redacted version.” Civ. L. R. 79-5(d)(1). 22 Here, Defendants’ motion to dismiss is more than tangentially related to the underlying 23 causes of action and thus the compelling reasons standard applies. See, e.g., Microsoft Corp. v. 24 Hon Hai Precision Inds. Co., 19-CV-01279-LHK, 2020 WL 8991707, at *2 (N.D. Cal. Feb. 21, 25 2020) (applying “compelling reasons” standard to patent license agreement attached to 26 defendant’s motion to dismiss). Compelling reasons justifying the sealing of court records 27 generally exist “when such ‘court files might have become a vehicle for improper purposes,’ such 1 as the use of records to gratify private spite, promote public scandal, circulate libelous statements, 2 or release trade secrets.” Kamakana v. City & Cnty. of Honolulu, 447 F.3d 1172, 1179 (9th Cir. 3 2006) (quoting Nixon, 435 U.S. at 598). However, “[t]he mere fact that the production of records 4 may lead to a litigant's embarrassment, incrimination, or exposure to further litigation will not, 5 without more, compel the court to seal its records.” Id. 6 The Court now addresses the substance of the instant sealing motion. Defendants’ motion 7 seeks to seal a patent license agreement between Plaintiff and Defendant Pintuitive. ECF No. 36- 8 2. Defendants do not object to Exhibit 1 being made public, but move to seal the entire Exhibit 1 9 because Plaintiff designated the entire patent agreement as confidential. ECF No. 36-3 10 (“Rodewald “Decl.”) ¶¶ 4, 5. In support of Defendants’ motion to seal, Plaintiff argues that 11 compelling reasons exist to seal Exhibit 1 because the patent agreement contains a confidentiality 12 provision, as well as “competitively sensitive information” such as “sensitive financial terms” and 13 “terms that dictated the rights and obligations between the parties.” ECF No. 38 ¶ 4. According 14 to Plaintiff, revealing the agreement “would put Dr. Vishkin in a competitive disadvantage.” Id. 15 The problem with Plaintiff’s argument is that the motion to seal seeks to seal the entire 16 exhibit. Such a request is clearly overbroad in that Defendants’ seek to seal vast swaths of non- 17 sealable material. As a result, the request is not “narrowly tailored to seek sealing only of sealable 18 material,” as mandated by Civil Local Rule 79-5(b). 19 For example, portions of the patent license agreement encompass such items as definitions 20 of generic terms and introductory sentences, ECF No. 36-2 at 2-5, or blank generic forms, id. at 21 32-33.1 Although the Court acknowledges that “pricing terms, royalty rates, and guaranteed 22 minimum payment terms” meet the compelling reasons standard for sealing, In re Elec. Arts, Inc., 23 298 Fed. App’x 568, 569 (9th Cir. 2008), much of the redacted material does not fall into these 24 categories. Moreover, Plaintiff’s claims that there is a confidentiality provision and making the 25 agreement public “would put Dr. Vishkin in a competitive disadvantage” are too general and 26 27 1 Because the internal pagination is inconsistent, the Court refers to the ECF stamp pagination. 1 conclusory, rather than particularized to each piece of information sought to be sealed. ECF No. 2 |} 3894. “[C]onclusory offerings do not rise to the level of ‘compelling reasons’ sufficiently 3 specific to bar the public access to the documents.” Kamakana, 447 F.3d at 1182 (requiring a 4 || specific compelling reason for each redaction rather than “a general category of privilege” and 5 rejecting conclusory arguments that the documents are confidential). 6 Therefore, the Court DENIES without prejudice Defendants’ motion to seal Exhibit 1 7 attached to Defendants’ motion to dismiss. See Hon Hai, 2020 WL 8991707, at *3 (denying 8 without prejudice motion to seal entire patent agreement because it was not narrowly tailored). By 9 December 28, 2021, Defendants may file a renewed request that is narrowly tailored to seek 10 sealing only of material that is sealable under applicable case law and conforms to the 11 requirements in Civil Local Rule 79-5(d)(1). Plaintiff would then have until January 3, 2022 to 12 file a declaration “as required by subsection 79-5(d)(1)(A) establishing that all of the designated 5 13 material is sealable,” Civil Local Rule 79-5(e)(1). The parties may also choose to file a joint 14 motion to seal by December 28, 2021. 15 16 || IT ISSO ORDERED. || Dated: December 13, 2021 □□□ Ht. Koh LUCY H. KOH 20 United States District Judge 21 22 23 24 25 26 27 28 Case No. 21-CV-01432-LHK