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Microsoft v. Motorola Trial - Everyone Involved Asks That the Public Be Excluded From the Heart of the Evidence ~ pj Updated
Saturday, November 03 2012 @ 10:47 AM EDT

It looks like everything that really matters in the Microsoft v. Motorola trial, now scheduled to begin on November 13, will be kept secret from the public. Not only are the parties asking the judge to keep their secrets, a substantial list of non-parties are asking that their license agreements with the parties be kept a secret as well. One of them, RIM, even asks the court not only to keep the public from the details but to keep Microsoft from seeing the details of its agreement with Motorola. So any time a license is discussed in detail, the public could be ushered out of the courtroom. That's what they are asking for. IBM specifies that it wants its materials kept out of the public record, meaning sealed forever.

Secret trials are exactly what the US legal system was set up to try to avoid, and for a good reason -- so the public can keep an eye on the courts. This case seems particularly inappropriate for heavy-handed secrecy, in that Microsoft refused to negotiate with Motorola privately to arrive at a royalty figure, opting for a public trial instead of following the typical RAND process.

If all the requests for sealing are granted, and nothing is ever part of the public record, we will never get to know what happened in this case and whether the judge properly arrived at a figure for Microsoft to pay. Some believe - me, for instance -- that this case is just part of a bigger Microsoft legal strategy to try to hobble or destroy Android, by devaluing Motorola's standards-essential patents while asking for much greater royalties on their own utility patents that are not RAND patents. That would result in Android taking quite a beating in terms of negotiations for licenses, with obvious results in the marketplace that will affect the public. That's why we care and why the public has an interest in this case. We'll be the ones who can't find Android on many or any devices, if vendors decide it's too expensive to sell, thanks to Microsoft (and Apple against Samsung) jacking up their royalties while Android vendors find their royalties suddenly valued at next to nothing.

The judge is not considering that angle at all in this case. Only the public is. And that's why excluding the public is so disturbing. We have a dog in this fight, but there will be no one in the secret trial that will be representing our interest. The trial is about setting a price, with Motorola showing prior license deals it entered into as a marker. That's all this part of the litigation will be about, setting a royalty or range. So if all the license terms are kept secret, why bother to cover this trial at all? I see no point.

Normally, when parties are looking to license someone's RAND patents, standards-essential patents, such as is the case here, the parties negotiate the terms themselves. Microsoft filed suit instead of responding to Motorola's opening offer, and now the judge has decided he will set a royalty for the parties, or a range. But the problem with his decision, coupled with all the sealing, is this: how will the public know whether or not there was a fair trial if we can't see the basis for the final decision? I mean, corruption in the courts is rare, precisely because of transparency, but it isn't non-existent. If, just to imagine things, Microsoft paid off a judge, how would we find out about it? Normally, there would be strong hints in the way then judge rules on various motions and his conduct at trial and thereafter. That's how you catch it. You get a whiff and you start to dig. But if the public is excluded not only from filed documents but from all the significant evidence at trial -- as is now looking to be the way this trial will be conducted -- due to being asked to leave the courtroom, it would be very easy for a corrupt judge to throw a case a certain way without a trace. And that is a problem. Again, I'm not saying that is the case here, but it is a realistic concern that without real transparency, the legal system can run right off the rails.

Let me show you what's been going on in the filings recently. I think you'll see that this judge, by taking on himself the role of decider instead of compelling Microsoft to negotiate privately with Motorola, has opened up a can of worms. The trial centers on how much a license should cost Microsoft, and that means Motorola will be showing a number of licenses that it has signed with others, to provide a ballpark figure in the marketplace. So if the terms of each and every license agreement is kept from the public, what else is there to the trial that would give us a clue as to fairness? There is a reason standards bodies leave it to the parties to work out the terms, as I'll show you. Bypassing that norm is freaking out a fair number of third parties, who didn't ask to have their license terms made public in a court of law and don't want it to happen.

Here are the recent filings first -- look at all the requests for sealing and exclusion of the public:

495 - Filed & Entered:   10/29/2012
MOTION to Seal Documents and Trial Testimony and Exclude Unauthorized Persons From the Courtroom During Testimony Regarding Trade Secrets by Defendants General Instrument Corporation, Motorola Mobility LLC, Motorola, Inc.. (Attachments: # (1) Exhibit A, # (2) Exhibit B, # (3) Proposed Order) Noting Date 11/9/2012, (Palumbo, Ralph)

496 - Filed & Entered:   10/29/2012
DECLARATION of Brian Blasius filed by Defendants General Instrument Corporation, Motorola Mobility LLC, Motorola, Inc. re [495] MOTION to Seal Documents and Trial Testimony and Exclude Unauthorized Persons From the Courtroom During Testimony Regarding Trade Secrets (Palumbo, Ralph)

497 - Filed & Entered:   10/29/2012
Pretrial Conference - MINUTE ENTRY for proceedings held before Judge James L. Robart- Dep Clerk: Casey Condon; Pla Counsel: Arthur Harrigan, David Pritikin, Richard Cederoth, Christopher Wion, Andy Culbert, David Giardina, Ellen Robbins, Shane Cramer, David Killough; Def Counsel: Ralph Palumbo, Jesse Jenner, Steve Pepe, Kevin Post, Stuart Yothers, Philip McCune; CR: Debbie Zurn; Pretrial Conference held on 10/29/2012. The court discusses the trial schedule with counsel. Trial shall begin Tuesday, Nov. 13, 2012 at 9:00 a.m. Trial schedule Nov. 13-16 is 9:00 a.m. to 12:00 p.m. and 1:00 p.m. to 4:00 p.m. Monday, Nov. 19 trial will begin at 1:00 p.m. Nov. 20-21, trial schedule is 9:00 a.m. to 12:00 p.m. and 1:00 p.m. to 4:00 p.m. Each side allowed 18 hours of trial time. Included in the 18 hours is the time used by the court to read depositions. The court encourages counsel to attend technology training. Trial briefs may be up to 24 pages. For the reasons stated on the record, the court grants in part and denies in part the motions in limine, Dkt. ##449,450,456. (CC)

498 - Filed & Entered:   10/29/2012
MOTION to Seal by Interested Parties IBM Corp., IBM Corp.. (Attachments: # (1) Proposed Order) Noting Date 11/9/2012, (Tondini, John)

499 - Filed & Entered:   10/29/2012
DECLARATION of Kenneth S. King filed by Interested Party IBM Corp. re (103 in 2:11-cv-00343-JLR) MOTION to Seal (Tondini, John)

500 Filed & Entered:   10/29/2012
DECLARATION of John A. Tondini filed by Interested Party IBM Corp. re (103 in 2:11-cv-00343-JLR) MOTION to Seal (Tondini, John)

501 - Filed & Entered:   10/29/2012
MOTION to Seal Nonparties Research in Motion Limited and Research in Motion Corporation's Motion to File Documents Under Seal by ThirdParty Defendant Research in Motion Limited and Research in Motion Corporation. (Attachments: # (1) Proposed Order) Noting Date 11/9/2012, (Denkenberger, John)

502 - Filed & Entered:   10/29/2012
SEALED MOTION to Seal Terms of Patent License Agreements and to Deny Microsoft In-House Counsel Access to the Agreements; re [501] MOTION to Seal Nonparties Research in Motion Limited and Research in Motion Corporation's Motion to File Documents Under Seal ; by ThirdParty Defendant Research in Motion Limited and Research in Motion Corporation. Oral Argument Requested. (Attachments: # (1) Proposed Order) Noting Date 11/9/2012, (Denkenberger, John)

503 - Filed & Entered:   10/29/2012
SEALED DOCUMENT Declaration of Michael J. Crowley in Support of Nonparties Research in Motion Limited and Research in Motion Corporation's Motion to Seal Terms of Patent License Agreements and to Deny Microsoft Inside Counsel Access to the Agreements by ThirdParty Defendant Research in Motion Limited and Research in Motion Corporation re [501] MOTION to Seal Nonparties Research in Motion Limited and Research in Motion Corporation's Motion to File Documents Under Seal (Denkenberger, John)

504 - Filed & Entered:   10/29/2012
REDACTION to [502] SEALED MOTION to Seal Terms of Patent License Agreements and to Deny Microsoft In-House Counsel Access to the Agreements; re [501] MOTION to Seal Nonparties Research in Motion Limited and Research in Motion Corpora by ThirdParty Defendant Research in Motion Limited and Research in Motion Corporation. (Attachments: # (1) Proposed Order)(Denkenberger, John) 505 - Filed & Entered:   10/29/2012
REDACTION to [503] Sealed Document,, [504] Redacted Document, Redacted Declaration of Michael J. Crowley in Support of Nonparties Research in Motion Limited and Research in Motion Corporation's Motion to Seal Terms of Patent License Agreements and to Deny Microsoft Inside Counsel Access to the Agreements by ThirdParty Defendant Research in Motion Limited and Research in Motion Corporation. (Denkenberger, John) 506 - Filed & Entered:   10/29/2012; Terminated: 10/30/2012
APPLICATION OF ATTORNEY Vincent J. Belusko FOR LEAVE TO APPEAR PRO HAC VICE for ThirdParty Defendant Research in Motion Limited and Research in Motion Corporation (Fee Paid) Receipt No. 0981-2997677. (Denkenberger, John)

507 - Filed & Entered:   10/30/2012
ORDER re (506 in 2:10-cv-01823-JLR) Application for Leave to Appear Pro Hac Vice. The Court ADMITS Attorney Vincent J Belusko for Research in Motion Limited and Research in Motion Corporation, by William M. McCool. (No document associated with this docket entry, text only.)(DS)

508 - Filed & Entered:   11/01/2012
NOTICE of Joinder JOINING (495 in 2:10-cv-01823-JLR) MOTION to Seal Documents and Trial Testimony and Exclude Unauthorized Persons From the Courtroom During Testimony Regarding Trade Secrets, by Interested Parties VTech Communications, VTech Communications. (Barton, Walter)

509 - Filed & Entered:   11/01/2012
DECLARATION of Kenton Erwin filed by Interested Party VTech Communications re [495] MOTION to Seal Documents and Trial Testimony and Exclude Unauthorized Persons From the Courtroom During Testimony Regarding Trade Secrets (Barton, Walter)

510 - Filed & Entered:   11/01/2012
MOTION to Seal Trial Exhibits That Disclose Microsoft's Trade Secrets by Plaintiff Microsoft Corporation, Defendant Microsoft Corporation. Oral Argument Requested. (Attachments: # (1) Proposed Order, # (2) Appendix A) Noting Date 11/9/2012, (Harrigan, Arthur)

511 - Filed & Entered:   11/01/2012
DECLARATION of Erich Andersen in Support of Microsoft's Motion to Seal filed by Plaintiff Microsoft Corporation, Defendant Microsoft Corporation re [510] MOTION to Seal Trial Exhibits That Disclose Microsoft's Trade Secrets (Harrigan, Arthur)

512 Filed & Entered:   11/01/2012
DECLARATION of Jennifer Ochs in Support of Microsoft's Motion to Seal filed by Plaintiff Microsoft Corporation, Defendant Microsoft Corporation re [510] MOTION to Seal Trial Exhibits That Disclose Microsoft's Trade Secrets (Harrigan, Arthur)

513 - Filed & Entered:   11/01/2012
DECLARATION of Tanya Moore in Support of Microsoft's Motion to Seal Confidential Documents filed by Plaintiff Microsoft Corporation, Defendant Microsoft Corporation re [510] MOTION to Seal Trial Exhibits That Disclose Microsoft's Trade Secrets (Harrigan, Arthur)

514 - Filed & Entered:   11/01/2012
DECLARATION of Leo Del Castillo in Support of Microsoft's Motion to Seal filed by Plaintiff Microsoft Corporation, Defendant Microsoft Corporation re [510] MOTION to Seal Trial Exhibits That Disclose Microsoft's Trade Secrets (Harrigan, Arthur)

515 - Filed & Entered:   11/02/2012
NOTICE of Joinder JOINING [495] MOTION to Seal Documents and Trial Testimony and Exclude Unauthorized Persons From the Courtroom During Testimony Regarding Trade Secrets, by Interested Party Ericsson Inc. (Jost, Shannon)

516 - Filed & Entered:   11/02/2012
DECLARATION of Anna Johns filed by Interested Party Ericsson Inc re [495] MOTION to Seal Documents and Trial Testimony and Exclude Unauthorized Persons From the Courtroom During Testimony Regarding Trade Secrets (Jost, Shannon)

517 - Filed & Entered:   11/02/2012
NOTICE of Intent to Request Redaction by Ralph H Palumbo of [491] Electronic Transcript (Palumbo, Ralph)

As you can see by the last entry, Motorola intends to redact even the transcript of the recent Daubert hearing. And IBM, RIM, Ericsson, and VTech Communications have joined the parties, Microsoft and Motorola, in asking for sealing, for exclusion of the public from the courtroom, and in one case to exclude Microsoft from knowing about the terms of a license. That motion is redacted, and the declaration in support [PDF] is so heavily redacted, there's no way to know why RIM doesn't want Microsoft to see the terms, but it surely doesn't.

Now, I understand how the non-parties feel. I'd likely feel the same way if I were a corporate entity surprised to find my lingerie drawer was about to go public and everyone in the world would be free to paw through it, and these third parties didn't ask for the benefits of a public trial. But Microsoft did. I don't believe it should be allowed to have it both ways to this degree.

Let's take a look at one such request, IBM's [PDF], both because it explains why it is worried about going public, and because it explains precisely why private negotiations are preferable:

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON

_____________

MICROSOFT CORPORATION, a Washington
corporation,

Plaintiff,

v.

MOTOROLA, INC., MOTOROLA MOBILITY,
LLC, and GENERAL INSTRUMENT
CORPORATION,

Defendant.

_____________

NO. C10-1823-JLR

NONPARTY INTERNATIONAL
BUSINESS MACHINES
CORPORATION’S MOTION FOR A
LIMITED SEALING ORDER

NOTE ON MOTION CALENDAR:
NOVEMBER 9, 2012

International Business Machines Corporation (“IBM”) submits this motion supporting Motorola’s motion to seal and independently requesting an order sealing reference either in documentary or testimony form to payment terms and the duration of the license grant relative to IBM’s license agreement with Motorola and its affiliates. There are compelling reasons for a narrowly tailored sealing of this information. IBM supports this motion with the Declaration of Kenneth King, filed herewith.

Motorola recently informed IBM that it intends to use a trial exhibit and/or demonstrative which includes a summary of a 2011 license agreement between Motorola Mobility Holdings, Inc. and IBM. Further, IBM was told that this license agreement may be used as a trial exhibit. There also may be offered testimony regarding this licensing relationship.

1

IBM considers the payment terms associated with the 2011 license agreement and the term, or duration, of that agreement to be confidential and trade secret information. IBM has done nothing to put that information at issue in this case where it is not a party. Therefore, IBM requests an order redacting and sealing the portion of any exhibits or demonstratives which states or references the payment terms and duration of the IBM license agreement. Because IBM is a non-party and does not have access to the exhibits or demonstratives, IBM seeks this order to require the parties to make these redactions to their summary exhibits and demonstratives. If the license agreement itself is offered, it should be redacted and sealed in part. If the parties do not offer this exhibit IBM does not want to make the license part of the public record. Therefore, if and when the parties determine they will actually use the license as an exhibit, a proposed redacted copy of the license will be submitted.

IBM also requests that to effectuate the sealing described above the courtroom be closed when argument on this topic, testimony, or these exhibits is discussed.

There are compelling reasons for sealing this commercially sensitive information. Public disclosure of the payment terms and duration of IBM’s license agreements would negatively impact IBM in future license and settlement negotiations by giving potential licensees the ability to derive IBM’s methodology for valuing its portfolio and those portfolios held by others. King Decl. ¶¶ 4-5. The amount of the payment is a significant data point toward reverse engineering IBM’s pricing methodology. Id. This is true regardless of amount.

IBM has had for decades, and continues to have, an active and substantial program of licensing and selling patents and other types of Intellectual Property. This includes entering into patent cross license agreements with third parties, under which each party grants to the other licenses under its patent portfolio as it relates to the other party’s business activities. Such cross licenses can include balancing payments from one party to the other to account for differences in the size and relevance of the respective patent portfolios. Id. at ¶ 3.

2

In the industry, the balancing payment in a cross license agreement may be based on a number of factors, which may include: the breadth of the license granted; the size, strength and age of the respective patent portfolios; the relevant product and service revenue of the parties; and the extent to which the parties may already have patent coverage. IBM’s particular pricing methodology for computing the balancing payments, reflecting the exact factors IBM relies upon and how it weights those factors, is trade secret information. Competitors and potential counterparties to licensing and settlement agreements would gain an unfair insight into IBM’s analyses, particularly as IBM would know nothing about their competitors’ methodology for the negotiations. Id. at ¶¶ 4-5. By using their knowledge of the precise substantive terms of this previously nonpublic agreement, this unfair advantage would allow competitors to calibrate their negotiation strategies to the detriment of IBM. Id.

Accordingly, license agreements have been consistently held by courts to meet the “compelling reasons” standard of the Ninth Circuit. See, e.g., Elec. Arts, Inc. v. United States Dist. Court for the N. Dist. of Cal., 298 Fed. App’x. 568, 569 (9th Cir. 2008) (pricing terms, royalty rates, guaranteed minimum payment terms of licensing agreement constituted trade secret); Powertech Tec., Inc. v. Tessera, Inc., 2012 U.S. Dist. LEXIS 75831, at *5 (N.D. Cal. May 31, 2012) (compelling reasons to seal license agreement). See In re Adobe Sys., Inc. Secs. Litig., 141 F.R.D. 155, 161-62 (N.D. Cal. 1992) (under-seal filings preserve third parties’ “legitimate expectation that confidential business information, proprietary technology and trade secrets will not be publicly disseminated”). These trade secret terms meet the standard set out by Kamakana v. City and Cnty. of Honolulu, 447 F.3d 1172, 1178-79 (9th Cir. 2006). “In general, ‘compelling reasons’ . . . exist when such ‘court files might have become a vehicle for improper purposes,’ such as the use of records to . . . release trade secrets.” Id.

For the reasons stated above, the public disclosure of the commercially sensitive payment terms and duration would harm IBM’s active and substantial patent licensing business. King Decl. ¶¶ 4-6. For these reasons, IBM seeks to ensure that any exhibit or demonstrative and any

3

testimony regarding the terms of its license(s) with Motorola entities be kept confidential; that the courtroom be cleared during such publication, testimony or argument and that any such exhibit be sealed in the record.

DATED this 29th day of October, 2012.

BYRNES KELLER CROMWELL LLP

By /s/ John A. Tondini
John A. Tondini, WSBA #19092
Byrnes Keller Cromwell LLP
[address, phone, fax, emails]
Attorneys for Nonparty International Business
Machines

4

If you read the Kamakana ruling by the US Court of Appeals for the Federal Circuit that IBM cites in full, it says quite a bit more about when you can and when you can't seal than IBM here quoted, and here's the explanation of the ground rules that have applied for some time, as a result of this ruling:

I. OVERVIEW OF THE RIGHT OF ACCESS TO JUDICIAL RECORDS

[1] Historically, courts have recognized a “general right to inspect and copy public records and documents, including judicial records and documents.” Nixon v. Warner Commc’ns, Inc., 435 U.S. 589, 597 & n.7 (1978). This right is justified by the interest of citizens in “keep[ing] a watchful eye on the workings of public agencies.” Id. at 598. Such vigilance is aided by the efforts of newspapers to “publish information concerning the operation of government.” Id.

Nonetheless, access to judicial records is not absolute. A narrow range of documents is not subject to the right of public access at all because the records have “traditionally been kept secret for important policy reasons.” Times Mirror Co. v. United States, 873 F.2d 1210, 1219 (9th Cir. 1989). Our case law has identified two categories of documents that fall in this category: grand jury transcripts and warrant materials in the midst of a pre-indictment investigation. Id.

[2] Unless a particular court record is one “traditionally kept secret,” a “strong presumption in favor of access” is the starting point. Foltz, 331 F.3d at 1135 (citing Hagestad v. Tragesser, 49 F.3d 1430, 1434 (9th Cir. 1995)). A party seeking to seal a judicial record then bears the burden of overcoming this strong presumption by meeting the “compelling reasons” standard. Foltz, 331 F.3d at 1135. That is, the party must “articulate[ ] compelling reasons supported by specific factual findings,” id. (citing San Jose Mercury News, Inc. v. U.S. Dist. Ct., 187 F.3d 1096, 1102-03 (9th Cir. 1999)), that outweigh the general history of access and the public policies favoring disclosure, such as the “ ‘public interest in understanding the judicial process.’ ” Hagestad, 49 F.3d at 1434 (quoting EEOC v. Erection Co., 900 F.3d 168, 170 (9th Cir. 1990)). In turn, the court must “conscientiously balance[ ] the competing interests” of the public and the party who seeks to keep certain judicial records secret. Foltz, 331 F.3d at 1135. After considering these interests, if the court decides to seal certain judicial records, it must “base its decision on a compelling reason and articulate the factual basis for its ruling, without relying on hypothesis or conjecture.” Hagestad, 49 F.3d at 1434 (citing Valley Broadcasting Co. v. U.S. Dist. Ct., 798 F.2d 1289, 1295 (9th Cir. 1986)).

In 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 gratify private spite, promote public scandal, circulate libelous statements, or release trade secrets. Nixon, 435 U.S. at 598; accord Valley Broadcasting Co., 798 F.2d at 1294. The mere fact that the production of records may lead to a litigant’s embarrassment, incrimination, or exposure to further litigation will not, without more, compel the court to seal its records. Foltz, 331 F.3d at 1136.

[3] We acknowledged explicitly in San Jose Mercury News, 187 F.3d at 1102, and later confirmed in Foltz, 331 F.3d at 1136, that the strong presumption of access to judicial records applies fully to dispositive pleadings, including motions for summary judgment and related attachments. We adopted this principle of disclosure because the resolution of a dispute on the merits, whether by trial or summary judgment, is at the heart of the interest in ensuring the “public’s understanding of the judicial process and of significant public events.” Valley Broadcasting, 798 F.2d at 1294; accord Foltz, 331 F.3d at 1135-36 (noting that “ ‘summary judgment adjudicates substantive rights and serves as a substitute for trial’ ”) (quoting Rushford v. The New Yorker Magazine, 846 F.2d 249, 252 (4th Cir. 1988)). Thus, “compelling reasons” must be shown to seal judicial records attached to a dispositive motion. Foltz, 331 F.3d at 1136. The “compelling reasons” standard is invoked even if the dispositive motion, or its attachments, were previously filed under seal or protective order. Id. (“[T]he presumption of access is not rebutted where . . . documents subject to a protective order are filed under seal as attachments to a dispositive motion. The . . . ‘compelling reasons’ standard continues to apply.”) (internal citations omitted).

[4] We have, however, “carved out an exception to the presumption of access” to judicial records, Foltz, 331 F.3d at 1135, for a “sealed discovery document [attached] to a non- dispositive motion,” such that “the usual presumption of the public’s right of access is rebutted.” Phillips v. General Motors Corp., 307 F.3d 1206, 1213 (9th Cir. 2002) (emphasis added). There are, as we explained in Foltz, “good reasons to distinguish between dispositive and nondispositive motions.” 331 F.3d at 1135. Specifically, 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.’ ” Id. (quoting Seattle Times Co. v. Rhinehart, 467 U.S. 20, 33 (1984)).

The public policies that support the right of access to dispositive motions, and related materials, do not apply with equal force to non-dispositive materials. Phillips, 307 F.3d at 1213. We reasoned in Phillips that when a district court grants a protective order to seal documents during discovery, “it already has determined that ‘good cause’ exists to protect this information from being disclosed to the public by balancing the needs for discovery against the need for confidentiality.” Id. The application of a strong presumption of access to sealed records, not directly relevant to the merits of the case, would eviscerate the “broad power of the district court to fashion protective orders.” Id. Thus a “particularized showing,” Foltz, 331 F.3d at 1138, under the “good cause” standard of Rule 26(c) will “suffice[ ] to warrant preserving the secrecy of sealed discovery material attached to nondispositive motions.” Id. at 1135.

[5] In sum, we treat judicial records attached to dispositive motions differently from records attached to non-dispositive motions. Those who seek to maintain the secrecy of documents attached to dispositive motions must meet the high threshold of showing that “compelling reasons” support secrecy. Id. at 1136. A “good cause” showing under Rule 26(c) will suffice to keep sealed records attached to nondispositive motions. Id. at 1135.

It is important to emphasize the difference between the “compelling reasons” standard and the “good cause” standard, especially because the City suggests that they essentially collapse in this case..4 A “good cause” showing will suffice to seal documents produced in discovery. Fed. R. Civ. P. 26(c) (stating that if “good cause” is shown in discovery, a district court may issue “any order which justice requires to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense”). Rule 26(c) gives the district court much flexibility in balancing and protecting the interests of private parties. Id.

[6] A “good cause” showing will not, without more, satisfy a “compelling reasons” test. See Foltz, 331 F.3d at 1135-36; Phillips, 307 F.3d at 1212 (observing that even if a court finds “good cause” under Rule 26(c) to seal a document, it must still determine whether the common law right of access compels production). Different interests are at stake with the right of access than with Rule 26(c); with the former, the private interests of the litigants are not the only weights on the scale. Unlike private materials unearthed during discovery, judicial records are public documents almost by definition, and the public is entitled to access by default. See Nixon, 435 U.S. at 597. This fact sharply tips the balance in favor of production when a document, formerly sealed for good cause under Rule 26(c), becomes part of a judicial record. Thus a “good cause” showing alone will not suffice to fulfill the “compelling reasons” standard that a party must meet to rebut the presump- tion of access to dispositive pleadings and attachments.5

_______________
4 Acknowledging that “compelling reasons” are required to keep under seal dispositive motions and attachments, the City argues that a previous showing of “good cause” suffices to satisfy the more demanding “compelling reasons” test. The City notes that it already had shown “good cause” before the January 22, 2004 order and that such a showing sufficed to keep its documents sealed under the “compelling reasons” standard. The City also argues that the magistrate judge, in analyzing “good cause,” had been analyzing “compelling reasons” all along without knowing it. Thus, the City maintains that the “very factors the Magistrate Judge used to determine ‘good cause’ were, by her own definition, identical to the factors to establish ‘compelling reasons’ ” and that “where the Magistrate Judge found ‘good cause’ . . . , she must necessarily also have found ‘compelling reasons’ to protect the sealed documents. The difference, in this particular case, is one of lexicon.” But, as we explain, the difference between the two standards is not merely semantic.

5 Perhaps based on its misconception of the overlap between the “compelling reasons” and “good cause” standards, the City mistakenly argues that the magistrate judge’s decisions were inconsistent because certain materials she found “compelling reasons” to withhold were similar to other materials she ordered unsealed. The City observes that “for reasons unstated and unclear” the magistrate judge protected significant portions of the depositions of two former CIU detectives, but ordered the unsealing of depositions of 32 other witnesses who offered similar details about the case.

But the City failed to note a crucial difference between the depositions that will stay sealed and those that will be unsealed—the unsealed depositions were attached to dispositive motions. The depositions of the two former CIU officers were not attached to dispositive pleadings, and thus the lesser “good cause” showing sufficed to keep these depositions sealed. See Phillips, 307 F.3d at 1213.

You can read it all, of course, to get the complete picture. I left out a couple of footnotes that were not central to our point, but you get the idea that there are sealings in some situations and not sealing in others. For example, there might be a document sealed, something attached to a nondispositive motion during the discovery phase, that later is made public as part of the public record. Two different standards apply. And I wanted to highlight that because IBM is asking that its licensing terms not be made public ever, not even as part of the public record.

You might be interested too in this declaration in support [PDF] of IBM's motion, regarding a signature that couldn't be handled the usual way due to Hurricane Sandy. Lawyers can't just ignore the rules for verifying a matter, as you'll see.

Here's the guide for journalists covering federal trials that the court system makes available, where you can find the reason why some things are indeed normally sealed on page 13:

Sealing of Documents

Although neither the Freedom of Information Act nor the Privacy Act applies to the Judiciary, information received by the court is publicly available unless sealed by statute, rule, or order of the court.

Statutes provide for sealing documents in specific proceedings, such as juvenile and grand jury proceedings. More generally, a federal rule of civil procedure provides for protective orders during discovery to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense. Similarly, bankruptcy court records are public and open to examination except that the court may protect commercial information or protect a person “with respect to scandalous or defamatory matter.”

There are no statutes or federal rules that provide guidance for when a court should or should not seal documents in cases not specifically covered by a statute or a rule. Courts sometimes have sealed documents that contain sensitive material, such as classified information affecting national security.

An entire case may be sealed at the opening of a case, or certain docket entries may be sealed during the course of the proceedings. These cases or documents generally are listed on the docket but with the notation that the information is sealed.

As you can see, they can probably do what they are doing, as judges have wide discretion to look at the requests and either reject or grant, limited only by the prior cases on the issue. But appeals courts can and do review such decisions, if asked.

Here's the trial schedule, from the docket entry from the pretrial conference on Oct 29th:

Trial shall begin Tuesday, Nov. 13, 2012 at 9:00 a.m. Trial schedule Nov. 13-16 is 9:00 a.m. to 12:00 p.m. and 1:00 p.m. to 4:00 p.m. Monday, Nov. 19 trial will begin at 1:00 p.m. Nov. 20-21, trial schedule is 9:00 a.m. to 12:00 p.m. and 1:00 p.m. to 4:00 p.m. Each side allowed 18 hours of trial time.
Here's the Seattle courthouse, and the local rules. No cameras; cell phones turned off; frisked on entry to building. Laptops are OK, but you can't use them in the room unless the judge says you can. By the way, you might be interested in how local rules can affect the outcome of patent cases, as argued in this Federalist Society paper by Arthur Gollwitzer III of the firm of F&B LLP, in Austin, Texas, Local Patent Rules - Certainty and Efficiency or a Crazy Quilt of Substantive Law?.

The court in Seattle is taking part in a test of using video of hearings and trials, and there was a notice in the docket that someone did make such a request regarding this litigation. I seriously doubt at this point that the request will be granted, however:

464 - Filed & Entered:   10/05/2012
Notice-Other - Docket Text: The court is in receipt of a request for video recording of the trial. Counsel shall respond by Wed., Oct. 17, 2012 stating their position.(CC)
Either party can ix-nay such a request, and nobody tells the public who said no. There isn't a notice yet about whether it will be allowed, but given the latest filings, I'm guessing no.

Even if they agreed to let it happen, what would there be to see, if the heart of the case is kept secret from the public? So at this point, I don't see any point in attending the trial. If you wish to attend, feel free, and if you do, let us know what they let you know, but I'm not going to ask anyone to take the time and trouble to cover a secret trial, when we aren't going to be let into the secrets.

For any who are new, here are a couple of articles providing some background and context.

Update: In a parallel litigation between Apple and Motorola, where Apple also had asked the court in Wisconsin to set a royalty rate for Motorola's RAND patents, Apple slipped up and revealed a bit of truth that highlights why I call this RAND legal strategy what I do -- Apple told the judge that if she set a rate higher than Apple likes, it will ignore it and continue litigation. She has now told the parties that she is considering dropping the trial, which was scheduled to start on Monday, since it now seems pointless to set a rate that is going to ignored at will. She also explains why courts are not the right vehicle to set a rate. It's better for the parties to negotiate terms. The parties are asked to respond to her concerns before she reaches a final decision. I'll put the ruling up as text in a new article next, but here it is as PDF.


  


Microsoft v. Motorola Trial - Everyone Involved Asks That the Public Be Excluded From the Heart of the Evidence ~ pj Updated | 101 comments | Create New Account
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Microsoft v. Motorola Trial - Everyone Involved Asks That the Public Be Excluded From the Heart of the Evidence ~ pj
Authored by: vadim on Saturday, November 03 2012 @ 11:08 AM EDT
Can't Groklaw submit a Friend of Court opinion on this subject?

[ Reply to This | # ]

Microsoft v. Motorola Trial - Everyone Involved Asks That the Public Be Excluded From the Heart of the Evidence ~ pj
Authored by: Anonymous on Saturday, November 03 2012 @ 11:21 AM EDT
If their is such a public interest, what is the vehicle tonotify the court/judge
of the reasons to weigh more heavily on the publics side. Does one contact the
EFF or write a letter or contact the newspapers?

Are there any more appropriate methods?

Shawn

[ Reply to This | # ]

Off Topic Discussions
Authored by: cassini2006 on Saturday, November 03 2012 @ 11:26 AM EDT
Please put off topic discussions in this thread.

[ Reply to This | # ]

Microsoft & RIM
Authored by: Anonymous on Saturday, November 03 2012 @ 12:08 PM EDT
There have been rumours about a takeover, and they do partner on the Blackberry
software.
I can think of several reasons why the might not want to let others know about
3rd party deals.

Maybe a key piece of the BlackBerry is licenced rather than owned and it would
reduce their value if it was know that they just repackaged others work like
Apple's revolutionary screens that they buy from someone else.

Maybe they have some deals related to the new release and Windows phone is now
their closest competitor.

[ Reply to This | # ]

Trade Secrets
Authored by: hAckz0r on Saturday, November 03 2012 @ 12:59 PM EDT
What exactly is a "trade secret" as far as the legal system is concerned? Is this just a way of saying *everything*, or what us technical geeks might otherwise think. If it were by my definition then there would still be plenty to read after proper redactions are made, but PJ makes this sound hopeless to learn anything.

---
The Investors IP Law: The future health of a Corporation is measured as the inverse of the number of IP lawsuits they are currently litigating.

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Completely Confused & Totally Ignorant...
Authored by: Jamis on Saturday, November 03 2012 @ 01:03 PM EDT
If this case is in a federal court, does this mean that there are no federal
laws or restrictions on all of this privacy in a public trial? If so, any
federal trial could become a sealed affair and our judicial system is at great
peril.

I still want to know who paid off whom in the Citizens United case.

[ Reply to This | # ]

The Conduct of Judge Alsup
Authored by: nyarlathotep on Saturday, November 03 2012 @ 01:21 PM EDT
In the Oracle v. Google trial, the conduct of Judge Alsup
with respect to the ideals of our American legal system was
outstanding.

Unfortunately, this trial doesn't feel like it is living up
to the same ideal, and feels more like the standard that our
legal system has become... which is why the majority of
Americans place less faith and respect in our legal system
than we once did.

But, we do have an election coming up. When our legal system
fails, it is ultimately the fault of the American people.

The local elections matter too... especially judges.

[ Reply to This | # ]

How about obfuscated disclosure?
Authored by: Anonymous on Saturday, November 03 2012 @ 01:42 PM EDT
That is, there are enough agreements here that statistcs should apply, and
undoubtedly will apply. Therefore, let a special master "fudge" the
numbers
in these agreements, such that they retain their statistical properties, but
are not actually the true numbers.

This would allow the whole thing to be public, without jeopardizing the
interests of the non-parties.

(Christenson)

[ Reply to This | # ]

    Telecoms don't want people to know
    Authored by: kawabago on Saturday, November 03 2012 @ 01:56 PM EDT
    Telecoms don't want people to know exactly how much they are
    being screwed! Currently telecoms consider it their job to
    provide the least service for the most money. That is exactly
    the opposite of what we need to get out of recession in an
    information economy!

    [ Reply to This | # ]

    Microsoft v. Motorola Trial - Everyone Involved Asks That the Public Be Excluded From the Heart of the Evidence ~ pj
    Authored by: Anonymous on Saturday, November 03 2012 @ 01:57 PM EDT
    That's really really stinky,

    Sure there is a danger that each of these companies is going
    to take a beating in negotiations if others discover how
    much/little is being paid.

    What worries me more is just how stinky this really is.
    When someone looks for that level of opacity, it is *only*
    because they have something to hide from someone.

    I have always considered these cross licensing deals to be
    something of a circular investment program.

    All of these companies have vast patent portfolios, some are
    worth more than others, but this is a situation where
    A pays B who pays C who pays D who pays A and variations.

    In investment funds that kind of dealing/trading is
    specifically banned because it is (and has been) used to
    artificially inflate the value of the fund portfolio. It
    looks great till someone tries to liquidate their
    investment, get the money, at which point the downward
    spiral starts and accelerates very rapidly and another
    bubble bursts/market crashes.

    So that's one thing, at the other end, we all know just how
    rubbish most of these patents are and what value we would
    place on them, zero in most cases; but how much money do
    these companies book to these cross licensing deals for
    these worthless patents and then just how much corporate tax
    is lost due to these companies moving money away from the
    profit line with this trick.

    So you lose because your government doesn't get it's due,
    and you lose again because these guys are basically running
    a cartel that artificially inflates their costs so you are
    charged more for your goods.

    Starbucks recently got caught in the UK avoiding billions in
    tax, by 'licensing' it's own logo from itself for pretty
    much all of it's profit.

    Indeed avoidance is not wrong, as they said, they followed
    the rules, but it is just as stinky as politicians writing
    their own expenses claim rules and then claiming that they
    were only following the rules as they repeatedly dipped
    their hands into the till.

    Is it possible that Googles "do no evil" policy prevents
    them from joining in the game and may result in the cat
    getting out of the bag?

    IANAL or an accountant so I don't know.
    I do know it reeks.

    These people could have sat at a table and reached an
    agreement they decided to fight it out in a public place in
    front of the public.

    They should not now be allowed to change their minds and ask
    that it not be public, unless they choose to do so by
    settling the matter before it arises.

    I for one would like to see the corruption exposed.


    Just speculatin'

    [ Reply to This | # ]

    I'm not buying IBMs argument
    Authored by: Anonymous on Saturday, November 03 2012 @ 02:22 PM EDT

    I get that they feel their lingerie draw is about to be made
    front page news, but their argument is that the license
    document motorola is going to use will "expose" their
    portfolio pricing method.

    but...but... is it not the case that IBM widely licenses its
    patent portfolio? so pretty much everyone involved has
    already got access to the same information in the form of
    their own licensing agreement , so what's the problem? maybe
    possibly they might be looking at slightly as a result of
    being in a weak negotitating position, everyone knows how it
    works.

    but..but...IBMs patent portfolio is a constantly shifting
    beast it expires, it expands, markets change, value
    perception changes, needs change, supply changes, demand
    changes every single day, so IBM has to change its pricing
    model every single day, so the document that resulted from a
    negotiation that took place 1 or two years ago is absolutely
    worthless when preparing for a negotiation that is going to
    take place tomorrow.

    It is a specious argument.

    [ Reply to This | # ]

    Anything the public can do to stop this?
    Authored by: Anonymous on Saturday, November 03 2012 @ 03:35 PM EDT
    Anything we can do to stop this? To ask the court to make those documents
    public? Anything legal we could do - like Reuters did with the Apple/Samsung
    case - as a third-party?

    [ Reply to This | # ]

    Wider implications
    Authored by: Anonymous on Saturday, November 03 2012 @ 03:42 PM EDT
    These companies want their dealings sealed, that is, hidden from public view.
    Just what are the limits to public view?

    Supposedly these companies have boards and shareholders. Are the small
    shareholders among those excluded from knowing?
    What about institutional investors and THEIR share-/stakeholders (which could
    include say pension funds)?

    Shareholders are the owners and legally employers of boards. I they can't see
    the content of financial dispositions, only read the net result on the corporate
    statement, has the employer/employee relationship been turned on its head?

    This agreement amongst opponents to seal is worrying. It points to an unhealthy
    collusion between financial interests not in the interest of society.

    [ Reply to This | # ]

    Corrections here
    Authored by: BJ on Saturday, November 03 2012 @ 04:14 PM EDT
    While I myself note that the link behind
    "this declaration in support [PDF] of IBM's motion"
    is dead.

    bjd


    [ Reply to This | # ]

    Everyone possible needs to file an Amicus
    Authored by: Anonymous on Saturday, November 03 2012 @ 07:21 PM EDT

    Personally, as well as corporately. If the judge gets two or three thousand
    Amicus filings, I suspect he'll get a better understanding of the situation.

    I'm not going to suggest what you put into your Amicus. We all have
    different viewpoints as to what is wrong with this case. Also if we all file the

    same Amicus it will look like an attempt to AstroTurf the court, and w don't
    want to do that.

    We do howev want to be heard.

    Wayne
    http://madhatter.ca

    [ Reply to This | # ]

    If secrecy then the market is inefficient and there is no true market price
    Authored by: Anonymous on Saturday, November 03 2012 @ 07:38 PM EDT
    Markets depend on information. Yes a commercial secret may allow one to get a
    temporary jump on the market and make a windfall profit, but that happens
    because the secrecy creates a flaw in the market and you can make a windfall
    profit by exploiting the flaw. There are no secrets in a perfectly functioning
    market. Markets can stand a little bit of secrecy, but too much of it and the
    market stops behaving like a market should. Without information there is no
    market and therefore no market price. What all these companies desperately
    imploring the court to hide every detail of their license agreements says to me
    is that there is no functional market for these licence agreements. And
    therefore there is no real market price.

    [ Reply to This | # ]

    Overturning FRAND is Opening a Can of Worms
    Authored by: Anonymous on Saturday, November 03 2012 @ 07:48 PM EDT

    One of the problems which this case raises is that the judge wants to overturn the current understanding of FRAND and substitute something new that will benefit Apple. However, what about existing licenses, or licenses that will need to be renewed in future? If existing terms become exposed, it won't be just the public who find out about them, it will be all the licensees as well. They will then see just what a wild range of terms and rates are in effect.

    I can imagine that once a new FRAND precedent is set, some existing licensees will open up lawsuits claiming that they have been "wronged" because the license the were offered wasn't really "FRAND". They will be marching into this judge's court demanding new terms equivalent to Apple's under the "non-discriminatory" clause. If Apple succeeds, this could be just the beginning of a complete lawsuit melt-down.

    Oh where are the "FRAND is so wonderful in standards" pundits now?

    [ Reply to This | # ]

    Microsoft v. Motorola Trial - Everyone Involved Asks That the Public Be Excluded From the Heart of the Evidence ~ pj
    Authored by: joef on Saturday, November 03 2012 @ 08:47 PM EDT
    Given that the FRAND issue is generally considered to be unplowed ground, whatever the judge decides will be making law from the bench.

    In our system, any lawmaking of such consequences as are anticipated by the Groklaw commenters should go through the full legislative process, including public hearings with informed testimony. Such lawmaking should not be done from the bench in the context of a high-stakes adversarial battle.

    [ Reply to This | # ]

    Shout it from the rooftops, PJ
    Authored by: DCFusor on Monday, November 05 2012 @ 02:31 PM EST
    This is nuts. Yes, I understand things are complex, as IBM mentions - there are
    all these cross-trading agreements that make the value exchanged for a single
    thing hard to figure.

    Don't you dare give up on covering this, even if the secrecy is the main news -
    People might want to know who has something to hide.

    But that's no excuse for us to not find out how much say, an android maker who
    caved is paying MS.

    And it's not an excuse to keep these kinds of details hidden. Moto could be
    trying to gouge, or just get the best deal they can, who knows? We will never
    know if we don't make enough fuss, that's certain.

    An example that comes to mind was what Apple wanted Samsung to pay for
    non-essential patents, and how much huger that was than what Samsung wanted for
    *essential* patents. It made Apple look like the predator, - charging a ton but
    refusing to pay even a little, when cross licensing. I think we the public
    deserve to know who is doing the "sharp dealing" here (though of
    course, we can kind of guess).


    ---
    Why guess, when you can know? Measure it!

    [ Reply to This | # ]

    A different opinion
    Authored by: Anonymous on Monday, November 05 2012 @ 03:11 PM EST
    When IBM, etc., wrote their frand license agreements with
    the respective parties, I expect that there is a
    confidentiality clause. By Microsoft and/or Motorola
    deciding to take these individual contracts into court to
    use as evidence (of what I do not know), that
    confidentiality clause has been broken. What kind of mess
    is this going to make in the legal system? For the
    individual company's profit, to the cost of the product to
    the consumer?

    We the public do not need to know the value of each
    individual business contract. There are many variables that
    go into pricing a product, one of which is: is IBM going to
    sell more of this than RIM? If so, maybe IBM deserves a
    lower rate. If Apple pays $2 or $5 for frand licensing, it's
    probably not going to change the cost to the consumer. Now
    that Google owns Motorola I expect somethings to change
    regarding Android licensing as well. (I personally don't
    know if Android is free or licensed under frand terms.)

    Some of us expect that when something enters our public
    courts, all the information should be displayed to
    everybody. In this case I respectfully disagree. IBM
    didn't ask to have it's business contracts revealed, so they
    should not be. In fact the judge shouldn't allow them to
    enter the case at all.

    On this I will agree with most of you. The judge should sit
    them down in a conference room and make they come to terms.
    He/she should not set a price. No product leaves a
    warehouse until the terms of the contract are agreed to.
    Neither Apple or Microsoft can sit on millions of units of
    inventory very long without being allowed to sell anything
    in the US, or potentially world wide.

    To me, that's how this problem should get resolved.

    wjarvis, not logged in.

    [ Reply to This | # ]

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