Apple and Samsung Agree on Something, Docs Should Be Sealed
After what seems like the 200th round in the Apple v. Samsung litigation, we find ourselves asking: Why can't we all just get along? Well, that day might have actually come.
Both Apple and Samsung appealed the District Court for the Northern District of California's orders refusing to seal confidential documents submitted in support of pre- and post-trial motions. The Federal Circuit Court of appeals agreed with their positions, and reversed and remanded the district court's decision.
The Pre- and Post-Trial Documents and Orders
Both Apple and Samsung submitted exhibits in support of many pre- and post-trial motions. Whenever confidential information was filed, the parties sought to have the documents sealed. The district court asked the parties to narrow down the information they wanted sealed to that information that was "exceptionally sensitive information." In many instances the parties only sought to redact documents, rather than seal them in their entirety.
Collectively, the kind of information Apple and Samsung wanted excluded related to market research, source codes, financial information, licensing information, future business plans and accounting procedures.
Interestingly, the parties did not object to each others' motions, instead, Reuters intervened and opposed the motions. The district court denied some of the motions to seal, the parties appealed, and the orders were held in abeyance pending appeal.
The Correct Standard
Applying the law of the Ninth Circuit, the Federal Circuit found that normally, there is a "strong presumption in favor of access to court records ... [unless there are] 'sufficiently compelling reasons' that override the public policies favoring disclosure."
The court noted that where the release of information would "cause competitive harm to a business," that factor weighed in favor of sealing the documents. It also noted an exception the Ninth Circuit: where non-dispositive motions are concerned, the presumption in favor of disclosure is rebutted because "those documents are often unrelated, or only tangentially related, to the underlying cause of action."
Finding legal error because the district court applied the wrong standard, the court went on to state that under the stricter (erroneous) analysis, the district court still erred.
Competitive Harm and Trade Secrets
The Federal Circuit found that both Apple and Samsung would suffer competitive harm if the information in the exhibits was made public. Both companies offered testimony stating that within the company, the information in the exhibits was marked "confidential" and only released on a need-to-know basis. These facts, together with the nature of the information, and the fact that the parties were only redacting what was needed persuaded the Federal Circuit that the documents should be sealed.
First Amendment Implications
Though Reuters made the initial objections to sealing the docs, it did not participate in the appeal. Instead, a coalition of media enterprises were allowed to file briefs amicus curiae and participate in oral arguments. Here, the court had the difficult task of weighing the public interest and a company's right not to release trade secrets in the course of litigation. The court showed us it's a fine line, but will depend on the law of the circuit that you practice in.
- Apple Samsung Verdict: Apple Wins $1.05 Billion (FindLaw's California Case Law Blog)
- Judicial Conference Recommends New Policy for Sealing Records (FindLaw's U.S. Eleventh Circuit Blog)
- Protecting Trade Secrets (FindLaw)