Case Number: BC561469 Hearing Date: July 20, 2016 Dept: 20

TENTATIVE RULING
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TENTATIVE RULING
JUDGE DALILA C. LYONS
DEPARTMENT 20
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Hearing Date: July 25, 2016
Posted on CourtNet: July 19, 2016
Case Name: Prophet Productions v. Acacia Patent Acquisition, LLC
Case No.: BC561469
Motion: File Document under Seal
Moving Party: Defendant Acacia Research Group, LLC (erroneously named as Acacia Patent Acquisition, LLC)
Responding Party: Plaintiff Prophet Productions
Notice: OK
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Ruling: Defendant Acacia Research Group, LLC’s motion to file documents under seal is DENIED.
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Defendant Acacia Research Group, LLC (“Defendant”) moves for an order sealing certain documents Defendant has produced in this litigation as “Confidential” or “Highly Confidential” under the Stipulated Confidentiality Agreement and Protective Order entered by the Court on June 10, 2015 (the “Protective Order” and that are being lodged under conditional seal in connection with Defendant’s motion for summary adjudication (“MSA”).

Specifically, Defendant moves for an order to seal five documents:

(1) Exhibit 1 to the Declaration of Holly Hernandez in support of the MSA: “Exclusive License Agreement” between Defendant and Plaintiff, dated February 26, 2009;

(2) Exhibit 1 to the Declaration of Matthew Vella in support of the MSA: an agreement between Defendant and Oracle Corporation, dated December 30, 2009;

(3) Exhibit 2 to the Declaration of Matthew Vella in support of the MSA: an amendment to the agreement, dated March 01, 2010;

(4) Exhibit 3 to the Declaration of Matthew Vela in support of the MSA: an amendment to the agreement dated March 29, 2010; and

(5) Exhibit 4 to the Declaration of Matthew Vella in support of the MSA: an agreement between Defendant and SK Hynix, Inc. dated March 29, 2012.

Defendant also seeks an order sealing portions of the MSA, the separate statement of undisputed facts, the appendix of exhibits, the supporting declarations of Matthew Vella and Holly Hernandez, the instant motion, the declaration of Travis P. Brennan in support of the instant motion, and the notice of lodging as all discuss or reference specific terms of these documents.

ANALYSIS

I. Legal Standard

California law authorizes the sealing of court records containing confidential information. See NBC Subsidiary, Inc. v. Superior Court (1999) 20 Cal.4th 1178, 1222, n. 46. California Rules of Court Rule 2.551(a) provides that a record may not be filed under seal without a court order and the court must not permit a record to be filed under seal based solely on the agreement or stipulation of the parties. The party requesting a record be filed under seal must file a motion or an application for an order sealing the record that is accompanied by a memorandum or declaration containing facts to justify the sealing. CRC Rule 2.551(b)(1). “The court may order that a record be filed under seal” if it finds that there is an overriding interest in favor of maintaining the confidentiality of the information. CRC Rule 2.550(d).

The factual findings required to seal records require the court to expressly find that (1) there exists an overriding interest that overcomes the right of public access to the record; (2) the overriding interest supports sealing the record; (3) a substantial probability exists that the overriding interest will be prejudiced if the record is not sealed; (4) the proposed sealing is narrowly tailored; and (5) no less restrictive means exist to achieve the overriding interest. CRC Rule 2.550(d)(1)-(5). If the Court grants the order sealing a record, the order must state whether, in addition to the sealed records, the order itself, the register of actions, any other court records, or any other records relating to the case are to be sealed and the order must state whether any person other than the court is authorized to inspect the sealed record. CRC Rule 2.551(e)(2)-(3). An order sealing the record must specifically state the facts that support the findings and direct the sealing of only those documents and pages, or if reasonably practicable, portions of documents and pages that contain the material that needs to be placed under seal and all other portions of each document and page must be included in the public filed. CRC Rule 2.550(e)(1)(A)-(B). And unless the sealing order otherwise states, it prevents the parties from disclosing the contents of any materials that have been sealed in anything that is subsequently publicly filed. CRC Rule 2.551(e)(4).

Defendant states that the documents at issue are covered by the Protective Order and by confidentiality obligations as such documents contain non-public and sensitive business and proprietary information. Defendant argues certain parties and third parties would be prejudiced from the public disclosure of such documents and there are no less restrictive means to prevent the disclosure of the public information. Defendant states its licensing and enforcement efforts can result in agreements with certain companies covering multiple of Defendant’s patent portfolios and that such “Global Agreements” contain highly confidential and proprietary terms of the agreements and patents involved. Brennan Decl. ¶ 3. And Defendant states the agreement Plaintiff and Defendant entered into in which Defendant obtained all substantial rights in two of Plaintiff’s patents to pursue licensing and enforcement against infringers so the parties could share the resulting profits contains confidential proprietary business information regarding the terms of the patent license. Hernandez Decl. Exh. 1; Brennan Decl. ¶ 3.

Defendant states that among other things, Plaintiff alleges Defendant granted SK Hynix, Inc. and Oracle Corporation rights to Plaintiff’s patents under Global Agreements without notifying or remunerating Plaintiff. Defendant states the Protective Order permits the parties to designate as “Highly Confidential” non-public documents, testimony, or information the designating party in good faith believes would risk serious injury, including financial harm, if disclosed to another party or non-party and that such risk cannot be avoided by less restrictive means and the parties have agreed to apply to file designated information under seal. Brennan Decl. ¶ 2, Exh. 1. Defendants argue the Global Agreements contain information regarding thousands of patents unrelated to the action that contain highly confidential business and proprietary information regarding the rights granted as well as confidential information of third parties and that the Agreement in this action and the Global Agreements contain express confidentiality provisions to prohibit the unauthorized disclosure of their terms, reflecting the expectation of the parties on confidential and proprietary information. Brennan Decl. ¶ 3.

Plaintiff argues Defendant’s motion falls short of making the required factual showing to seal documents filed in support of the Motion for Summary Adjudication and Defendant has not provided specific reasons to justify the sealing and instead relies on conclusory statements and blanket assertions of confidentiality. Plaintiff argues the public’s right of access to civil litigation documents substantially outweighs any reason in support of sealing the documents. Plaintiff argues Defendant has not providing sufficient information that sealing the requested documents protects any trade secrets or the reasons parties will suffer harm if the documents are not sealed.

Defendant responds that if the documents are not sealed, it will irreparably damage Defendant’s relationships with counterparties and the ability to negotiate with such counterparties as the Global Agreements are heavily negotiated and contain terms Defendant wishes to remain confidential and not be known to non-signatories, particularly those Defendant may need to negotiate with in the future and that the counterparties may be hesitant to enter into any agreement with Defendant if the terms will become publicized as the agreements contain confidentiality requirements.

Here, the Court agrees with Plaintiff that Defendant failed to make the factual showing to seal document required by CRC Rule 2.551. Defendant has not provided specific reasons to justify the sealing and instead relies on conclusory statements and blanket assertions of confidentiality. The requested sealing is extensive and not narrowly tailored. The public’s right of access to civil litigation documents substantially outweighs any reason presented by Defendant in support of sealing the documents. The fact that the parties agreed to a protective order on these documents is not dispositive. The issue on this motion is the public’s right to access to civil litigation documents. Finally, the information sought to be redacted does not appear to be material to the motion for summary judgment. The conditionally sealed documents filed by Defendant will be returned to Defendant at the hearing for summary judgment.