On April 4, 2014, OptumSoft filed its complaint alleging three causes of action against Arista Networks, Inc. (“Arista”): breach of contract, trade secret misappropriation, and declaratory relief as to the ownership of certain software components. OptumSoft’s breach of contract claim arises from a License Agreement (“Agreement”) between the parties that included provisions related to the parties’ respective ownership of intellectual property under the Agreement and that required Arista to meet certain confidentiality obligations with respect to such software. In its contract claim, OptumSoft alleges that Arista breached both the ownership and confidentiality provisions of the Agreement.

Arista filed its answer on April 14, 2014 and denied all allegations. Arista also filed a cross-complaint on April 14, 2014 alleging one cause of action for declaratory relief as to the ownership of the software components in dispute. OptumSoft filed its answer to the cross complaint on August 20, 2014, and denied all allegations.

On February 20, 2015, the Court granted Arista’s to compel further identification of trade secrets.

OptumSoft now moves to seal all, or in the alternative, portions of, Arista’s Motion to Compel Further Identification of Trade Secrets (“Arista’s Motion”) and supporting papers, identified as follows:

(1) Page 8, Lines 12-13 of Arista’s Memorandum of Points and Authorities in support of its Motion to Compel Further Identification of Trade Secrets, lodged January 23, 2015;
(2) Exhibit 1 at 1:17-22, 2:7-9, 18-28; Exhibit 1 at 2:10-18 of the Declaration of Adam Regoli in support of Arista’s Motion to Compel Further Identification of Trade Secrets, lodged January 23, 2015; and

(3) P1:26-2:4, 2:18-21, 3:3-13; P2:22-3:2 of the Separate Statement in support of Arista’s Motion to Compel Further Identification of Trade Secrets, lodged January 23, 2015.

Analysis: “A record must not be filed under seal without a court order. The court must not permit a record to be filed under seal based solely on the agreement or stipulation of the parties.” (Cal. Rules of Court, rule 2.551(a).) “The court may order that a record be filed under seal only if it expressly finds facts that establish: [¶] (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.” (Cal. Rules of Court, rule 2.550(d).) Where some material within a document warrants sealing, but other material does not, the document should be edited or redacted if possible, to accommodate the moving party’s overriding interest and the strong presumption in favor of public access. (Cal. Rules of Court, rule 2.550(d)(4), (5).) In such a case, the moving party should take a line-by-line approach to the information in the document, rather than framing the issue to the court on an all-or-nothing basis. (In re Providian Credit Card Cases (2002) 96 Cal.App.4th 292, 309.)

“The party requesting that a record be filed under seal must lodge it with the court under (d) when the motion or application is made, unless good cause exists for not lodging it or the record has previously been lodged under (3)(A)(i). Pending the determination of the motion or application, the lodged record will be conditionally under seal.” (Cal. Rules of Court, rule 2.551(b)(4).) “If necessary to prevent disclosure, any motion or application, any opposition, and any supporting documents must be filed in a public redacted version and lodged in a complete version conditionally under seal.” (Id. at (b)(5).)

“Courts have found that, under appropriate circumstances, various statutory privileges, trade secrets, and privacy interests, when properly asserted and not waived, may constitute overriding interests.” (In re Providian Credit Card Cases, supra, 96 Cal.App.4th at p. 298 fn. 3; NBC Subsidiary (KNBC-TV) vs. Superior Court (1999) 20 Cal.4th 1178, 1222, fn. 46.) Financial information involving confidential matters relating to the business operations of a party may be sealed where public revelation of the information would interfere with the party’s ability to effectively compete in the marketplace and there is a substantial probability that their revelation would prejudice the foregoing legitimate interests of the party. (See Universal City Studios, Inc. v. Superior Court (2003) 110 Cal.App.4th 1273, 1285-1286.)

Page 8, Lines 12-13 of Arista’s Memorandum of Points and Authorities in support of its Motion to Compel Further Identification of Trade Secrets, lodged January 23, 2015 refers by name specific code files of TACC (pronounced “taxi”), which are confidential to OptumSoft. TACC is a software program owned by OptumSoft and includes run-time framework software and has associated documentation. TACC is proprietary software that OptumSoft only shares with partners, customers, and potential customers pursuant to non-disclosure agreements, and is not publicly available. Goosen Decl. ¶ 4.

Exhibit 1 at 1:17-22, 2:7-9, 18-28 of the Declaration of Adam Regoli in support of Arista’s Motion to Compel Further Identification of Trade Secrets, lodged January 23, 2015, refer to by name specific source code files of TACC and describes functionality of OptumSoft’s source code, which are confidential to OptumSoft. OptumSoft’s source code is a trade secret. OptumSoft’s source code and its nomenclature and functionality is not publicly available information. OptumSoft only reveals such source code file names and functionality to customers, partners and potential customers pursuant to non-disclosure agreements. Goosen Decl. ¶ 3, 4.

Exhibit 1 at 2:10-18 of the Declaration of Adam Regoli in support of Arista’s Motion to Compel Further Identification of Trade Secrets, lodged January 23, 2015, refers to by name specific Application Program Interfaces (“API”) for TACC, which are proprietary to OptumSoft. OptumSoft’s API and their nomenclature are not publicly known. OptumSoft only reveals such API names to customers, partners and potential customers pursuant to non-disclosure agreements. Goosen Decl. ¶ 3, 5.

P1:26-2:4, 2:18-21, 3:3-13 of the Separate Statement in support of Arista’s Motion to Compel Further Identification of Trade Secrets, lodged January 23, 2015, refers to by name specific source code files of TACC and describes functionality of OptumSoft’s source code, which are confidential to OptumSoft. OptumSoft’s source code is a trade secret. OptumSoft’s source code and its nomenclature and functionality is not publicly available information. OptumSoft only reveals such source code file names and functionality to customers, partners, and potential customers pursuant to non-disclosure agreements. Goosen Decl. ¶ 4.

P2:22-3:2 of the Separate Statement in support of Arista’s Motion to Compel Further Identification of Trade Secrets, lodged January 23, 2015, refers to by name specific API for TACC, which are proprietary to OptumSoft. OptumSoft’s APIs and their nomenclature are not publicly known. OptumSoft only reveals such API names to customers, partners, and potential customers pursuant to nondisclosure agreements. Goosen Decl. ¶ 5.

The sealed record rules (Cal. Rules of Court, rules 2.550-2.551) “do not apply to discovery motions and records filed or lodged in connection with discovery motions or proceedings. However, the rules do apply to discovery materials that are used at trial or submitted as a basis for adjudication of matters other than discovery motions or proceedings.” (Rule 2.550(a)(3).) Furthermore, a right of public access may exist and sealing rules may apply where the discovery motion involves “questions of great significance to members of the public.” (H.B. Fuller Co. v. Doe (2007) 151 Cal.App.4th 879, 893.) Here, the records to be sealed were lodged in connection with discovery motions. Thus, the sealed record rules do not apply. According to the parties, all items requested to be sealed were designated as Highly Confidential – Outside Counsel’s Eyes Only, pursuant to the Stipulated Protective Order in this action. The motion is not opposed. The discovery motion at issue do not seem to involve questions of great significance to members of the public; rather, they involve detailed and highly technical information on the nature of the claimed trade secrets in this case.

Furthermore, “[t]he sealed records do not apply to records that are required to be kept confidential by law[,]” (Cal. Rules of Court, rule 2.550(a)(2)), and this includes records containing claimed trade secrets in actions initiated pursuant to the UTSA for misappropriation of trade secrets. (See In re Providian Credit Card Cases (2002) 96 Cal.App.4th 292, 298-290.) Even if the rules were to apply, there would very likely be an overriding interest in keeping this trade secret information confidential. (See NBC Subsidiary (KNBC-TV) vs. Superior Court (1999) 20 Cal.4th 1178, 1222, fn. 46 [recognizing trade secrets as overriding interest].)

For all of these reasons, the motion to seal should be GRANTED as to (1) Page 8, Lines 12-13 of Arista’s Memorandum of Points and Authorities in support of its Motion to Compel Further Identification of Trade Secrets, lodged January 23, 2015; (2) Exhibit 1 at 1:17-22, 2:7-9, 18-28; Exhibit 1 at 2:10-18 of the Declaration of Adam Regoli in support of Arista’s Motion to Compel Further Identification of Trade Secrets, lodged January 23, 2015; and (3) P1:26-2:4, 2:18-21, 3:3-13; P2:22-3:2 of the Separate Statement in support of Arista’s Motion to Compel Further Identification of Trade Secrets, lodged January 23, 2015.

Note that no party moved to seal Optumsoft’s Opposition to Arista’s motion to compel further identification of trade secrets, lodged February 5, 2015, and no party moved to seal Arista’s Reply in support of its motion to compel further identification of trade secrets, lodged February 11, 2015, even though both documents were lodged conditionally under seal. Each party shall submit revised public versions of both of these documents.