VLSI Technology LLC v. Intel Corporation, No. 5:2017cv05671 - Document 727 (N.D. Cal. 2023)
Court Description: ORDER GRANTING ADMINISTRATIVE MOTIONS ( 542 , 546 as corrected by 550 ) TO CONSIDER WHETHER ANOTHER PARTYS MATERIAL SHOULD BE SEALED. Signed by Judge Beth Labson Freeman on 10/16/2023. (blflc3, COURT STAFF) (Filed on 10/16/2023)
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1 2 3 UNITED STATES DISTRICT COURT 4 NORTHERN DISTRICT OF CALIFORNIA 5 SAN JOSE DIVISION 6 7 VLSI TECHNOLOGY LLC, Plaintiff, 8 v. 9 United States District Court Northern District of California Case No. 17-cv-05671-BLF 10 INTEL CORPORATION, 11 Defendant. ORDER GRANTING ADMINISTRATIVE MOTION TO CONSIDER WHETHER ANOTHER PARTY’S MATERIAL SHOULD BE SEALED [Re: ECF Nos. 542, 546, 550] 12 Before the Court are VLSI Technology LLC’s (“VLSI”) Administrative Motions regarding 13 14 its Daubert Motion to Exclude Damages Opinions of Intel's Experts (ECF No. 544) and its 15 Daubert Motion to Exclude Technical Opinions of Intel's Experts (ECF No. 545): 1. Administrative Motion to Consider Whether Another Party's Material Should Be 16 17 Sealed re: VLSI's Motion to Exclude Damages Opinions of Intel's Experts, and 18 Exhibits Thereto. ECF No. 542. 2. Administrative Motion to Consider Whether Another Party's Material Should Be 19 20 Sealed re VLSI's Daubert Motion to Exclude Technical Opinions of Intel's Experts. 21 ECF No. 546. 3. Administrative Motion to Consider Whether Another Party's Material Should Be 22 Sealed (Correction of ECF No. 546). ECF No. 550. 23 For the reasons described below, the Administrative Motions are GRANTED. 24 25 26 I. BACKGROUND VLSI filed its Daubert Motion to Exclude Damages Opinions of Intel's Experts (“Damages 27 Motion”) on July 25, 2023. ECF No. 544. That same day, VLSI filed an Administrative Motion 28 to File Under Seal regarding VLSI’s information in the Motion. ECF No. 542. Intel Corporation 1 (“Intel”) filed a declaration and exhibits in support of VLSI’s administrative motion. ECF Nos. 2 618, 619. NXP Semiconductors USA, Inc., NXP Semiconductors B.V. and Freescale 3 Semiconductor Inc. (collectively “NXP”) also filed a declaration in support of VLSI’s 4 administrative motion. ECF No. 621. VLSI did not name NXP in ECF No. 542, but the Court 5 nonetheless considers NXP’s declaration in the interest of judicial economy. VLSI filed its Daubert Motion to Exclude Technical Opinions of Intel's Experts United States District Court Northern District of California 6 7 (“Technical Motion”) on July 25, 2023. ECF No. 545. The next day, VLSI filed an 8 Administrative Motion to File Under Seal regarding VLSI’s information in the Motion. ECF No. 9 546. VLSI subsequently filed a correction to ECF No. 546 with updated exhibits. ECF No. 550. 10 Intel filed a declaration and exhibits in support of VLSI’s Administrative Motion. ECF Nos. 620, 11 622. 12 II. 13 LEGAL STANDARD “Historically, courts have recognized a ‘general right to inspect and copy public records 14 and documents, including judicial records and documents.’” Kamakana v. City & Cty. Of 15 Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006) (quoting Nixon v. Warner Commc'ns, Inc., 435 16 U.S. 589, 597 & n.7 (1978)). Accordingly, when considering a sealing request, “a ‘strong 17 presumption in favor of access’ is the starting point.” Id. (quoting Foltz v. State Farm Mut. Auto. 18 Ins. Co., 331 F.3d 1122, 1135 (9th Cir. 2003)). Parties seeking to seal judicial records relating to 19 motions that are “more than tangentially related to the underlying cause of action” bear the burden 20 of overcoming the presumption with “compelling reasons” that outweigh the general history of 21 access and the public policies favoring disclosure. Ctr. for Auto Safety v. Chrysler Grp., 809 F.3d 22 1092, 1099 (9th Cir. 2016); Kamakana, 447 F.3d at 1178–79. 23 Records attached to motions that are “not related, or only tangentially related, to the merits 24 of a case,” however, are not subject to the strong presumption of access. Ctr. for Auto Safety, 809 25 F.3d at 1099; see also Kamakana, 447 F.3d at 1179 (“[T]he public has less of a need for access to 26 court records attached only to non-dispositive motions because those documents are often 27 unrelated, or only tangentially related, to the underlying cause of action.”). Parties moving to seal 28 the documents attached to such motions must meet the lower “good cause” standard of Rule 2 1 26(c). Kamakana, 447 F.3d at 1179 (internal quotations and citations omitted). This standard 2 requires a “particularized showing,” id., that “specific prejudice or harm will result” if the 3 information is disclosed. Phillips ex rel. Estates of Byrd v. Gen. Motors Corp., 307 F.3d 1206, 4 1210–11 (9th Cir. 2002); see Fed. R. Civ. P. 26(c). “Broad allegations of harm, unsubstantiated 5 by specific examples of articulated reasoning” will not suffice. Beckman Indus., Inc. v. Int'l Ins. 6 Co., 966 F.2d 470, 476 (9th Cir. 1992). 7 III. 8 United States District Court Northern District of California 9 DISCUSSION The documents at issue in VLSI’s motions to seal are associated with its Daubert motions. These opinions concern infringement and invalidity of the patents at issue in the case, available 10 damages for the alleged infringement, and efforts to strike or exclude expert opinions. These 11 issues are “more than tangentially related to the merits of [the] case” and therefore the parties must 12 provide “compelling reasons” for maintaining the documents under seal. See Ctr. for Auto Safety, 13 809 F.3d at 1101; see also Finjan, Inc. v. Juniper Network, Inc., No. C 17-5659 WHA, 2021 WL 14 1091512, at *1 (N.D. Cal. Feb. 10, 2021). 15 A. 16 17 ECF No. 542 (Damages Motion) i. Intel Intel seeks to seal selected portions of VLSI’s Damages Motion and its exhibits. Intel 18 writes that licensing information should be sealed because “[p]ublic disclosure of information 19 regarding the payment terms from Intel’s license agreements, the scope of Intel’s license 20 agreements and other terms from Intel’s agreements could negatively affect Intel’s future licenses 21 and settlements and negotiations for such agreements.” ECF No. 618 ¶ 13. Intel adds that 22 financial information should be sealed because “[d]isclosure of information regarding Intel’s 23 financials and financial decisions—such as product pricing; discounts and criteria Intel uses for 24 pricing; and Intel’s revenue, profits, and costs—would provide competitors and potential 25 counterparties with unfair insight into Intel’s business strategies and cost/benefit analyses.” Id. ¶ 26 15. Intel contends that it “ has narrowly identified for redaction with yellow highlighting the 27 portions of VLSI’s Daubert memorandum that reveal highly confidential licensing information.” 28 Id. ¶ 17. 3 1 The Court finds that compelling reasons exist to seal the highlighted portions of the 2 document. See Finjan, Inc. v. Proofpoint, Inc., No. 13-CV-05808-HSG, 2016 WL 7911651, at *1 3 (N.D. Cal. Apr. 6, 2016) (finding “technical operation of [defendant's] products” sealable under 4 “compelling reasons” standard); Exeltis USA Inc. v. First Databank, Inc., No. 17-CV-04810-HSG, 5 2020 WL 2838812, at *1 (N.D. Cal. June 1, 2020) (noting that courts have found “confidential 6 business information” in the form of “business strategies” sealable under the compelling reasons 7 standard.). The Court also finds that the request is narrowly tailored. The Court’s ruling is 8 summarized below: 9 ECF or Document Exhibit No. VLSI’s Memorandum 10 United States District Court Northern District of California 11 12 13 Ex. 1 Excerpt from Yellow the transcript of highlighted the deposition portions of Patrick Fay Ex. 2 Excerpt from Yellow June 1, 2023 highlighted Rebuttal Expert portions Report of Patrick Fay 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Portion(s) to Seal Yellow highlighted portions Ruling Granted, as yellow highlighted portions of VLSI’s memorandum on page 11 reveals highly confidential licensing information regarding payment terms. Selwyn Decl. ¶ 17. Granted, as yellow highlighted portions of Exhibit 1 on page 34 reveals highly confidential technical information regarding design details and/or operation of accused features in Intel’s products. Selwyn Decl. ¶ 18. Granted, as yellow highlighted portions of Exhibit 2 on pages 85-92 reveals highly confidential technical information regarding design details and/or operation of accused features in Intel’s products. Selwyn Decl. ¶ 19a. Furthermore, yellow highlighted portions of Exhibit 2 on pages 282-83, 289, 293, 304, 314, 324, 333, 339, 374, 422, and 447 reveal highly confidential information regarding Intel’s licenses, including payment terms from Intel’s license agreements, the scope of Intel’s license agreements, and other confidential licensing information. Selwyn Decl. ¶ 19b. Intel also seeks to seal the names of the counterparties to these agreements in Exhibit 2 because the names of counterparties to Intel’s agreements are maintained in confidence by Intel, and Intel is under confidentiality obligations to the counterparties not to reveal that information. 4 1 2 3 4 5 6 7 8 9 10 Ex. 4 Excerpt from Yellow June 1, 2023 highlighted Rebuttal Expert portions Report of Lauren R. Kindler Public disclosure of these counterparties could provide competitors and potential counterparties to licensing, acquisition, and settlement agreements with an unfair insight into Intel’s business strategies. Id. Likewise, public disclosure of the patents covered by a license agreement could reveal confidential information about the scope of the patent license and provide insight into the structure of Intel’s licenses and licensing strategy. Id. Granted, as yellow highlighted portions of Exhibit 4 on pages 67 (paragraph 145), 75 (paragraph 157), 95 (paragraph 186), 121 (paragraph 222, fn. 457) reveal highly confidential technical information regarding design details and/or operation of accused features in Intel’s products. Selwyn Decl. ¶ 20a. United States District Court Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Furthermore, yellow highlighted portions of Exhibit 4 on pages 66 (paragraph 143.d, fn.198), 73-74 (paragraph b, fn.235), 80 (paragraph 166.b, fn.264), 87 (paragraph 175.f, fn.302), 94 (paragraph 184.d, fn.334), 106-7 (paragraph 202.b, fn. 390), 112-13 (paragraph 211.b, fn. 416), 120 (paragraph 220.e, fn.450), 126 (paragraph 229.a, fn. 480) reveal highly confidential information regarding Intel’s sales. Selwyn Decl. ¶ 20b. Furthermore, yellow highlighted portions of Exhibit 4 on pages 65-67, 73-75, 79-81, 86-88, 93-95, 106-108, 112-114, 118-121, and 126127 reveal highly confidential information regarding Intel’s licenses, including payment terms from Intel’s license agreements, the scope of Intel’s license agreements, and other confidential licensing information. Selwyn Decl. ¶ 20c. Intel also seeks to seal the names of the counterparties to these agreements in Exhibit 4 because the names of counterparties to Intel’s agreements are maintained in confidence by Intel, and Intel is under confidentiality obligations to the counterparties not to reveal that information. Public disclosure of these counterparties could provide competitors and potential counterparties to licensing, acquisition, and settlement 5 1 2 3 4 5 6 7 8 Ex. 6 9 10 Excerpt from Yellow June 1, 2023 highlighted Rebuttal Expert portions Report of M. Ray Perryman agreements with an unfair insight into Intel’s business strategies. Id. Likewise, public disclosure of the patents covered by a license agreement could reveal confidential information about the scope of the patent license and provide insight into the structure of Intel’s licenses and licensing strategy. Id. Moreover, public disclosure of the patents covered by a license agreement in conjunction with the expert’s analysis of those patents could provide competitors with insight into the technical functionality of Intel’s products. Id. Granted, as yellow highlighted portions of Exhibit 6 on page 65 (paragraph 136, fn. 243, fn. 244) reveal highly confidential technical information regarding design details and/or operation of accused features in Intel’s products. Selwyn Decl. ¶ 21a. United States District Court Northern District of California 11 Furthermore, yellow highlighted portions of Exhibit 6 on pages 58, 59, 64, and 65 (paragraph 134) reveal highly confidential information regarding Intel’s financial decisions including Intel’s strategy for pricing and the criteria Intel uses for pricing, and Intel’s revenue, profits, and costs. Selwyn Decl. ¶ 21b. 12 13 14 15 16 17 18 19 Ex. 8 20 21 22 23 24 Furthermore, yellow highlighted portions of Exhibit 8 on page 48 (paragraph 94) reveal highly confidential information regarding Intel’s licensing negotiation strategy. Selwyn Decl. ¶ 22b. 25 26 27 28 Excerpt from Yellow June 22, 2023 highlighted Reply Report of portions Ryan Sullivan Furthermore, yellow highlighted portions of Exhibit 6 on page 29 reveal highly confidential information regarding Intel’s licensing negotiation strategy. Selwyn Decl. ¶ 21c. Granted, as yellow highlighted portions of Exhibit 8 on pages 48 (paragraph 95), 49, 50, 74, and 81-84 reveal, or could be used to derive, highly confidential information regarding Intel’s financial decisions, including Intel’s strategy for pricing and the criteria Intel uses for pricing, and Intel’s revenue, profits, and costs and sales volume. Selwyn Decl. ¶ 22a. \\ 6 ii. 1 NXP seeks to seal selected portions of VLSI’s Damages Motion and its exhibits. NXP 2 United States District Court Northern District of California NXP 3 writes that the information should be sealed because “the exhibits that NXP seeks to seal all relate 4 to highly-confidential information regarding its past and current intellectual property licensing and 5 monetization practices, activities, capabilities, and efforts. Public disclosure of this information 6 would provide NXP’s competitors with sensitive information regarding NXP’s internal business 7 practices, as well as its relationships with other companies in the semiconductor industry and the 8 patent licensing industry, thus disadvantaging NXP in future business and contract negotiations. It 9 would also adversely affect NXP’s efforts to enter into intellectual property arrangements with 10 other companies.” ECF No. 621 ¶¶ 7-11. NXP contends that it “narrowly tailored its proposed 11 redactions only to information that maintains in confidence in the regular course of its business.” 12 Id. ¶ 6. 13 The Court finds that compelling reasons exist to seal the highlighted portions of the 14 document. See Finjan, Inc. v. Proofpoint, Inc., No. 13-CV-05808-HSG, 2016 WL 7911651, at *1 15 (N.D. Cal. Apr. 6, 2016) (finding “technical operation of [defendant's] products” sealable under 16 “compelling reasons” standard); Exeltis USA Inc. v. First Databank, Inc., No. 17-CV-04810-HSG, 17 2020 WL 2838812, at *1 (N.D. Cal. June 1, 2020) (noting that courts have found “confidential 18 business information” in the form of “business strategies” sealable under the compelling reasons 19 standard.). The Court also finds that the request is narrowly tailored. The Court’s ruling is 20 summarized below: 21 22 23 24 25 26 27 28 ECF or Exhibit No. ECF 542-5 Ex. 4 to VLSI’s Motion to Exclude Damages Opinions Document Portion(s) to Seal Excerpts from Blue-boxed the June 1, 2023 portions in ¶¶ Rebuttal Expert 91- 92, 143, Report of 154-155, 157. Lauren Kindler Ruling Granted, as the document identifies and describes (1) confidential patent agreements entered into between NXP/Freescale and other parties, (2) confidential intellectual property licensing and monetization practices, activities, capabilities, and efforts by NXP and Freescale, and (3) confidential testimony from current and former employees of NXP and Freescale regarding its intellectual property practices. See infra ¶¶ 6-11. 7 1 2 3 United States District Court Northern District of California 4 ECF 542-7 Ex. 6 to VLSI’s Motion to Exclude Damages Opinions Excerpts from the June 1, 2023 Rebuttal Expert Report of Dr. M. Ray Perryman Blue-boxed portions in ¶¶ 68-69. Granted, as the document identifies and describes confidential intellectual property licensing and monetization practices, activities, capabilities, and efforts by NXP and Freescale. See infra ¶¶ 6, 8. 5 B. 6 Intel seeks to seal selected portions of VLSI’s Technical Motion and its exhibits. Intel ECF No. 546 (Technical Motion) 7 writes that licensing information should be sealed because “[m]aintaining the confidentiality of 8 technical information about Intel’s product design and operation, including for proposed designs, 9 and manufacturing processes is critical to Intel’s business. Knowledge of this information by third 10 parties would put Intel at a competitive disadvantage in future product development and in its 11 business dealings as its competitors could incorporate that information into their own development 12 strategies and products to gain an unfair advantage over Intel in the market.” ECF No. 620 ¶ 11. 13 Intel contends that it “ narrowly tailored to the design details, operation and manufacturing 14 processes of accused product features and certain Intel product prior art.” Id. ¶ 15. 15 The Court finds that compelling reasons exist to seal the highlighted portions of the 16 document. See Finjan, Inc. v. Proofpoint, Inc., No. 13-CV-05808-HSG, 2016 WL 7911651, at *1 17 (N.D. Cal. Apr. 6, 2016) (finding “technical operation of [defendant's] products” sealable under 18 “compelling reasons” standard); Exeltis USA Inc. v. First Databank, Inc., No. 17-CV-04810-HSG, 19 2020 WL 2838812, at *1 (N.D. Cal. June 1, 2020) (noting that courts have found “confidential 20 business information” in the form of “business strategies” sealable under the compelling reasons 21 standard.). The Court also finds that the request is narrowly tailored. The Court’s ruling is 22 summarized below: 23 24 25 26 27 ECF or Exhibit No. Document Portion(s) to Seal VLSI’s Motion Yellow to Strike Certain highlighted Portions of portions Intel’s Technical Expert Reports Ruling Granted, as yellow highlighted portions contain highly confidential technical information regarding design details, operation and manufacturing processes of accused product features. Selwyn Decl. ¶¶ 13, 15. 28 8 1 Ex. 6 2 3 4 Ex. 8 5 Excerpt of Rebuttal Expert Report of Patrick Fay, Ph.D. Excerpt of Expert Report of Patrick Fay, Ph.D. 6 7 Yellow highlighted portions Granted, as yellow highlighted portions contain highly confidential technical information regarding design details, operation and manufacturing processes of accused product features. Selwyn Decl. ¶¶ 13, 15. Granted, as yellow highlighted portions contain highly confidential technical information regarding design details, operation and manufacturing processes of certain Intel product prior art. Selwyn Decl. ¶¶ 14-15. ORDER 8 For the foregoing reasons, IT IS HEREBY ORDERED that: 9 1. VLSI’s Administrative Motion (ECF No. 542) is GRANTED. 10 11 United States District Court Northern District of California IV. Yellow highlighted portions 2. VLSI’s Administrative Motion (ECF No. 546, as corrected by ECF No. 550) is GRANTED. 12 13 14 15 Dated: October 16, 2023 ______________________________________ BETH LABSON FREEMAN United States District Judge 16 17 18 19 20 21 22 23 24 25 26 27 28 9
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