Uniloc: everything's confidential, including case citations. Federal Circuit: No.

UNILOC 2017 LLC, UNILOC USA, INC., UNILOC LUXEMBOURG S.A., Plaintiffs-Appellants v. APPLE, INC., Defendant-Appellee ELECTRONIC FRONTIER FOUNDATION, Intervenor-Appellee

2019-1922 2019-1923 2019-1925 2019-1926

July 9, 2020

Case Summary


Does a district court abuse its discretion when it strictly enforces its local rules? In a case where a party designated publicly available materials as confidential, the Federal Circuit said it does not.


As the Ninth Circuit has explained, “judicial records are public documents almost by definition, and the public is entitled to access by default.” To that end, the Northern District of California’s local rule 79-5 requires requests to seal confidential materials to be “narrowly tailored to seek sealing of only sealable [truly confidential] materials.” This same rule also says that any party who seeks to seal material “must file a declaration . . . establishing that all of the designated material is sealable.”


Uniloc—a non-practicing patent licensing entity—filed several patent infringement actions against Apple in the Northern District of California. The defendant later filed a motion to dismiss these actions on the grounds that Uniloc did not own the patents it had asserted; and because this motion referenced material that Uniloc had designated as “highly confidential” under a protective order, Apple filed a motion to seal its motion to dismiss. Uniloc also filed sealing motions in which it asked the trial judge to seal most of the material in the parties’ briefs (including citations to caselaw and quotes from Federal Circuit opinions), and to seal exhibits that included a list of Uniloc’s patent litigations and other publicly available information.


As Local Rule 79-5 requires, Uniloc filed declarations listing the documents it wished to have sealed; these declarations said the documents “contain[ed] sensitive, confidential and proprietary information related to financial data, licensing terms and business plans with respect to various Uniloc entities,” and that “disclosure of this extremely sensitive information would create a substantial risk of serious harm to the Uniloc entities.”


The Electronic Frontier Foundation then contacted Uniloc’s counsel, complaining that: (1) its proposed redactions were excessive; and (2) that if it did not refile those documents in a way that was “consistent with the public’s right of access,” EFF would move to intervene in the case and “ask the court to . . . unseal improperly withheld material.” After Uniloc refused, EFF successfully moved to intervene.


In denying (in full) all of Uniloc’s motions to seal, the district court said these requests were “far from narrowly tailored” as required by Local Rule 79-5, and that Uniloc’s “generalized assertion of potential competitive harm fail[ed] to outweigh the public’s right to learn of the ownership of the patents-in-suit—which grant said owner the right to publicly exclude others.”


Uniloc then filed: (1) a motion for leave to seek reconsideration; and (2) an accompanying revised motion to seal, in which it expressed a willingness to make public more than 90 percent of the material it had originally sought to keep confidential. This revised motion to seal included a supporting declaration explaining why the remaining documents should be filed under seal, and several other declarations from third-party licensees who said that disclosure of their licensing terms with Uniloc would cause them competitive harm.


The district court also rejected these motions, noting that the Northern District’s Local Rule 7-9 requires a litigant who requests leave to file a motion for reconsideration to establish that there had either been some intervening change in the law, or that there were newly discovered material facts that the litigant could not have discovered earlier. Uniloc could show neither. The court also said that Uniloc’s problem was of its own making, because it should have filed a reasonable request for sealing “right from the outset rather than over-classifying and then trying to get away with whatever [it could] on a motion to reconsider.” Regarding the confidential information of Uniloc’s third-party licensees, the judge decided that their confidentiality concerns did “not surmount the hurdle of showing a compelling reason to seal.”


Uniloc’s main argument on appeal was not that its original sealing motion was reasonable, but that the district court abused its discretion by denying its motion for leave to file for reconsideration. This denial was an abuse of discretion because: (1) Uniloc’s second attempt at a sealing motion eliminated more than 90 percent of the material that it had originally sought keep from the public; and (2) other district court judges had granted such motions in similar circumstances.


The Federal Circuit disagreed. In a harshly worded opinion, the panel pointed out that under Ninth Circuit law (which governs in this case), district courts are given broad discretion to interpret their own local rules. Here, the Northern District’s Local Rule 79-5 put Uniloc on notice that its motion to seal could be “denied in its entirety” and that “[a] sealing order [would] issue only upon a request that establishe[d] that the document, or portions thereof, [were] privileged, protectable as a trade secret or otherwise entitled to protection under the law.” Uniloc certainly could have presented “compelling reasons for sealing or redacting its purportedly confidential information when it submitted its original motion to file under seal,” but it had squandered that opportunity.


Regarding Uniloc’s motion for leave to seek reconsideration, Local Rule 7-9 only allows such a motion if there had been some intervening change in the law, or if there were newly discovered material facts; again, Uniloc could show neither. And although this filing “was cloaked in the guise of a motion for leave to file for reconsideration, [it] was, in reality, an attempt to gain a ‘second shot’ at complying with Local Rule 79-5’s prerequisites for filing documents under seal.” The district court had no obligation to allow this, even if other courts had in similar circumstances. Because the lower court judge “took seriously the presumption of public access and did so in accord with precedent from the Supreme Court and [the Ninth Circuit],” the Federal Circuit concluded that there had been no abuse of discretion with respect to Uniloc’s information.


Finally, the appeals court was more generous to the third-party licensees, who “were not responsible for Uniloc’s filing of an overbroad sealing request.” The panel emphasized that the district court should have assessed whether any of the third-party information was “protectable as a trade secret or otherwise entitled to protection under the law” (as required by Local Rule 79-5), and remanded the case so that the lower court “may make particularized determinations as to whether and, if so, to what extent, the materials of each of these parties should be made public.”


2020
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