VLSI Technology LLC v. Intel Corporation

[2] 3 UNITED STATES DISTRICT COURT 4 NORTHERN DISTRICT OF CALIFORNIA 5 SAN JOSE DIVISION [6] 7 VLSI TECHNOLOGY LLC, Case No. 17-cv-05671-BLF 8 Plaintiff, ORDER GRANTING 9 v. ADMINISTRATIVE MOTION TO CONSIDER WHETHER ANOTHER 10 INTEL CORPORATION, PARTY’S MATERIAL SHOULD BE SEALED 11 Defendant. [Re: ECF Nos. 542, 546, 550] [12] 13 Before the Court are VLSI Technology LLC’s (“VLSI”) Administrative Motions regarding 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): 16 1. Administrative Motion to Consider Whether Another Party's Material Should Be 17 Sealed re: VLSI's Motion to Exclude Damages Opinions of Intel's Experts, and 18 Exhibits Thereto. ECF No. 542. 19 2. Administrative Motion to Consider Whether Another Party's Material Should Be 20 Sealed re VLSI's Daubert Motion to Exclude Technical Opinions of Intel's Experts. 21 ECF No. 546. 22 3. Administrative Motion to Consider Whether Another Party's Material Should Be 23 Sealed (Correction of ECF No. 546). ECF No. 550. 24 For the reasons described below, the Administrative Motions are GRANTED. 25 I. BACKGROUND 26 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 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. 6 VLSI filed its Daubert Motion to Exclude Technical Opinions of Intel's Experts 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. LEGAL STANDARD 13 “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 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. DISCUSSION 8 The documents at issue in VLSI’s motions to seal are associated with its Daubert motions. 9 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. ECF No. 542 (Damages Motion) 16 i. Intel 17 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.” 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 Portion(s) to Ruling 10 Exhibit No. Seal VLSI’s Yellow Granted, as yellow highlighted portions of 11 Memorandum highlighted VLSI’s memorandum on page 11 reveals portions highly confidential licensing information 12 regarding payment terms. Selwyn Decl. ¶ 17. [13] Ex. 1 Excerpt from Yellow Granted, as yellow highlighted portions of 14 the transcript of highlighted Exhibit 1 on page 34 reveals highly the deposition portions confidential technical information regarding 15 of Patrick Fay design details and/or operation of accused features in Intel’s products. Selwyn Decl. ¶ 18. [16] Ex. 2 Excerpt from Yellow Granted, as yellow highlighted portions of June 1, 2023 highlighted Exhibit 2 on pages 85-92 reveals highly [17] Rebuttal Expert portions confidential technical information regarding 18 Report of design details and/or operation of accused Patrick Fay features in Intel’s products. Selwyn Decl. ¶ 19 19a. [20] Furthermore, yellow highlighted portions of 21 Exhibit 2 on pages 282-83, 289, 293, 304, 314, 324, 333, 339, 374, 422, and 447 reveal highly 22 confidential information regarding Intel’s licenses, including payment terms from Intel’s 23 license agreements, the scope of Intel’s license agreements, and other confidential licensing [24] information. Selwyn Decl. ¶ 19b. Intel also seeks 25 to seal the names of the counterparties to these agreements in Exhibit 2 because the names of 26 counterparties to Intel’s agreements are maintained in confidence by Intel, and Intel is 27 under confidentiality obligations to the Public disclosure of these counterparties could [1] provide competitors and potential counterparties 2 to licensing, acquisition, and settlement agreements with an unfair insight into Intel’s 3 business strategies. Id. Likewise, public disclosure of the patents covered by a license 4 agreement could reveal confidential information about the scope of the patent license and provide [5] insight into the structure of Intel’s licenses and 6 licensing strategy. Id. Ex. 4 Excerpt from Yellow Granted, as yellow highlighted portions of 7 June 1, 2023 highlighted Exhibit 4 on pages 67 (paragraph 145), 75 Rebuttal Expert portions (paragraph 157), 95 (paragraph 186), 121 8 Report of (paragraph 222, fn. 457) reveal highly Lauren confidential technical information regarding [9] R. Kindler design details and/or operation of accused 10 features in Intel’s products. Selwyn Decl. ¶ 20a. [11] Furthermore, yellow highlighted portions of 12 Exhibit 4 on pages 66 (paragraph 143.d, fn.198), 73-74 (paragraph b, fn.235), 80 [13] (paragraph 166.b, fn.264), 87 (paragraph 175.f, 14 fn.302), 94 (paragraph 184.d, fn.334), 106-7 (paragraph 202.b, fn. 390), 112-13 (paragraph 15 211.b, fn. 416), 120 (paragraph 220.e, fn.450), 126 (paragraph 229.a, fn. 480) reveal highly [16] confidential information regarding Intel’s sales. 17 Selwyn Decl. ¶ 20b. 18 Furthermore, yellow highlighted portions of Exhibit 4 on pages 65-67, 73-75, 79-81, 86-88, 19 93-95, 106-108, 112-114, 118-121, and 126127 reveal highly confidential information [20] regarding Intel’s licenses, including payment 21 terms from Intel’s license agreements, the scope of Intel’s license agreements, and other 22 confidential licensing information. Selwyn Decl. ¶ 20c. Intel also seeks to seal the names of 23 the counterparties to these agreements in Exhibit 4 because the names of counterparties [24] to Intel’s agreements are maintained in 25 confidence by Intel, and Intel is under confidentiality obligations to the counterparties 26 not to reveal that information. Public disclosure of these counterparties could provide 27 competitors and potential counterparties to agreements with an unfair insight into Intel’s [1] business strategies. Id. Likewise, public 2 disclosure of the patents covered by a license agreement could reveal confidential information 3 about the scope of the patent license and provide insight into the structure of Intel’s 4 licenses and licensing strategy. Id. Moreover, public disclosure of the patents covered by a [5] license agreement in conjunction with the 6 expert’s analysis of those patents could provide competitors with insight into the technical 7 functionality of Intel’s products. Id. Ex. 6 Excerpt from Yellow Granted, as yellow highlighted portions of 8 June 1, 2023 highlighted Exhibit 6 on page 65 (paragraph 136, fn. 243, Rebuttal Expert portions fn. 244) reveal highly confidential technical [9] Report of M. information regarding design details and/or 10 Ray Perryman operation of accused features in Intel’s products. Selwyn Decl. ¶ 21a. [11] Furthermore, yellow highlighted portions of 12 Exhibit 6 on pages 58, 59, 64, and 65 (paragraph 134) reveal highly confidential [13] information regarding Intel’s financial 14 decisions including Intel’s strategy for pricing and the criteria Intel uses for pricing, and 15 Intel’s revenue, profits, and costs. Selwyn Decl. ¶ 21b. [16] 17 Furthermore, yellow highlighted portions of Exhibit 6 on page 29 reveal highly confidential 18 information regarding Intel’s licensing negotiation strategy. Selwyn Decl. ¶ 21c. 19 Ex. 8 Excerpt from Yellow Granted, as yellow highlighted portions of June 22, 2023 highlighted Exhibit 8 on pages 48 (paragraph 95), 49, 50, [20] Reply Report of portions 74, and 81-84 reveal, or could be used to 21 Ryan Sullivan derive, highly confidential information regarding Intel’s financial decisions, including 22 Intel’s strategy for pricing and the criteria Intel uses for pricing, and Intel’s revenue, 23 profits, and costs and sales volume. Selwyn Decl. ¶ 22a. [24] Furthermore, yellow highlighted portions of 25 Exhibit 8 on page 48 (paragraph 94) reveal highly confidential information regarding [26] Intel’s licensing negotiation strategy. Selwyn 27 Decl. ¶ 22b. 1 ii. NXP 2 NXP seeks to seal selected portions of VLSI’s Damages Motion and its exhibits. 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] ECF or Document Portion(s) to Ruling [22] Exhibit No. Seal 23 ECF 542-5 Excerpts from Blue-boxed Granted, as the document identifies and Ex. 4 to the June 1, 2023 portions in ¶¶ describes (1) confidential patent agreements 24 VLSI’s Rebuttal Expert 91- 92, 143, entered into between NXP/Freescale and other Motion to Report of 154-155, 157. parties, (2) confidential intellectual property 25 Exclude Lauren Kindler licensing and monetization practices, activities, Damages capabilities, and efforts by NXP and Freescale, [26] Opinions and (3) confidential testimony from current 27 and former employees of NXP and Freescale regarding its intellectual property practices. ECF 542-7 Excerpts from Blue-boxed Granted, as the document identifies and [1] Ex. 6 to the June 1, portions in ¶¶ describes confidential intellectual property 2 VLSI’s 2023 Rebuttal 68-69. licensing and monetization practices, activities, Motion to Expert Report capabilities, and efforts by NXP and Freescale. 3 Exclude of Dr. M. Ray See infra ¶¶ 6, 8. Damages Perryman 4 Opinions 5 B. ECF No. 546 (Technical Motion) 6 Intel seeks to seal selected portions of VLSI’s Technical Motion and its exhibits. Intel 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] ECF or Document Portion(s) to Ruling 24 Exhibit No. Seal VLSI’s Motion Yellow Granted, as yellow highlighted portions contain 25 to Strike Certain highlighted highly confidential technical information Portions of portions regarding design details, operation and 26 Intel’s Technical manufacturing processes of accused product Expert Reports features. Selwyn Decl. ¶¶ 13, 15. [27] I IEX. 6 Excerpt of Yellow Granted, as yellow highlighted portions contain Rebuttal Expert | highlighted highly confidential technical information 2 Report of portions regarding design details, operation and Patrick Fay, manufacturing processes of accused product 3 Ph.D. features. Selwyn Decl. 4] 13, 15. IEX. 8 Excerpt of Yellow Granted, as yellow highlighted portions contain 4 Expert Report of] highlighted highly confidential technical information 5 Patrick Fay, portions regarding design details, operation and Ph.D. manufacturing processes of certain Intel 6 product prior art. Selwyn Decl. {¥ 14-15. 7 IV. ORDER 8 For the foregoing reasons, IT IS HEREBY ORDERED that: 9 1. VLSI’s Administrative Motion (ECF No. 542) is GRANTED. 10 2. VLSI’s Administrative Motion (ECF No. 546, as corrected by ECF No. 550) is 11 GRANTED. [12] 13 Dated: October 16, 2023 _fcwinfaadian BETH LABSON FREEMAN 15 United States District Judge [16] = 17 Z 18