Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_13-cv-01161/USCOURTS-cand-4_13-cv-01161-23/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 28:1331 Fed. Question

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

THX, LTD.,

Plaintiff,

v.

APPLE, INC.,

Defendant.

Case No. 13-cv-01161-HSG 

ORDER GRANTING IN PART AND 

DENYING IN PART 

ADMINISTRATIVE MOTION TO FILE 

UNDER SEAL

Re: Dkt. No. 168

On August 22, 2016, Defendant Apple, Inc. filed an administrative motion to file under 

seal documents submitted with its opposition to Plaintiff THX Ltd.’s Second Motion to Amend 

Rule 3-1 and Rule 3-2 Disclosure of Asserted Claims and Infringement Contentions. Dkt. No. 168

(“Motion for Leave”). On August 26, 2016, THX filed a declaration in support of Apple’s Motion 

for Leave. Dkt. No. 174 (“Smith Decl.”). For the reasons articulated below, the motion is 

GRANTED IN PART and DENIED IN PART.

I. LEGAL STANDARD

Courts generally apply a “compelling reasons” standard when considering motions to seal 

documents. Pintos v. Pac. Creditors Ass’n, 605 F.3d 665, 678 (9th Cir. 2010). “This standard 

derives from the common law right ‘to inspect and copy public records and documents, including 

judicial records and documents.’” Id. “[A] ‘strong presumption in favor of access’ is the starting 

point.” Kamakana v. City & Cnty. of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006). To 

overcome this strong presumption, the moving party must “articulate compelling reasons 

supported by specific factual findings that outweigh the general history of access and the public 

policies favoring disclosure, such as the public interest in understanding the judicial process.” Id. 

at 1178-79 (citations, internal quotation marks, and alterations omitted). “In general, ‘compelling 

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reasons’ sufficient to outweigh the public’s interest in disclosure and justify sealing court records 

exist when such ‘court files might have become a vehicle for improper purposes,’ such as the use 

of records to gratify private spite, promote public scandal, circulate libelous statements, or release 

trade secrets.” Id. at 1179 (citing Nixon, 435 U.S. at 598). The Court must “balance the 

competing interests of the public and the party who seeks to keep certain judicial records secret. 

After considering these interests, if the court decides to seal certain judicial records, it must base 

its decision on a compelling reason and articulate the factual basis for its ruling, without relying on 

hypothesis or conjecture.” Id. (internal quotation marks omitted). 

Civil Local Rule 79-5 further supplements the compelling reasons standard. The party 

seeking to file a document or portions of it under seal must “establish[ ] that the document, or 

portions thereof, are privileged, protectable as a trade secret or otherwise entitled to protection 

under the law. . . . The request must be narrowly tailored to seek sealing only of sealable

material.” Civil L.R. 79-5(b). 

Records attached to motions that are only “tangentially related to the merits of a case” are 

not subject to the strong presumption of access. Ctr. for Auto Safety v. Chrysler Grp., LLC, 809 

F.3d 1092, 1101 (9th Cir. 2016). Accordingly, parties moving to seal such records must meet the 

lower “good cause” standard of Rule 26(c) of the Federal Rules of Civil Procedure. Id. at 8-9. 

The “good cause” standard requires a “particularized showing” that “specific prejudice or harm 

will result” if the information is disclosed. Phillips ex rel. Estates of Byrd v. Gen. Motors Corp., 

307 F.3d 1206, 1210–11 (9th Cir. 2002) (internal quotation marks omitted); see Fed. R. Civ. P. 

26(c).

II. DISCUSSION

Apple seeks to file under seal portions of the following documents: the unredacted version 

of Apple’s opposition to THX’s Second Motion to Amend Rule 3-1 and Rule 3-2 Disclosure of 

Asserted Claims and Infringement Contentions (“Apple’s Opposition”), and Exhibits 1, 5, 13, and 

14 to the Declaration of Christine Capuyan in support of Apple’s Opposition. Dkt. No. 168. 

Apple represents that “THX may maintain a claim of confidentiality over information contained in 

Apple’s Opposition and Exhibits 1, 5, 13, and 14” because THX has designated such information 

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“Highly Confidential — Attorneys’ Eyes Only” under the operative protective order. Id. Because 

a motion for leave to amend Rule 3-1 and Rule 3-2 disclosure of asserted claims and infringement 

contentions is more than tangentially related to the merits of a case, the Court applies the 

compelling reasons standard in evaluating the Motion for Leave.

A. Apple’s Opposition

Apple seeks to seal fives lines in its Opposition. However, the Smith Declaration does not 

assert that Apple’s Opposition contains sealable information. See Smith Decl.

Accordingly, the Court DENIES the Motion for Leave to the extent that it seeks to seal 

portions of Apple’s Opposition.

B. Exhibits 1, 13, and 14

Exhibits 1, 13, and 14 to the Capuyan Declaration are iterations of THX’s supplemental 

responses to Apple’s first set of interrogatories. See Smith Decl. ¶¶ 3, 6, 7. Although Apple 

requests to seal significant portions of Exhibits 1, 13, and 14, the Smith Declaration only seeks to 

seal page 5 lines 21-25 of Exhibit 1, page 4 lines 7-11 of Exhibit 13, and page 4 lines 7-11 of 

Exhibit 14. Id. THX represents that the lines sought to be sealed are identical across the three 

exhibits and that they reflect “conception and development of the inventions of the patents-in-suit, 

including the design and development of THX technologies, operational procedures internal to 

THX, and product details of the inventions of the patents-in-suit.” Id. ¶¶ 4, 6, 7. THX contends 

that if made public, the information “is likely to cause economic harm and/or significant 

competitive disadvantage” to THX “because competitors would learn how THX develops 

intellectual property and products, including workflow of the technical employees at THX, and the 

identities and the nature of relationships of THX’s business and technology partners.” Id. ¶¶ 5, 6, 

7, 10.

Having reviewed the redacted and unredacted copies of Exhibits 1, 13, and 14 to the 

Capuyan Declaration, the Court finds that the request is narrowly tailored to information that 

could expose THX to competitive harm if disclosed, and GRANTS the request to seal Exhibits 1, 

13, and 14 as submitted with the Smith Declaration. See Nixon v. Warner Commc’ns, Inc., 435 

U.S. 589, 598 (1978) (“[C]ourts have refused to permit their files to serve . . . as sources of 

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business information that might harm a litigant’s competitive standing.)

C. Exhibit 5

Exhibit 5 is a letter from Apple’s counsel to THX’s counsel that quotes and describes 

portions of THX’s responses to Apple’s first set of interrogatories. Smith Decl. ¶ 8. Apple seeks 

to seal two full paragraphs contained in Exhibit 5, but the Smith Declaration asserts that only 

portions of the two paragraphs are sealable. See id. ¶ 8; Dkt. No. 174-2. THX contends that the 

information sought to be sealed “reflects THX’s internal operations and its practices in technology 

development, and THX’s confidential contacts and collaboration with third parties that are subject 

to non-disclosure agreements.” Smith Decl. ¶ 6. Accordingly, THX represents that if made 

public, the information “is likely to cause economic harm and/or significant competitive 

disadvantage” to THX “because competitors would learn how THX develops intellectual property 

and products, including workflow of the technical employees at THX, and the identities and the 

nature of relationships of THX’s business and technology partners.” Id. ¶ 10.

Having reviewed the redacted and unredacted copies of Exhibit 5 to the Capuyan 

Declaration, the Court finds that the request is narrowly tailored to information that could expose 

THX to competitive harm if disclosed, and GRANTS the request seal portions of Exhibit 5 as 

submitted with the Smith Declaration. See Nixon, 435 U.S. at 598.

III. CONCLUSION

For the aforementioned reasons, the Court GRANTS IN PART and DENIES IN PART 

Apple’s Motion for Leave. The Court GRANTS the request to seal portions of Exhibits 1, 5, 13, 

and 14 to the Capuyan Declaration, as submitted with the Smith Declaration. See Dkt. No. 174. 

The Court DENIES the request to seal portions of Apple’s Opposition. Pursuant to Civil Local 

Rule 79-5(f)(3), Apple shall file an unredacted version of Apple’s Opposition in the public record 

within 7 days of this Order.

IT IS SO ORDERED.

Dated: October 5, 2016

______________________________________

HAYWOOD S. GILLIAM, JR.

United States District Judge

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