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Apple, Samsung Join Hands Over Sealing Motions
After two years of take-no-prisoners litigation, there is not much the lawyers for Apple and Samsung can agree on.
But a rare moment of solidarity between rivals occurred Tuesday as the tech giants joined in urging the U.S. Court of Appeals for the Federal Circuit to block the public disclosure of court filings that contain sensitive financial data.
The price of litigating patent cases should not be the exposure of information that would harm companies in the marketplace, lawyers for Apple Inc. and Samsung Electronics Corp. told Judges William Bryson, Sharon Prost and Kathleen O'Malley.
"I think the issue has immense implications," said Apple lawyer William Lee of Wilmer Cutler Pickering Hale and Dorr. "If anything that gets filed in patent litigation becomes subject to public disclosure, that is going to have really significant impacts on access to the courts."
At issue is whether U.S. District Judge Lucy Koh in San Jose went too far in ordering the unsealing of certain exhibits attached to pretrial motions in the high-profile patent case she tried last August. Koh reviewed the motions to seal after the media organization Reuters America, represented by Karl Olson of San Francisco's Ram, Olson, Cereghino & Kopczynski, complained that the litigation lacked transparency.
Two lawyers arguing on behalf of news organizations as amici curiae emphasized the public's right to understand the judicial process for resolving intellectual property disputes.
Attorney Gregg Leslie of the Reporters Committee for Freedom of the Press in Arlington, Va., noted his group had never appeared in a case before the Federal Circuit and called it a "sign of the times." He added: "The public interest in patent disputes has never been higher."
Leslie highlighted the potential impact on consumers of Apple and Samsung's bitter courtroom feuding over their smartphones and tablets.
"The public wants to know how courts dispose of these claims," Leslie said. "If a very popular product is taken off the market, I think the public wants to know everything it can."
O'Malley, an Obama appointee and the newest member on the panel, seemed to balk at the idea of a public right to access for all court filings, no matter how sensitive: "Is it your view that the minute someone either invokes the processes of the court or is dragged into the processes of the court that they've essentially laid themselves bare for the public to examine everything about their business?" she asked.
Apple and Samsung did not appeal Koh's sealing orders in their entirety but are seeking to protect certain financial information they contend could be used by competitors to gain an advantage. Such information should be treated as corporate trade secrets and subject to heightened protection, said Samsung attorney Victoria Maroulis.
Maroulis, a partner at Quinn Emanuel Urquhart & Sullivan, said detailed information related to the sales, costs and profits for particular products is necessary to calculate damages in patent cases. Typically, district judges permit those filings to remain under seal, she said.
"If the parties cannot rely on the rule knowing that they can seal this information, protect it from competitors, it would discourage a number of litigants from seeking redress in court," Maroulis cautioned.
Under case law in the Ninth Circuit, which the Federal Circuit would rely on, different standards for disclosure apply to dispositive motions, such as motions for summary judgment, and nondispositive motions that are deemed to be less directly related to the merits of the case. For dispositive motions, a compelling reason must exist to keep material under seal. For nondispositive motions, the standard is the less stringent "good cause."
The judges grappled during oral argument with where to draw the line between dispositive and nondispositive motions.
Prost, appointed in 2001 by President George W. Bush, noted that closely contested evidentiary issues could sometimes determine the outcome of a case. The public's interest in court proceedings therefore might be broader, she reflected, than "just who wins and who loses and how much money does X have to pay Y."
Bryson, who was appointed to the Federal Circuit in 1994 by President Bill Clinton, focused on the type of information at issue and questioned whether the public's right to access should extend to confidential financial data. While undoubtedly of interest to newspaper readers, such information would not promote deeper understanding of the justice system, Bryson said.
"If something would not materially advance the understanding of the judicial process, although it might materially advance one's knowledge of how Apple and Samsung operate their businesses, it doesn't get disclosed, correct?" Bryson asked an attorney for the First Amendment Coalition.
The coalition's lawyer, Hughes Hubbard & Reed partner Eric Parnes, begged to differ. "The real question," he said, "is have they shown a compelling reason for sealing these documents."