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Facing heat from the press, federal bankruptcy judge Roger Efremsky changed course Thursday regarding how confidential documents would be handled during a contentious trial. On Wednesday, the judge ejected from his San Jose courtroom two reporters, in-cluding one from The Recorder, after they refused to sign a non-disclosure agreement. With the NDAs, Efremsky wanted the reporters to promise not to write about anything they’d heard in the trial because one of the parties, Nvidia, feared trade secrets would be released. Wednesday night, Sheppard, Mullin, Richter & Hampton partner James Chadwick filed a motion protesting the court closure on behalf of the San Jose Mercury News. And on Thursday morning, after hear-ing Chadwick and the parties’ arguments, Efremsky had a change of heart. He de-cided reporters will be asked to temporar-ily leave the courtroom only after a hear-ing has determined whether a specific document should be kept secret. And he axed the NDAs. “The NDA is a problem on several lev-els,” Chadwick said, noting that case law showed that courts have considered it a prior restraint on free speech. “The press can never agree with these kinds of agree-ments.” In the trial, Santa Clara graphics chip maker Nvidia is fighting allegations that it paid too little for the assets of a finan-cially troubled former rival called 3dfx. Nvidia bought the assets in 2001 for $70 million, and not long after, 3dfx went bankrupt. Now 3dfx’s creditors are seeking $70 million more from Nvidia, which they say grossly underpaid for 3dfx’s prized engi-neering workforce. Nvidia counters that it paid a fair price to 3dfx, and made the deal with no guarantees the 120-some 3dfx engineers would come aboard at Nvidia. About 100 of them did, according to opening statements from the parties, which reporters heard Wednesday before they were asked to leave. Reporters did not hear the testimony of the first witness, Nvidia Chief Executive Jen-Hsun Huang, because of the court closure, but Huang is set to finish on the stand Friday afternoon. Efremsky will first hold a morning hearing on whether documents Huang may mention should be kept confidential. The judge will hold a similar hearing Monday with regard to the confidentiality of any remaining docu-ments. The court-closure hubbub involved not just free-speech drama but also heated opinions from parties about possible un-derlying legal maneuverings. Leigh Kermisse, the attorney for former Nvidia Chief Financial Officer Christine Hoberg, chastised the 3dfx creditors for raising confidentiality objections just be-fore trial. In particular, she criticized Bu-chalter Nemer partner Peter Bertrand, the lead attorney for the creditors. “He’s taking this position to try and put pressure on Nvidia to settle,” she said. “It’s just a cheap tactic and it’s bullying. It has nothing to do with the press.” Bertrand called her allegations “outra-geous,” saying public scrutiny is impor-tant to his case because Nvidia has repre-sented itself differently in internal docu-ments than it has in government filings. “Disrupting the trial is not helpful for us,” he said.

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