Philips North America LLC v. Summit Imaging Inc

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE 10 PHILIPS NORTH AMERICA LLC, CASE NO. C19-1745JLR et al., 11 ORDER ON MOTIONS TO SEAL Plaintiffs, 12 v. SUMMIT IMAGING INC., et al., Defendants.

I. INTRODUCTION Before the court are three motions to seal filed by Plaintiffs Philips North America, LLC, Koninklijke Philips N.V., and Philips India, Ltd.’s (collectively, “Philips”) and Defendants Summit Imaging Inc. and Lawrence R. Nguyen (collectively, “Summit”): (1) Philips’s motion to seal documents filed in support of its motion for partial summary judgment and motions to exclude (Philips MTS (Dkt. # 134)); (2) Summit’s motion to seal its motion for summary judgment (Summit 1st MTS (Dkt.

1 # 181); and (3) Summit’s motion to seal documents filed in support of its motion to exclude (Summit 2d MTS (Dkt. # 136)). Neither party opposes the sealing of any of the documents designated as confidential by the other party. (See Summit 1st MTS at 2-3 (taking “no position” towards Philips’s documents); Summit 2d MTS at 3 (same); Philips MTS Resp. (Dkt. # 195); Summit MTS Resp. (Dkt. # 193).) The court has considered the motions, the submissions concerning the motions, the relevant portions of the record, and the applicable law. Being fully advised,1 the court GRANTS Philips’s motion to seal and Summit’s motion to seal documents filed in support of its motion to exclude. It additionally GRANTS in part Summit’s motion to seal documents filed in support of its motion for summary judgment with the exception of three documents.

11 II. BACKGROUND 12 On April 5, 2021, the parties each filed dispositive motions and various motions to exclude. (See generally Dkt.) Philips additionally moved to seal its motion for partial summary judgment; its three motions to exclude; and various documents filed in support of the four motions. (Philips MTS at 1.) Summit moved to seal its motion for summary judgment; its motion to exclude; and various documents filed in support of both motions.

17 (Summit 1st MTS at 1; Summit 2d MTS at 1-2.) Both parties move to seal documents that had been designated confidential pursuant to their stipulated protective order.

19 // // No party requests oral argument (see Philips MTS at 1; Summit 1st MTS at 1; Summit 2d MTS at 1; Philips MTS Resp. at 1; Summit MTS Resp. at 1), and oral argument would not be helpful to the disposition of the motions, see Local Rules W.D. Wash. LCR 7(b)(4).

1 (Philips MTS at 2-3; Summit 1st MTS at 3-5; Summit MTS Resp. at 1, App. A; see also Protective Order (Dkt. # 40).)

3 III. ANALYSIS 4 When deciding a motion to seal, courts “start with a strong presumption in favor of access to court records.” Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 1122, 1135 (9th Cir. 2003) (citing Hagestad v. Tragesser, 49 F.3d 1430, 1434 (9th Cir. 1995)). This presumption, however, “is not absolute and can be overridden given sufficiently compelling reasons for doing so.” Id. (citing San Jose Mercury News, Inc. v. U.S. Dist.

9 Ct. N. Dist. (San Jose), 187 F.3d 1096, 1102 (9th Cir. 1999)). The standard for determining whether to seal a record depends on the filing to which the sealed record is attached. See id. at 1136-37. Because the sealed documents at issue here are attached to motions that are “more than tangentially related to the merits of [this] case,” the court applies the compelling reasons standard to determine if sealing is appropriate. See Ctr.

14 for Auto Safety v. Chrysler Grp., 809 F.3d 1092, 1098-102 (9th Cir. 2016).

15 Under the compelling reasons standard, the party seeking to seal a judicial record bears the burden of showing that “compelling reasons supported by specific factual findings . . . outweigh the general history of access and the public policies favoring disclosure.” Kamakana v. City & Cnty. of Honolulu, 447 F.3d 1172, 1178-79 (9th Cir. 2006). If a court decides to seal a record, it must “base its decision on a compelling reason and articulate the factual basis for its ruling.” Id. at 1179 (quoting Hagestad, 49 F.3d at 1434). The final determination of what constitutes a compelling reason is “best left to the sound discretion of the trial court.” Nixon v. Warner Commc’ns, Inc., 435 U.S. 1 589, 599 (1978). “In general, ‘compelling 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 . . . release trade secrets.” Id. (quoting Nixon, 435 U.S. at 598).

5 Trade secrets can be “any formula, pattern, device or compilation of information which is used in one’s business, and which gives him an opportunity to obtain an advantage over competitors who do not know or use it.” Wetzel v. CertainTeed Corp., No. C16-1160JLR, 2019 WL 1236859, at *6 (W.D. Wash. Mar. 18, 2019). Proprietary business information that “if released to the public, has the potential to harm the parties’ positions in the industry” has been found to satisfy the compelling reason standard.

11 BitTitan, Inc. v. Skykick, Inc., No. C15-0754RSM, 2015 WL 12159149, at *1 (W.D.

12 Wash. Aug. 14, 2015). Similarly, technical documents that “describe the components and internal operations” of proprietary technology have also been kept under seal when they contain “business and proprietary interests that would harm” the entity if publicly disclosed. Genuine Enabling Tech. LLC. v. Nintendo Co., Ltd., No. C19-0351RSM, 2020 16 WL 4366181, at *1-2 (W.D. Wash. July 30, 2020).

17 Additionally, in the Western District of Washington, parties seeking to file documents under seal must follow the procedure laid out in Local Rule 5(g). See Local Rules W.D. Wash. LCR 5(g). Pursuant to Local Rule 5(g), a party filing a motion to seal must include “a certification that the party has met and conferred with all other parties in an attempt to reach agreement on the need to file the document[s] under seal.” Id. LCR // 5(g)(3)(A). The party seeking to seal the documents must also explain the bases for requiring the relief. Id. LCR 5(g)(3)(B).

3 The court finds that the parties have met and conferred pursuant to Local Rule 5(g) and that there are compelling reasons to seal the documents at issue. The documents that the parties seek to maintain under seal contain the parties’ confidential and proprietary source code or trade secrets; technical documents that describe internal operations of the parties’ technology and procedures; and business documents that contain proprietary financial or accounting information. (See Philips MTS at 1; Summit 1st MTS at 1; Philips MTS Resp. at 1-2; Summit MTS Resp. at App. A (listing documents).) The court agree with the parties that the release of such information would potentially harm the parties’ position in the industry. See Wetzel, 2019 WL 1236859, at *6. Moreover, neither party opposes the sealing of the other’s identified documents. (See Summit 1st MTS at 2-3 (taking “no position” towards Philips’s documents); Summit 2d MTS at 3 (same); Philips MTS Resp.; Summit MTS Resp.)

15 However, Philips has identified three documents erroneously identified as confidential. (Summit MTS Resp. at 1 n.1 (citing Shewmake Decl. (Dkt. # 163) ¶ 25, Ex. W; id. ¶ 27, Ex. Y; id. ¶ 30, Ex. BB).) Summit has no objection to unsealing those documents. (Summit MTS Reply (Dkt. # 217) at 1.) Accordingly, the court GRANTS the parties’ motions with the exception of the three documents found at docket numbers 163-15 (Ex. W), 163-17 (Ex. Y) and 163-19 (Ex. BB).

21 // // 1 IV. CONCLUSION 2 For the foregoing reasons, the court GRANTS Philips’s motion to seal (Dkt.

3 # 134) and Summit’s motion to seal documents filed in support of its motion to exclude (Dkt. # 136). The court DIRECTS the Clerk to maintain the seal on all documents identified within those two motions. The court additionally GRANTS in part Summit’s motion to seal documents filed in support of its motion for summary judgment (Dkt.

7 # 181). The court DIRECTS the Clerk to remove the seal on Exhibits W, Y and BB to the declaration of Thomas Shewmake (Dkt. # 163). All other documents shall remain under seal as filed.

10 Dated this 27th day of April, 2021.

A 13 JAMES L. ROBART United States District Judge