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Samsung Electronics Co., Ltd. v. Imperium IP Holdings (Cayman), Ltd.

United States District Court, D. Delaware

August 28, 2017

SAMSUNG ELECTRONICS CO., LTD.
v.
IMPERIUM IP HOLDINGS (CAYMAN), LTD.

          MEMORANDUM

          KEARNEY, J.

         A pleading generally describing a license agreement is not “sealed” and precluded from public access in this Court simply because it discloses agreed business terms not known to the market. Sealing or redacting business terms from pleadings requires particularized allegations, often with sworn testimony, of the present harm from disclosure. Parties seeking to invoke the constitutional authority of federal courts must recognize the public trust placed in our judicial processes from a transparent deliberative process. We do not preclude public access to the facts underlying our Orders simply because businesspersons do not want their business dealings disclosed. We need much more. As confirmed in today's Order denying a motion to seal most of a proposed first amended complaint, we decline to block public access to a wide variety of plead general business terms from a 2013 license agreement between the defendant and a third party at issue in this case without particularized allegations of present (not stale) harm to future confidential business dealings when we have no evidence the proposed redactions of 2013 business terms involve trade secrets or private patent valuations, pricing, or licensing strategies in place today or at issue in upcoming business negotiations.

         I. Facts

         Samsung Electronics Co., Ltd. sues Imperium IP Holdings (Cayman), Ltd. for allegedly breaching contractual obligations owed to third-party beneficiaries under a 2013 contract/license between Inperium and Sony Corporation and Sony Mobile Communications (USA), Inc. Samsung's claims arise from the May 2013 settlement of an earlier lawsuit filed by Imperium against Sony alleging infringement of five United States patents in the United States District Court for the Eastern District of Texas. Based on a settlement, the Texas district court dismissed Imperium's complaint on May 10, 2013.

         Imperium later sued Samsung in the same Texas district court for infringing three of the patents identified in the settlement license agreement with Sony. Following a February 2016 trial, the jury returned a verdict finding certain of the products infringed the patents involving Sony. Following trial, the district court ordered briefing on issues related to the Sony license agreement and Imperium moved for an ongoing royalty for the accused Samsung products and future products. This Texas case is ongoing.

         Samsung then filed a complaint here as a third-party beneficiary of the Sony license agreement with Imperium seeking damages, declaratory relief and equitable relief. Samsung filed its initial complaint under seal and now moves to file a first amended complaint with redactions of varying lengths in 55 of the 79 allegations and in five of the nine requests for relief.

         Samsung argues the 2013 settlement agreement must be maintained as confidential because Sony and Imperium agreed to keep their agreement confidential and Sony's future unidentified interests in license agreements are at stake. Samsung also cites Sony's “competitive interest” in finding similar business resolutions to future litigation. We lack evidence from Sony nor do we understand any of the redacted allegations as disclosing licensing strategies, pricing or patent valuations. Rather, Samsung seeks to redact general business terms and reaches as far as hoping to redact a venue selection clause.

         II. Analysis

         Samsung seeks to seal dozens of allegations in a proposed first amended complaint without citing particularized harm. Its argument is conclusory: “[w]ere disclosure required, competitors and potential licensing targets would gain access to pricing, finances, patent valuation, and licensing strategies which could be used to undercut future licensing negotiations”… “private [settlement] contract is highly confidential, contains sensitive business information belonging to [Defendant] and a third party to this action, and expressly prohibits unrestricted public disclosure of its terms.”[1] Samsung argues the specific license language is also entitled to be redacted because third party Sony has not consented to its disclosure. There is no disclosure of financial information or patent disclosures other than identifying public information on patent holders. There is no recital of pricing, finances, patent valuation or licensing strategies.

         The common law right of access to judicial proceedings and judicial records” is a right which our court of appeals holds is “‘beyond dispute.'”[2] The burden of justifying the confidentiality of each document sought to be covered by a protective order remains on the party seeking the order.[3] Right of access to judicial records is not absolute.[4]

         We have “supervisory power over [our] own records and files” and may deny access “where court files [may] become a vehicle for improper purposes.”[5] Our court of appeals permits us to seal documents where justice requires.[6] Right of access “promotes public confidence in the judicial system by enhancing testimonial trustworthiness and the quality of justice dispensed by the court.”[7] A “‘strong presumption' in favor of accessibility attaches to almost all documents created in the course of civil proceedings.”[8] Beyond evidence, the common law right of access includes all judicial records and documents, “transcripts, evidence, pleadings, and other materials submitted by litigants ...”[9]

         We do not preclude public access absent particularized good cause. “Good cause is established on a showing that disclosure will work a clearly defined and serious injury to the party seeking closure. The injury must be shown with specificity.”[10] “Broad allegations of harm, unsubstantiated by specific examples or articulated reasoning, ” do not support a good cause showing.[11] We must make “specific, rigorous findings before sealing” court filings.[12]

         A. Plaintiff offers no basis to find current harm from 2013 general information.

         There is no basis to find impact on present negotiations or strategies. The proposed redactions involve a settlement of claims in 2013. Samsung's request ...


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