Case Name:???? HP v. Oracle Corporation
Case No.:??????? 1-11-CV-203163
Nonparty Intel Corporation (?Intel?) moves this Court for an Order sealing a limited number of exhibits that may be offered by the parties during the Phase 2 trial set to begin on May 23, 2016.? In its moving papers, Intel contends that of portions of 17 documents (from the original estimate of 49 exhibits) warrant sealing in part or in whole.? In addition, Intel moves to seal 13 documents that it learned might be offered at trial when it reviewed the preliminary exhibit list that the parties exchanged on April 26, 2016.? In its moving papers, Intel contends that some of the potential trial exhibits that have been identified by HP and Oracle contain highly confidential financial and product plan information with competitively sensitive financial information that Intel produced under the protections set forth in Judge Kleinberg?s Order dated 5/14/12.? Intel identifies these documents and the basis for their sealing as follows:? (1) Trial Exhibit 2013?Confidential ?impairment analysis? profit and loss statements prepared for and produced by Intel which contain sensitive financial and product-specific information for the Itanium product family; (2) Trial Exhibit 2093—Itanium Profit and Loss chart containing sensitive financial information and other product-specific data; (3) Trial Exhibit 2081—A ?Spending Details? chart for Itanium products which list product-specific direct and indirect costs; (4) Trial Exhibits 2055, 2056, 2067, 2099, 2100, 2157, 2292, 2562 and 3020—Undisclosed agreements between Intel and HP that include confidential financial transactions for products that are unrelated to Itanium; (5) Trial Exhibit 2630—Undisclosed agreement between Intel and Oracle that includes confidential financial transactions for non-Itanium server products; (6) Trial Exhibits 2222, 2399, and 2577—–Undisclosed technical and engineering resource allocation and headcount data for multiple Itanium products that are nearly identical to information previously sealed in the Court?s 1/13/13 Order; and (7) Trial Exhibits 2066, 2088, 2195, 2324, 2381, 2397 and 3014—-Undisclosed pricing or financial incentives information for Itanium products.
In addition to the trial exhibits referenced above, Intel moves to seal portions of documents that contain competitively sensitive plans, strategies, financials and other information about Intel products that are unrelated to Itanium or Intel?s server business.? These exhibits are identified as Trial Exhibits 2153, 2156, 2157, 2171, 2210, 2250, 2324, 2381, 2397, 2398 and 3014.? Intel also moves to seal Trial Exhibit 2127 which they contend contains competitively sensitive and undisclosed plans and strategies for its non-Itanium server product plans, including its Xeon product line.
With respect to the exhibits referenced above, Intel argues that it has an overriding interest in maintaining the confidentiality of the documents that overcomes the right to any public access as the exhibits contain highly sensitive financial information and access to these documents would cause Intel to suffer great competitive harm.? Intel argues that disclosure of these documents would provide Intel?s competitors and customers ammunition to more effectively negotiate against Intel on product sales thereby eliminating many of Intel?s competitive advantages.? Intel further argues that any use of their sensitive competitive information at trial should occur under seal in a closed courtroom with business representatives present from either party.
Defendant Oracle Corporation (?Oracle?) filed its Response to Intel?s Motion to Seal Records.? In its Response, Oracle states that it does not oppose Intel?s proposed redactions to 28 of the 29 documents it has identified.? Oracle does, however, oppose Intel?s request to completely seal Trial Exhibit 2103, the Intel ?impairment analysis? that reflects certain financial and planning information related to Intel?s Itanium processor from 2007-2010.? Oracle requests that if the Court is inclined to seal Exhibit 2103, it be limited to portions of the document rather than the entire exhibit.? Specifically, Oracle proposes to redact all information regarding technological development, costs, product margin, revenue, cost of sales, royalties, margins, research and development, and various other expenses.? The only portions left unredacted would be the information not identified in the Walch Declaration and other information that Oracles contends is already public.? Finally, Oracle argues that Exhibit 2103 is the only internal Intel document produced in this litigation that corroborates what the market perceived and supports Oracle?s assertion that after 2007, Intel was not invested in or making substantial profits from the Itanium technology.
Analysis:? ???A record must not be filed under seal without a court order.?The court must not permit a record to be filed under seal based solely on the agreement or stipulation of the parties.? ?(Cal. Rules of Court, rule 2.551(a).)? ?The court may order that a record be filed under seal only if it expressly finds facts that establish: [?] (1) There exists an overriding interest that overcomes the right of public access to the record; [?] (2) The overriding interest supports sealing the record; [?] (3) A substantial probability exists that the overriding interest will be prejudiced if the record is not sealed; [?] (4) The proposed sealing is narrowly tailored; and [?] (5) No less restrictive means exist to achieve the overriding interest.? ?(Cal. Rules of Court, rule 2.550(d).)? Where some material within a document warrants sealing, but other material does not, the document should be edited or redacted if possible, to accommodate the moving party?s overriding interest and the strong presumption in favor of public access. ?(Cal. Rules of Court, rule 2.550(d)(4), (5).) ?In such a case, the moving party should take a line-by-line approach to the information in the document, rather than framing the issue to the court on an all-or-nothing basis. ?(In re Providian Credit Card Cases (2002) 96 Cal.App.4th 292, 309.)
?The party requesting that a record be filed under seal must lodge it with the court under (d) when the motion or application is made, unless good cause exists for not lodging it or the record has previously been lodged under (3)(A)(i). ?Pending the determination of the motion or application, the lodged record will be conditionally under seal.? ?(Cal. Rules of Court, rule 2.551(b)(4).) ??If necessary to prevent disclosure, any motion or application, any opposition, and any supporting documents must be filed in a public redacted version and lodged in a complete version conditionally under seal.? ?(Id. at (b)(5).)
?Courts have found that, under appropriate circumstances, various statutory privileges, trade secrets, and privacy interests, when properly asserted and not waived, may constitute overriding interests.? ?(In re Providian Credit Card Cases, supra, 96 Cal.App.4th at p. 298 fn. 3; NBC Subsidiary (KNBC-TV) vs. Superior Court (1999) 20 Cal.4th 1178, 1222, fn. 46.) ?Financial information involving confidential matters relating to the business operations of a party may be sealed where public revelation of the information would interfere with the party?s ability to effectively compete in the marketplace and there is a substantial probability that their revelation would prejudice the foregoing legitimate interests of the party. ?(See Universal City Studios, Inc. v. Superior Court (2003) 110 Cal.App.4th 1273, 1285-1286.)
A party moving to seal a record must file a memorandum and a declaration containing facts sufficient to justify the sealing. ?(Cal. Rules of Court, rule 2.551(b)(1).) ?A declaration supporting a motion to seal should be specific, not conclusory, as to the facts supporting the overriding interest. ?If the court finds that the supporting declarations are conclusory or otherwise unpersuasive, it may conclude that the moving party has failed to demonstrate an overriding interest that overcomes the right of public access. ?(In re Providian Credit Card Cases, supra, 96 Cal.App.4th at 301, 305.)
Further, where some material within a document warrants sealing but other material does not, the document should be edited or redacted if possible, to accommodate the moving party?s overriding interest and the strong presumption in favor of public access. ?(See Cal. Rules of Court, rule 2.550(e)(1)(B); See In re Providian Credit Card Cases, supra, 96 Cal.App.4th at p. 309.) ?In such a case, the moving party should take a line-by-line approach to the information in the document, rather than framing the issue to the court on an all-or-nothing basis. ?(See In re Providian Credit Card Cases, supra, 96 Cal.App.4th at p. 309.)
The Court has now had the opportunity to conduct its in camera review of the documents which Intel moves to seal.? In addition, the Court has reviewed the Declarations of Patrick Buddenbaum, Suzette Neyra-Jones, Patrick Walch and Robert Deline in support of the Motion to Seal.? Applying the standards for sealing set forth above, the Court finds that the moving party, Intel, has met its burden in establishing that it has an overriding interest in sealing portions of the documents due to the competitively sensitive nature of the information redacted and that Intel?s proposed redactions are narrowly tailored and meet the standards for sealing pursuant to California Rules of Court, Rule 2.550 and 2.551.? With respect to Trial Exhibit 2103, the Court has reviewed the proposed redactions submitted by Oracle, which appear to be reasonable and consistent with the information redacted in the other Exhibits.? Prior to entering an Order on this Exhibit, however, the Court would like to hear Intel?s reply to the proposed redactions.? Counsel should be prepared to discuss this at the hearing.