Uniloc 2017 LLC v. Apple, Inc.

• Decision Date: 09 July 2020
• Docket Number: 2019-1922, 2019-1923, 2019-1925, 2019-1926
• Citation: 964 F.3d 1351
• Parties: UNILOC 2017 LLC, Uniloc USA, Inc., Uniloc Luxembourg S.A., Plaintiffs-Appellants v. APPLE, INC., Defendant-Appellee Electronic Frontier Foundation, Intervenor-Appellee
• Court: U.S. Court of Appeals — Federal Circuit

964 F.3d 1351

UNILOC 2017 LLC, Uniloc USA, Inc., Uniloc Luxembourg S.A., Plaintiffs-Appellants

v. APPLE, INC., Defendant-AppelleeElectronic Frontier Foundation, Intervenor-Appellee

2019-1922, 2019-1923, 2019-1925, 2019-1926

United States Court of Appeals, Federal Circuit.

Decided: July 9, 2020

Aaron Jacobs, Prince Lobel Tye LLP, Boston, MA, argued for plaintiffs-appellants.

Doug J. Winnard, Goldman Ismail Tomaselli Brennan & Baum LLP, Chicago, IL, argued for defendant-appellee. Also represented by Michael T. Pieja, Alan Ernst Littmann.

Alexandra Helen Moss, Electronic Frontier Foundation, San Francisco, CA, argued for intervenor-appellee.

Before Prost, Chief Judge, Mayer and Taranto, Circuit Judges.

Mayer, Circuit Judge.

Uniloc 2017 LLC, Uniloc USA, Inc., and Uniloc Luxembourg, S.A. (collectively "Uniloc") appeal orders issued by the United States District Court for the Northern District of California denying, in full, their motions to seal. See Uniloc USA, Inc. v. Apple Inc. , Nos. 3:18-cv-00360-WHA, 3:18-cv-00363-WHA, 3:18-cv-00365-WHA, 3:18-cv-00572-WHA (N.D. Cal. Jan. 17, 2019) ("Sealing Order "), revised motion to seal and motion for leave to file for reconsideration denied by Uniloc 2017 LLC v. Apple Inc. , Nos. 3:18-cv-00360-WHA, 3:18-cv-00363-WHA, 3:18-cv-00365-WHA, 3:18- cv-00572- WHA, 2019 WL 2009318 (N.D. Cal. May 7, 2019) (" Reconsideration Order "). For the reasons discussed below, we affirm in part, vacate in part, and remand.

I. BACKGROUND

Uniloc filed four separate patent infringement actions against Apple Inc. ("Apple").¹ J.A. 42–44. On October 25, 2018, Apple moved to dismiss for lack of subject matter jurisdiction. J.A. 262–93. It argued that Uniloc had granted its creditor, Fortress Credit Co. LLC ("Fortress"), a license with the right to sublicense in the event of a Uniloc default. J.A. 267–88. According to Apple, because Uniloc had defaulted on its loan with Fortress, Fortress had the right to license the asserted patents and Uniloc therefore "lacked the right to exclude Apple from using the patents and could not claim an injury-in-fact." J.A. 267.

Apple's motion to dismiss referenced material that Uniloc had designated as highly confidential under a protective order entered by the district court, see J.A. 1–28, and it therefore filed an administrative motion to seal this material, see J.A. 255–57.² The parties filed similar sealing motions when Uniloc filed its opposition to Apple's motion to dismiss and Apple filed its reply. See J.A. 417–19, 458–61.

In its sealing motions, Uniloc asked the district court to seal most of the materials in the parties’ underlying briefs, including citations to case law and quotations from published opinions. J.A. 414–15; see J.A. 279–87. It also requested that the court seal twenty-three exhibits in their entireties. J.A. 414–15; see J.A. 299–412, 422, 503. These exhibits included matters of public record, such as a list of Uniloc's active patent cases. See J.A. 388.

In support of its sealing requests, Uniloc filed three short declarations. See J.A. 413–16, 420–22, 502–04. These declarations listed the exhibits Uniloc sought to seal and stated that these exhibits "contain[ed] sensitive, confidential and proprietary information related to financial data, licensing terms and business plans with respect to various Uniloc entities" and that "disclosure of this extremely sensitive information would create a substantial risk of serious harm to the Uniloc entities." J.A. 503; see also J.A. 414–15, 422.

On November 28, 2018, the Electronic Frontier Foundation ("EFF") contacted counsel for Uniloc, asserting that its proposed redactions were excessive. J.A. 768.³ EFF stated, moreover, that if the documents at issue were not "re-filed consistent with the public's right of access," it would move to formally intervene in the case and "ask the court to ... unseal improperly withheld material." J.A. 768. After Uniloc declined to revise its sealing requests, EFF filed a motion to intervene for the purpose of opposing Uniloc's sealing motions. J.A. 53.

On January 17, 2019, the district court denied, in full, the administrative motions to seal, stating that Uniloc had failed to provide "a compelling reason to justify sealing."⁴ Sealing Order , slip op. at 1. According to the court, Uniloc's "generalized assertion of potential competitive harm fail[ed] to outweigh the public's right to learn of the ownership of the patents-in-suit—which grant said owner the right to publicly exclude others." Id . at 2.

The court stated, moreover, that Uniloc's request to seal covered an "astonishing" amount of material. Id . In support, it noted that Uniloc sought "to seal the majority of exhibits and large swaths of briefing and declarations," including portions of Apple's motion to dismiss "that simply quote[d] Federal Circuit law." Id . In the court's view, Uniloc's motion to seal was "far from narrowly tailored as required by" Northern District of California Civil Local Rule 79-5 ("Local Rule 79-5"). Id . (internal quotation marks omitted).

On February 15, 2019, after obtaining an extension of time, Uniloc filed a motion for leave to seek reconsideration.⁵ J.A. 548–55. Uniloc stated that it was willing to make public more than ninety percent of the material it had originally sought to shield from disclosure. J.A. 552. In support of its motion, it submitted a declaration setting forth the individual grounds for redacting or sealing the remaining materials. See J.A. 574–88. Uniloc also submitted declarations from several of its third-party licensees, who stated that disclosure of their confidential and/or proprietary information, including the terms of their licenses with Uniloc, would cause them significant competitive harm. See, e.g. , J.A. 552, 576–88, 662–86.

Uniloc asserted that the court should seal a table showing the licenses it had entered into between 2010 and mid-2017, explaining that this table disclosed the names of its third-party licensees, the dates of their licenses, and the amounts paid for the licenses. J.A. 561, 567; see J.A. 646–48. Uniloc also sought to seal or redact: (1) certain information related to its relationship with Fortress; (2) materials about a purportedly proprietary software platform; and (3) certain financial information pertaining to Uniloc and its related entities. See J.A. 548–88; see also J.A. 591–648, 689–785.

On May 7, 2019, the district court denied both Uniloc's motion for leave to file for reconsideration and its accompanying revised motion to seal. Reconsideration Order , 2019 WL 2009318, at *3. According to the court, Uniloc should have submitted a narrowly tailored request for sealing "right from the outset rather than over-classifying and then trying to get away with whatever [it could] on a motion to reconsider." Id . at *2.

The court asserted, moreover, that although Uniloc "grumble[d]" that it had insufficient time to properly narrow and support its original sealing request, it "could have easily requested additional time to file [its] supporting declaration." Id . at *2 n.2. Additionally, the court concluded that Uniloc had failed to provide "sufficient justification" for redacting or sealing the information identified in its revised sealing request, stating that its "supposed risk of ... generalized competitive harm in future negotiations from disclosure did not ... compellingly outweigh the public's interest in accessing this information." Id . at *2. The court explained that "the public has an especially strong interest in learning the machinations that bear on the issue of standing in the patent context" and that "[b]ecause Uniloc's rights flow directly from th[e] government-conferred power to exclude, the public ... has a strong interest in knowing the full extent of the terms and conditions involved in Uniloc's exercise of its patent rights and in seeing the extent to which Uniloc's exercise of the government grant affects commerce." Id . at *1.

The district court recognized that Uniloc's third-party licensees had "some interest in redacting licensing information (including their identit[ies] )" and that some of these licensees had filed declarations stating that they would suffer competitive harm from the disclosure of such licensing information. Id . at *3. In the court's view, however, the concerns of the third-party licensees did "not surmount the hurdle of showing a compelling reason to seal." Id . Uniloc then filed a timely appeal with this court.

II. DISCUSSION

A. Standard of Review

"Where, as here, an appeal does not involve substantive issues of patent law, we apply the law of the regional circuit in which the district court sits." Apple Inc. v. Samsung Elecs. Co. , 727 F.3d 1214, 1220 (Fed. Cir. 2013) (" Apple I "). In the Ninth Circuit, a district court's decision to seal or unseal court records is reviewed for abuse of discretion. See Ctr. for Auto Safety v. Chrysler Grp., LLC , 809 F.3d 1092, 1096 (9th Cir. 2016) ; In re Midland Nat. Life Ins. Co. Annuity Sales Practices Litig. , 686 F.3d 1115, 1119 (9th Cir. 2012) (" Midland "). The question of whether a district court applied the correct legal standard when ruling on a motion to seal is reviewed de novo. See Ctr. for Auto Safety , 809 F.3d at 1096.

B. The Collateral Order Doctrine

Although the parties do not challenge our authority to consider this appeal, we have an independent duty to assure ourselves of jurisdiction. See Arbaugh v. Y&H Corp. , 546 U.S. 500, 514, 126 S.Ct. 1235, 163 L.Ed.2d 1097 (2006) ; see also Henderson ex rel. Henderson v. Shinseki , 562 U.S. 428, 434, 131 S.Ct. 1197, 179 L.Ed.2d 159 (2011) (emphasizing that "federal courts have an independent obligation to ensure that they do not exceed the scope of their jurisdiction, and therefore they must raise and decide jurisdictional questions that the parties either overlook or elect not to press"). As a general rule, the jurisdictional reach of the federal appellate courts extends only to "final decisions of the...