Case 1:13-cv-00919-JLH Document 592 Filed 07/26/23 Page 1 of 8 PageID #: 59688
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`ARENDI S.A.R.L.,
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`v.
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`GOOGLE LLC,
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
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`Plaintiff,
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`Defendant.
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`) C.A. No. 13-919-JLH
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`) REDACTED
`) PUBLIC VERSION
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`NON-PARTY MICROSOFT CORP.’S UNOPPOSED MOTION TO SEAL PORTIONS
`OF THE TRIAL TRANSCRIPTS AND EXHIBITS
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`Non-party Microsoft Corp. (“Microsoft”) respectfully moves to seal limited portions of the
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`trial transcripts and certain exhibits relating to Microsoft’s highly confidential settlement and
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`licensing agreements. Pursuant to D. Del. L.R. 7.1.1, Microsoft conferred with Plaintiff Arendi
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`S.A.R.L. (“Arendi”) and Defendant Google LLC (“Google”) regarding whether they opposed this
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`request to seal. Both parties indicated that they do not oppose.1 The bases for this Motion are set
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`forth below.
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`Microsoft’s proposed redactions are highlighted in the attached sealed Exhibit A.2
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`I.
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`FACTUAL BACKGROUND
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`This Court presided over a six-day jury trial from April 24, 2023 to May 2, 2023. During
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`the proceedings, testimony was elicited, and exhibits were admitted, concerning both Microsoft
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`1 Although Arendi does not oppose Microsoft’s request to seal portions of the transcripts and
`exhibits identified in this motion, Arendi indicated that its non-opposition should not be interpreted
`as agreement that such information is properly subject to sealing. Arendi also disagrees with
`Microsoft’s assertion that its damages expert, Mr. Weinstein, disclosed information in violation of
`the Arendi-Microsoft agreements or protective order in this case. See infra Section I.
`2 Because Microsoft was only given access to versions of the trial transcripts that already contained
`redactions related to other third parties’ confidential information (see D.I. 570), to avoid confusion,
`Microsoft has highlighted, rather than redacted, the information it seeks to seal.
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`Confidential Version Filed: July 21, 2023
`Redacted Version Filed: July 26, 2023
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`Case 1:13-cv-00919-JLH Document 592 Filed 07/26/23 Page 2 of 8 PageID #: 59689
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`and Microsoft Multi-Modality Inc.’s (“MMI”)3 settlement and licensing agreements with Plaintiff
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`Arendi. Specifically, Arendi’s damages expert, Mr. Weinstein (see Day 3 Tr., supra Section
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`III(2)), and Google’s damages expert, Mr. Kidder (see Day 6 Tr., supra Section III(3)), disclosed
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`the confidential settlement/licensing amount Microsoft paid in both agreements. Arendi’s owner,
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`Mr. Hedloy, also disclosed the consideration paid in both agreements (see Day 1 Tr., supra Section
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`III(1)). The settlement and licensing agreement documents were admitted into evidence (PX-75,
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`PX-78, DTX-971). In most instances, the courtroom was sealed when the evidence regarding both
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`agreements was discussed. However, on Day 3, Arendi’s damages expert, Mr. Weinstein,
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`disclosed the financial terms of the Microsoft Agreements in open court, without the courtroom
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`being sealed, and without notice to Microsoft, in violation of the terms of those Agreements and
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`the Protective Order in the case. Mr. Weinstein apparently made a similar disclosure of the
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`financial terms of the Apple settlement agreement, leading to Apple filing a motion for sanctions
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`against Arendi, Arendi’s counsel, and Mr. Weinstein for disclosure of such information. D.I. 538.
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`That motion remains pending.
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`On May 25, 2023, Microsoft filed a notice of intent to redact and/or seal limited portions
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`of the trial transcripts. D.I. 556. On June 9, Microsoft filed a stipulation and proposed order in
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`which the parties agreed to allow Microsoft’s outside counsel to access portions of the trial
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`transcripts with third-party confidential information unrelated to Microsoft’s agreements redacted.
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`D.I. 565. On June 15, the Court ordered the stipulation. D.I. 570. Microsoft received the redacted
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`transcripts from Arendi’s counsel on July 7.
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`3 Microsoft Multi-Modality Inc. is a subsidiary of Microsoft.
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`2
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`Case 1:13-cv-00919-JLH Document 592 Filed 07/26/23 Page 3 of 8 PageID #: 59690
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`Relatedly, non-party Apple filed a motion to seal similar materials, including financial
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`information related to its licensing/settlement agreement with Arendi. See D.I. 491, 537. This
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`motion was granted by the Court on June 6. D.I. 562.
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`II. LEGAL STANDARD
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`Although there is a “presumptive right of public access” to judicial proceedings, the right
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`is not absolute. In re Avandia Marketing, 924 F.3d 662, 672 (3d Cir. 2019) (quoting In re Cendant
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`Corp., 260 F.3d 183, 192–93 (3d Cir. 2001) and Bank of Am. Nat’l Tr. & Sav. Ass’n v. Hotel
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`Rittenhouse Assocs., 800 F.2d 339, 344 (3d Cir. 1986)). “The party seeking to overcome the
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`presumption of access bears the burden of showing ‘that the interest in secrecy outweighs the
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`presumption.’” Id. (quoting Bank of Am., 800 F.2d at 344). The presumption of public access is
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`overcome where the material sought to be protected is “the kind of information that courts will
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`protect and that disclosure will work a clearly defined and serious injury to the party seeking
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`closure.” Id. (internal quotation marks omitted); see also Littlejohn v. Bic Corp., 851 F.2d 673,
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`677-78 (3d Cir. 1988) (recognizing that the right of access to judicial proceedings and records “is
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`not absolute” and stating that “[c]ourts may deny access to judicial records, for example, where
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`they are sources of business information that might harm a litigant’s competitive standing.”).
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`Good cause must be demonstrated to justify redacting a judicial transcript. See Mosaid
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`Technologies Inc. v. LSI Corp., 878 F. Supp. 2d 503, 507 (D. Del. 2012). To determine whether
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`“good cause” to seal exists, a court may look to a number of things, including (1) whether
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`disclosure will violate any privacy interests; (2) whether the party benefiting from the order of
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`confidentiality is a public entity or official; and (3) whether the case involves issues important to
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`the public. See Glenmede Trust Co. v. Thompson, 56 F.3d 476, 483 (3d Cir. 1995). The Supreme
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`Court has acknowledged that “courts have refused to permit their files to serve as … sources of
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`Case 1:13-cv-00919-JLH Document 592 Filed 07/26/23 Page 4 of 8 PageID #: 59691
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`business information that might harm a litigant’s competitive standing.” Nixon v. Warner
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`Commc’ns, Inc., 435 U.S 589, 598 (1978); see also Littlejohn, 851 F.2d at677-78 (recognizing that
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`the right of access to judicial proceedings “is not absolute” and that “[c]ourts may deny access to
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`judicial records, for example, where they are sources of business information that might harm a
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`litigant’s competitive standing”). The Third Circuit has also recognized that “if a case involves
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`private litigants, and concerns matters of little legitimate public interest, that should be a factor
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`weighing in favor of granting or maintaining an order of confidentiality.” Pansy v. Borough of
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`Stroudsburg, 23 F.3d 772, 788 (3d Cir. 1994).
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`III.
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`INFORMATION TO BE SEALED
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`Microsoft respectfully requests to seal exhibits and limited portions of the trial transcripts
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`consistent with Third Circuit law. Specifically, with respect to the non-redacted portions of the
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`trial transcripts to which Microsoft has access,4 it requests sealing the confidential information
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`found on the following pages/lines:
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`1. The Day 1 Transcript:
`a) Page 157, lines 1, 4
`b) Page 158, lines 7, 16
`c) Page 164, line 8
`d) Page 243, lines 10, 13, 17
`e) Page 250, line 16
`f) Corresponding portions of the index related to these redactions
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`2. The Day 3 Transcript:
`a) Page 576, lines 20-21
`b) Page 577, lines 6, 12
`c) Page 578, line 12
`d) Page 579, line 2
`e) Page 589, line 19
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`4 Microsoft has been informed that the sealed trial transcripts have recently been filed on the
`docket. See D.I. 577-585. The page/line numbers noted in Microsoft’s motion, however,
`correspond to the versions of the transcripts it received from Arendi’s counsel. To the extent that
`there are any discrepancies between the page/line numbers of the transcripts, Microsoft requests
`that the confidential information highlighted in Ex. A should control.
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`Case 1:13-cv-00919-JLH Document 592 Filed 07/26/23 Page 5 of 8 PageID #: 59692
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`f) Page 590, line 12
`g) Page 591, lines 10-11, 15
`h) Page 618, line 11, 24
`i) Page 619, lines 4, 6, 9, 11
`j) Page 621, lines 2, 7, 12, 17
`k) Page 626, line 25
`l) Page 627, line 12
`m) Page 665, line 3
`n) Corresponding portions of the index related to these redactions
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`3. The Day 6 Transcript:
`a) Page 1286, line 5
`b) Page 1290, line 9
`c) Page 1292, line 21
`d) Page 1294, line 17
`e) Page 1322, line 13
`f) Page 1323, lines 5, 9-13, 25
`g) Page 1324, lines 4, 7, 11-15, 24-25
`h) Corresponding portions of the index related to these redactions
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`4. Exhibits PX-75 (Microsoft Agreement), PX-78 (MMI Agreement), and DTX-971
`(Microsoft Agreement) in their entirety
`IV. ARGUMENT
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`The testimony and exhibits that Microsoft seeks to seal contain information relating to
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`highly confidential settlement and licensing agreements. Similar to non-party Apple’s requested
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`redactions, which were granted by the Court (see D.I. 562), Microsoft’s requested redactions are
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`narrowly tailored to seek to redact either the exact amount paid by Microsoft in the Microsoft and
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`MMI Agreements or information from which the exact amounts paid could be calculated. Notably,
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`Microsoft does not seek to redact other mentions of the Microsoft and MMI Agreements, including
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`references made to the recitals of those Agreements.
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`It is well-established that parties have a “legitimate private interest in keeping confidential
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`the terms of a confidential business agreement not otherwise available to the public.” Mars, Inc.
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`v. JCM Am. Corp., 2007 WL 496816, at *2 (D.N.J. Feb. 13, 2007). Public disclosure of
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`information parties have agreed to keep confidential may “dampen [the party’s] ability to negotiate
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`Case 1:13-cv-00919-JLH Document 592 Filed 07/26/23 Page 6 of 8 PageID #: 59693
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`effectively favorable terms” in the future and cause it to “suffer a competitive injury by having its
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`[c]onfidential [i]nformation disclosed to the public.” Id.
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`Here, as explained in the Declaration of Daniel Foster, filed concurrently herewith, the
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`amount paid by Microsoft in the Microsoft and MMI Agreements is highly confidential
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`information that, if publicly disclosed, would cause a “clearly defined and serious injury” to
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`Microsoft. See D.I. 588 (“Foster Decl.”) at ¶ 5; see also In re Avandia Marketing, 924 F.3d at 678
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`(citations omitted). This is because such disclosure would negatively impact Microsoft’s ability
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`to secure favorable settlements and patent licensing agreements in the future. Id. If hopeful
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`licensors or litigants were aware of the specific amount Microsoft had previously settled for, this
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`would seriously undermine Microsoft’s bargaining position. Id. Microsoft would also be harmed
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`if its competitors gained insight into the resolution of its confidential settlement/licensing
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`agreements. Id. Further, because Microsoft is a non-party in this action, the risk of injury to it is
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`“presumably greater.” See United States v. Dentsply Int’l, Inc., 187 F.R.D. 152, 160 n.7 (D. Del.
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`1999) (“The risk of injury to the owner of confidential information is presumably greater where
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`the owner was never in a position to accept or reject the risk of disclosure of confidential
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`information. . . . [T]he nonparty has never undertaken the risks of disclosure.”).
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`Courts in this District have recognized the importance of sealing the terms of a party’s
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`confidential settlement agreements. See, e.g., Amgen Inc. v. Amneal Pharms. LLC, C.A. No. 16-
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`853-MSG, 2021 WL 4133516, at *5 (D. Del. Sept. 10, 2021), opinion vacated in part on other
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`grounds, 2021 WL 4843959 (D. Del. Oct. 18, 2021) (granting motion to seal various settlement
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`agreements because “Courts protect settlement agreements when public disclosure will reveal a
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`signatory’s ‘business and litigation strategies to competitors. . .undermining its future bargaining
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`positions. … Here, the settlement agreements not only ended the parties’ patent-infringement
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`Case 1:13-cv-00919-JLH Document 592 Filed 07/26/23 Page 7 of 8 PageID #: 59694
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`litigation but also granted the settled-defendants a license to Amgen’s asserted patent.
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`Accordingly, the settlement agreements contain the financial terms of an ongoing business
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`relationship. ‘[T]erms that relate to pricing, valuation, monetary payments, and financial
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`information should be protected.’”) (citation omitted); Genentech, Inc. v. Amgen, Inc., C.A. No.
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`17-1407- CFC, 2020 WL 9432700, at *6 (D. Del. Sept. 2, 2020), report and recommendation
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`adopted, 2020 WL 9432702 (D. Del. Oct. 1, 2020) (“Revelation of the terms of settlement
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`agreements, which are among the documents for which continued sealing is often sought, could
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`place the parties at a demonstrable disadvantage in navigating and negotiating other litigation
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`contests with competitors in the same pharmaceutical space.”). Thus, the confidential settlement
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`and licensing information Microsoft is seeking to redact is “the kind of information that courts will
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`protect.” In re Avandia Marketing, 924 F.3d at 678 (citations omitted).
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`V. CONCLUSION
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`For the foregoing reasons, Microsoft respectfully requests that the Court seal the limited,
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`confidential information related to Microsoft’s licensing and settlement agreements with Arendi,
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`as set forth in Section III(1) through (4), above.
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`Case 1:13-cv-00919-JLH Document 592 Filed 07/26/23 Page 8 of 8 PageID #: 59695
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`July 26, 2023
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`MORRIS NICHOLS ARSHT & TUNNELL LLP
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`/s/ Karen Jacobs
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`Jack B. Blumenfeld (#1014)
`Karen Jacobs (#2881)
`Benjamin Yenerall (#7132)
`1201 North Market Street
`P.O. Box 1347
`Wilmington, DE 19899
`(302) 658-9200
`jblumenfeld@morrisnichols.com
`kjacobs@morrisnichols.com
`byenerall@morrisnichols.com
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`Attorneys for Microsoft Corp.
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