Trials@uspto.gov Paper 40
`571-272-7822
` Entered: February 27, 2015
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
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`UNIFIED PATENTS INC,
`Petitioner
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`v.
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`DRAGON INTELLECTUAL PROPERTY, LLC,
`Patent Owner.
`_______________
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`Case IPR2014-01252
`Patent 5,930,444
`_______________
`
`Before NEIL T. POWELL, GREGG I. ANDERSON, and
`J. JOHN LEE, Administrative Patent Judges.
`
`POWELL, Administrative Patent Judge.
`
`DECISION
`Petitioner’s Motions to Seal
`37 C.F.R. §§ 42.14 and 42.54
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`IPR2014-01252
`Patent 5,930,444
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`
`Introduction
`I.
`Petitioner has filed a number of motions to seal various exhibits and
`pleadings, either in whole or in part. Patent Owner has filed oppositions to all of
`Petitioner’s motions to seal. On November 15, 2014, Petitioner filed a Motion to
`Seal Exhibits 2001, 2003–2005, 2007–2009, 2011–2013, and 2015–2016. Paper
`12 (“First Motion to Seal”). Patent Owner filed an Opposition to the First Motion
`to Seal. Papers 21, 22 (“First Opposition”).1 On December 5, 2014, Petitioner
`filed a Motion to Seal Petitioner’s Reply Brief on Real Party in Interest and Exhibit
`1015 filed therewith. Paper 17 (“Second Motion to Seal”). Patent Owner filed an
`Opposition to the Second Motion to Seal. Paper 32 (“Second Opposition”). On
`December 24, 2014, Petitioner filed a Motion to Seal, in which Petitioner requested
`that we seal Patent Owner’s First Opposition, Patent Owner’s Motion for
`Additional Discovery (Paper 24), Exhibit 1017, “as well as portions of this
`Motion.” Papers 27, 28 (“Third Motion to Seal”).2 On January 5, 2015, Petitioner
`filed a Motion to Seal Petitioner’s Opposition to Patent Owner’s Motion for
`Additional Discovery (Paper 31). Paper 30 (“Fourth Motion to Seal”). Patent
`Owner filed an Opposition that opposes both the Third Motion to Seal and the
`Fourth Motion to Seal. Paper 35 (“Third Opposition”). Patent Owner also filed
`another Opposition that opposes the Fourth Motion to Seal. Paper 36 (Fourth
`Opposition). For each of the exhibits and pleadings that Petitioner moves to seal,
`two versions have been filed: an unredacted, confidential version, and a redacted,
`public version.
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`1 Paper 21 is an unredacted, confidential version of the first Opposition. Paper 22
`is a redacted, public version of the first Opposition.
`2 Paper 27 is a redacted, public version of the third Motion to Seal. Paper 28 is an
`unredacted, confidential version of the third Motion to Seal. 
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`In its Motions to Seal, Petitioner identifies three categories of information in
`the exhibits and pleadings that Petitioner wishes to have sealed. E.g., Paper 27, 3.
`In the first category, Petitioner asserts that the identities of its members constitute
`confidential information that should remain sealed. Paper 12, 2; Paper 17, 2–3;
`Paper 27, 3; Paper 30, 4–7. In the second category, Petitioner asserts that its
`membership terms and business strategy constitute confidential information that
`should remain sealed. Paper 12, 2; Paper 17, 3; Paper 27, 3; Paper 30, 3. In the
`third category, Petitioner asserts that its financial information constitutes
`confidential information that should remain sealed. Paper 27, 3. We address each
`of these categories separately below.
`In connection with the Motions to Seal, Petitioner has filed a Protective
`Order stipulated to by the parties. Ex. 1014. We address the Protective Order after
`the Motions to Seal.
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`II. Discussion
`The record for an inter partes review shall be made available to the public,
`except as otherwise ordered, and a document filed with a motion to seal shall be
`treated as sealed until the motion is decided. 35 U.S.C. § 316(a)(1); 37 C.F.R.
`§ 42.14. The Office Trial Practice Guide provides that:
`The rules aim to strike a balance between the public’s interest
`in maintaining a complete and understandable file history and
`the parties’ interest in protecting truly sensitive information.
`* * *
`identify confidential
`Confidential Information: The rules
`information in a manner consistent with Federal Rule of Civil
`Procedure 26(c)(1)(G), which provides for protective orders for
`trade secret or other confidential research, development, or
`commercial information. § 42.54.
`77 Fed. Reg. 48,756, 48,760 (Aug. 14, 2012).
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`The standard for granting a motion to seal is “good cause.” 37 C.F.R.
`§ 42.54. There is a strong public policy that favors making information filed in
`inter partes review proceedings open to the public. See Garmin International v.
`Cuozzo Speed Technologies, LLC, Case IPR2012-00001, slip op. at 1-2 (PTAB
`March 14, 2013) (Paper 34) (discussing the standards of the Board applied to
`motions to seal). The moving party bears the burden of showing that the relief
`requested should be granted. 37 C.F.R. § 42.20(c).
`a. Identities of Petitioner’s Members
`Petitioner asserts multiple reasons in support of its contention that the
`identities of its members should remain under seal. Petitioner argues that the
`identities of its members should remain under seal because of concerns that
`Petitioner’s members would experience retaliation from non-practicing entities
`(“NPEs”) if the identities of the members became public. Paper 12, 2, 4; Paper 17,
`2–4; Paper 27, 7; Paper 30, 6. Patent Owner counters that this argument is
`speculative and unsupported by evidence that Petitioner’s members would suffer
`any retaliation if their identities became public. Paper 22, 5–7.
`Petitioner further argues that the list of its members is a trade secret, and that
`the “Office Patent Trial Practice Guide (‘OPTP Guide’) explains that rule 37
`C.F.R. § 42.54 identifies ‘confidential information in a manner consistent with
`Federal Rule of Civil Procedure 26(c)(1)(G), which provides for protective orders
`for trade secret or other confidential research, development, or commercial
`information.’” Paper 27, 4 (citing Office Patent Trial Practice Guide, 77 Fed. Reg.
`48,756, 48,760 (Aug. 14, 2012)). Asserting that California state law governs the
`agreements with its members, Petitioner states that a trade secret under California
`law “includes (a) information (b) which is valuable because unknown to others and
`(c) which the owner has attempted to keep a secret.” Paper 27, 4 (citing ABBA
`Rubber Co. v. Seaquist, 286 Cal. Rptr. 518, 526 (Cal. Ct. App. 1991)). Petitioner
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`argues that it meets this test with respect to the list of its members. Paper 27, 5–8;
`Paper 30, 5–7.
`Petitioner contends that the list of its members would be valuable to NPEs
`because NPEs could use the list of members to identify litigation targets. Paper 27,
`5–7; Paper 30, 5–7. Petitioner argues that “[Petitioner]’s current membership list
`contains economic value because it would provide NPEs with the means to identify
`companies that were concerned about NPE litigation, retaliate against them, and
`hurt [Petitioner]’s ability to deter NPEs.” Paper 27, 7; Paper 30, 6.
`Patent Owner argues that Petitioner does not demonstrate that the list of its
`members is a trade secret. Paper 35, 1–2. In particular, Patent Owner argues that
`Petitioner does not provide sufficient evidence to support its assertion that the list
`of Petitioner’s list of members meets the test for a trade secret under California
`law. Id.
`Consistent with Patent Owner’s assertion, Petitioner has cited limited
`evidence to support its concerns about retaliation against its members. For
`example, in the Third Motion to Seal, Petitioner cites evidence that its members
`fear retaliation. Paper 27, 6. At the same time, the fact that “the ’444 patent, has
`been asserted against ten companies in district court patent infringement
`proceedings” (Paper 14, 1) illustrates a reasonable basis for concerns about
`litigation.
`In addition to Petitioner’s needs in protecting the identities of its members,
`we must consider the public’s interest in maintaining a complete and
`understandable file history of this case. 77 Fed. Reg. at 48,760. We agree with
`Patent Owner that if any of Petitioner’s members are real parties-in-interest in the
`present case, the identities of those members needs to be disclosed to the public.
`As explained in our decision instituting inter partes review, however, the current
`record does not demonstrate that any of Petitioner’s members are real parties-in-
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`interest. Paper 37, 8–14. Accordingly, at this stage of the proceeding, the public
`has little interest in knowing the identities of Petitioner’s members.
`Balancing Petitioner’s need to maintain the identities of its members
`confidential against the public’s need to know the identities of Petitioner’s
`members, we conclude that Petitioner has shown good cause to seal the identities
`of its members. Consequently, we grant Petitioner’s motions to seal the identities
`of Petitioner’s members.
`b. Membership Terms and Business Strategy
`Petitioner cites multiple reasons that information about its membership terms
`and business strategy should be sealed. Paper 12, 2; Paper 27, 9–10; Paper 30, 9.
`Petitioner asserts that it guards this information to protect its business. Paper 12, 2;
`Paper 17, 3. Petitioner argues also that its membership terms and business strategy
`constitute trade secrets. Paper 27, 9–10; Paper 30, 9. In support of this, Petitioner
`argues that the membership terms and business strategy are valuable because
`“[d]isclosing this information to the public would provide [Petitioner]’s
`competitors or would-be competitors with a roadmap of how to replicate
`[Petitioner]’s business model, which is very valuable.” Paper 27, 9; Paper 30, 9.
`Petitioner further notes that its membership agreements contain confidentiality
`provisions and are marked HIGHLY CONFIDENTIAL – ATTORNEYS’ EYES
`ONLY in this proceeding. Paper 27, 10. Petitioner concludes that even if its
`membership terms and business strategy do not qualify as trade secrets, they
`“constitute highly sensitive business information, deserving of protection.” Id.
`We are persuaded that Petitioner’s membership terms and business strategies
`are highly sensitive confidential information. As Petitioner notes, its membership
`agreements (Exhibits 2003, 2004, and 2005) include confidentiality provisions and
`have been marked as highly confidential for this case. Paper 27, 10. Additionally,
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`we find persuasive Petitioner’s concerns that disclosing its membership terms and
`business strategy could harm Petitioner by enabling others to replicate its business.
`Accordingly, we are persuaded that Petitioner has shown good cause for
`maintaining its membership terms and business strategy under seal. Consequently,
`we grant Petitioner’s motion to seal this information.
`c. Financial Information
`In support of the assertion that its financial information should remain under
`seal, Petitioner argues that the Board has previously maintained financial
`information under seal where reasonable redactions were proposed and the thrust
`of the underlying argument or evidence could reasonably be discerned from the
`redacted versions. Paper 27, 10 (citing Greene’s Energy Grp., LLC, Inc. v. Oil
`States Energy Svcs., LLC, IPR2014-00216, Paper 27, 5 (Sept. 23, 2014)). In
`concert with this, Petitioner asserts that the redactions related to Petitioner’s
`financial information relate only to the financial information, and do not affect the
`underlying arguments made by Patent Owner. Paper 27, 10–11.
`We are persuaded that Petitioner has shown good cause for maintaining its
`financial information under seal. We agree that the redactions of Petitioner’s
`financial information do not obscure the thrust of Patent Owner’s underlying
`arguments thus far in this proceeding. On the current record, Patent Owner’s
`arguments to date have not demonstrated the relevance of any specific portion of
`Petitioner’s financial information to the real party-in-interest issue. See Paper 37,
`8–14. Accordingly, the public’s interest in knowing Petitioner’s financial
`information is relatively low, such that it is outweighed by Petitioner’s interest in
`maintaining its financial information confidential. Therefore, we grant Petitioner’s
`motion to seal this information.
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`d. Protective Order
`The parties’ stipulated Protective Order differs from the default protective
`order in various ways. For example, in addition to the general class of confidential
`information marked “CONFIDENTIAL – PROTECTIVE ORDER MATERIAL,”
`the parties’ stipulated Protective Order identifies another class of confidential
`information marked “HIGHLY CONFIDENTIAL – ATTORNEYS’ EYES
`ONLY.” Ex. 1014, 1–3, 10–11. The stipulated Protective Order provides more
`stringent restrictions on who can view the “HIGHLY CONFIDENTIAL”
`information, as compared to the restrictions on who can view general
`“CONFIDENTIAL” information. For example, the stipulated Protective Order
`provides that general “CONFIDENTIAL” information can be disclosed to in-house
`counsel who have signed the Acknowledgment (id. at 4), but in-house counsel
`cannot view “HIGHLY CONFIDENTIAL” information (id. at 2). Additionally,
`the stipulated Protective Order specifies that “HIGHLY CONFIDENTIAL”
`information may be viewed by retained experts of the parties only if such experts
`“are not employed by any party” (id. at 2), whereas the default protective order
`does not proscribe disclosure of confidential information to retained experts who
`are employees of a party (77 Fed. Reg. at 48,771).
`Compared to the default protective order, the stipulated Protective Order
`also specifies more extensive procedures to be used by the parties in connection
`with filing documents designated as confidential by a party. In particular, the
`stipulated Protective Order provides detailed procedures for handling
`circumstances where a party intends to file a document or information received
`from another party who has designated the document or information confidential.
`Ex. 1014, 6–10.
`In addition to the foregoing, the stipulated Protective Order differs from the
`default protective order in various other ways. For example, the stipulated
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`Protective Order provides that “HIGHLY CONFIDENTIAL” and
`“CONFIDENTIAL” information can be disclosed to support personnel only if
`those personnel have signed the Acknowledgment (id. at 2–3), whereas the default
`protective order provides that support personnel need not sign the
`Acknowledgment to have access to confidential information (77 Fed. Reg. at
`48,771).
`After reviewing the stipulated Protective Order, we determine that it is
`acceptable.
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`III. Conclusion
`For the foregoing reasons, Petitioner’s motions to seal are granted, and the
`stipulated Protective Order is entered in this proceeding. Circumstances may arise,
`however, in which some or all of the information identified in Petitioner’s motions
`to seal may be unsealed. For example, if we later determine that any of
`Petitioner’s members constitute a real party-in-interest, the identity of such
`members will be unsealed. Additionally, confidential information that is subject to
`a protective order ordinarily becomes public 45 days after final judgment in a trial.
`77 Fed. Reg. at 48761. There is an expectation that information will be made
`public where the existence of the information is identified in a final written
`decision following a trial. Id. Petitioner may, after final judgment in a trial, file a
`motion to expunge confidential information from the record prior to the
`information becoming public. See 37 C.F.R. § 42.56.
`IV. Order
`In consideration of the foregoing, it is hereby:
`ORDERED that Petitioner’s Motions to Seal are granted;
`FURTHER ORDERED that the stipulated Protective Order filed as Exhibit
`1014 is entered in this proceeding.
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`PETITIONER:
`Michael Kiklis
`cpdocketkiklis@oblon.com
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`Katherine Cappaert
`cpdocketcappaert@oblon.com
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`Scott McKeown
`cpdocketmckeown@oblon.com
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`PATENT OWNER:
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`Jason Angell
`janfell@fawlaw.com
`DragonIPR@fawlaw.com
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