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Ati Industrial Automation, Inc. v. Applied Robotics, Inc.

United States District Court, M.D. North Carolina

June 11, 2014

ATI INDUSTRIAL AUTOMATION, INC., Plaintiff,
v.
APPLIED ROBOTICS, INC., Defendant.

MEMORANDUM OPINION AND ORDER

L. PATRICK AULD, Magistrate Judge.

This case comes before the Court on Defendant's Motion to Seal Document. (Docket Entry 128.) For the reasons that follow, the Court will grant the instant Motion.

I. BACKGROUND

Plaintiff's Second Amended Complaint alleges that Defendant has infringed three of its utility patents for robotic tool changers and that Defendant's claimed design patent is invalid as functional. (Docket Entry 154 at 4-9.) The Parties previously filed a Joint Motion for Impoundment Renewed (Docket Entry 48), which sought to seal documents containing trade secrets filed in connection with Defendant's Motion to Dismiss (see id. at 1-2). In granting that Motion, the Court concluded that the First Amendment standard (as opposed to the common law standard) applied to documents filed in connection with a dispositive motion and that Defendant's interest in protecting its trade secrets outweighed the public's First Amendment right of access. (Docket Entry 84 at 14-19.)

Defendant now moves to seal a document ("the Document") it filed in opposition to Plaintiff's Motion to Amend its Amended Complaint. (See Docket Entry 129 at 1; see also Docket Entry 127-1 (redacted version of document).) It describes the Document as "a spreadsheet containing lists of [Defendant's] customers and identifying information thereof such as their locations[] and specifics of their order histories[, ].... [as well as] highly sensitive cost and pricing information.... [and, further, notes that said document] is not publicly available and is maintained confidentially by [Defendant] as a trade secret." (Docket Entry 129 at 4.) Defendant's instant Motion thus contends that "[d]isclosure of this type of information would unnecessarily burden [Defendant] with economic harm by providing a competitive advantage to its direct competitors in the industry." (Id.) Plaintiff does not oppose Defendant's instant Motion. (Docket Entry 142 at 1.)

II. DISCUSSION

A. Standard for Sealing Documents

Federal Rule of Civil Procedure 26(c) states in relevant part that:

The court may, for good cause, issue an order to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense, including one or more of the following:
....
(G) requiring that a trade secret or other confidential research, development, or commercial information not be revealed or be revealed only in a specific way; and
(H) requiring that the parties simultaneously file specified documents or information in sealed envelopes, to be opened as the court directs.

Fed. R. Civ. P. 26(c) (emphasis added).

The United States Court of Appeals for the Fourth Circuit has recognized that "there may be instances in which discovery materials should be kept under seal even after they are made part of a dispostiive motion." Rushford v. The New Yorker Magazine, Inc. , 846 F.2d 249, 253 (4th Cir. 1988). However, the authority granted to a court under Rule 26(c) to require special handling of information gathered during discovery is constrained by the public's right of access when that information later becomes part of a judicial record. See Level 3 Commc'ns, LLC v. Limelight Networks, Inc. , 611 F.Supp.2d 572, 576 (E.D. Va. 2009) ("There is a highly-developed body of case law governing the handling of discovery documents and other materials filed with courts under seal in civil cases. For current purposes, this case law can be divided analytically into two categories. One body of case law relates to the protected status of documents produced in pre-trial discovery pursuant to a stipulated, court-approved protective order under Rule 26(c) of the Federal Rules of Civil Procedure. The second body of case law governs the public availability ...


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