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Syngenta Crop Protection, LLC v. Willowood, LLC

United States District Court, M.D. North Carolina

December 4, 2017

SYNGENTA CROP PROTECTION, LLC, Plaintiff,
v.
WILLOWOOD, LLC, WILLOWOOD USA, LLC, WILLOWOOD AZOXYSTROBIN, LLC and WILLOWOOD LIMITED, Defendants.

          MEMORANDUM OPINION AND ORDER

          Catherine C. Eagles, District Judge.

         In 2015, Syngenta sued Willowood, seeking millions of dollars in lost profits as a result of alleged patent infringement. The case was tried to a jury in September 2017. Syngenta now seeks to seal certain trial exhibits and related portions of the trial transcript that contain confidential business information. The public interest in open trials is extraordinarily high. Open courts promote the integrity of the judiciary, increase public understanding of the court system, and assure the public that proceedings and the resulting verdicts are fair, impartial and non-arbitrary. Secret trials and verdicts based on secret evidence kindle suspicions of corruption, unfairness, and conspiracies. Public access should rarely be restricted when the information sought to be sealed is important to understanding what happened at trial

         As to some of the exhibits and testimony, the information that Syngenta seeks to seal is crucial to understanding the trial, and Syngenta has not established that its private interest outweighs the public interest in open courts. As to these materials, the motion will be denied.

         As to other materials, Syngenta primarily seeks to seal confidential information that was never mentioned during the trial but is in evidence because it was part of an exhibit containing relevant information and Syngenta does not seek to seal the relevant portions of the exhibit or accompanying testimony. The public interest in access to such information is small and disclosure of Syngenta's confidential information would harm its competitive standing. As to these materials, non-disclosure will not interfere with public understanding and oversight and the motion will be granted.

         BACKGROUND

          I. OVERVIEW OF THE CASE

         In 2015, Syngenta sued Willowood[1] for patent infringement, seeking millions of dollars in lost profits on its fungicides containing azoxystrobin. There were four patents at issue: the compound patents (the ‘076 Patent and the ‘256 Patent) both claim a group of chemical compounds that includes azoxystrobin, and the process patents (the ‘138 Patent and the '761 Patent) both claim methods of manufacturing azoxystrobin. See, e.g., Doc. 1 at ¶ 21; PTX 1-4. The compound patents and the ‘138 Patent expired before trial, and the '761 Patent expires in 2029. See PTX 1, 2, 3 and 4; 35 U.S.C. § 154. Syngenta asserted that the infringement began in 2013 and, as to the ‘761 Patent, was continuing.

         The Court granted summary judgment in favor of Syngenta as to validity and infringement of the compound patents by certain Willowood defendants. Doc. 141. The remaining issues were tried to a jury in September 2017. The jury found that: Willowood Limited did not infringe the compound patents; Willowood did not infringe the ‘138 Patent; the ‘761 Patent was valid and Willowood infringed it; Syngenta proved that it was entitled to $75, 600 in damages for Willowood's infringement of the compound patents; Syngenta proved that it was entitled to $900, 000 in damages for Willowood's infringement of the ‘761 Patent; and Willowood's infringement of the compound patents was not willful. Doc. 319.

         After trial, Syngenta filed the pending motion, seeking to seal twelve exhibits in full and to redact information from an additional thirteen exhibits. See Doc. 331 at 12, 14, 16-18. Syngenta also seeks to redact information from the publicly available trial transcript that, for the most part, discloses information in the exhibits. Id. at 13, 15, 17.[2]

         II. STANDARD FOR SEALING TRIAL TESTIMONY AND EXHIBITS

         Because the public has a right to attend trials and oversee the courts, the First Amendment protects the public's right to access the trial testimony and exhibits that Syngenta is moving to seal. See, e.g., In re Application of U.S. for an Order Pursuant to 18 U.S.C. Section 2703(D), 707 F.3d 283, 290-91 (4th Cir. 2013); Am. Civil Liberties Union v. Holder, 673 F.3d 245, 252 (4th Cir. 2011) (collecting cases).[3] The Court therefore evaluates Syngenta's motion under the First Amendment public right to access standard.[4]

         The public interest in open courts at this stage of the proceedings-a civil trial-is almost at its peak, exceeded only by the public interest in a criminal trial. “A trial is a public event. What transpires in the court room is public property.” Craig v. Harney, 331 U.S. 367, 374 (1947). Openness advances the civil adjudication process by increasing public understanding of the court system and by assuring the public that proceedings and the resulting verdicts are fair, impartial, and non-arbitrary. See, e.g., Richmond Newspapers, Inc. v. Virginia, 448 U.S. 555, 571-72 (1980); Doe v. Pub. Citizen, 749 F.3d 246, 263, 267 (4th Cir. 2014). Open trials also promote the institutional integrity of the judiciary, Pub. Citizen, 749 F.3d at 263, 267, by encouraging a sense of public responsibility by judges and jurors, see Cowley v. Pulsifer, 137 Mass. 392, 394 (1884), and by discouraging arbitrary decision-making. See In re Oliver, 333 U.S. 257, 270-71 (1948).

         While “the operation of the court system is a matter of utmost public concern, ” Va. Dep't of State Police v. Wash. Post, 386 F.3d 567, 574 (4th Cir. 2004), [5] the public's right of access to trials and trial exhibits is neither absolute nor unlimited. Nixon v. Warner Commc'ns, Inc., 435 U.S. 589, 598 (1978). Rather, it “must be balanced against other compelling interests.” In re Knight Pub. Co., 743 F.2d 231, 234 (4th Cir. 1984). Restrictions on the public's right of access may be appropriate when access to judicial records could provide a “source of business information that might harm a litigant's competitive standing.” Nixon, 435 U.S. at 598; see also Woven Elecs. Corp. v. Advance Grp., Inc., Nos. 89-1580, 89-1588, 1991 WL 54118, at *6 (4th Cir. Apr. 15, 1991). “A corporation may possess a strong interest in preserving the confidentiality of its proprietary and trade-secret information, which in turn may justify partial sealing of court records.” Pub. Citizen, 749 F.3d at 269; see also Apple, Inc. v. Samsung Elecs. Co., Ltd., 727 F.3d 1214, 1218, 1228-29 (Fed. Cir. 2013) (applying Ninth Circuit law and sealing narrow selection of records submitted in a patent case in connection with a non-dispositive pretrial motion and a post-trial motion for injunctive relief and enhanced damages where records contained product-specific financial information and other information that, if public, would cause competitive harm).

         Even under the less stringent common law right of access, the litigant seeking to restrict access must show that its interest protected by sealing “heavily outweigh[s] the public interests in access” to court proceedings before a district court may restrict or limit public access. See Rushford v. New Yorker Magazine, Inc., 846 F.2d 249, 253 (4th Cir. 1988). When the First Amendment right of access applies, the litigant must also present “specific reasons” that “justify restricting access to the information”; conclusory assertions are not sufficient. Lord Corp. v. S & B Tech. Prods., Inc., No. 5:09CV205D, 2012 WL 4056755, at *1 (E.D. N.C. Sept. 14, 2012); see Press-Enterprise Co. v. Superior Court, 478 U.S. 1, 15 (1986). Further, the requested restriction on public access must be narrowly tailored to serve the private interest. See Va. Dep't of State Police, 386 F.3d at 575; accord Woven Elec., 1991 WL 54118, at *6 (“The district court should review the entire record of the trial, including the exhibits and transcripts if any, and seal only those portions necessary to prevent the disclosure of trade secrets.”).

         ANALYSIS

         The information Syngenta seeks to seal is confidential business information that falls into five general categories: financial information; supply agreements; corporate strategy documents; experiments related to the development of the ‘761 Patent; and testing protocols. In support of its motion, Syngenta has submitted a declaration by Andrew Fisher, Syngenta's Product Lead for azoxystrobin products. He has testified to the confidential nature of the trial exhibits that Syngenta is moving to seal, which he asserts include confidential and trade secret information. See Doc. 332 at ¶¶ 3-13. Mr. Fisher also affirms that Syngenta's competitive standing will be harmed by the disclosure of this confidential information. Id.

         The Court has complied with the First Amendment notice requirements set forth in Stone v. Univ. of Md. Med. Sys. Corp., 855 F.2d 178, 181 (4th Cir. 1988) and Rushford, 846 F.2d at 253-54. Syngenta filed a pretrial motion seeking similar relief on August 28, 2017, Doc. 287, and on August 30, 2017, the Court arranged for posting notice of that motion on the Middle District's website. Syngenta filed the post-trial motion on October 4, 2017. Doc. 330; see Mears v. Atl. Se. Airlines, Inc., No. 5:12CV613F, 2014 WL 5018907, at *2 (E.D. N.C. Oct. 7, 2014) (“The filing of a litigant's motion to seal . . . is sufficient to provide public notice and opportunity to challenge the request to seal.”). On October 10, 2017, Willowood responded to the motion, but did not object to it. See Doc. 335. No one else has challenged either motion or otherwise asked to be heard on them.[6]

         In order to determine whether Syngenta's motion should be granted, the Court evaluates: whether Syngenta has shown that the information sought to be sealed is confidential; whether disclosure would harm Syngenta's competitive standing or otherwise harm its business interests; whether the motion is narrowly tailored; and whether the interests in non-disclosure are compelling and heavily outweigh the public's interest in access to the information. In weighing the competing interests, the Court considers, among other things, whether access to the evidence is needed to understand what happened at trial and the degree of harm that disclosure would be likely to cause.

         I. FINANCIAL INFORMATION, SUPPLY AGREEMENTS, AND CORPORATE STRATEGY DOCUMENTS

         At trial, Syngenta sought approximately $75 million in damages for lost profits it asserted were caused by Willowood's infringement of the compound patents and alleged infringement of the process patents. Willowood contended that Syngenta's lost profits damages were speculative and that Syngenta was limited to reasonable royalty damages. Willowood's expert, John Jarosz, calculated Syngenta's damages at $900, 000 for the ‘761 Patent. 9/12/17 Tr. at 21. Ultimately, the jury awarded damages in the amount calculated by Mr. Jarosz. Doc. 319.

         Specifically, Syngenta contended that Willowood's infringing sales caused it to lose sales and forced it to reduce prices to compete with Willowood, thus reducing its profits. Syngenta presented testimony from its employees involved in selling and marketing azoxystrobin fungicides about the effect Willowood's entry into the market had on its prices and sales. 9/6/17 Tr. at 86-204 and 9/7/17 Tr. at 9-200 (testimony of Mr. Cecil and Mr. Fisher). It also presented testimony from an expert, Dr. Benjamin Wilner, who offered an opinion on Syngenta's lost profits for each relevant calendar year and patent. 9/8/17 Tr. at 37-172. Dr. Wilner calculated Syngenta's lost profits using actual sales as compared to budgeted (or estimated) sales for azoxystrobin fungicides, adjusted to the same extent an allegedly similar product, mesotrione, met its budget projections.[7]

         Willowood contended that its infringement, if any, did not cause Syngenta's lost sales and price reductions because Willowood had a small part of the market and there were other competitors selling azoxystrobin fungicides. See, e.g., 9/8/18 Tr. at 103-04. Willowood also challenged Dr. Wilner's testimony as, inter alia, relying on inaccurate budgets, failing to consider particular aspects of the budget process, and selecting an inappropriate product as a benchmark. See Id. at 92-171 (cross examination of Dr. Wilner).

         As part of resolving the dispute over Syngenta's damages, both parties presented evidence about Syngenta's gross sales of azoxystrobin fungicides and its pricing of those fungicides before and after Willowood entered the market. Both Syngenta and Willowood offered numerous exhibits and questioned witnesses about detailed sales figures and pricing information for both mesotrione and azoxystrobin, as well as details about Syngenta's budget process and marketing strategies. Syngenta seeks to seal in whole or in part a number of these trial exhibits, and it also seeks to redact some pricing and sales numbers disclosed in trial testimony.

         A. ...


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