Case: 21-1568 Document: 72 Page: 1 Filed: 02/09/2022
`
`United States Court of Appeals
`for the Federal Circuit
`______________________
`
`UNILOC USA, INC., UNILOC LUXEMBOURG S.A.,
`Plaintiffs-Appellants
`
`UNILOC 2017 LLC,
`Plaintiff
`
`v.
`
`APPLE INC.,
`Defendant-Appellee
`
`ELECTRONIC FRONTIER FOUNDATION,
`Intervenor-Appellee
`______________________
`
`2021-1568, 2021-1569, 2021-1570, 2021-1571, 2021-1573
`______________________
`
`Appeals from the United States District Court for the
`Northern District of California in Nos. 3:18-cv-00358-
`WHA, 3:18-cv-00360-WHA, 3:18-cv-00363-WHA, 3:18-cv-
`00365-WHA, 3:18-cv-00572-WHA, Judge William H.
`Alsup.
`
`______________________
`
`Decided: February 9, 2022
`______________________
`
`AARON JACOBS, Prince Lobel Tye LLP, Boston, MA, ar-
`gued for plaintiffs-appellants. Also represented by JAMES
`J. FOSTER.
`
`
`

`

`Case: 21-1568 Document: 72 Page: 2 Filed: 02/09/2022
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`2
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`UNILOC USA, INC. v. APPLE INC.
`
` DOUG J. WINNARD, Goldman Ismail Tomaselli Brennan
`& Baum LLP, Chicago, IL, argued for defendant-appellee.
`Also represented by ALAN ERNST LITTMANN, MICHAEL T.
`PIEJA; CATHERINE CARROLL, DAVID P YIN, Wilmer Cutler
`Pickering Hale and Dorr LLP, Washington, DC; MARK D.
`SELWYN, THOMAS GREGORY SPRANKLING, Palo Alto, CA.
`
` ALEXANDRA HELEN MOSS, Electronic Frontier Founda-
`tion, San Francisco, CA, argued for intervenor-appellee.
`Also represented by AARON DAVID MACKEY.
` ______________________
`
`
`Before LOURIE, MAYER, and CUNNINGHAM, Circuit Judges.
` Opinion for the court filed by Circuit Judge LOURIE.
`Dissenting opinion filed by Circuit Judge MAYER.
`LOURIE, Circuit Judge.
`Uniloc USA, Inc., and Uniloc Luxembourg, S.A. (collec-
`tively, “Uniloc”) appeal from a decision of the United States
`District Court for the Northern District of California refus-
`ing to seal certain documents in several related cases be-
`tween Uniloc and Apple Inc. (“Apple”). See Uniloc USA,
`Inc. v. Apple, Inc., 508 F. Supp. 3d 550 (N.D. Cal. 2020)
`(“Decision”). For the reasons provided below, we vacate
`and remand.
`
`BACKGROUND
`This is Uniloc’s second appeal regarding the sealing of
`documents. In its first appeal, Uniloc attempted to defend
`requests to seal matters of public record, such as quota-
`tions of this court’s opinions and a list of patent cases
`Uniloc had filed. See Uniloc 2017 LLC v. Apple, Inc., 964
`F.3d 1351 (Fed. Cir. 2020). The district court correctly ap-
`plied its local rules to reject these requests in their entirety
`and to reject Uniloc’s request for reconsideration. This
`
`

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`UNILOC USA, INC. v. APPLE INC.
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`3
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`court affirmed the district court’s rulings in nearly all re-
`spects.
`We also held, however, that the district court must con-
`duct a more detailed analysis on whether confidential li-
`censing information of certain third-party licensees of
`Uniloc’s patents should be sealed. Id. at 1363–64. As for
`this subset of information, we remanded for the district
`court to “make particularized determinations as to whether
`and, if so, to what extent, the materials of each of these
`parties should be made public.” Id. at 1364. The present
`appeal is narrowly directed to this third-party licensing in-
`formation.
`One threshold issue raised by this court in its remand
`order was whether Uniloc’s financier, Fortress Credit Co.
`LLC (“Fortress”), should be considered a third party or a
`Uniloc-related entity for purposes of sealing. Uniloc moved
`to seal or redact third-party documents that revealed li-
`censing terms, licensees’ names, amounts paid, and dates.
`One document at issue was a Fortress investment memo-
`randum that contained Fortress’s investment criteria and
`other third-party licensing information. Apple did not op-
`pose Uniloc’s motion. The Electronic Frontier Foundation
`(“EFF”) moved to intervene to argue in favor of unsealing,
`and the district court granted its motion.
`The district court denied Uniloc’s motion. The court
`explained that “[t]he public has every right to account
`for . . . anyone holding even a slice of the public grant.” De-
`cision at 554. It added that “patent licenses carry unique
`considerations” that bolster the public’s right of access, in-
`cluding the valuation of patent rights. Id. at 555. The
`court further stated that “[t]he public has an interest in in-
`specting the valuation of the patent rights” reflected in
`Uniloc’s licenses. Id. It then suggested that disclosure of
`patent licensing terms would facilitate “up-front cost eval-
`uations of potentially infringing conduct,” “driv[e] license
`values to a more accurate representation of the
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`UNILOC USA, INC. v. APPLE INC.
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`technological value of the patent,” and help “inform reason-
`able royalties in other courts.” Id.
`The district court also determined that “the dates and
`dollar amounts involved in Uniloc’s patent licenses go to
`the heart of the primary dispute, that of Uniloc’s standing
`(or lack of) to sue.” Id. (internal quotation marks omitted).
`The court then ordered that the licensing information, in-
`cluding the identity of the licensees, be unsealed in full.
`With respect to the Fortress investment memorandum,
`the district court found that Fortress did not comply with
`Local Rule 79-5(e)(1) of the Northern District of California
`because Uniloc filed a declaration in support of sealing, in-
`stead of Fortress, as required by the rules. Id. On this
`basis alone, the court denied Uniloc’s request to seal this
`document.
`Uniloc filed the present notice of appeal to this court.
`We have jurisdiction pursuant to the collateral order doc-
`trine. See Uniloc 2017, 964 F.3d at 1357–58.
`DISCUSSION
`This appeal involves the standard for sealing court rec-
`ords, not substantive issues of patent law. Thus, Ninth
`Circuit law applies. Uniloc 2017, 964 F.3d at 1357. “In the
`Ninth Circuit, a district court’s decision to seal or unseal
`court records is reviewed for abuse of discretion.” Id. “A
`district court abuses its discretion if it bases its decision on
`an erroneous legal standard or clearly erroneous findings
`of fact.” Apple Inc. v. Samsung Elecs. Co., 727 F.3d 1214,
`1221 (Fed. Cir. 2013) (internal quotation marks omitted).
`A district court also abuses its discretion if the reviewing
`court “has a definite and firm conviction that the court be-
`low committed a clear error of judgment in the conclusion
`it reached upon a weighing of the relevant factors.” Id.
`Sealing may be appropriate to keep records from being
`used “as sources of business information that might harm
`a litigant’s competitive standing.” Nixon v. Warner
`
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`UNILOC USA, INC. v. APPLE INC.
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`Commc’ns, Inc., 435 U.S. 589, 598 (1978). In the Ninth Cir-
`cuit, “compelling reasons” are needed to seal judicial rec-
`ords related to a dispositive motion. Kamakana v. City &
`Cnty. of Honolulu, 447 F.3d 1172, 1179 (9th Cir. 2006).
`Such compelling reasons include preventing the release of
`trade secrets. Id.
`Uniloc and Apple both argue that the district court
`erred in failing to follow this court’s remand instructions to
`make particularized determinations as to whether third-
`party licensing information should be sealed. The parties
`contend that the court erroneously applied heightened
`scrutiny to requests to seal licensing information. Apple
`adds that such information can rise to the level of a trade
`secret, which is the type of information that the Ninth Cir-
`cuit has deemed sealable. Uniloc cites various cases from
`the district court and the Ninth Circuit sealing similar
`types of information. See, e.g., Uniloc 2017 LLC v. Google
`LLC, 508 F. Supp. 3d 556, 575 n.23 (N.D. Cal. 2020); In re
`Elec. Arts, Inc., 298 F. App’x 568, 569 (9th Cir. 2009).
`Intervenor EFF counters that denying Uniloc’s motion
`was a sound use of the district court’s discretion. EFF adds
`that the court conscientiously weighed Uniloc’s submis-
`sions in support of sealing and concluded that they were
`insufficient to overcome the public’s strong interest in ac-
`cess.
`We conclude that the district court failed to follow our
`remand instructions to make particularized determina-
`tions as to whether the third-party licensing information
`sought to be sealed should be made public. That failure
`was an abuse of discretion. The first time this case ap-
`peared before us, “the district court failed to make findings
`sufficient to allow us to adequately assess whether it
`properly balanced the public’s right of access against the
`interests of the third parties in shielding their financial
`and licensing information from public view.” Uniloc 2017,
`964 F.3d at 1364. We explained that “there is no indication
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`UNILOC USA, INC. v. APPLE INC.
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`in the record that the court assessed whether any of the
`third-party information was protectable as a trade secret
`or otherwise entitled to protection under the law.” Id. (in-
`ternal quotation marks omitted). We thus remanded and
`instructed that the district court “make particularized de-
`terminations as to whether and, if so, to what extent, the
`materials of each of these parties should be made pub-
`lic.” Id. Yet, on remand, the district court again neglected
`to make sufficient findings. Nowhere in the record does the
`district court discuss whether any of the third-party mate-
`rials constitute protectable trade secrets. See Deci-
`sion. For that reason, and because it is relevant to the
`protectability of the license information, we remand for the
`district court to carry out the examination this court in-
`structed it to do.
`We also disagree with the district court’s statements
`purportedly supporting its decision concerning the public’s
`right of access to information relating to patent licenses.
`The court stated that “[t]he public has an interest in in-
`specting the valuation of patent rights . . . particularly
`given secrecy so often plays into the patentee’s advantage
`in forcing bloated royalties.” Decision at 555. The court
`thus made an error of law in making a blanket ruling that
`the public has a broad right to licensing information relat-
`ing to patents.
`The public indeed does have an interest in patents, but
`it is an interest in ensuring that patents are not procured
`by fraud, or other improper means. See U.S. v. Glaxo Grp.
`Ltd., 410 U.S. 52, 57–58 (1973) (discussing the public in-
`terest in free competition and ensuring that patents are not
`obtained by fraudulent means). This is because patents are
`to be granted only if they are valid, i.e., they describe and
`claim inventions meeting the requirements of the law, in-
`ventions that are novel, not obvious, and described in an
`enabling manner.
`
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`UNILOC USA, INC. v. APPLE INC.
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`The enforcement of patents is also imbued with the
`public interest. Litigants and their counsel are subject to
`Rule 11 of the Federal Rules of Civil Procedure, requiring
`that parties presenting a case perform an “inquiry reason-
`able under the circumstances” as to the legal and factual
`merits of the claim, and they are subject to sanctions for an
`exceptional case and for a frivolous appeal. Fed. R. Civ.
`P. 11. Moreover, a patent can be held to be unenforceable
`for inequitable conduct in its procurement. But no rule of
`law or binding precedent says that the public is generally
`entitled to know what consideration a patentee receives for
`licensing its patent.
`The district court stated that patents are granted in
`derogation of the usual free flow of goods and ideas. It
`stated colorfully that “a patent owner is a tenant on a plot
`within the public realm of public knowledge, and a licensee
`a subtenant.” Decision at 554. Those statements are in-
`correct, as patents are granted for inventions that, until
`their disclosure, did not constitute any flow of goods. Goods
`claimed in a patent, if the patent is valid, did not previously
`flow. Patents are granted for new inventions, those which
`did not flow in commerce before the invention. A properly-
`issued patent creates new land, keeping within the court’s
`metaphor. It expands public knowledge.
`The district court stated that the public has a strong
`interest in knowing the full extent of the terms and condi-
`tions involved in the exercise of its patent rights and in see-
`ing the extent to which the patentee’s exercise of the
`government grant affects commerce. But this is not an an-
`titrust case or an FTC investigation involving unlawful re-
`straint of trade or monopolization. It is a suit for patent
`infringement. Absent an issue raised by the parties con-
`cerning license rights and provisions, there is no public in-
`terest
`or
`entitlement
`to
`information
`concerning
`consideration for the grant of licenses. The parties are in
`agreement that license information here should be sealed
`and protected. The only differing voice has come from an
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`UNILOC USA, INC. v. APPLE INC.
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`independent nonparty, appointed by the district court to
`advocate unsealing the information that neither party
`wished to unseal. But we have seen no citation of a rule of
`law providing a presumption of access in a patent infringe-
`ment suit to information concerning consideration for the
`licensing of a patent.
`An earlier issue in this case was a question of alleged
`indiscriminate oversealing in patent and commercial cases
`nationwide. For that reason, in the earlier appearance of
`this case in our court, we affirmed-in-part the district
`court’s refusal to seal all the requested information and re-
`manded for the limited purpose of assessing whether third-
`party licensing information should be sealed. But overseal-
`ing was no longer the issue on remand.
`The district court did note that a key issue in this case
`was whether Uniloc had received at least $20 million in
`royalties needed under licensing agreements to provide it
`with standing to sue. But that fact can be proved without
`opening up all the licenses that the court granted access to.
`Lastly, for the Fortress investment memorandum, any
`procedural failings of Uniloc and Fortress cannot justify
`unsealing the information of third parties. The district
`court should have considered whether the interests of the
`implicated third parties outweigh the public’s interest in
`seeing individual licensing details that are not necessary
`for resolving this case.
`We therefore vacate and remand for the district court
`to comply with this court’s previous remand instructions.
`CONCLUSION
`We have considered EFF’s remaining arguments, but
`we find them unpersuasive. Because the district court
`failed to follow our previous remand instructions to make
`particularized determinations as to whether third-party li-
`censing information should be sealed, we vacate the court’s
`denial and remand for the court to perform that analysis.
`
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`UNILOC USA, INC. v. APPLE INC.
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`VACATED AND REMANDED
`COSTS
`
`No costs.
`
`

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`
`
`United States Court of Appeals
`for the Federal Circuit
`______________________
`
`
`
`
`
`
`
`
`
`
`
`
`UNILOC USA, INC., UNILOC LUXEMBOURG S.A.,
`Plaintiffs-Appellants
`
`UNILOC 2017 LLC,
`Plaintiff
`
`v.
`
`APPLE INC.,
`Defendant-Appellee
`
`ELECTRONIC FRONTIER FOUNDATION,
`Intervenor-Appellee
`______________________
`
`2021-1568, 2021-1569, 2021-1570, 2021-1571, 2021-1573
`______________________
`
`Appeals from the United States District Court for the
`Northern District of California in Nos. 3:18-cv-00358-
`WHA, 3:18-cv-00360-WHA, 3:18-cv-00363-WHA, 3:18-cv-
`00365-WHA, 3:18-cv-00572-WHA, Judge William H.
`Alsup.
`
`______________________
`MAYER, Circuit Judge, dissenting.
`The district court adhered to our remand instructions
`when it carefully weighed the public’s right of access to
`court records against the interests of third-party patent li-
`censees in shielding their licensing information from public
`view. The court’s decision to deny the motion by Uniloc
`
`

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`Case: 21-1568 Document: 72 Page: 11 Filed: 02/09/2022
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`2
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`UNILOC USA, INC. v. APPLE INC.
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`USA, Inc., and Uniloc Luxembourg, S.A. (collectively,
`“Uniloc”) to seal information related to its licenses with
`third parties was a sound exercise of discretion given that
`the dates and dollar amounts of those licenses went “to the
`heart of the primary dispute” between Uniloc and Apple
`Inc., which was whether Uniloc had generated sufficient li-
`censing revenue to provide it with standing to sue. Uniloc
`USA, Inc. v. Apple, Inc., 508 F. Supp. 3d 550, 555 (N.D. Cal.
`2020) (“District Court Decision”) (internal quotation marks
`omitted). Uniloc’s third-party licensees, moreover, failed to
`demonstrate a compelling interest in keeping their licens-
`ing information confidential. See id. at 554. I therefore
`respectfully dissent.
`The public’s right of access to documents filed in con-
`nection with a dispositive pleading is sacrosanct. See
`Kamakana v. City & Cnty. of Honolulu, 447 F.3d 1172,
`1179 (9th Cir. 2006) (explaining that “the strong presump-
`tion of access to judicial records applies fully to dispositive
`pleadings, including motions for summary judgment and
`related attachments,” given that “the resolution of a dis-
`pute on the merits, whether by trial or summary judgment,
`is at the heart of the interest in ensuring the public’s un-
`derstanding of the judicial process and of significant public
`events” (citations and internal quotation marks omitted));
`see also DePuy Synthes Prods., Inc. v. Veterinary Orthope-
`dic Implants, Inc., 990 F.3d 1364, 1369 (Fed. Cir. 2021)
`(stating that the “longstanding right” of access to judicial
`records and documents “helps secure the integrity and
`transparency of the judicial process”); In re Chiquita
`Brands Int’l, Inc., 965 F.3d 1238, 1242 (11th Cir. 2020) (“A
`lawsuit is a public event. Parties who ask a court to resolve
`a dispute must typically walk in the public eye.”); In re
`Cendant Corp., 260 F.3d 183, 192 (3d Cir. 2001) (explaining
`that “[t]he public’s right of access extends beyond simply
`the ability to attend open court proceedings” and includes
`“a pervasive common law right to inspect and copy public
`records and documents, including judicial records and
`
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`UNILOC USA, INC. v. APPLE INC.
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`3
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`documents” (citations and internal quotation marks omit-
`ted)). The right can be abridged only in certain narrow cir-
`cumstances, and the party seeking to seal information
`bears the burden of providing “sufficiently compelling rea-
`sons for doing so.” Foltz v. State Farm Mut. Auto. Ins. Co.,
`331 F.3d 1122, 1135 (9th Cir. 2003). While “[m]any a liti-
`gant would prefer that the subject of [its] case . . . be kept
`from the curious (including its business rivals and custom-
`ers),” those who “call on the courts . . . must accept the
`openness that goes with subsidized dispute resolution by
`public (and publicly accountable) officials.” Union Oil Co.
`v. Leavell, 220 F.3d 562, 567–68 (7th Cir. 2000).
`What constitutes a compelling reason to seal docu-
`ments is a determination “best left to the sound discretion
`of the trial court.” Nixon v. Warner Commc’ns, Inc., 435
`U.S. 589, 599 (1978). Here, the district court did not abuse
`its discretion in concluding that Uniloc’s third-party licen-
`sees failed to make out a compelling case for shielding their
`licensing information from public view. Notably, not a sin-
`gle licensee directly filed a request with the district court
`seeking to seal its licensing information. See District Court
`Decision, 508 F. Supp. 3d at 554. Instead, when this case
`was initially pending before the district court, “Uniloc so-
`licited the views of all one hundred nine licensees regard-
`ing the sealing of their patent license details.” Id. While
`thirty-one licensees requested that all or part of their li-
`censing information be kept confidential, only thirteen li-
`censees submitted declarations
`in support of their
`requests. See id.; J.A. 436–50, 805–37 (sealed third-party
`declarations).
`These declarations, by and large, are vague and conclu-
`sory and fail to provide concrete evidence that the dissem-
`ination of licensing information would cause the licensees
`significant competitive injury in future licensing negotia-
`tions or that the licensing information in question other-
`wise qualifies as a trade secret. See J.A. 436–50, 805–37;
`see also Total Recall Techs. v. Luckey, No. 21-15590, 2021
`
`

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`UNILOC USA, INC. v. APPLE INC.
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`WL 5401664, at *1 (9th Cir. Nov. 18, 2021) (affirming a dis-
`trict court’s order denying seven motions to seal where the
`party seeking sealing failed to provide “specific” or “com-
`pelling” evidence for doing so); DePuy, 990 F.3d at 1373 (af-
`firming a district court order unsealing purportedly
`confidential business information where the declarations
`filed by the party seeking to prevent disclosure failed to ad-
`dress how making the information public “would harm its
`proprietary and competitive business interests” (citations
`and internal quotation marks omitted)); Kamakana, 447
`F.3d at 1182 (explaining that a party’s “conclusory”decla-
`rations about the confidential nature of certain documents
`did “not rise to the level of ‘compelling reasons’ sufficiently
`specific to bar the public access to the documents”). Indeed,
`only one of the publicly available declarations even uses
`the term “trade secret” and that declaration broadly, and
`without meaningful support, states that all the company’s
`“financial records” qualify as trade secrets. J.A. 438. Im-
`portantly, moreover, none of the declarations adequately
`explain why redacting the names of the third-party licen-
`sees—but fully disclosing the dates and dollar amounts of
`their licenses with Uniloc—would not serve to eradicate
`any even arguable concern regarding the disclosure of
`trade secret information. See N.D. Cal. Civ. Local R. 79-
`5(b) (2018) (emphasizing that any motion to seal “must be
`narrowly tailored to seek sealing only of sealable material”
`(emphasis added)).
`The fact that other courts, under other circumstances,
`have granted motions to seal patent licensing information
`does not mean that the district court abused its discretion
`in declining to do so here. This case involves the unusual
`situation in which Uniloc, the party seeking the sealing or-
`der, forfeited its right to keep its licensing information con-
`fidential because its “original sealing request was grossly
`excessive and its flouting of Local Rule 79-5 particularly
`flagrant.” Uniloc 2017 LLC v. Apple, Inc., 964 F.3d 1351,
`1361 (Fed. Cir. 2020).
`
`

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`UNILOC USA, INC. v. APPLE INC.
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`I disagree with this court’s conclusion that the district
`court “made an error of law in making a blanket ruling that
`the public has a broad right to licensing information relat-
`ing to patents.” Ante at 6. The public presumptively has a
`broad right of access to all information filed with a court in
`connection with a dispositive motion, and this includes pa-
`tent licensing information. See, e.g., Kamakana, 447 F.3d
`at 1180 (explaining that “judicial records are public docu-
`ments almost by definition, and the public is entitled to ac-
`cess by default”).
`“The political branches of government claim legitimacy
`by election, judges by reason. Any step that withdraws an
`element of the judicial process from public view makes the
`ensuing decision look more like fiat, which requires com-
`pelling justification.” Union Oil, 220 F.3d at 568. Because
`the third-party licensees failed to supply compelling rea-
`sons for overriding the strong presumption in favor of pub-
`lic access, I would affirm.
`
`