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Application to File Settlement Agreement under Seal Denied Where Defendant Did Not Show Competitive Harm from Disclosure

The Defendant, International Paper Company (“IPC”) filed an application for leave to file under seal a settlement agreement between Plaintiff and IPC’s co­defendants and portions of IPC’s motion to dismiss that quoted the settlement agreement.

To analyze whether the settlement agreement and the quoted portions should be filed under seal, the district court noted that: “The public has a general right to inspect and copy judicial documents so that it can monitor how public agencies work.” See Kamakana v. City & County of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006) (citing Nixon v. Warner Commc’ns, Inc., 435 U.S. 589, 597 & n.7, 598 (1978)).

The district court explained that “[t]here is a strong presumption of public access to documents falling outside a narrow class of documents—such as grand jury transcripts and warrant materials in pending pre-indictment investigations—that have ‘traditionally been kept secret for important policy reasons.’ See id. To overcome the strong presumption of public access to judicial documents, a party seeking to seal such documents in dispositive motions must ‘articulate[] compelling reasons supported by specific factual findings that outweigh the general history of access and the public policies favoring disclosure, such as the public interest in understanding the judicial process.’ Id. at 1178-79 (internal citations and quotation marks omitted). For non-dispositive motions, the party must provide good cause to seal. See Ctr. For Auto Safety v. Chrysler Grp., LLC, 809 F.3d 1092, 1096 (9th Cir. 2016). “Good cause is established on a showing that disclosure will work a clearly defined and serious injury to the party seeking closure. The injury must be shown with specificity.” Pansy v. Borough of Stroudsburg, 23 F.3d 772, 786 (3d Cir. 1994) (quoting Publicker Indus., Inc. v. Cohen, 733 F.2d 1059, 1071 (3d Cir. 1984)).

IPC raised two arguments in support of its request to seal. First, IPC argued that disclosure of the royalty rate terms in the settlement agreement would put it at a competitive disadvantage in future negotiations. The district court rejected this argument as the Plaintiff, which IPC apparently acknowledged, had already disclosed these rates in its complaint. The district court determined that good cause did not exist to redact the information where the Plaintiff had already made the information public.

IPC’s second argument was the settlement agreement “reveals the terms under which [its co-defendants] resolved a patent dispute with Plaintiff,” such that other firms might acquire “an unearned competitive advantage.” The district court determined that this assertion was vague and conclusory and did not amount to good cause. See Pansy, 23 F.3d at 786 (“Broad allegations of harm, unsubstantiated by specific examples or articulated reasoning, do not support a good cause showing.”) (internal quotations omitted).

Accordingly, the district court denied the request to seal the terms of the settlement agreement.

Acorn West LLC v. Berkeley International (NC), LLC, et al., Case No. CV-21-07821-CJC (SKx)


The authors of are patent trial lawyers at Jeffer Mangels Butler & Mitchell LLP. For more information about this case, contact Stan Gibson at 310.201.3548 or