Ameranth, Inc. v. ChowNow, Inc.

District Court, S.D. California·Decided August 18, 2021·No. 3:20-cv-02167·Unknown

Opinion

AMERANTH, INC., a Delaware ) Case No.: 3:20-cv-02167-BEN-BLM corporation, ) ) ORDER GRANTING-IN-PART: Plaintiff, ) v. ) ) (1) P DL OA CI UN MTI EF NF T’S S M UNO DT EIO RN SS E T AO L F anIL dE CHOWNOW, INC., a Delaware ) corporation, (2) DEFENDANTS’ MOTIONS TO ) FILE DOCUMENTS UNDER SEAL Defendant. ) ) [ECF Nos. 13, 14, 15, 16, 20, 21] CHOWNOW, INC., a Delaware ) corporation, ) Counterclaimants, ) v. ) ) AMERANTH, INC., a Delaware ) corporation; ) ) Counterdefendants. )

) Plaintiff/Counter-Defendant Ameranth, Inc., a Delaware corporation (“Plaintiff”) brings this action for breach of a patent licensing agreement against Defendant/Cross- Complainant ChowNow, Inc., a Delaware corporation (“Defendant”). ECF No. 1; see also ECF No. 12-1 at 6:3-4. Before the Court are the following Motions: (1) Plaintiff’s Motion to File Documents Under Seal, ECF No. 13, and (2) Defendant’s Motions to File Documents Under Seal, ECF Nos. 15, 20. “Open, public courts stand as a pillar of American democracy, to which motions to seal stand in derogation.” Kivett v. Neolpharma, Inc., No. 2:20-00664-JDW, 2021 WL 1209844, at *1 (E.D. Pa. Mar. 31, 2021). However, “all too often, parties pay little attention to a motion to seal that accompanies a complicated filing.” Id. Instead, sealing motions often include “only generalized recitations of the factors that a court must consider before placing material under seal.” Id. Alternatively, the redactions made may be overly broad, thereby limiting information appropriate for public record in a case. “Given the important public interest at stake,” courts should neither permit parties seal dockets without an adequate showing of injury, id., nor prevent information from being disclosed to the public where the parties did not narrowly tailor their request. Thus, the Court GRANTS- IN-PART both motions according to the terms set forth in the conclusion of this order. This matter arises from Plaintiff’s ownership of several patents, which Plaintiff licensed to Defendant. See generally ECF No. 1. Defendant eventually ceased paying royalties to Plaintiff on the basis that the patents underlying the licensing agreement had been declared invalid, and as such, Defendant no longer owed royalties. Id. Plaintiff contends that Defendant’s failure to continue paying royalties constitutes a breach of the agreements between the parties. Id. On November 19, 2020, Plaintiff timely filed a Motion to (1) Dismiss Defendant’s Counterclaims for (a) Failure to State a Claim for Relief and (b) Lack of Subject Matter Jurisdiction and (2) Remand to State Court. Mot., ECF No. 12. That same day, Plaintiff also filed a Motion to File Documents Under Seal in support of the Motion, ECF No. 13, lodging the documents it sought to seal as ECF No. 14. On November 20, 2020, Defendant filed a Motion to Seal, seeking to seal portions of its exhibits to the Notice of Removal, ECF No. 15, lodging the documents it sought to seal as ECF No. 16. On December 7, 2020, Defendant filed amended counterclaims, containing the same claims for relief as its cross-complaint filed in the superior court but adding eight additional claims for relief for (1) declaration of invalidity as to the 9,747,651 Patent (the “651 Patent”); (2) unenforceability of the 8,146,077 Patent (the “077 Patent”); (3) declaration of unenforceability of the 9,009,060 Patent (the “060 Patent”); (4) declaration of unenforceability of the 9,747,651 Patent (the “651 Patent”); (5) bad faith enforcement of patents, 15 U.S.C. § 2; (6) bad faith enforcement of patents through a pattern of sham litigation, 15 U.S.C. § 2; (7) violation of California’s Unfair Competition Law, Cal. Bus. & Prof. Code § 17200; and (8) unjust enrichment. ECF No. 18. That same day, Defendant also filed its opposition to Plaintiff’s Motion, ECF No. 19, along with a Motion to File Documents Under Seal in support of the Opposition as well as documents related to its Amended Counterclaims, ECF No. 20, lodging the documents it sought to seal as ECF No. 21. On December 11, 2020, Plaintiff filed its reply to Defendant’s opposition. ECF No. 24. Due to the number of motions to seal and exhibits thereto, they are summarized as follows: Sealed Request to Seal Portions of: ECF Doc. Filing Party No. ECF Ex. Description No. Original License Agreement entered into between 1 Ameranth and ChowNow on June 22, 2012 First Amended License Agreement entered into 2 between Ameranth and ChowNow on December 20, 13 Plaintiff 14 2013 First Amended License Agreement entered into 5 between Ameranth and Splick-It on November 19, 2013 First Amended License Agreement entered into 1 between Ameranth and ChowNow on December 20, 15 Defendant 16 2013 Original License Agreement entered into between 12 Ameranth and ChowNow on June 22, 2012 EA-mmearialn ctohr reexsepcountidveensc aen bde tthweeier nr eCspheocwtiNveo wle gaanld 17 counsel, dated October 11, 2018 through July 31, 2020 N/a Cross-Complaint First Amended License Agreement entered into 1 between Ameranth and ChowNow on December 20, 2013 20 Defendant 21 Original License Agreement entered into between 12 Ameranth and ChowNow on June 22, 2012 N/a Amended Counterclaims N/a Opposition Brief III. LEGAL STANDARD Except for certain documents “traditionally kept secret,” federal courts begin a sealing analysis with “a strong presumption in favor of access to court records.” Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 1122, 1135 (9th Cir. 2003). A party seeking to seal a judicial record then must “articulate [] compelling reasons supported by specific factual findings,” id., that outweigh the general history of access and the public policies favoring disclosure, such as the “public interest in understanding the judicial process,” Hagestad v. Tragesser, 49 F.3d 1430, 1434 (9th Cir. 1995). The Court “conscientiously balance[s] . . . the competing interests” of the public and the party who seeks to keep certain judicial records secret. Foltz, 331 F.3d at 1135. After considering these interests, if the Court decides to seal certain judicial records, it “base[s] its decision on a compelling reason and articulate[s] the factual basis for its ruling, without relying on hypothesis or conjecture.” Hagestad, 49 F.3d at 1434; see also Kamakana v. City & Cty. of Honolulu, 447 F.3d 1172, 1179 (9th Cir. 2006) (applying compelling reasons standard to dispositive motions). A party must satisfy the compelling reasons standard even if the motion, or its attachments, were previously filed under seal or protective order. Foltz, 331 F.3d at 1136 (“[T]he presumption of access is not rebutted where . . . documents subject to a protective order are filed under seal as attachments to a dispositive motion.”). A party’s failure to meet the burden of articulating specific facts showing a “compelling reason” means that the “default posture of public access prevails.” Kamakana, 447 F.3d at 1182. In ruling on motions to seal, the Ninth Circuit has recognized that “compelling reasons sufficient to outweigh the public’s interest in disclosure and justify sealing court records exist when such court files might . . . become a vehicle for improper purposes, such as the use of records to . . . release trade secrets.” Kamakana, 447 F.3d at 1179. Similarly, other “sources of business information that might harm a litigant’s competitive standing” may also constitute a compelling reason to seal, see Nixon v. Warner Communications, Inc., 435 U.S.

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Ameranth, Inc. v. ChowNow, Inc., (S.D. Cal. 2021).

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