1 2 3 UNITED STATES DISTRICT COURT 4 NORTHERN DISTRICT OF CALIFORNIA 5 SAN JOSE DIVISION 6 7 APEX.AI, INC, Case No. 5:23-cv-02230-BLF
8 Plaintiff, ORDER GRANTING PLAINTIFF 9 v. APEX.AI, INC.’S ADMINISTRATIVE MOTION TO FILE UNDER SEAL 10 NEIL RICHARD LANGMEAD, AN PORTIONS OF ITS MEMORANDUM INDIVIDUAL; VERIFA, INC., A IN SUPPORT OF THE EX PARTE 11 MASSACHUSETTS CORPORATION; APPLICATION FOR A TEMPORARY CODECLINIC, LLC DBA LATTIZ, A RESTRAINING ORDER AND 12 MASSACHUSETTS LIMITED DECLARATIONS IN SUPPORT LIABILITY COMPANY; AND DOES 1- THEREOF 13 20, [Re: ECF 5] 14 Defendants.
15 16 This action arises from a dispute between Plaintiff Apex.AI, Inc. (“Apex.AI”) and 17 Defendants, Neil Richard Langmead (“Langmead”), Verifa, Inc. (“Verifa”), and CodeClinic LLC 18 dba Lattix (“CodeClinic”). The dispute is regarding alleged trade secret misappropriation and 19 breach of a Consulting Agreement. Langmead, hired by Apex.AI under a Consulting Agreement, 20 was tasked to ensure that Apex.AI’s software meets applicable safety requirements. In this role, 21 Langmead allegedly acquired Apex.AI’s proprietary information, including its trade secrets. 22 Apex.AI argues that Langmead engaged in misconduct during his consultancy by disclosing its 23 trade secrets and confidential information. Apex.AI filed suit against Defendants on May 8, 2023, 24 for temporary, preliminary, and permanent injunctive relief and filed an Ex Parte Application for a 25 Temporary Restraining Order (“TRO”) on the same date. 26 Apex.AI has filed a motion to seal portions of its Memorandum in support of its Ex Parte 27 Application for a TRO (the “Memorandum”) and the Declarations of Dejan Pangercic and Dmytro 1 of Dejan Pangercic and Dmytro Tutynin include non-public, confidential materials regarding 2 Apex.AI’s business arrangements, partners and customers, and trade secrets. Id. Defendants have 3 not responded to Apex.AI’s motion, though they have appeared in the case through counsel. 4 Having reviewed Apex.AI’s submissions and the applicable law, the Court 5 GRANTS Apex.AI’s administrative motion to seal for the reasons below. 6 I. LEGAL STANDARD 7 “Historically, courts have recognized a ‘general right to inspect and copy public records and 8 documents, including judicial records and documents.’” Kamakana v. City and Cnty of Honolulu, 9 447 F.3d 1172, 1178 (9th Cir. 2006). Consequently, access to motions and their attachments that 10 are “more tangentially related to the merits of a case” may be sealed only upon a showing of 11 “compelling reasons” for sealing. Ctr for Auto Safety v. Chrysler Grp., LLC, 809 F.3d 1092, 12 1101-02 (9th Cir. 2006). Filings that are only tangentially related to the merits may be sealed 13 upon a lesser showing of “good cause.” Id. at 1097. 14 In addition, in this district, all parties requesting sealing must comply with Civil Local Rule 15 79-5. A party moving to seal a document in whole or in part must file a statement identifying the 16 legitimate private or public interests that warrant sealing, the injury that will result if sealing is 17 denied, and why a less restrictive alternative to sealing is not sufficient. Civ. L.R. 79-5(c)(1). A 18 supporting declaration shall be submitted if necessary. Civ. L.R. 79-5(c)(2). Finally, the moving 19 party must submit “a proposed order that is narrowly tailored to seal only the sealable material[.]” 20 Civ. L.R. 79-5(c)(3). 21 II. DISCUSSION 22 Apex.AI moves to file under seal portions of its Memorandum and supporting Declarations 23 of Dejan Pangercic and Dmytro Tutynin, and Exhibits A-F to the Declaration of Dmytro Tutynin 24 on the basis that these documents contain non-public, confidential information about Apex.AI’s 25 proprietary information. ECF 5 at 2; Declaration of Dejan Pangercic in Support of Apex.AI’s 26 Motion to File Under Seal, ECF 5-1 (“Pangercic Decl.”) at pg. 2. Specifically, Apex.AI seeks to 27 seal the highlighted portions on pages 10-12, 15, and 17 of the Memorandum, paragraphs 49, 56- 1 58, and 61 of the Declaration of Dejan Pangercic, paragraphs 6.b, 6.c, and 6.d of the Declaration 2 of Dmytro Tutynin, and Exhibits A-F in their entirety. Since, the proprietary information at issue 3 goes to the merits of the case, the “compelling reasons” standard applies. 4 First, the Court GRANTS Apex.AI’s request to seal portions of the Memorandum in 5 support of the Application for a TRO and supporting Declarations of Dejan Pangercic and 6 Dmytro Tutynin. The Supreme Court has ruled that the right to inspect and copy judicial records 7 “has bowed before the power to insure that its records are not used…as sources of business 8 information that might harm a litigant’s competitive standing.” Nixon v. Warner Commc’ns, Inc, 9 435 U.S. 589, 598 & n.7 (1978). As such, courts have found it appropriate to seal customer 10 names or similar information, business contracts, and internal documents. See, e.g., Van v. 11 Language Line Servs., Inc., No. 14-CV-03791-LHK, 2016 WL 3565980, at 2 (N.D. Cal. June 30, 12 2016); Virun, Inc. v. Cymbiotika, LLC, No. 8:22-cv-00325-SSS-DFMx, 2022 WL 17401698, at 2 13 (C.D. Cal. Aug. 19, 2022). Here, the Memorandum and Declarations contain detailed information 14 about Apex.AI’s business arrangements, business plans about specific software products, and 15 identities of its partners and customers. Pangercic Decl. at 2. This kind of business and customer- 16 specific information, if available to competitors who otherwise would not have access to or be 17 able to use such information, could be used to undercut Apex.AI and deprive it of an opportunity 18 to be competitive in its relevant market. Thus, Apex.AI has provided a compelling reason to seal 19 this material. The Court is also satisfied that Apex.AI’s request is narrowly tailored to only the 20 sealable material. 21 Second, the Court GRANTS Apex.AI’s request to seal Exhibits A-F in support of the 22 Declaration of Dmytro Tutynin in their entirety. Under the case law already discussed, customer 23 identities and business information are sealable. Additionally, the Ninth Circuit has found that a 24 company’s financial records, such as receipts, accounts receivable, and expenses are also 25 confidential information which should be sealed. In re Electronic Arts, 298 Fed. Appx. 568, 569 26 (2008); Apple Inc. v. Samsung Elecs. Co., 282 F.R.D. 259; Cox v. Roadrunner Intermodal Servs., 27 LLC, No. 117CV01056DADBAM, 2019 WL 3202922, at *2 (E.D. Cal. July 16, 2019); In re 1 ConAgra Foods, Inc., No. CV1105379MMAGRX, 2014 WL 12577132, at *4 (C.D. Cal. July 11, 2 2014). Further, details about the technical operation of a company product, such as source codes, 3 internal documents, and other technical documents should remain confidential and be sealed from 4 the public. Digital Reg of Texas, LLC v. Adobe Sys., Inc., No. C 12-1971 CW, 2014 USS. Dist. 5 LEXIS 171088, 2014 WL 6986068, at *1 (N.D. Cal. Dec. 10, 2014). In this case, Exhibits A-F 6 contain business arrangements, internal financial documents, technical documents and source 7 codes, and data extracted from a work laptop. ECF 5-10—5-13; Pangercic Decl. at 2. Disclosure 8 could enable Apex.AI’s competitors to gain insight into its business and give them an opportunity 9 to outcompete it. Pangercic Decl. at 2-3. Moreover, internal financial information and receipts 10 for professional services, if available to the public, could impair Apex.AI’s negotiations with its 11 customers. Thus, the Court finds that Exhibits A-F are sealable in their entirety and that they do 12 not include significant amounts of non-sealable information. 5 13 Il. ORDER 14 (1) For the foregoing reasons, Apex.AI’s motion to seal is GRANTED.
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1 2 3 UNITED STATES DISTRICT COURT 4 NORTHERN DISTRICT OF CALIFORNIA 5 SAN JOSE DIVISION 6 7 APEX.AI, INC, Case No. 5:23-cv-02230-BLF
8 Plaintiff, ORDER GRANTING PLAINTIFF 9 v. APEX.AI, INC.’S ADMINISTRATIVE MOTION TO FILE UNDER SEAL 10 NEIL RICHARD LANGMEAD, AN PORTIONS OF ITS MEMORANDUM INDIVIDUAL; VERIFA, INC., A IN SUPPORT OF THE EX PARTE 11 MASSACHUSETTS CORPORATION; APPLICATION FOR A TEMPORARY CODECLINIC, LLC DBA LATTIZ, A RESTRAINING ORDER AND 12 MASSACHUSETTS LIMITED DECLARATIONS IN SUPPORT LIABILITY COMPANY; AND DOES 1- THEREOF 13 20, [Re: ECF 5] 14 Defendants.
15 16 This action arises from a dispute between Plaintiff Apex.AI, Inc. (“Apex.AI”) and 17 Defendants, Neil Richard Langmead (“Langmead”), Verifa, Inc. (“Verifa”), and CodeClinic LLC 18 dba Lattix (“CodeClinic”). The dispute is regarding alleged trade secret misappropriation and 19 breach of a Consulting Agreement. Langmead, hired by Apex.AI under a Consulting Agreement, 20 was tasked to ensure that Apex.AI’s software meets applicable safety requirements. In this role, 21 Langmead allegedly acquired Apex.AI’s proprietary information, including its trade secrets. 22 Apex.AI argues that Langmead engaged in misconduct during his consultancy by disclosing its 23 trade secrets and confidential information. Apex.AI filed suit against Defendants on May 8, 2023, 24 for temporary, preliminary, and permanent injunctive relief and filed an Ex Parte Application for a 25 Temporary Restraining Order (“TRO”) on the same date. 26 Apex.AI has filed a motion to seal portions of its Memorandum in support of its Ex Parte 27 Application for a TRO (the “Memorandum”) and the Declarations of Dejan Pangercic and Dmytro 1 of Dejan Pangercic and Dmytro Tutynin include non-public, confidential materials regarding 2 Apex.AI’s business arrangements, partners and customers, and trade secrets. Id. Defendants have 3 not responded to Apex.AI’s motion, though they have appeared in the case through counsel. 4 Having reviewed Apex.AI’s submissions and the applicable law, the Court 5 GRANTS Apex.AI’s administrative motion to seal for the reasons below. 6 I. LEGAL STANDARD 7 “Historically, courts have recognized a ‘general right to inspect and copy public records and 8 documents, including judicial records and documents.’” Kamakana v. City and Cnty of Honolulu, 9 447 F.3d 1172, 1178 (9th Cir. 2006). Consequently, access to motions and their attachments that 10 are “more tangentially related to the merits of a case” may be sealed only upon a showing of 11 “compelling reasons” for sealing. Ctr for Auto Safety v. Chrysler Grp., LLC, 809 F.3d 1092, 12 1101-02 (9th Cir. 2006). Filings that are only tangentially related to the merits may be sealed 13 upon a lesser showing of “good cause.” Id. at 1097. 14 In addition, in this district, all parties requesting sealing must comply with Civil Local Rule 15 79-5. A party moving to seal a document in whole or in part must file a statement identifying the 16 legitimate private or public interests that warrant sealing, the injury that will result if sealing is 17 denied, and why a less restrictive alternative to sealing is not sufficient. Civ. L.R. 79-5(c)(1). A 18 supporting declaration shall be submitted if necessary. Civ. L.R. 79-5(c)(2). Finally, the moving 19 party must submit “a proposed order that is narrowly tailored to seal only the sealable material[.]” 20 Civ. L.R. 79-5(c)(3). 21 II. DISCUSSION 22 Apex.AI moves to file under seal portions of its Memorandum and supporting Declarations 23 of Dejan Pangercic and Dmytro Tutynin, and Exhibits A-F to the Declaration of Dmytro Tutynin 24 on the basis that these documents contain non-public, confidential information about Apex.AI’s 25 proprietary information. ECF 5 at 2; Declaration of Dejan Pangercic in Support of Apex.AI’s 26 Motion to File Under Seal, ECF 5-1 (“Pangercic Decl.”) at pg. 2. Specifically, Apex.AI seeks to 27 seal the highlighted portions on pages 10-12, 15, and 17 of the Memorandum, paragraphs 49, 56- 1 58, and 61 of the Declaration of Dejan Pangercic, paragraphs 6.b, 6.c, and 6.d of the Declaration 2 of Dmytro Tutynin, and Exhibits A-F in their entirety. Since, the proprietary information at issue 3 goes to the merits of the case, the “compelling reasons” standard applies. 4 First, the Court GRANTS Apex.AI’s request to seal portions of the Memorandum in 5 support of the Application for a TRO and supporting Declarations of Dejan Pangercic and 6 Dmytro Tutynin. The Supreme Court has ruled that the right to inspect and copy judicial records 7 “has bowed before the power to insure that its records are not used…as sources of business 8 information that might harm a litigant’s competitive standing.” Nixon v. Warner Commc’ns, Inc, 9 435 U.S. 589, 598 & n.7 (1978). As such, courts have found it appropriate to seal customer 10 names or similar information, business contracts, and internal documents. See, e.g., Van v. 11 Language Line Servs., Inc., No. 14-CV-03791-LHK, 2016 WL 3565980, at 2 (N.D. Cal. June 30, 12 2016); Virun, Inc. v. Cymbiotika, LLC, No. 8:22-cv-00325-SSS-DFMx, 2022 WL 17401698, at 2 13 (C.D. Cal. Aug. 19, 2022). Here, the Memorandum and Declarations contain detailed information 14 about Apex.AI’s business arrangements, business plans about specific software products, and 15 identities of its partners and customers. Pangercic Decl. at 2. This kind of business and customer- 16 specific information, if available to competitors who otherwise would not have access to or be 17 able to use such information, could be used to undercut Apex.AI and deprive it of an opportunity 18 to be competitive in its relevant market. Thus, Apex.AI has provided a compelling reason to seal 19 this material. The Court is also satisfied that Apex.AI’s request is narrowly tailored to only the 20 sealable material. 21 Second, the Court GRANTS Apex.AI’s request to seal Exhibits A-F in support of the 22 Declaration of Dmytro Tutynin in their entirety. Under the case law already discussed, customer 23 identities and business information are sealable. Additionally, the Ninth Circuit has found that a 24 company’s financial records, such as receipts, accounts receivable, and expenses are also 25 confidential information which should be sealed. In re Electronic Arts, 298 Fed. Appx. 568, 569 26 (2008); Apple Inc. v. Samsung Elecs. Co., 282 F.R.D. 259; Cox v. Roadrunner Intermodal Servs., 27 LLC, No. 117CV01056DADBAM, 2019 WL 3202922, at *2 (E.D. Cal. July 16, 2019); In re 1 ConAgra Foods, Inc., No. CV1105379MMAGRX, 2014 WL 12577132, at *4 (C.D. Cal. July 11, 2 2014). Further, details about the technical operation of a company product, such as source codes, 3 internal documents, and other technical documents should remain confidential and be sealed from 4 the public. Digital Reg of Texas, LLC v. Adobe Sys., Inc., No. C 12-1971 CW, 2014 USS. Dist. 5 LEXIS 171088, 2014 WL 6986068, at *1 (N.D. Cal. Dec. 10, 2014). In this case, Exhibits A-F 6 contain business arrangements, internal financial documents, technical documents and source 7 codes, and data extracted from a work laptop. ECF 5-10—5-13; Pangercic Decl. at 2. Disclosure 8 could enable Apex.AI’s competitors to gain insight into its business and give them an opportunity 9 to outcompete it. Pangercic Decl. at 2-3. Moreover, internal financial information and receipts 10 for professional services, if available to the public, could impair Apex.AI’s negotiations with its 11 customers. Thus, the Court finds that Exhibits A-F are sealable in their entirety and that they do 12 not include significant amounts of non-sealable information. 5 13 Il. ORDER 14 (1) For the foregoing reasons, Apex.AI’s motion to seal is GRANTED. The 3 15 designated portions on pages 10-12, 15, and 17 of the Memorandum in 16 support of the Application for a Temporary Restraining Order, paragraphs 49, 3 17 56-58, and 61 of the Declaration of Dejan Pangercic in Support of the 18 Application, paragraphs 6.b, 6.c, and 6.d of the Declaration of Dymtro 19 Tutynin, and the entirety of Exhibits A-F to the Declaration of Dymtro 20 Tutynin, shall be filed under seal. 21 (2) This order terminates ECF 5. 22 23 IT IS SO ORDERED. 24 25 Dated: June 23, 2023 Ais j V (2) □ 06 B TH LABSON FREEMAN United States District Judge 27 28