Encyclopedia Brown Productions, Ltd. v. Home Box Office, Inc.

26 F. Supp. 2d 606, 1998 U.S. Dist. LEXIS 16106, 1998 WL 726065
District Court, S.D. New York·Decided October 15, 1998·No. 91 Civ. 4092(PKL), 93 Civ. 1407(PKL)·Published·Cited by 195 cases

Opinion

OPINION AND ORDER

LEISURE, District Judge.

Plaintiffs bring these consolidated actions alleging copyright infringement and various pendent state law claims against Home Box Office, Inc. (“HBO”), a cable television programmer, and various cable television system operators (the “cable operator defendants”). Pursuant to Rule 26(c) of the Federal Rules of Civil Procedure, defendants move to seal portions of the record and of the forthcoming trial. Plaintiffs Oppose defendants’ motion and cross-move to unseal this Court’s Opin *608 ion and Order dated August 24,1994, as well as the briefs and documents submitted by the parties in connection therewith.

For the reasons stated herein, defendants’ motion to seal is GRANTED in part and DENIED in part, and plaintiffs’ cross-motion to unseal is GRANTED in part and DENIED in part.

BACKGROUND

I. Exhibition of the Pilot and Episodes

The Court presumes familiarity with the facts set forth in its Opinion and Order dated August 24, 1994, and its Opinion and Order dated September 24, 1998, issued in connection with this action. In brief summary of the relevant facts, EBP and HBO entered into an agreement, dated March 10,1988 (the “Agreement”), granting HBO an option for production and licensing of an hour-long pilot television program (the “Pilot”) based on Encyclopedia Brown, a character in a series of children’s books.

Following HBO’s exercise of the option for the Pilot, EBP produced, delivered and licensed the Pilot to HBO in exchange for payment of a fee. Under the Agreement, the Pilot could only be exhibited during a two-year period ending on March 3, 1991 (the “Exhibition Period”).

The Pilot was provided by HBO to the cable operator defendants for viewing by cable subscribers. The relationship between HBO and the cable operator defendants is governed by Service Network Affiliation Agreements (“Affiliation Agreements”), which are negotiated separately by HBO with each cable operator. Declaration of Robert Grassi, dated June 20,1997 [hereinafter “Grassi Dec!.”], at ¶ 4. Following expiration of the Exhibition Period, the Pilot was exhibited on the dates of May 2, 13, 22 and 26,1991.

EBP also produced and delivered to HBO six additional episodes based on the Encyclopedia Brown character (the “Episodes”), in exchange for several payments. The last exhibition of the Episodes by HBO occurred on October 22, 1991. EBP has registered copyrights in the Pilot and the Episodes.

II. Alleged Confidential Business Information

During discovery, HBO and the cable operator defendants disclosed certain business information which defendants contend is confidential. Most of the information is from 1991, the year the infringing broadcasts of the Pilot occurred. The information falls into four categories: (i) detailed operations information; (ii) HBO programming strategies and decisionmaking; (iii) customer surveys conducted by HBO; and (iv) license fees paid by HBO to plaintiffs. Defendants have submitted examples of documents containing alleged confidential information and have identified witnesses who are expected to provide live testimony regarding such information. The evidence proffered by defendants as to why the information should be sealed is summarized below.

A. Operations Information

Defendants proffer sworn declarations by representatives of HBO and the cable operator defendants that the following operations information should be sealed: breakdowns of defendants’ revenues and expenses, the total number of HBO subscribers, the number of subscribers to HBO by geographic area, the rates charged by HBO to each cable operator, the discounts and other incentives given by HBO to cable operators and the amounts actually remitted by cable operators to HBO. Defendants’ representatives testify that the information is kept confidential and, with respect to operations information contained in the Affiliation Agreements, employee access is limited. See, e.g., Grassi Deck, ¶¶ 4, 9; Declaration of John M. Dyer [hereinafter “Dyer Deck”], dated June' 19, 1997, ¶¶ 7-8. In addition, according to the declarations, the operations information defendants seek to seal contains far greater detail than the financial data required to be publicly disclosed by defendants. See, e.g., Grassi Deck, ¶ 9; Dyer Deck, ¶ 8.

The cable operator defendant representatives testify that the cable operators would be irreparably harmed by disclosure of the actual rates paid by each cable operator to HBO for programming. See, e.g., Dyer Deck *609 ¶¶ 5, 8. The representatives testify that public access to such information would give their competitors a bargaining advantage in negotiating with HBO and, in addition, would impede the cable operator defendants’ ability effectively to bargain with suppliers of cable programming other than HBO. Id., ¶¶ 5, 6.

The cable operator defendant representatives proffer further testimony that disclosure of detailed breakdowns of their revenues and expenses would allow competitors to ascertain each cable operator’s cost and profit structure, threatening the companies’ future profitability. Dyer Deck, ¶ 9. Finally, the cable operator defendant representatives testify that disclosure of the number of HBO subscribers of each cable operator may result in imposition of quotas on the cable operators by programming suppliers as a condition of favorable rates or other incentives. Id., ¶ 11.

Robert Grassi, an HBO representative, testifies that disclosure of the rates charged and incentives offered to cable operators (or disclosure of information from which those rates could be obtained) would hinder HBO’s ability to obtain favorable rates from cable operators and other service providers. Gras-si Deck, ¶¶ 5-7. Moreover, Grassi states that disclosure of detailed HBO financial information would expose HBO’s cost and profit structure and, thereby, threaten HBO’s competitive position. Id., ¶ 11.

Plaintiffs submit the declaration of an expert, Morton I. Hamburg, who contests the alleged confidentiality of the operations information. Hamburg testifies that the information is well-known due to frequent movement of employees between competitors in the cable programming industry and because the information is almost a decade old. Hamburg Deck, ¶ 10. Hamburg further states that the information can be easily extrapolated from publicly-available information. Id., ¶ 12.

Plaintiffs also submit various public documents purporting to set forth the operations information defendants contend is confidential and/or which allegedly contain information from which the data can be extrapolated. Declaration of Jeffrey M. Eilender, dated October 5, 1997 [hereinafter “Eilender Deck”], passim.

B. Programming Strategies

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Encyclopedia Brown Productions, Ltd. v. Home Box Office, Inc., 26 F. Supp. 2d 606, 1998 U.S. Dist. LEXIS 16106, 1998 WL 726065 (S.D.N.Y. 1998).

26 F. Supp. 2d 606 (Encyclopedia Brown Productions, Ltd. v. Home Box Office, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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