Epic Games, Inc. v. Apple Inc.

Opinion

1 UNITED STATES DISTRICT COURT 2 NORTHERN DISTRICT OF CALIFORNIA 3 4 EPIC GAMES, INC., Case No. 4:20-cv-05640-YGR

5 Plaintiff, TRIAL ORDER NO. 7 RE: (1) PENDING STIPULATIONS; (2) BRIEFING SCHEDULE 6 vs. RE: MOTION FOR JUDGMENT ON PARTIAL FINDINGS; AND (3) WEEK 2 SEALING 7 APPLE INC., REQUESTS

8 Defendant. Re: Dkt. Nos. 641, 649, 659, 660, 663, 665, 682, 692, 705, 707 9 AND RELATED COUNTERCLAIM 10 11 TO ALL PARTIES AND COUNSEL OF RECORD: 12 The Court issues this Order with respect to several items on the docket: 13 1. Pending Stipulations 14 Having reviewed the pending stipulations on the docket, and for the good cause shown 15 therein, the Court GRANTS the following pending stipulations: 16  Dkt. Nos. 641, 682 17 o The Clerk of the Court shall admit into evidence the exhibits identified in 18 these stipulations. All exhibits shall be posted to the public box except for 19 those in which the parties have identified any potential sealing issue. Those 20 documents for which the Court has issued a definitive ruling (i.e. a ruling 21 other than deferred) shall be placed into the public box in conformance with 22 the Court’s Orders (or shall be appropriately withheld in the event that the 23 entirety of the document is appropriately sealed). 24 2. Briefing Schedule Re: Motion for Judgment on Partial Findings (Dkt. No. 707) 25 The Court sets the following briefing schedule on the motion for judgment on partial 26 findings: plaintiff Epic Games, Inc.’s response shall be filed on or before Sunday, May 23, 2021 27 at 12:00 PM PDT. Defendant Apple Inc. may file a reply (optional) on or before Wednesday, 1 3. Week 2 Sealing Requests 2 The Court has received several new requests to seal from both the parties and third parties. 3 As the Court explained in Pretrial Orders 7 and 9, as well as Trial Orders 1 and 5:

4 Local Rule 79-5 provides that documents, or portions thereof, may be sealed if a party “establishes that the documents, or portions thereof, 5 are privileged, protectable as a trade secret, or otherwise entitled to protection under the law.” Civ. L. R. 79-5(b). In general, a “strong 6 presumption in favor of access” to court records exists, especially during trial. At times, compelling reasons which are “sufficient to 7 outweigh the public’s interest in disclosure and justify sealing court records exist when such ‘court files might have become a vehicle for 8 improper purposes,’ such as the use of records to . . . release trade secrets.” Kamakana v. City and Cty. of Honolulu, 447 F.3d 1172, 9 1178 (9th Cir. 2006) (quoting Nixon v. WarnerCommc’ns, Inc., 435 U.S. 589, 598 (1978) (“[C]ourts have refused to permit their files to 10 serve as . . . sources of business information that might harm a litigant’s competitive standing”). 11 Here, and importantly, the gravamen of this case is business 12 competition, including whether competition exists; if so, among which players; and how such competition influences the market. The 13 Court understands that the standard is more lenient when the information concerns third parties, but this is not dispositive. The 14 third-party information must be balanced with the Court’s ultimate resolution of the instant dispute which should be transparent in its 15 analysis. Accordingly, the Court makes the following findings based upon the current state of the record:1 16 17 (Dkt. No. 547 at 1-2; Dkt. No. 564 at 1-2; Dkt. No. 594 at 2-3; Dkt. No. 643 at 2-3.)2 With this 18 1 Litigants are advised that if the Court ultimately decides that certain information is 19 important to disclose which has been sealed, it will provide an opportunity for the moving party to respond. 20 2 The Court similarly stated in Trial Order No. 3: 21 Trial records enjoy a “strong presumption in favor of access” that can 22 only be overcome by “compelling reasons supported by specific factual findings that outweigh the general history of access and the 23 public policies favoring disclosure.” Kamakana v. City & Cty. of Honolulu, 447 F.3d 1172, 1178- 79 (9th Cir. 2006). “In general, 24 ‘compelling reasons’ sufficient to outweigh the public’s interest in disclosure and justify sealing court records exist when such ‘court 25 files might have become a vehicle for improper purposes,’ such as the use of records to gratify private spite, promote public scandal, 26 circulate libelous statements, or release trade secrets.” Id. at 1179 (quoting Nixon v. Warner Commc’ns, Inc., 435 U.S. 589, 598 (1978)). 27 1 prior framework in mind, the Court addresses the below administrative motions to seal. 2 a. Spotify USA Inc.’s Administrative Motions to Seal (Dkt. No. 649, 692) 3 The Court GRANTS non-party Spotify USA Inc.’s administrative motions to seal portions 4 of the document with bates numbers SPOT-EPIC-00000925 and SPOT-EPIC-00001023 (Dkt. No. 5 649), and of the document with bates number SPOT-EPIC-00001047. (Dkt. No. 692.) These 6 documents reflect highly confidential information including recent internal user data, the release 7 of which would competitively harm Spotify. 8 b. Apple’s Administrative Motion to Seal (Week 2) (Dkt. No. 659) 9 The motion is GRANTED as to all documents except for: 10  PX-602 11 o 602.27: the notes shall be unredacted except that the words after “WW 12 games business” shall be redacted and sealed up until the comma. The 13 remainder of the sentence after the comma and the notes shall be 14 unredacted. The remainder of the proposed redactions on this page is 15 appropriately sealed. 16 o 602.32: the first bullet point shall be unredacted in the notes section. The 17 remainder of the proposed redactions on this page are appropriately sealed. 18 o The remainder of the proposed redactions in this document is appropriately 19 sealed. 20  PX-608 21 o 608.13: the slide shall be unredacted except that the percentage may remain 22 redacted and sealed. 23 o The remainder of the proposed redactions in this document is appropriately 24 sealed. 25  PX-2176 26 o 2176.48: this page shall be unredacted. 27 o 2176.64: this page shall be unredacted. 1 may be redacted and sealed. The categories in the notes shall be 2 unredacted, but the remainder of the notes section is appropriately sealed 3 (including the text following these categories after the “- ”). 4 o 2176.74: this slide shall be unredacted except that the monetary amounts 5 may be redacted and sealed. The categories in the notes shall be 6 unredacted, but the remainder of the notes section is appropriately sealed 7 (including the text following these categories after the “- ”). 8 o 2176.176: this slide shall be unredacted. The first four bullet points in the 9 notes section shall be unredacted. The line “Spend Segment” shall be 10 unredacted, along with the categories of the bullet points below that line. 11 The percentages and the amounts that follow these categories shall be 12 redacted and sealed. The final note at the bottom shall be unredacted. 13 o 2176.177: this page shall be unredacted. 14 o 2176.178: this page shall be unredacted. 15 o 2176.180: the title of the slide shall be unredacted. The remainder of the 16 proposed redactions on this page is appropriately sealed. 17 o 2176.181: this page shall be unredacted. 18 o 2176.192: this page shall be unredacted. 19 o The remainder of the proposed redactions in this document is appropriately 20 sealed. 21  DX-4800 22 o Given the testimony and other unsealed documents, this page shall be 23 unredacted except that the Samsung Electronics Co. Ltd. and Gearbox 24 Software LLC commission rates shall be redacted and sealed. 25  DX-4094 26 o 4094.007: The first two sentences in the notes shall be unredacted on this 27 slide. The remainder on this slide shall be sealed. 1 sealed. 2  DX-4170 3 o This document is sealed. However, the parties are on notice that the Court 4 may cite to certain statistics contained within the document in any final 5 order on the merits in this action. 6 c. Epic Games’ Administrative Motion to Seal (Week 2) (Dkt. No. 660) 7 The motion is GRANTED as to all documents except for: 8  DX-4800 9 o See above in the Apple section for the appropriate redactions. 10  DX-5549 and DX-5550 11 o The Court has reviewed Spotify’s declaration in support of the sealing of 12 certain information in these documents. (See Dkt. Nos. 680 (declaration), 13 681 (proposed redactions).) The Court approves of Spotify’s proposed 14 redactions of these documents, which are narrowly tailored. 15 d. Sony Interactive Entertainment LLC’s Administrative Motion to Seal (Dkt. No. 663) 16 Having reviewed Sony Interactive Entertainment LLC’s renewed administrative motion to 17 seal, the Court will follow the example set by Judge Lucy Koh in Apple, Inc. v. Samsung Elecs. 18 Co., No. 11-CV-01846-LHK, 2012 WL 3283478, at *13 (N.D. Cal. Aug. 9, 2012), rev’d and 19 remanded on other grounds, 727 F.3d 1214 (Fed. Cir. 2013). The Court considers the extent to 20 which the inadvertently disclosed documents have been publicized, weighs the public’s right of 21 access to these documents considering the merits of this action, and balances these considerations 22 against any potential competitive harm to Sony. The motion is therefore GRANTED as follows: 23  DX-3660 (Ex. A) 24 o Although this agreement was identified as one document that was 25 inadvertently disclosed by the parties, the Court agrees to limited proposed 26 redactions. Thus, the proposed redactions are sealed except as follows: 27  Section 1.2: The sentence defining “Competitive Platform” shall be 1  The remainder of the document is otherwise appropriately 2 unredacted. 3  DX-3865 (Ex. B) 4 o The section titled “Gift card economics” shall be sealed. The remainder of 5 this email shall be unredacted. 6  DX-3988 (Ex. C) / DX-4519 (Ex. F) 7 o Sony admits that DX-3988 is a duplicate document of DX-4519, which was 8 inadvertently disclosed. The Court agrees to limited proposed redactions, 9 which request sealing of specialized terms in an agreement between Epic 10 Games and Sony. 11  DX-4425 (Ex. D) / DX-3582 (Ex. J) 12 o Sony admits that DX-4425 is substantively similar to DX-3582, which was 13 inadvertently disclosed. The Court agrees to limited proposed redactions, 14 which request sealing of specialized terms in an agreement between Epic 15 Games and Sony. 16  DX-4493 (Ex. E) 17 o Although this agreement was identified as one document that was 18 inadvertently disclosed by the parties, the Court agrees to the limited 19 proposed redactions by Sony. 20  DX-3094 (Ex. G) 21 o This request is DENIED. First, portions of this document remain readily 22 accessible to the public.3 Second, as the Court also reasoned in Trial Order 23 1, the Court will not seal general terms applicable to all developers who 24 wish to sell on a gaming platform. (Dkt. No. 594 at 5 (rejecting Nintendo’s 25 request, and noting the prior rejections of Valve and Sony’s similar 26

27 3 See https://www.theverge.com/2021/5/3/22417560/sony-ps4-cross-play-confidential- 1 requests).) The same reasoning is true here, where the document is a 2 general policy applicable to any developer who wishes to sell on the Sony 3 PlayStation platform, and such a policy is widely disseminated to the 4 developer community. Moreover, this document is highly relevant to the 5 Court’s analysis in assessing where competition exists in this action. 6  DX-3125 (Ex. H) 7 o Tim Sweeney’s statements on June 2, 2018 shall be unredacted. The 8 remainder of the proposed redactions shall be sealed. 9  DX-3433 (Ex. I) 10 o This request is DENIED. The proposed redactions are overbroad, especially 11 where this document is (1) more than three years old, (2) is highly relevant 12 to the Court’s analysis in assessing where competition exists in this action, 13 and (3) portions of which are readily accessible to the public.4 Thus, the 14 document shall be entirely unredacted. 15 Regarding the unredacted documents above: these documents, or portions thereof, do not 16 reveal information which is so confidential as to be damaging if revealed as balanced against the 17 need for public access to the factual issues underlying this case. Sony shall provide the parties 18 with revised redacted versions of the documents which may be used in any public portion of the 19 trial. 20 e. Nintendo of America, Inc.’s Administrative Motion to Seal (Dkt. No. 705) 21 The Court GRANTS non-party Nintendo of America, Inc’s administrative motion to seal the 22 proposed redactions in its specific agreement with Epic Games. The Court finds that the requested 23 sealing is narrowly tailored, and that the public’s right of access to this sealed document is 24 outweighed by any competitive harm that would be incurred by Nintendo by the release of the 25 unredacted version of the agreement. 26 27 1 f. Samsung Electronics Co. Ltd. Request to Seal (Dkt. No. 665) 2 Non-party Samsung Electronics Co. Ltd. has filed a declaration renewing its request to seal 3 exhibits DX-4322 and DX-4800. (Dkt. No. 665.) As discussed above, the Court has addressed 4 || the sealing of DX-4800. With regard to DX-4322, the Court agrees that this document is 5 appropriately sealed in its entirety. Thus, Samsung’s request is GRANTED. 6 This Order terminates Docket Numbers 641, 649, 659, 660, 663, 665, 682, 692, and 705. 7 IT Is SO ORDERED. 8 Dated: May 20, 2021 YVONNE GONZALEZ ROGER ? UNITED STATES DISTRICT JUDGE 10 11 12

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