PTP OneClick LLC v. Avalara Inc

District Court, W.D. Washington·Decided November 21, 2019·No. 2:19-cv-00640·Unknown

Opinion

1 2

3 4 5 6 7 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON 8 AT SEATTLE

9 10 PTP ONECLICK, LLC, CASE NO. C19-0640JLR 11 Plaintiff, ORDER ON MOTIONS TO SEAL v. AND MOTION FOR AN 12 EXTENSION FOR TIME AVALARA, INC., 13 Defendant. 14

15 I. INTRODUCTION 16 Before the court are three motions: (1) Defendant Avalara, Inc.’s (“Avalara”) motion 17 to seal Exhibits A and B, which were attached to its September 30, 2019, letter brief (see 18 MTS (Dkt. # 55); see also Def. Ltr. Br. (Dkt. # 57); Ex. A (Dkt. # 58) (sealed); Ex. B 19 (Dkt. # 59) (sealed)); (2) Plaintiff PTP OneClick, LLC’s (“PTP”) motion to redact 20 portions of the October 1, 2019, hearing transcript (see MTR (Dkt. # 80); see also 21 10/1/19 Min. Entry (Dkt. # 62); Hr. Tr. (Dkt. # 63) (sealed)); and (3) Avalara’s motion 22 for an extension of time to file a motion for attorney’s fees pursuant to 35 U.S.C. § 285 1 (see MET (Dkt. # 68)). The court has considered the motions, the parties’ submissions 2 filed in support of and in opposition to the motions, the relevant portions of the record,

3 and the applicable law. Being fully advised, the court (1) GRANTS in part and DENIES 4 in part Avalara’s motion to seal Exhibits A and B (“the Exhibits”) to its September 30, 5 2019, letter brief and ORDERS PTP to file redacted versions of the Exhibits on the 6 docket, (2) GRANTS PTP’s motion to redact portions of the October 1, 2019, hearing 7 transcript, and (3) DENIES as MOOT and WITHOUT PREJUDICE Avalara’s motion for 8 an extension of time to file its motion for attorney’s fees pursuant to 35 U.S.C. § 285

9 because the 14-day period for filing such a motion under Rule 54(d)(2)(B)(i) is not yet 10 triggered in this case. 11 II. BACKGROUND 12 Avalara is in the business of selling tax preparation software. (See Compl. (Dkt. 13 # 1) ¶ 14.) On October 22, 2018, PTP filed a complaint in the federal district court in the

14 Eastern District of Wisconsin alleging five counts against Avalara: (1) patent 15 infringement, (2) misappropriation under federal trade secret laws, (3) misappropriation 16 under state uniform trade secret laws, (4) unfair competition under Wisconsin statutory 17 law, and (5) breach of contract. (Id. ¶¶ 55-81.) On April 30, 2018, the court transferred 18 PTP’s complaint to the Western District of Washington. (See 4/30/18 Order (Dkt. # 25).)

19 On November 7, 2018, Avalara filed a motion to dismiss PTP’s claims. (MTD 20 (Dkt. # 8).) On September 27, 2019, the court granted Avalara’s motion on PTP’s patent 21 infringement claim and dismissed the claim with prejudice. (9/27/19 Order (Dkt. # 54) at 22 22, 32-33.) The court ruled that the patent claims at issue “fail[ed] the two-part Alice 1 test, [we]re directed to an abstract concept, and therefore [we]re not patentable.” (Id. at 2 22); see also Alice Corp. Party Ltd. v. CLS Bank Int’l, 573 U.S. 208, 216-18 (2014). The

3 court also granted Avalara’s motion on PTP’s claim for unfair competition under Wis. 4 Stat. § 100.20 and dismissed the claim with prejudice. (Id. at 32-33.) The court denied 5 Avalara’s motion to dismiss with respect to the remainder of PTP’s claim. (Id.) 6 Under 35 U.S.C. § 285, the court “in exceptional cases may award reasonable 7 attorney fees to the prevailing party” in a patent infringement suit. See 35 U.S.C. § 285. 8 A prevailing party, however, must file such a motion within 14 days after entry of

9 judgment. IPXL Holdings, L.L.C. v. Amazon.com, Inc., 430 F.3d 1377, 1384-85 (Fed. 10 Cir. 2005) (citing Fed. R. Civ. P. 54(d)(2)(B)). Avalara argues that the default deadline 11 for a fee motion under 35 U.S.C. § 285 fell on October 11, 2019, which is 14 days after 12 the court’s entry of summary judgement on PTP’s claim for patent infringement. (See 13 MET at 1.) October 10, 2019, Avalara filed a Federal Rule of Civil Procedure 6(b)(1)(A)

14 motion seeking to extend that default deadline to the conclusion of the case. (See 15 generally id.) PTP opposes an extension of the deadline. (MET Resp. (Dkt. # 72).) 16 On September 30, 2019, the parties filed letter briefs concerning a discovery 17 dispute. (PTP Ltr. Br. (Dkt. # 56); Def. Ltr. Br.) In addition to its letter brief, Avalara 18 filed two exhibits under seal—both of which PTP had previously marked as confidential.

19 (See Ex. A; Ex. B.) On the same day, Avalara filed a motion seeking permission to file 20 Exhibits A and B under seal. (See MTS.) Because PTP had previously designated the 21 Exhibits as confidential, the protective order in this case required Avalara to file the 22 1 Exhibits under seal. (See MTS at 1 (citing Protective Order (Dkt. # 49).) However, 2 Avalara stated that it did “not take the position that the [c]ourt should seal them.” (Id.)

3 On October 15, 2019, PTP filed a response to Avalara’s motion asking the court to 4 grant Avalara’s motion to seal Exhibits A and B but offering redacted versions of the 5 Exhibits to file on the court’s docket if the court granted Avalara’s motion. (See 6 generally MTS Resp. (Dkt. # 70); see also Kurtenback Decl. (Dkt. # 71) ¶¶ 2-3, Exs. 1, 2 7 (attaching redacted copies of Exhibits A and B).) PTP asserts that portions of the 8 Exhibits contain its confidential trade secrets. (MTS Resp. at 1.) Avalara filed a reply

9 opposing the sealing of the Exhibits. (See generally MTS Reply (Dkt. # 74).) Finally, 10 PTP also filed a surreply in support of the motion to seal. (MTS Surreply (Dkt. # 77).) 11 On October 1, 2019, the court held a telephone conference with counsel to resolve 12 the parties’ discovery dispute. (See 10/1/19 Min. Entry.) On October 3, 2019, the court 13 reporter filed a transcript of the telephone conference under seal. (See Hr. Tr.) On

14 October 13, 2019, PTP filed a motion to redact certain portions of the transcript prior to 15 unsealing. (See generally MTR.) PTP asserts that portions of the transcript, if unsealed, 16 would reveal its trade secrets. (Id. at 4-5.) Avalara opposes the motion. (MTR Resp. 17 (Dkt. # 84).) 18 The court now considers the parties’ motions.

19 III. ANALYSIS 20 A. Motions to Seal and Redact Certain Documents 21 Although Avalara filed the motion to seal Exhibits A and B pursuant to the 22 parties’ stipulated protective order, it is PTP that seeks to maintain the Exhibits under 1 seal and that offers redacted versions of the Exhibits for filing on the court’s docket. (See 2 MTS; MTS Resp.; Kurtenbach Decl. ¶¶ 2-3, Exs. 1, 2).) In addition, PTP seeks to redact

3 three lines from page 15 of the October 1, 2019, hearing transcript. (MTR at 4 (“PTP 4 asks the Court to redact: Page 15, Lines 14-16, from after “sales category is” through 5 before “I read.”).) PTP asserts that the redacted portions of Exhibits A and B and the 6 proposed redaction of the hearing transcript contain its confidential trade secrets. (See 7 generally MTS Resp.; MTR.) 8 When deciding a motion to seal, courts “start with a strong presumption in favor

9 of access to court records.” Foltz v. State Farm Mut. Auto. Ins.

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