[00:00:06] Speaker 03:
with Electronic Frontier Foundation as an intervenor.

[00:00:11] Speaker 03:
Pellee 2021, 1568.

[00:00:17] Speaker 03:
Mr. Jacobs, when you were ready.

[00:00:22] Speaker 05:
Good morning, Your Honors.

[00:00:23] Speaker 05:
May it please the Court.

[00:00:24] Speaker 05:
My name is Aaron Jacobs, and I represent the Unalak Appellants.

[00:00:27] Speaker 05:
Your Honors, as this Court recognized the last time these cases were here, and as this Court recognized in Apple versus Samsung, the question of whether documents may be filed under seal is a question for local circuit law.

[00:00:38] Speaker 05:
And in the Ninth Circuit, this law is clear.

[00:00:41] Speaker 05:
The Ninth Circuit in Inri Electronic Arts found that a district court abused its discretion for refusing to seal, quote,

[00:00:47] Speaker 05:
Pricing terms, royalty rates, and guaranteed minimum payment terms found in a license agreement, which were plainly within the definition of trade secrets.

[00:00:56] Speaker 05:
This opinion has been cited more than 100 times in the Northern District of California alone, including, as noted in our briefs, scores on scores of times specifically to seal patent licensing information, including by the judge on appeal today.

[00:01:11] Speaker 05:
The same day, this opinion that is on appeal was issued.

[00:01:16] Speaker 05:
The same day, Judge Consolid Rogers, also of the Northern California, considered sealing some of the same materials.

[00:01:23] Speaker 05:
And she, like those scores upon scores of other opinions, recognized that those documents should be filed under seal.

[00:01:31] Speaker 03:
So what's the error?

[00:01:34] Speaker 03:
Is it an error of law?

[00:01:36] Speaker 03:
Because the district judge here

[00:01:40] Speaker 03:
talked about the public interest in a patent extending to who it's licensed to and what the royalty rates are.

[00:01:50] Speaker 03:
Is that a number of law?

[00:01:52] Speaker 05:
Yes, Judge Lawyer, there were a number of errors.

[00:01:54] Speaker 05:
That's one of them.

[00:01:54] Speaker 05:
In particular, that was a mistake of law.

[00:01:57] Speaker 05:
The district court was simply wrong.

[00:01:59] Speaker 05:
To begin with, as the Ninth Circuit and scores of Northern California judges have concluded, licensing terms are trade secrets, and they should be filed under seal.

[00:02:10] Speaker 05:
in terms of the question of whether the public has an interest in knowing amounts paid for licenses.

[00:02:17] Speaker 05:
This court stated in Apple v. Samsung that a generalized interest is not sufficient to overcome a compelling interest in filing something under seal.

[00:02:28] Speaker 05:
In that case, there were entities that said, yes, we want to know these amounts.

[00:02:32] Speaker 05:
We want to know how much

[00:02:33] Speaker 05:
Apple and Samsung are paying or earning for these things.

[00:02:36] Speaker 05:
And this court said, no, that is not relevant.

[00:02:40] Speaker 05:
What is relevant is whether the particular documents are necessary to understand the outcome of the case.

[00:02:45] Speaker 05:
And in this instance, the individual licensing amounts, the individual names are not relevant.

[00:02:52] Speaker 02:
But these cases are all FAT-specific.

[00:02:55] Speaker 02:
And your case is different from all the other ones.

[00:02:59] Speaker 02:
The district judges are not bound by each other's rulings.

[00:03:02] Speaker 02:
Northern District of California.

[00:03:04] Speaker 02:
And in this case, the case started by your side with issuing an overbroad effective orders request.

[00:03:13] Speaker 02:
And this is how we got to where we are.

[00:03:17] Speaker 02:
And the judge, taking our opinion, did a particularized look at the various issues and made his ruling.

[00:03:25] Speaker 02:
How can we say he's wrong?

[00:03:28] Speaker 02:
There's no binding precedent in the Ninth Circuit or anywhere else

[00:03:32] Speaker 02:
controls this unique situation that you created.

[00:03:36] Speaker 05:
Well, Your Honors, yes, we created the situation.

[00:03:39] Speaker 05:
And it was a mistake to have broadly requested the ceiling that we did.

[00:03:44] Speaker 05:
I'm not going to rehash that.

[00:03:46] Speaker 05:
However, this court looked at that and said, OK, under the local rules, that was an overbook request.

[00:03:50] Speaker 05:
And therefore, you lost all confidentiality.

[00:03:54] Speaker 05:
But as to these third party documents, you, the district court, have not looked at this.

[00:03:58] Speaker 05:
You need to go look at this and make a decision.

[00:04:00] Speaker 05:
This court did the same thing again in Apple v. Samsung.

[00:04:03] Speaker 05:
He was faced with the district court judge who had said, no, I'm not going to seal this.

[00:04:07] Speaker 05:
It was a fact, a specific question.

[00:04:08] Speaker 05:
He came forward this court, and this court had, in a 3-0 decision, said, no, this was a mistake.

[00:04:14] Speaker 05:
You were relying upon things that may not form the basis for forcing disclosure.

[00:04:20] Speaker 05:
Or at the very least, they don't counterbalance the compelling interests of the individual entity.

[00:04:27] Speaker 05:
This actually brings up a point that the intervenor EFF constantly makes, which I think, frankly, doesn't hold water.

[00:04:33] Speaker 05:
And it's the argument that Uniloc is reversing the presumption of confidentiality.

[00:04:37] Speaker 05:
I am telling you, we hold the burden of establishing that these documents may be filed under seal.

[00:04:44] Speaker 05:
If you look at our brief, the very first line of the section of law is, documents filed with the court are presumed to be accessible to the public, to allow the public to hold the courts accountable for their reasoning.

[00:04:57] Speaker 05:
Although they are presumed public, we can rebut that presumption by establishing compelling evidence, compelling interest.

[00:05:03] Speaker 05:
And we see that, for example, in the Microsoft Settlement Agreement.

[00:05:07] Speaker 05:
When we first came before Judge Allison, asking to seal these documents back in 2018, Microsoft said, no, nothing may be made public.

[00:05:15] Speaker 05:
Judge Alsop issued his ruling in 2018.

[00:05:18] Speaker 05:
He went back to Microsoft.

[00:05:20] Speaker 05:
And Microsoft, you know what?

[00:05:21] Speaker 05:
OK.

[00:05:22] Speaker 05:
You can release all of the information other than the licensing amount.

[00:05:26] Speaker 05:
Please keep that under seal.

[00:05:28] Speaker 05:
And the Assistant General Counsel of Microsoft submitted a sworn declaration.

[00:05:32] Speaker 05:
His declaration laid out in detail the harm that would befall Microsoft if it was made public.

[00:05:38] Speaker 05:
I'm not going to quote it at length here.

[00:05:39] Speaker 05:
It's in the public record.

[00:05:40] Speaker 05:
But the short of it is that Microsoft be put at a competitive disadvantage

[00:05:45] Speaker 05:
if it were forced to have this information put into the public due to information asymmetry.

[00:05:50] Speaker 05:
Every licensing executive would tell you information asymmetry is the most dangerous thing that can happen in a licensing negotiation.

[00:05:57] Speaker 05:
If the other side knows how much you've paid for licenses in the past and you don't know what they've accepted for payments, it's an imbalance and it can make it very difficult to negotiate.

[00:06:09] Speaker 05:
Now, we have to balance that real world and recognize in scores every single opinion out of the Northern District of California, other than from this one judge.

[00:06:18] Speaker 05:
We have to recognize that real world harm against the public's interest in this case.

[00:06:25] Speaker 03:
Well, you're arguing the issue.

[00:06:27] Speaker 03:
The issue has been decided by a district judge.

[00:06:31] Speaker 03:
And then the question is, abuse of discretion or error of law?

[00:06:36] Speaker 03:
Or failure, and I haven't heard you mention this,

[00:06:39] Speaker 03:
failure to follow our remand instruction?

[00:06:44] Speaker 05:
Yes, Your Honor.

[00:06:45] Speaker 05:
And I am saying that he made an abusive discretion in weighing these generalized public interests, on the one hand, and also saying that, for some reason, these individualized licenses are relevant, and we should be weighed against the compelling interests of the licensees in having their license as file under seal.

[00:07:03] Speaker 05:
To do so was, in two respects, a mistake of law.

[00:07:08] Speaker 05:
He made the mistake of law by weighing it against the generalized public interest.

[00:07:13] Speaker 05:
whatever interest the public might have in known licensing terms, that, under Apple v. Samsung, is not a basis on which to disclose individual licenses.

[00:07:24] Speaker 05:
Then in this case, we have, for example, again, Microsoft, which has expressed strong compelling interest in having its stockings filed under seal.

[00:07:31] Speaker 05:
And that was weighed by the district court, not as to the relevance of that one license, because that one license doesn't matter.

[00:07:38] Speaker 05:
Whether Microsoft paid Uniloc a peppercorn or $10 million doesn't matter.

[00:07:42] Speaker 05:
What matters is whether Uniloc earned a total of $20 million in the aggregate between April 1, 2016 and March 31, 2017.

[00:07:51] Speaker 05:
It didn't.

[00:07:53] Speaker 05:
But the individual license payments are not relevant to figuring that out.

[00:07:59] Speaker 05:
This example is borne out by the other 108 lines of licenses that we see in the Conformed Revenue Sharing and Note and Warrant Purchase Agreement at 732 to 734.

[00:08:09] Speaker 05:
It was a mistake of law.

[00:08:12] Speaker 05:
It was an abusive discretion.

[00:08:14] Speaker 05:
And again, I realize I keep on saying this, but every other judge, every single one of them, has recognized that in the electronic arts, in the Ninth Circuit says, this is truly sealed.

[00:08:26] Speaker 05:
The other document I want to address briefly.

[00:08:28] Speaker 03:
And so what's the relevance of every other judge having ruled differently?

[00:08:37] Speaker 05:
The relevance is that this is an abuse of discretion because it is a violation of law.

[00:08:44] Speaker 05:
Every one of those judges recognizes.

[00:08:46] Speaker 05:
In fact, Judge Alsop himself, if you look at the procedural history of this case,

[00:08:51] Speaker 05:
He initially rejected our request to file under seal.

[00:08:54] Speaker 05:
We went back, we retrenched 90% of the redactions.

[00:08:58] Speaker 05:
We filed a motion for reconsideration.

[00:08:59] Speaker 05:
He denied that, saying, no, patent licenses should be made public.

[00:09:06] Speaker 05:
Literally the next week, he issued another opinion in which he cited in re-electronic arts for the proposition that patent licenses should be filed under seal.

[00:09:16] Speaker 05:
And he sealed it in that case.

[00:09:20] Speaker 05:
And he did so with far less evidence than in our cases.

[00:09:24] Speaker 05:
If you look at all the declarations that he previously accepted, if you look at all the opinions, in each of those situations, you had a party that was similarly situated, or in some respects, worse situated than we are, or that the 109 licensees are.

[00:09:40] Speaker 05:
There is a vast amount of evidence in this case saying, this will hurt us in the real world.

[00:09:47] Speaker 05:
And it was an abuse of discretion.

[00:09:49] Speaker 05:
It was a mistake of law to say, well, the generalized public interest outweighs your individual interest in keeping this information under seal.

[00:09:59] Speaker 05:
That was the mistake of law.

[00:10:00] Speaker 05:
That was the abuse of discretion.

[00:10:03] Speaker 05:
That's with respect to the license information.

[00:10:06] Speaker 05:
Why was it a mistake of law?

[00:10:08] Speaker 05:
Because Henry Electronic Arts already forecloses this.

[00:10:11] Speaker 05:
Henry Electronic Arts said that this sort of information is clearly a trade secret and should be sealed.

[00:10:16] Speaker 05:
This has already been settled in the Ninth Circuit.

[00:10:18] Speaker 05:
This court recognized it much in Apple v. Samsung when this court quoted the language I began my discussion with.

[00:10:27] Speaker 00:
In his Freeman order, did the court consider whether or not the information was trade secret?

[00:10:31] Speaker 00:
Was that analysis performed?

[00:10:36] Speaker 05:
Yes and no.

[00:10:39] Speaker 05:
The district court below recognized that there was a vast array of evidence provided for him, but then he then discounted it for a number of reasons.

[00:10:47] Speaker 05:
For example, he said that it was hearsay and therefore he was going to ignore it.

[00:10:51] Speaker 05:
This ignores 13 declarations.

[00:10:54] Speaker 05:
It also ignores my declaration.

[00:10:56] Speaker 05:
It also ignores the fact that under the local rules, there is nothing that prohibits reliance on hearsay information.

[00:11:02] Speaker 05:
In fact, nobody, other than in this one case, nobody has found a situation where the Northern District of California has ever said, you can't use hearsay to establish a motion to file under seal.

[00:11:14] Speaker 05:
And if you look at our reply brief, we cite in no fewer than 13 instances where the district court, including the court on appeal,

[00:11:21] Speaker 05:
specifically relied on hearsay declarations from outside counsel.

[00:11:24] Speaker 02:
Well, they also mentioned that these were stale.

[00:11:27] Speaker 02:
These were from earlier on.

[00:11:29] Speaker 02:
No effort was made to update anything after the remand.

[00:11:34] Speaker 05:
They were stale, Your Honor.

[00:11:35] Speaker 05:
But, Your Honor, when this court remanded,

[00:11:38] Speaker 05:
It did so with specific instructions.

[00:11:40] Speaker 05:
This court said specifically that it was remanding to consider the materials that had already been put into the record.

[00:11:47] Speaker 05:
This court looked at the record.

[00:11:48] Speaker 05:
It was voluminous.

[00:11:48] Speaker 05:
It said, well, as to Unalak, sorry, you violated the local rules.

[00:11:52] Speaker 05:
You're out of luck.

[00:11:54] Speaker 05:
Fine.

[00:11:54] Speaker 05:
That was our mistake.

[00:11:56] Speaker 05:
But as the third parties, the district court did not weigh the evidence.

[00:12:00] Speaker 05:
And so it was remanded to consider that evidence.

[00:12:03] Speaker 05:
There was no inclination, there was no indication that we would need to go back to those third parties again and ask for more evidence again.

[00:12:11] Speaker 05:
If you look at the joint appendix of 503, you see the remand order from this court.

[00:12:16] Speaker 05:
The remand order said, there are a number of declarations already in the record.

[00:12:22] Speaker 05:
The district court did not appear to consider these, so we are remaining for that court to consider this information.

[00:12:30] Speaker 05:
The other document I'd like to bring up is the so-called Fortress Memorandum and that has slightly different issues.

[00:12:35] Speaker 05:
The third page lists 55 licenses and for the reasons I've already discussed, that licensing information we believe should be redacted.

[00:12:43] Speaker 05:
As to the first two pages, however, that has slightly different issues.

[00:12:46] Speaker 05:
Specifically, those pages lay out the analysis by Fortress of its investments in Uniloc and considers whether to provide more money, more investments, more loans to Uniloc.

[00:12:58] Speaker 05:
This is the classic sort of trade secret information that we see throughout every court, frankly, in this country.

[00:13:07] Speaker 05:
The argument for not filing this under seal was that it was not provided by the party, by Fortress.

[00:13:14] Speaker 05:
My firm represents Fortress.

[00:13:16] Speaker 05:
I represent Fortress.

[00:13:18] Speaker 05:
We reviewed those documents.

[00:13:19] Speaker 03:
That's irrelevant, though, isn't it?

[00:13:23] Speaker 05:
The basis for concluding that these documents shouldn't be filed under seal was that there was no declaration from the producing party.

[00:13:31] Speaker 05:
The Fortress memorandum was produced by Fortress.

[00:13:34] Speaker 05:
And again, it was produced by my firm on behalf of Fortress.

[00:13:37] Speaker 05:
And when we sought to seal that document in the 358 case, the court said, no, no.

[00:13:42] Speaker 05:
I understand this is a declaration from Mr. Jacobs.

[00:13:45] Speaker 05:
But it's not from a producing counsel.

[00:13:49] Speaker 05:
And therefore, I'm going to ignore it.

[00:13:50] Speaker 05:
And therefore, you didn't follow the rules.

[00:13:53] Speaker 03:
Were you acting as a fast witness?

[00:13:55] Speaker 05:
of Act of Witness, no more so than the declarants in all of those other cases, including the last 50 pages worth of the Joint Appendix, in which outside counsel stated the basis for filing documents under seal.

[00:14:09] Speaker 05:
That's how I did that.

[00:14:12] Speaker 05:
The court below knew that we represented quarters.

[00:14:16] Speaker 03:
You are into your rebuttal time.

[00:14:18] Speaker 03:
Oh.

[00:14:19] Speaker 03:
And so why don't you listen to Apple, and we'll save you two minutes.

[00:14:23] Speaker 05:
I appreciate it.

[00:14:24] Speaker 05:
Thank you, Your Honor.

[00:14:27] Speaker 03:
And I don't see Ms.

[00:14:29] Speaker 03:
Moss for EFF.

[00:14:31] Speaker 03:
Is that because you consider you're not a party and shouldn't be at the council table?

[00:14:40] Speaker 03:
Well, I think you should sit up here.

[00:14:50] Speaker 03:
You are, of course, not a party, but that issue is behind us.

[00:14:56] Speaker 03:
Mr. Winard.

[00:15:02] Speaker 04:
May it please the court?

[00:15:03] Speaker 04:
Doug Winard on behalf of Apple.

[00:15:06] Speaker 04:
Apple agrees that there was an abuse of discretion below.

[00:15:09] Speaker 04:
I think the clearest way we can see this is what the district court ordered to be unsealed versus the reasoning given in the opinion.

[00:15:16] Speaker 04:
The district court ordered unsealed a table listing 109 third party licensees.

[00:15:23] Speaker 04:
The only reasoning given was that the district court felt that the dates and dollar amounts went to, quote, the heart of the dispute.

[00:15:31] Speaker 04:
But even if we give full credit to the district court's statement, there's only about a third of those licenses that were actually relevant.

[00:15:38] Speaker 04:
As Councilor Unalak pointed out, the only relevant time frame for Apple's motion and the district court's resolution of it was from April 1, 2016,

[00:15:47] Speaker 04:
until March 31, 2017.

[00:15:48] Speaker 04:
So that's the only period of time that's going to be relevant.

[00:15:52] Speaker 04:
That only implicates about a third of those licenses.

[00:15:55] Speaker 04:
So the remaining two-thirds have absolutely no relevance to Apple's motion or to the district court's resolution of it.

[00:16:02] Speaker 04:
And yet the district court ordered all of that information unsealed.

[00:16:07] Speaker 04:
Likewise, the district court again said that dates and dollar amounts went to the heart of the dispute.

[00:16:12] Speaker 04:
It did not say the identities.

[00:16:15] Speaker 04:
But nevertheless, the district court

[00:16:17] Speaker 04:
in its ruling unsealed all of the material, including the identities of all 109 licensees.

[00:16:23] Speaker 04:
But there was no basis in the district court's opinion for that decision, except for legally improper basis.

[00:16:31] Speaker 04:
And those are the ones outlined at the beginning in appendix 33 and appendix 34, where the district court says patent licenses carry unique considerations.

[00:16:40] Speaker 04:
That's not part of Ninth Circuit Law, nor is it part of this decision in Apple v. Samsung applying Ninth Circuit Law.

[00:16:48] Speaker 04:
Patent licenses, just like any other type of license, are to be analyzed as, would the disclosure of this information cause competitive harm?

[00:16:55] Speaker 04:
Here we have numerous declarations, including from Microsoft and others, explaining that the disclosure of this information will cause information asymmetry.

[00:17:04] Speaker 04:
It will harm them in future negotiations with other patentees or other patent assertion entities who now have information

[00:17:11] Speaker 04:
about what Microsoft or these other third parties paid, that they wouldn't be able to get reciprocal information from that entity.

[00:17:18] Speaker 04:
So there is a clear competitive harm there.

[00:17:21] Speaker 04:
And if we balance that against the licenses that are outside that one-year window, where there's outside that one-year window, there is no public interest.

[00:17:29] Speaker 04:
The public has no reason or need to seek that information because it had absolutely

[00:17:36] Speaker 04:
no bearing on the calculation of the $14 million.

[00:17:39] Speaker 04:
That $14 million is looking at a one-year window.

[00:17:42] Speaker 04:
nor is the identity of any licensee relevant, because it doesn't matter who paid how much.

[00:17:48] Speaker 04:
All that mattered was the aggregate figure.

[00:17:50] Speaker 04:
So then we'd look at, OK, what about in that one-year window?

[00:17:54] Speaker 04:
What's the public's interest in that?

[00:17:56] Speaker 04:
And that interest remains de minimis, because the calculation of that $14 million was undisputed by the parties, taken as uncontested by the district court.

[00:18:07] Speaker 02:
So you're actually the appellant in this case, huh?

[00:18:11] Speaker 04:
We agree with you.

[00:18:12] Speaker 02:
You won this case and now you're arguing with the plaintiff.

[00:18:18] Speaker 04:
Apple is taking the same position it took in the prior appeal, which is that the third-party licensing information is sealable information.

[00:18:25] Speaker 02:
In the prior appeal, you didn't say much at all.

[00:18:28] Speaker 04:
So in the prior appeal, we defended the district court on the grounds of its application to local rules.

[00:18:34] Speaker 04:
In particular, Local Rule 7.79.5 regarding filings under seal and Local Rule 7.9 regarding motions for reconsideration.

[00:18:43] Speaker 04:
But we noted at the end of our briefing and at oral argument, and it shows up in footnote 9 of the court's prior opinion, that the table of information regarding third party licensees is sealable information.

[00:18:54] Speaker 04:
That is the type of trade secret information that the Ninth Circuit

[00:18:58] Speaker 04:
has held can be protected as a trade circuit.

[00:19:01] Speaker 04:
It provides a compelling reason to seal over and above what would normally be the presumption of the public's right of access.

[00:19:09] Speaker 04:
So yes, Your Honor, that is correct.

[00:19:11] Speaker 04:
We disagreed with Unilock at about 98%, 99%, which is why we defended the district court on those local rule applications.

[00:19:18] Speaker 04:
But we did agree with them on that one sliver, this third party information.

[00:19:22] Speaker 04:
That's the last piece left.

[00:19:24] Speaker 04:
Nothing else is at issue in this appeal.

[00:19:26] Speaker 04:
And on that third-party information, we agree with Unilock on this that the district court made an error by unsealing the entire table, including the identities of the licensees that had no relevance to Apple's motion or to the district court's resolution of it, as well as the unsealing of any information about licenses that were outside the one-year window that was actually pertinent to Apple's motion.

[00:19:50] Speaker 04:
But even within that window, Apple would still submit it as a first request that it should still remain under seal, because the public interest is still de minimis.

[00:19:59] Speaker 04:
As I was explaining, it's not contested.

[00:20:03] Speaker 04:
It wasn't a matter of factual dispute between the parties that the court had to resolve as to how much license revenue was generated.

[00:20:09] Speaker 04:
It was an uncontested fact.

[00:20:11] Speaker 04:
And there was a 30 v 6 witness, a court representative, who testified to the calculation.

[00:20:16] Speaker 04:
And that testimony is in the public record.

[00:20:18] Speaker 04:
So he explained, this is how much was generated over this period of time.

[00:20:22] Speaker 04:
So at that point, we have to have a stopping point at some point in terms of, oh, does the public get the right to ask if that witness did the calculation right?

[00:20:30] Speaker 04:
Or does the public have the right to look at all of the individual licenses?

[00:20:34] Speaker 02:
When we have faces with people like you and him,

[00:20:37] Speaker 02:
Opposite side, the public interest loses.

[00:20:40] Speaker 02:
You have no interest in the public interest.

[00:20:42] Speaker 04:
I understand that, Your Honor.

[00:20:43] Speaker 04:
I believe you have that.

[00:20:44] Speaker 02:
The Supreme Court has spoken very loudly about it.

[00:20:47] Speaker 02:
Certainly, Your Honor.

[00:20:48] Speaker 02:
I would say that... Although she didn't mention anything about the Supreme Court, especially the newspapers case.

[00:20:54] Speaker 04:
Certainly, Your Honor.

[00:20:55] Speaker 04:
Obviously, there is that issue when parties to a case have at least some converging interest in sealing material.

[00:21:01] Speaker 04:
I will say that in this case, we were not on unilocked sign for 99% of this.

[00:21:06] Speaker 01:
And so we did.

[00:21:08] Speaker 04:
We offer this last remaining information, but that's because it's implicating both third party licensing information, as well as Apple's own

[00:21:16] Speaker 04:
We've filed things under seal in this case.

[00:21:18] Speaker 04:
And we don't think that the district court's application of Ninth Circuit law was an appropriate application of that law.

[00:21:24] Speaker 04:
And we have our own interest in maintaining our materials under seal in this case and would not want to see a ruling that would allow further challenges to what we believe is properly under seal.

[00:21:36] Speaker 04:
If there are no further questions, Apple will see the remainder of its time.

[00:21:40] Speaker 03:
Thank you, counsel.

[00:21:50] Speaker 03:
Now, you are here not because you're a party and not because you filed an amicus brief indicating your interest that we have granted you a right to file.

[00:22:03] Speaker 03:
You're here because the district court was dissatisfied that no party before it was representing the position that he favored.

[00:22:12] Speaker 03:
Is that right?

[00:22:13] Speaker 01:
That's correct.

[00:22:16] Speaker 01:
I want to...

[00:22:19] Speaker 01:
We're here because the public has a powerful interest in this case.

[00:22:23] Speaker 01:
And as this court recognized, there's a strong presumption of public access to these records.

[00:22:29] Speaker 01:
There's one big difference since the last time we were here, which is that the district court has now dismissed the case and granted Apple's second motion.

[00:22:38] Speaker 01:
The only evidence in the record of the operative fact, of the fact that Fort Unalak didn't make its monetary goal, is the evidence in that licensing tape

[00:22:48] Speaker 01:
What counsel just referenced about expert testimony, that is the first I have heard of that.

[00:22:53] Speaker 01:
I have scrutinized the record.

[00:22:54] Speaker 01:
I have not seen any other evidence of the figure.

[00:22:58] Speaker 01:
And the district court, in its opinion, didn't cite to anything.

[00:23:01] Speaker 01:
And in the party's briefs, when they say the information is in the record, they either cite to the district court opinion, or in one case in Apple's brief, it cites to sealed material.

[00:23:10] Speaker 03:
Well, this case isn't moot.

[00:23:12] Speaker 03:
I haven't seen a motion by the parties to dismiss it.

[00:23:16] Speaker 01:
The underlying patent case was dismissed by the district court.

[00:23:21] Speaker 01:
And that standing decision, that dismissal, is not on appeal.

[00:23:24] Speaker 01:
The parties didn't challenge that.

[00:23:27] Speaker 03:
But the question of sealing the record is properly on appeal to us.

[00:23:32] Speaker 03:
Correct.

[00:23:34] Speaker 03:
OK.

[00:23:34] Speaker 03:
Now, why wasn't it an era of law for the district court to talk about a patent owner being a tenant on a

[00:23:46] Speaker 03:
public land, this plot of land didn't exist until a patent did.

[00:23:55] Speaker 03:
It created something new.

[00:24:00] Speaker 03:
The district court said the public has an interest in inspecting the valuation of the patent rights.

[00:24:07] Speaker 03:
The public has an interest to ensure that the procurement of a patent is proper, that it be free of fraud and misrepresentation.

[00:24:17] Speaker 03:
But where has there ever been a proper governing holding that the public has an interest in how much people license a patent for?

[00:24:29] Speaker 01:
I'd share some of your honor's misgivings about it.

[00:24:32] Speaker 01:
I think we need to be careful about real property analogies to intellectual property.

[00:24:36] Speaker 01:
But I think the party's characterization of that analysis is an erroneous reading of the district court's opinion.

[00:24:43] Speaker 01:
The first public interest that the district court identified is the public's interest in understanding the judicial process and in being able to look over the shoulders of the fact finder to make sure their interests are correct, that their decisions are correct.

[00:24:58] Speaker 01:
And then what the district court said was conclusive to its decision to uphold the strong presumption of access is the fact that what these court records show, those facts, go to the heart of the standing decision.

[00:25:11] Speaker 01:
In the hearing, it said these facts were highly relevant to my decision.

[00:25:14] Speaker 01:
That's what the district court explicitly said was conclusive.

[00:25:18] Speaker 01:
I believe the district court then, because of the arguments, some of which you've heard, that suggest a categorical or per se rule for stealing patent licenses,

[00:25:28] Speaker 01:
which is also not the case.

[00:25:35] Speaker 01:
that want the amounts of their licenses to be known, that admit them into the public record for damages evidence so that people know their rights are enforced and respected.

[00:25:44] Speaker 01:
There's no categorical rule of sealing, period.

[00:25:48] Speaker 01:
It is always a fact-specific inquiry.

[00:25:50] Speaker 01:
But there's also not a general or uniform expectation that this information shouldn't be public.

[00:25:57] Speaker 01:
And given the arguments presented about a per se rule of sealing patent licenses,

[00:26:03] Speaker 01:
I think the district court's language about the public interest is really secondary to the Supreme Court's language, which has repeatedly recognized that the public's interest in the patent system is paramount and understanding how patent owners use the courts.

[00:26:18] Speaker 03:
But not in the amount of royalties, the details of patent licenses.

[00:26:26] Speaker 03:
The Supreme Court has never stated there's a public interest in that, has it?

[00:26:30] Speaker 01:
I agree that it hasn't said there is a generalized public interest in each and every patent license.

[00:26:36] Speaker 01:
I think it turns on the facts of the case.

[00:26:39] Speaker 01:
And the Supreme Court, certainly in MedImmune and in Lear, has made decisions about patent licenses and talked about those licenses.

[00:26:46] Speaker 01:
And they weren't under seal.

[00:26:48] Speaker 01:
So I agree that the language of the district court's opinion, of course, this court is reviewing its substance of its judgment.

[00:26:55] Speaker 03:
But languages express reasoning.

[00:26:58] Speaker 03:
And reasoning provides the legal basis for a decision.

[00:27:04] Speaker 03:
And if the language shows that the reasoning was wrong, then the decision needs to be reversed.

[00:27:11] Speaker 01:
And I think the operative language is what the district court said was conclusive.

[00:27:15] Speaker 01:
What is conclusive is the fact that these facts go to the heart of the matter.

[00:27:20] Speaker 01:
That is the language that is conclusive, and that the district court, you don't have to take my word about what was highly relevant to the district court's decision or what was central to it.

[00:27:31] Speaker 00:
Counsel, do you agree with what Apple said in terms of the fact that outside that time frame, April 2016 to March 2017, would not be relevant to the disputed issue?

[00:27:43] Speaker 01:
Those arguments weren't before the court.

[00:27:45] Speaker 01:
And I can't see any of the entries on the license.

[00:27:50] Speaker 01:
None of those arguments were made about the time frame, and I have no idea if it's true.

[00:27:56] Speaker 01:
What I will say is that there are 109 entries on that table.

[00:27:59] Speaker 01:
For 78 of those entries, Uniloc provided either no evidence to support sealing or contradictory evidence.

[00:28:08] Speaker 01:
Two of those licensees explicitly consented to disclose the amounts and dates of their licenses, but Uniloc is still trying to seal them.

[00:28:17] Speaker 01:
So I don't know if of that third that are allegedly relevant, if that includes any of the licensees that submitted declarations, or if that includes the two who consented to disclosure.

[00:28:31] Speaker 01:
I can't see the dates, and so I can't attest to that, and certainly that wasn't

[00:28:37] Speaker 01:
an argument made below, I would also argue that in this case on the standing decision, which again isn't before this court because it wasn't appealed, Unilock argued first that there was no default, and then that if there was a default, it was cured.

[00:28:52] Speaker 01:
And I would suspect that the dates of the licenses could be very relevant to see whether those arguments were plausible.

[00:28:59] Speaker 01:
If Unalak was getting a peppercorn per license, then it might not be so plausible to think that Fortress considered no default or considered it cured.

[00:29:11] Speaker 01:
If Unalak was getting $5 million a license, including in the year before or two years before, it might then be quite plausible to think there was no meaningful default or that the contracting party would think it was cured.

[00:29:22] Speaker 00:
Well then, how about this?

[00:29:23] Speaker 00:
Do you agree that the public does not have an interest in licensing information that's not relevant to the dispute?

[00:29:28] Speaker 00:
So we don't have to give it a specific time frame.

[00:29:31] Speaker 00:
But do you agree that the public has no interest in that information?

[00:29:34] Speaker 01:
Well, the starting point is the public has an interest in what happens in the courts.

[00:29:39] Speaker 01:
There's a strong presumption of public interest and access to materials that are attached to a dispositive motion.

[00:29:46] Speaker 01:
So I think the public has a strong interest in knowing what information was before the court.

[00:29:51] Speaker 01:
If that information happens to be the dates and lump sum payments of licenses, then the public has an interest in knowing.

[00:29:59] Speaker 01:
And these arguments about what was relevant or not, the district court should at least get deference about what was relevant to their own decision making.

[00:30:08] Speaker 01:
And an important distinction, though Electronic Arts has talked about a lot, these are not royalty rates.

[00:30:14] Speaker 01:
These are lump sum payments.

[00:30:17] Speaker 01:
They do not say anything about the products to which they relate.

[00:30:20] Speaker 01:
They do not say anything about the patents to which they relate.

[00:30:23] Speaker 01:
These are lump sum payments.

[00:30:25] Speaker 01:
And so they do not show anything about the licensees' business.

[00:30:31] Speaker 01:
And presumably, that's why 76 of them were silent, not only when supposedly contacted in 2019, but after this court's ruling, and when two of the licensees

[00:30:43] Speaker 01:
affirmatively consented to the disclosure of the amounts that they paid and the dates.

[00:30:48] Speaker 01:
And there's no justification for keeping those under seal.

[00:30:52] Speaker 01:
It was not an abuse of discretion for the district court to refuse to seal information that the licensees consented to seal.

[00:31:00] Speaker 01:
And I want to also point out that in the district court's standing decision, it made clear that it was reversing itself.

[00:31:09] Speaker 01:
because it concluded that Uniloc had misrepresented facts in the first standing decision that led it to commit a clear error.

[00:31:18] Speaker 01:
None of the cases cited involved that fact pattern.

[00:31:21] Speaker 01:
It was not an abuse of discretion for the district court not to accept the assertions from Uniloc, from none of the parties for those 78 entries, when relying on those assertions had previously led the district court to commit clear error.

[00:31:39] Speaker 01:
And I want to emphasize that what was conclusive to the district court was the fact that the operative fact of the standing issue was, what did Unalak earn?

[00:31:55] Speaker 01:
How much did it make on its licenses?

[00:31:57] Speaker 01:
This is the record evidence of that amount.

[00:32:00] Speaker 01:
The parties could have filed a stipulation.

[00:32:03] Speaker 01:
They did not.

[00:32:04] Speaker 01:
Unalak could have provided other evidence in that second standing motion.

[00:32:08] Speaker 01:
It did not.

[00:32:09] Speaker 01:
It could have offered at any point to seal the names of the licensees and respect their privacy interests that way.

[00:32:17] Speaker 01:
Instead, it unsealed them in order to double down on an effort to seal the dates and amounts.

[00:32:24] Speaker 03:
So you're disavowing.

[00:32:28] Speaker 03:
so many of the statements which might look like statements of law about the patent system, but you're arguing affirmance on the basis of lack of abuse of discretion with respect to the specific data in this case relating to the $20 million.

[00:32:52] Speaker 01:
I'm disavowing my friend's reading of the district court opinion.

[00:32:55] Speaker 03:
Based on- Well, I was reading what the judge himself said.

[00:33:02] Speaker 01:
And I respectfully think right in light of the hearing transcript, I think that it comes across more clearly there how much of the district court's decision on standing was informed by

[00:33:13] Speaker 01:
the significance of these facts to their standing decision, and to the lack of compelling support that UNILOC provided.

[00:33:21] Speaker 01:
It's also worth noting that 78 licensees either consented or were silent.

[00:33:26] Speaker 01:
Of those that did submit or declarations or make statements, the vast majority are completely sealed, completely sealed.

[00:33:34] Speaker 01:
So the district court could not go into great depth about their contents because they were under seal.

[00:33:41] Speaker 01:
And I very much hope that we haven't seen those.

[00:33:44] Speaker 01:
And I very much hope that this court will scrutinize the entirely sealed material, because there is no precedent to support sealing material based on sealed material.

[00:33:55] Speaker 01:
And though I can't see what's in it, I find it hard to understand how the rationale for sealing, how that argument could require sealing itself.

[00:34:05] Speaker 01:
So to circle back, I believe that the district court's decision, what was conclusive, was the relevance of these facts to the standing decision.

[00:34:16] Speaker 01:
And I believe that the statements about the public's interest were not conclusive of its decision and that its ultimate judgment rested on it upholding the strong presumption of access based on the insufficient submissions and the significance of the facts to its merits decision on dismissal.

[00:34:36] Speaker 01:
Are there any further questions from the court?

[00:34:39] Speaker 03:
Apparently not.

[00:34:41] Speaker 03:
Thank you, counsel.

[00:34:43] Speaker 03:
Unilock has two minutes for a huddle.

[00:34:54] Speaker 05:
Thank you, Your Honors.

[00:34:55] Speaker 05:
Three very quick points.

[00:34:56] Speaker 05:
First, the district court's substantive opinion was appealed.

[00:35:01] Speaker 05:
At 2021-1572, thereafter, Appel and Unlock settled, and so the appeal was dismissed.

[00:35:07] Speaker 05:
But it was appealed.

[00:35:09] Speaker 05:
Second, in addition to appearing on behalf of Fortress, we specifically noted, for example, in the appendix at 888-3889, that we represented Fortress, and we informed the court of this before the hearing, before the order.

[00:35:26] Speaker 05:
So the court knew that my declaration was also on behalf of Fortress.

[00:35:30] Speaker 05:
The last thing I want to point out is my esteemed opposing counsel noted that the district court said that these facts go to the heart of his decision.

[00:35:40] Speaker 05:
He had originally said, no, Unilock has standing.

[00:35:43] Speaker 05:
And then in his second order, said 180 degree change, now Unilock doesn't have standing.

[00:35:47] Speaker 05:
And he said, this goes to the heart of the matter.

[00:35:50] Speaker 05:
The appendix of page 897, quote, our facts are uncontested, continuing.

[00:35:56] Speaker 05:
And discovery now reveals, this part's in italics, the Unilocks took no action to remedy any default, and no one even discussed what steps the parties might take to cure the default.

[00:36:07] Speaker 05:
So the new evidence that goes to the heart of the matter was there was no evidence.

[00:36:12] Speaker 05:
These documents, the 109 licenses, those were literally in the first exhibit filed in the first motion to seal.

[00:36:21] Speaker 05:
Your Honors, I began my presentation earlier today by quoting the Ninth Circuit's Inter-Electronic Arts.

[00:36:26] Speaker 05:
In that case, Judge Alsop, of all judges, should have known the import within the electronic arts.

[00:36:32] Speaker 05:
After all, when the Ninth Circuit reversed a district court for abusing discretion for failing to seal licensing information, the district judge on appeal in that case was Judge Alsop.

[00:36:44] Speaker 05:
The Ninth Circuit found in that case that he abused his discretion for failing to seal licensing information.

[00:36:50] Speaker 05:
For the reasons stated earlier today in our briefing, Unalak suggests that he should be reversed again.

[00:36:57] Speaker 05:
Thank you.

[00:36:58] Speaker 03:
Thank you, counsel.

[00:36:59] Speaker 03:
The case is submitted.