An important issue to many practitioners whose clients have confidential or trade secret information is the ability to protect that information from public disclosure. Several weeks ago Congress enhanced the protections available for trade secrets by passing the Defendant Trade Secrets Act. But when confidential information, including trade secrets, becomes an issue in court proceedings, the parties and the court have to balance the owners' interest in protecting that confidential information against the public's interest in open trials - an example being Judge Craven's recent opinion in favor of an intervenor that I posted on a couple of weeks ago.
Relevant to that second issue is a new standing order entered Wednesday by U.S. District Judges Rodney Gilstrap and Trey Schroeder and applicable to their shares of the Marshall, Texarkana, and Tyler dockets, which encompasses most of the patent cases filed in the district. The order addresses the protection of confidential information to be presented to the Court during motion and trial practice, and provides a consistent and uniform practice for minimizing disruption during such practice. It provides:
- Requests to seal or otherwise protect certain information of a confidential and/or proprietary nature from public disclosure during a hearing or trial should be made before the public disclosure of the information.
- Any such request must demonstrate: a) that the information sought to be protected is of such a sensitive nature that its disclosure creates a risk of harm that outweighs the strong presumption in favor of public access to judicial proceedings; and b) that the parties have met and conferred in good faith concerning the manner in which the sensitive information will be presented at the hearing or at trial, with the goal of minimizing the need to seal the record and the courtroom.
- Except for requests to redact information referenced in Fed. R. Civ. P. 5.2(a), requests to seal or protect information after its public disclosure at a hearing or trial must, in addition to the preceding requirements, show good cause why the motion was not made in advance of the disclosure.
The order applies to all pending cases as well as cases which may be assigned to the judges in the future.
Accompanying the order is a useful commentary that sets forth the basis for the Court's reference to a "strong presumption in favor of public access to judicial proceedings," including citations to the U.S. Supreme Court, and the Fifth and Federal Circuits. "The U.S. Supreme Court has emphasized the societal importance of open trials," the Court notes, "writing that they 'assure the public that procedural rights are respected, and that justice is afforded equally' and cautioning that closed trials 'breed suspicion of prejudice and arbitrariness, which in turn spawns disrespect for law.' See Richmond Newspapers, Inc. v. Virginia, 448 U.S. 555, 595 (1980)."
The commentary recites the history of redaction rules locally, focusing on the 2008 enactment of CV-5.2, and the resulting influx of post-hearing requests to redact or "seal" confidential information other than the personal identifiers set out in Fed. R. Civ. P. 5.2. It then states that the new rule "is based upon and codifies the existing case law which balances the interests of parties seeking to protect confidential information against the strong presumption in favor of a common law right of public access to court proceedings noted above," and that it does so by providing guidance as to when such requests should be made, and what standards apply to such requests.
1. When Should the Request Be Made?
The standing order makes clear that requests to seal or otherwise protect information from public disclosure during a hearing or trial should be made before the public disclosure of the information. This avoids the current problem it identifies of parties "mistakenly assuming that redaction and sealing requests can be made after the fact, as is the case for requests to redact information referenced in Fed. R. Civ. P. 5.2(a)." This timing also gives parties the maximum opportunity to work out sealing and redaction issues by agreement, using alternative means of presentation (redactions of numbers or dollar amounts or party names, or restrictions on use of information on slides are some common methods).
Requests to seal or protect information after its public disclosure at a hearing or trial are not prohibited under the order, but must, in addition to the normal requirements, show "good cause" why the motion was not made in advance of the disclosure. "Failing a clear showing of good cause," the commentary states, "such requests should be denied."
2. What Are the Standards for Sealing/Redaction?
The standards for sealing and redaction are well-established, as noted above, and the above standing order makes no substantive change to them, but instead simply brings them to the parties' attention. Again, the latter requirement gives the parties and the Court the ability to utilize alternative methods of presentation to avoid unnecessary sealing of the courtroom, and redactions to the transcript, as well as opportunities to minimize the inherent courtroom disruptions that the sealing process includes.