Pennsylvania Judge Won’t Seal Slideshows, Affidavit In $1.1 Billion Patent Case

by Tara Arick on April 3, 2013 · 0 comments

in Patent Law

- From LexisNexis® Mealey’s™ Daily Legal News.

Efforts by Marvell Technology Group Ltd. to seal demonstrative slides shown during a 2012 patent infringement trial that ended in a $ 1.1 billion award were unsuccessful on March 29, when a Pennsylvania federal judge ruled that the documents are subject to a common-law presumption of public access (Carnegie Mellon University v. Marvell Technology Group Ltd., No. 09-290, W.D. Pa.).

U.S. Judge Nora Barry Fischer of the Western District of Pennsylvania also refused to seal an already-redacted affidavit by Marvell CEO Dr. Sehat Sutardja, which spoke to Marvell’s post-trial motion on the question of laches.

Disk Drive Circuits

At issue in the dispute are plaintiff Carnegie Mellon University’s (CMU’s) U.S. patent Nos.

6,483,180 and 6,201,839. Both patents relate to systems and methods developed by a CMU professor and former doctoral student. According to previous rulings by Judge Fischer, Marvell’s business model revolves around an expensive sales cycle for read channel chips, during which the defendant invests “significant resources with each potential customer without any assurance of sales to that customer.” When a customer opts to go into production with Marvell, the transaction is considered a “design win” – a situation described by the judge as a “winner-take-all affair,” whereby the winner becomes the exclusive supplier for the customer’s specific hard drive or generation of hard drives.

In filing suit, CMU alleged that Marvell infringed the ’180 and ’839 patents through its technology for hard disk drive circuits that read data from high-speed magnetic disks. Agreeing, jurors in December answered “yes” to a variety of questions posed, including “has CMU proven by a preponderance of the evidence that Marvell’s MNP-Type chips infringe Claim 4 of the ’839 Patent?” and “has CMU proven by a preponderance of the evidence that Marvell has induced at least one of its customers or an end user to infringe Claim 2 of the ’180 Patent in the United States” with the MNP-Type chips and a related product, the “NLD-Type” chips? With regard to validity, the jurors rejected Marvell’s claim that the patents in suit are invalid as obvious or anticipated by prior art.

Additionally, the jury deemed Marvell’s infringement willful and found that it failed to present an “objectively reasonable” defense to CMU’s complaint. Jurors awarded CMU $ 1,169,140,271 in damages.

In the instant motion, Marvell sought to seal three categories of documents – demonstrative slides shown to the jury, demonstrative slides not shown to the jury and the affidavit of Sutardja. According to the defendant, the documents contain confidential sales data, trade secrets and sensitive financial information.

Open Proceeding

Denying the request, Judge Fischer noted that “most of the slides requested to be sealed were shown at trial, are either part of witnesses’ testimony, referenced in closing arguments or used as evidence offered by Marvell.” Furthermore, because they were shown publicly, Marvell cannot now claim that the information referenced in the slides is a secret.

“Members of the press, attorneys from both parties, witnesses, jury consultants, shadow jurors, and numerous interested bystanders, including judges, law clerks, and business lawyers, as well as local patent practitioners, who attended all or part of this trial, were free to see these slides, listen to the relevant testimony, and record any and all information contained therein,” Judge Fischer said.

“As this was an open proceeding, the public maintains its right to secure knowledge of what occurred there, and it would be inconsistent with Third Circuit precedent to seal the materials discussed at such an open proceeding. Even if the materials were not shown for the jury’s consideration, the slides remain part of the judicial trial record. The Court made rulings based on same. Accordingly, there is a strong presumption in favor of public access to all of the slides that Marvell seeks to seal,” the judge added.

No Compelling Reason

Because the defendant is unable to establish “compelling” reasons to seal, pursuant to Poliquin v. Garden Way Inc. (989 F.2d 527, 533 [1st Cir. 1993]), the slides should remain part of the public judicial record, with no restriction on their future use, according to Judge Fischer. Furthermore, the sizable verdict has “garnered extensive public interest,” and the financial information Marvell seeks to seal is “essential to understanding the jury calculation of damages,” the judge added.

Finally, Judge Fischer addressed Marvell’s request to seal the affidavit of Sutardja. Because Marvell chose to file the affidavit in redacted form, “the court will not now consider completely sealing the document,” the judge held.

CMU is represented by Daniel H. Royalty of K&L Gates in Seattle. David C. Radulescu of Quinn, Emanuel, Urquhart & Sullivan in New York represents Marvell.

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