Blockchain Innovation, LLC v. Franklin Resources, Inc.

Background

The order addresses four motions to seal filed in connection with Blockchain Innovation, LLC’s motion to strike improper expert rebuttal opinions. Blockchain Innovation filed one motion to seal and two requests asking the court to decide whether materials designated confidential by defendants should be sealed. The defendants filed a separate request concerning materials designated confidential by Blockchain Innovation.

The court applied the “good cause” standard for sealing materials attached to a nondispositive motion. That standard begins with a strong presumption that court records should be available to the public. The party seeking sealing must make a particularized showing that disclosure would cause specific prejudice or harm. The court also applied Northern District of California Local Rule 79-5, which requires the designating party to identify the interests supporting secrecy, the injury from disclosure, and why a less restrictive alternative would not be sufficient.

Rulings on Blockchain Innovation’s Motions

Blockchain Innovation’s first motion sought to seal portions of expert reports and related exhibits containing descriptions of its alleged trade secrets. The defendants disputed whether those materials involved legally protectable trade secrets and argued that Blockchain Innovation had not shown it was an operating entity or had used the alleged trade secrets. The defendants did not oppose the sealing motion, while reserving their right to contest the merits of Blockchain Innovation’s trade-secret claims. The court stated that the sealing motion was not the proper proceeding to decide whether the alleged trade secrets were legally protectable. It found that Blockchain Innovation made the required showing of specific harm and granted that motion in full.

Blockchain Innovation’s other motions concerned materials designated “Highly Confidential – Attorney’s Eyes Only” by Roger Bayston and by Franklin Resources, Inc. doing business as Franklin Templeton, FT FinTech Holdings, LLC, Franklin Templeton Companies, LLC, and Jennifer Johnson. The defendants sought sealing for commercially sensitive, proprietary, technical, business-strategy, corporate-decisionmaking, budgeting, financial, source-code, and personal-contact information.

The court granted Blockchain Innovation’s requests as to Exhibits 1–4, 8, 11, and 13. It denied the requests as to the redacted version of Blockchain Innovation’s motion to strike because Blockchain Innovation stated that it did not believe the motion itself contained confidential information. The court also denied the requests as to Exhibit 9, finding that neither side had shown good cause to seal the deposition excerpts of Dr. Stephen Melvin. Blockchain Innovation was ordered to file the unredacted motion to strike and Exhibit 9 in the public record no sooner than three days and no later than seven days after the order.

Ruling on the Defendants’ Motion

The defendants asked the court to decide whether excerpts from Nigel Jones’s expert report should be filed under seal because Blockchain Innovation had designated the report confidential. Blockchain Innovation requested sealing only for portions of page 4 that described aspects of its alleged trade secrets. The court found that Blockchain Innovation made the required showing of specific harm and granted the defendants’ motion as to the highlighted portions of page 4. It denied the motion as to the remainder of the exhibit. The unredacted exhibit already filed with the declaration was ordered to remain under seal, and the court found that no further filing was required.

Disposition

The court stated that the parties’ motions were “GRANTED IN PART and DENIED IN PART” overall. Specifically, Blockchain Innovation’s motion at ECF No. 264 was granted in full; its motions at ECF Nos. 265 and 266 were granted as to Exhibits 1–4, 8, 11, and 13 and denied as to the motion to strike and Exhibit 9; and the defendants’ motion at ECF No. 281 was granted as to the highlighted portions on page 4 of Nigel Jones’s report and denied as to the remainder of the exhibit. Judge Thomas S. Hixson signed the order as a United States Magistrate Judge.