Teradata Corporation v. SAP SE

Background

Teradata Corporation, Teradata US, Inc., and Teradata Operations, Inc. moved to file under seal exhibits to a joint letter brief. SAP SE, SAP of America, Inc., and SAP Labs, LLC filed a responsive declaration withdrawing some of SAP’s confidentiality assertions while supporting the sealing of some material.

Teradata initially sought to seal much of the material based only on SAP’s confidentiality designations. SAP withdrew those designations in its response. The remaining material consisted of portions of Exhibits 6, 15, and 17. Teradata argued that public disclosure could reveal confidential commercial information, harm its competitive standing, and negatively affect its relationships with customers, potential customers, partners, or other parties. SAP sought to seal portions of Exhibits 6 and 15, arguing that they contained Teradata counsel’s unproven allegations about trade secrets, misappropriation, and employees’ intentions.

Legal standard

The court explained that documents filed in a federal civil case generally require “compelling reasons” for sealing rather than placing them in the public record. A lower “good cause” standard may apply to confidential discovery documents filed with a motion that is not more than tangentially related to the underlying claims. The court found that the good-cause standard was appropriate because the material concerned a discovery-related motion.

Ruling

After reviewing the material, the court found that counsel for both sides accused the opposing side’s employees of stealing or misusing trade secrets and other confidential information. The court stated that the confidential information itself was not included in the letters. It also stated that unproven allegations are routinely disclosed in litigation and that neither party cited authority supporting the sealing of such allegations in comparable circumstances.

Judge Spero denied Teradata’s administrative motion to file under seal in its entirety. The court ordered Teradata to file all of the documents at issue in the public record no later than February 1, 2021. The court noted that it did not decide whether the outcome might differ if the parties had sought to seal particular communications between counsel intended to remain confidential.