Patent Law Opinion Can't Be Sealed to Avoid Hurting Plaintiff's Future Similar Lawsuits

[UPDATE: I've added comments from plaintiff's lawyer.]

From Araujo v. E. Mishan & Sons, Inc., decided Thursday by Judge John Cronan (S.D.N.Y.):

Plaintiff William Araujo filed a motion to seal the Court's Opinion and Order construing two terms in one of the claims of his patent….

Under "the First Amendment and the common law," the public has a "presumption of access to judicial records." The Second Circuit has broadly defined a "judicial document" as an "item that is relevant to the performance of the judicial function and useful in the judicial process." A document is relevant to the performance of the judicial function "if it would reasonably have the tendency to influence a district court's ruling on a motion or in the exercise of its supervisory powers." The public has a presumption of access to these documents "so that the federal courts have a measure of accountability and so that the public may have confidence in the administration of justice." …

Plaintiff concedes that the Opinion is a judicial document, as it obviously is…. [A] strong presumption of public access attaches to the Opinion.

Plaintiff argues that presumption is weak because this case is a "civil controversy between private individuals" which has not sparked "interest on the part of news media." But this is also true of most civil litigation cases. The fact that Plaintiff's case has not received significant media attention does not detract from the Opinion's role in the Court's exercise of its Article III power. Further, there may be a public interest in the Opinion as its discussion of the claim construction legal standard and subsequent analysis could serve as helpful authority for litigants and judges in future cases….

Plaintiff has failed to meet his burden "to articulate a compelling countervailing rationale" for sealing the Opinion "against this strong presumption of public access." Plaintiff argues that he "should not be hampered by the record created in this Court" should he choose to file new infringement actions against other defendants, and expresses concern that the Opinion could "foreclose[ ]" the possibility of settlement "should the new defendants be [able to] access" it. But "[t]he natural desire of parties to shield prejudicial information contained in judicial records cannot be accommodated by courts without seriously undermining the tradition of an open judicial system." …

The opinion that plaintiff sought interpreted the claims in plaintiff's patent for "exercise devices intended to strengthen abdominal muscles by enabling a technique that resembles a reverse sit-up." Here's an excerpt from the plaintiff's argument, which the court rejected:

Following a Markman [patent claim construction] hearing, the Court rendered a Claim Construction Opinion and Order on June 29, 2022 under Document No. 93…. In light of that ruling, plaintiff William Araujo abandoned the pursuit of his Complaint…. [But] Plaintiff still has the option to pursue infringement actions against other defendants before the term of his patent expires ….

In any new infringement action plaintiff may file[,] the possibility of a settlement short of a Markman hearing is foreclosed should the new defendants be to able access Document No. 93. Needless to say settlement of litigation is a high priority for all Courts.

In his earlier case that was filed in the United States District Court for the District of New Jersey, plaintiff was able to receive a settlement before a Markman hearing. This will assuredly not happen again if Document No. 93 is not sealed. Plaintiff will then be faced with the unsavory options of collaterally attacking Document No. 93 or seeking its  collateral review on appeal.

Such choices will place unnecessary burdens on plaintiff, his adversaries and the District and Court of Appeals. It will not serve the best interests of all concerned….

Unsurprisingly, the court didn't view this as a sufficient basis for concealing its opinion from the public.

UPDATE: I had reached out to plaintiff's lawyer (Amirali Haidri) for comments, and he was kind enough to respond:

In a nutshell, we had encountered a Motion to Dismiss that was denied by Magistrate Judge Sarah Netburn.  Her Honor also held that photographs were not necessary in our pleadings and oppositions.  This ruling was precedential and received a published commentary from members of the bar.

The Markman ruling by U.S.D.J. John P. Cronan was therefore a surprise.  The client did not wish to pursue the matter further including an appeal.

Accordingly, we filed a motion to seal to ensure that the Markman ruling would not haunt us in future litigation.  We may now have to collaterally attack it in future litigation which is not the best course of action.

At page 3 of the Order, Judge Cronan writes that his "…analysis could serve as helpful legal authority for litigants and judges in future cases."

While true, I question what mindset this sentence represents.

I followed up with,

[Y]ou mention that the Markman ruling was a surprise—I assume that's as to the substance of the ruling, yes?  I take it that it wasn't a surprise that the court would make some ruling as to claim construction, given the February 2022 Markman hearing, right?

More broadly, generally speaking court decisions are public, precisely so the public does understand what judges are doing (whether correctly or not); and, as I understand it, the possible collateral estoppel consequences of a decision—or even just its value as persuasive precedent—are viewed as positive features of our legal system, rather than defects.  Am I missing something here?

Mr. Haidri in turn responded:

The Markman ruling was a surprise as we believed that we were on a sound footing under CAFC precedents and the MPEP.

We sought to seal the ruling because the client did not authorize an appeal.

I agree that justice must not only be done but be seen to be done to ensure institutional integrity.  Collateral estoppel is a form of stare decisis and is in the interests of judicial economy.  There is precedential value to rulings as well, as concerns other parties.

I much appreciate his willingness to comment on the matter, and I'm glad to have had a chance to pass along his comments to our readers.

Comments

[apedad]

Good to see a court get it right without a kick in the butt from Prof. Volokh (and team).

[Bruce Hayden]

Essentially, they are saying that just because they lost in the Markman (patent) claim construction phase in one suit, they shouldn’t be tied to that in another case. Not quite issue preclusion, nor (litigation) claim preclusion, but close, and the real target of their attempt at secrecy is other courts. They are trying for multiple bites at the Apple, and this court saw through that.

[David Nieporent]

Wait, he thinks “I want to avoid res judicata” is an argument for sealing?

[Bored Lawyer]

I chuckled at that. I guess he is following the saying, “When life gives you lemons, make lemonade.”

[Snorkle]

The economically efficient thing to do would be to cut the judge in on future suits in return for creating an asymmetrical information environment.

Thankfully, the economic analysis of law hasn’t quite reached that point. Yet.

Some guy named Gary stroked his nonexistent beard.

[ReaderY]

The judge here should have said the plaintiff has a lot of chutzpah, or words to that effect. The reason for publishing opinions is different from, and stronger than, the reason for publishing supporting documents. The main reason isn’t that the people, as the courts’ masters and sovereigns, need to know what judges are doing so they can manage them. It’s more that the people, as the courts’ subjects, need to know what the law is and what the judges want of them so they can manage their own affairs accordingly.

The losing litigant’s wish to pretend to other parties that his case never happened is as good an example of why opinions need to be public, to prevent exactly this sort of hoodwinking. The nerve.

All rulings a

[John F. Carr]

I think the public’s right to know is greater in a dispute over a special privilege granted by the government, compared to ordinary property.

[Krayt]

Further, there may be a public interest in the Opinion as its discussion of the claim construction legal standard and subsequent analysis could serve as helpful authority for litigants and judges in future cases….

While cases may be desirable to try as a self-contained unit severed from others, the public also has an interest in detecting serial lawsuits. They may be valid one and all. Or maybe not, and it’s something for legislation to address.

[Bruce Hayden]

Serial patent infringement lawsuits are probably the norm, instead of the exception. The early lawsuits fund the later ones, so you usually go after easier targets first. Early on, you prefer settlements anyway, since for the most part, if the defendant proves that the patent claims are invalid, your patent enforcement plan is over. Sometimes, you can survive a verdict of non infringement, because the infringing devices may be different enough for different defendants. But here, it is likely that the Markman hearing interpreted the claims narrow enough that the devices from other potential infringers would likely also not infringe – and hence why the plaintiff here wanted so badly to hide the Markman hearing results.

[Andrew Dhuey]

How brazen to try to keep the claim construction order under seal. There is a very strong public interest in seeing how the claims are construed so as to avoid infringing them. Also, potential licensees should be able to see the construction to decide whether to take a license, and to determine how much they might be willing to pay for one.

[kotodama]

Sort of an interesting plaintiff. It seems to be this guy who is active in Edison, NJ politics including multiple runs for School Board, as well as making an ultra-longshot bid for NJ Gov. in 2013.

https://ballotpedia.org/William_Araujo

As to the merits of the case, the court’s decision is plainly correct. It also seems to me plaintiff’s argument fails on its own terms. Other potential defendants’ knowledge of the claim construction wouldn’t prevent settlement from happening per se—it would just prevent it from happening on plaintiff’s preferred terms. But those aren’t the same thing.

Finally, the statement from plaintiff’s argument “Plaintiff still has the option to pursue infringement actions against other defendants before the term of his patent expires” isn’t quite correct. Patents have a 6-year lookback window for damages. So technically plaintiff could be suing parties for up to 6 years post-expiration.

I took the liberty of sharing this case/post with the folks over at Patently-O.

[Andrew Dhuey]

Excellent points. Count the several independent reasons why sealing the claim construction order is not a serious suggestion.

[DewbieDewbieDoo]

No you don’t get to seal your unfavorable construction on Markman. Something tells me Plaintiff’s attorney isn’t a patent attorney or too well versed in patent suits (I add the latter because one of the best patent litigators I know is a philosophy major UG).

But no, you don’t get to seal your Markman. If you think it’s wrong, appeal it. It’s not as if the Fed.Cir. isn’t basically a roll-yer-dice, Winsome-Lewsome type gambling house for claims construction reversals, depending on the panel drawn.

[Bored Lawyer]

” It’s not as if the Fed.Cir. isn’t basically a roll-yer-dice, Winsome-Lewsome type gambling house for claims construction reversals, depending on the panel drawn.”

I sometimes think it would be better if we replaced some federal judges with a monkey flipping a coin. Would sure be cheaper.