Opinion
Civil Action No. 21-15
03-10-2021
INVENTION SUBMISSION CORPORATION, d/b/a INVENTHELP and ROBERT J. SUSA, an individual, Plaintiffs, v. TAYLOR MACK ENTERPRISES, INC. and ZULAN BERRY, an individual, Defendants.
MEMORANDUM OPINION
I. BACKGROUND
Presently before the Court is Plaintiffs' Motion for Leave of Court to File Under Seal Complaint, Exhibit B to the Complaint, and Brief in Support of Motion for Preliminary Injunction (Doc. No. 1). Plaintiffs filed this Motion contemporaneously with the filing of redacted versions of their Complaint (Doc. No. 2), Motion for Preliminary Injunction (Doc. No. 4), and Brief in Support of Motion for Preliminary Injunction. (Doc. No. 5). Pursuant to the Court's February 5, 2021 Order, Plaintiffs filed a Supplemental Brief in Further Support of their Motion for Leave of Court to File Under Seal (Doc. No. 19) and Defendants filed a Response thereto. (Doc. No. 21). Furthermore, Plaintiffs supplied the Court with unredacted copies of each of the filings at issue (Doc. Nos. 2, 5), and the Court has conducted an in camera inspection of those unredacted documents. Plaintiffs' Motion is now ripe for decision. For reasons explained below, the Motion will be granted in part and denied in part.
The Complaint asserts claims for misappropriation of trade secrets under the Defend Trade Secrets Act and Pennsylvania Uniform Trade Secrets Act, breach of contract, and unfair competition.
As alleged in the redacted Complaint, Plaintiffs invited Defendant Berry and other select sales professionals to a private meeting in November 2019 at which time Plaintiff Susa revealed a new line of services Plaintiffs intended to offer through a new invention services platform, along with detailed and specific plans relating to marketing and business strategies. (Doc. No. 2, ¶¶ 9, 31, 32). At that meeting, Plaintiff Susa provided Defendant Berry (and the other attendees) with copies of Exhibit B to the Complaint (which is a printed-out PowerPoint presentation) and other unspecified written materials regarding Plaintiffs' proprietary new business model. (Id., ¶¶ 34, 35). Plaintiffs further allege that Defendants breached the parties' Regional Sales Director ("RSD") Agreement, (see Docket No. 2-1), and misappropriated the proprietary pricing, marketing, and business strategies contained in Exhibit B and presented at the meeting by using that information to create their own competing enterprise.
Plaintiffs' instant Motion seeks to seal from public access Exhibit B, (Docket No, 2-2), and certain specified averments contained in the Complaint and Brief in Support of their Motion for Preliminary Injunction because they contend those judicial records contain trade secrets and other proprietary and confidential information regarding the "sale and marketing of innovative new product and service offerings. . . ." (Doc. Nos. 1, ¶ 12; 19 at 5). Plaintiffs further contend that this "confidential marketing and business plan information" reflects the types of records that courts routinely seal, and that public disclosure of this information would harm their competitive standing in the marketplace, handicap their ability to compete by divulging confidential details as to pricing and marketing strategy, provide competitors an advantage when seeking to sell their products and services, and cause them defined and serious injury if released to the public. (Doc. Nos. 1, ¶¶ 3- 5, 10-11; 19 at 5-6). While Defendants do not contest the sealing of Exhibit B and related averments, they do not concede that these filings contain protected trade secrets. (See generally Doc. No. 21).
II. APPLICABLE STANDARDS AND GENERAL FINDINGS
The public has a right to access certain judicial records and proceedings pursuant to common law and the First Amendment to the United States Constitution. See In re Avandia Mktg., Sales Practices & Prods. Liab. Litig., 924 F.3d 662, 672 (3d Cir. 2019). The public's common law right to access judicial records (i.e., documents filed with the court and documents that are incorporated in the court's adjudicatory proceedings) is presumed. Id. at 670 (citing Goldstein v. Forbes (In re Cendant Corp.), 260 F.3d 183, 192-93 (3d Cir. 2001)). This common law right of access "promotes public confidence in the judicial system"; "diminishes possibilities for injustice, incompetence, perjury, and fraud"; and "provide[s] the public with a more complete understanding of the judicial system and a better perception of its fairness." Id. at 677 (quoting Littlejohn v. Bic Corp., 851 F.2d 673, 678 (3d Cir. 1988)).
However, this "common law right of access is 'not absolute.'" Avandia, 924 F.3d at 672 (quoting Bank of Am. Nat'l Trust & Sav. Ass'n v. Hotel Rittenhouse Assocs., 800 F.2d 339, 344 (3d Cir. 1986)). While the kinds of information courts protect from disclosure is narrow, courts do protect from disclosure "[d]ocuments containing trade secrets or other confidential business information." Leucadia, Inc. v. Applied Extrusion Techs., Inc., 998 F.2d 157, 166 (3d Cir. 1993). "[A]n interest in safeguarding a trade secret may overcome a presumption of openness." Avandia, 924 F.3d at 673 (quoting Publicker Indus., Inc. v. Cohen, 733 F.2d 1059, 1073 (3d Cir. 1984)); see also Cutsforth, Inc. v. Lemm Liquidating Co., LLC, Civ. No. 17-1025, 2020 WL 772442 at *2-3 (W.D. Pa. Feb. 18, 2020) (sealing from public access trade secrets and other confidential information that "derives independent economic value from not being generally known by others who can obtain economic value from its disclosure"). Indeed, "courts may permissibly seal judicial records 'where they are sources of business information that might harm a litigant's competitive standing.'" Avandia, 924 F.3d at 679 (quoting Republic of Philippines v. Westinghouse Elec. Corp., 949 F.2d 653, 662 (3d Cir. 1991)).
The party seeking to seal any part of a judicial record bears the burden of showing that "the material is the kind of information that courts will protect" and that "disclosure will work a clearly defined and serious injury to the party seeking closure." Mine Safety Appliances Co. v. North River Ins. Co., 73 F. Supp. 3d 544, 560 (W.D. Pa. 2014) (citations omitted). The party seeking closure must show "that the interest in secrecy outweighs the presumption." Id. (quoting Bank of Am., 800 F.2d at 344). In doing so, the party must establish that "the material [sought to be sealed] is the kind of information that courts will protect and that disclosure will work a clearly defined and serious injury to the party seeking closure." Id. (quoting Miller v. Indiana Hosp., 16 F.3d 549, 551 (3d Cir. 1994)). Moreover, the injury must be shown with specificity. Id. (citing Publicker, 733 F.2d at 1071). "Broad allegations of harm, bereft of specific examples or articulated reasoning, are insufficient." Id. (quoting In re Cendant Corp., 260 F.3d at 194).
When deciding to seal judicial records, the district court must articulate "compelling, countervailing interests to be protected" through specific findings on the record concerning the effects of disclosure. Avandia, 924 F.3d at 672, 678. In doing so, a document-by-document review must be conducted to determine if "the strong presumption of openness can be overcome by the secrecy interests of private litigants." Id. at 673 (quoting Leucadia, 998 F.2d at 167). The district court must also "provide an opportunity for interested third parties to be heard." Id. at 672-73, 678 (citation omitted). Avandia further instructs this Court to consider whether the First Amendment right of public access attaches even if any materials at issue are permissibly sealed pursuant to the common law right of access. Id. at 673, 680.
An analysis for preserving the confidentiality of discovery materials through a protective order under Federal Rule of Civil Procedure 26 is conducted using the Pansy factors. See Pansy v. Borough of Stroudsburg, 23 F.3d 772 (3d Cir. 1994); Glenmede Trust Co. v. Thompson, 56 F.3d 476, 483 (3d Cir. 1995); see also Avandia, 924 F.3d at 671. Some of the Pansy factors may provide guidance for a common law right of access analysis, but the Pansy factors do not displace the common law standard. Avandia, 924 F.3d at 676. The Pansy factors are as follows: "1. whether disclosure will violate any privacy interests; 2. whether the information is being sought for a legitimate purpose or for an improper purpose; 3. whether disclosure of the information will cause a party embarrassment; 4. whether confidentiality is being sought over information important to public health and safety; 5. whether the sharing of information among litigants will promote fairness and efficiency; 6. whether a party benefitting from the order of confidentiality is a public entity or official; and 7. whether the case involves issues important to the public." Id. at 671. However, some of the Pansy factors, including factors two and three, are inconsistent with the standard of the common law right of access. Id. at 676-77.
Here, the Court first examines Exhibit B and notes that this document contains proprietary information concerning Plaintiffs' new invention development service (including sample renderings), along with marketing and business strategies and related pricing and compensation structures. Based upon the limited record before the Court at this preliminary stage of the litigation, and based upon the individualized analysis of each proposed redaction or seal request as specified infra, the Court finds that Exhibit B and certain averments contained in the Complaint and Brief contain the type of information that derives independent economic value from not being generally known by others who can obtain economic value from its disclosure. The Court further finds that if these particular pieces of information were to be released to the public it would materially harm Plaintiffs' competitive standing in the invention services industry and would give their competitors an advantage when seeking to sell their products and services. Plaintiffs' Motion and contemporaneously filed Complaint also supports a finding that Exhibit B had been subject to efforts that are reasonable under the circumstances to maintain its secrecy because Plaintiffs shared it with Defendants and others who were signatories to an RSD Agreement containing confidentiality and non-disclosure provisions. The Court finds that Plaintiffs have a "compelling, countervailing interest [in the information contained in Exhibit B] to be protected." Avandia, 924 F.3d at 672. Accordingly, the Court finds that Plaintiffs' request to seal Exhibit B and to redact certain averments in the Complaint and Brief meets the applicable common law standard for doing so.
At this preliminary juncture and with the limited record before it, the Court has not yet discerned whether these materials constitute trade secrets within the meaning of the Defend Trade Secrets Act, 18 U.S.C. § 1836 et seq., or the Pennsylvania Uniform Trade Secrets Act, 12 Pa. C.S.A. § 5301 et seq. Such determination is not necessary because the Court may seal proprietary or otherwise confidential material regardless of whether such material constitutes a trade secret. See Avandia, 924 F.3d at 679 (observing that "courts may permissibly seal judicial records where they are sources of business information that might harm a litigant's competitive standing") (internal quotation marks and citation omitted).
The Court must now determine whether this information should also remain sealed under the First Amendment right of access. When the First Amendment right attaches, "[a]ny restriction on the right of public access is evaluated under strict scrutiny" and a party may only rebut the presumption in favor of access by "demonstrate[ing] an overriding interest [in excluding the public] based on findings that closure is essential to preserve higher values and is narrowly tailored to serve that interest." Avandia, 924 F.3d at 673 (citation omitted). The party seeking to seal the information, Plaintiffs here, "bears the burden of showing that the material is the kind of information that courts will protect and that there is good cause for the order to issue." Publicker, 733 F.2d at 1071.
Again, the record before the Court reflects that Exhibit B and certain averments related thereto contain confidential and proprietary business information that is of the kind that courts will protect. See Publicker, 733 F.2d at 1073; Cutsforth, 2020 WL 772442 at *2. Moreover, the Court also finds good cause for sealing Exhibit B and redacting certain related averments in the Complaint and Brief because of Plaintiffs' overriding interest in excluding such materials from disclosure because the potential harm public access to those materials would bear upon Plaintiffs' competitive standing in the invention services industry. Finally, the Court finds that sealing Exhibit B and redacting specific averments in the Complaint and Brief that would cause such harm if disclosed to the public is narrowly tailored to serve that interest.
III. SPECIFIC FINDINGS
An item by item review must be conducted to determine if "the strong presumption of openness can be overcome by the secrecy interests of private litigants." Avandia, 924 F.3d at 673 (quoting Leucadia, 998 F.2d at 167). Accordingly, the Court makes an individualized analysis of each proposed redaction or seal request as follows:
| RequestNo. | Description | ConfidentialMaterials | Plaintiffs' Rationale forRedacting or Sealing | Court's Findings |
| No. 1 | Exhibit B to theComplaint | PowerPoint presentationthat Susa createdrelative to the sale andmarketing of innovativenew product offeringsand groupings for a newinvention servicesplatform. | Susa invested substantial time,energy, and resources in developinga services model not previouslyseen in the competitive inventionservices industry. Certain servicesrevealed by Susa had never beenoffered in the invention servicesindustry; the PowerPointpresentation reveals confidentialdetails as to pricing, marketingstrategy, and the servicesthemselves. Moreover, thePowerPoint details how variouselements of the business modelcoordinate to provide an innovative,new approach for inventor clients.Disclosing this information wouldmaterially harm Susa's ability toattract customers and would alsogive potential competitors anadvantage when attempting to sellto Susa's customers.Disclosing the PowerPoint wouldresult in Susa's confidential businessstrategy and model being revealed tothe general public. | Exhibit B contains the type ofinformation that derivesindependent economic valuefrom not being generally knownby others who can obtaineconomic value from itsdisclosure. If these pieces ofinformation were to be releasedto the public, it wouldmaterially harm Plaintiffs'competitive standing in theinvention services industry andwould give their competitors anadvantage when seeking to selltheir products and services.Exhibit B had been subject toefforts that are reasonable underthe circumstances to maintainits secrecy because Plaintiffsshared it with Defendants andothers who were signatories toan RSD Agreement containingconfidentiality and non-disclosure provisions. Plaintiffshave a compelling,countervailing interest in theinformation contained inExhibit B to be protected frompublic disclosure. |
| No. 2 | The chart inPlaintiffs' Briefin Support oftheir Motion forPreliminaryInjunction | Chart that compares theproduct and serviceofferings ofDefendants' newbusiness with thoseoutlined in thePowerPoint preparedby Susa. | Susa invested substantial time,energy, and resources in developinga services model not previouslyseen in the competitive inventionservices industry. The chart detailsthe services package, which reflectsnew, innovative ideas that Susadeveloped, is refining, and which heis not currently offering to thepublic. Disclosing this informationwould materially harm Susa'sability to attract new customers andwould also give potentialcompetitors an advantage whenattempting to sell to Susa'scustomers.Because the services offered byDefendants are a near-perfect copyof the services offered under Susa'snew model, disclosing the servicesdeveloped by Susa as compared tothose peddled by Defendants wouldhave a detrimental effect on Susa'sability to benefit from the businessconcepts developed by his effortsand at his expense. | The contents of this chartcontain the type of informationthat derives independenteconomic value from not beinggenerally known by others whocan obtain economic value fromits disclosure. If these pieces ofinformation were to be releasedto the public, it wouldmaterially harm Plaintiffs'competitive standing in theinvention services industry andwould give their competitors anadvantage when seeking to selltheir products and services. Thecontents of this chart, which isderived from the contents ofExhibit B, had been subject toefforts that are reasonable underthe circumstances to maintainits secrecy because Plaintiffsshared it with Defendants andothers who were signatories toan RSD Agreement containingconfidentiality and non-disclosure provisions. Plaintiffshave a compelling,countervailing interest in theinformation contained in thechart to be protected frompublic disclosure.However, the redacted text inthe Brief immediately precedingthis chart does not contain suchinformation; rather, that textmerely asserts a conclusoryargument regarding the contentsof the chart referenced above. |
| No. 3 | Paragraph No.10 of theComplaint | Allegations that describeand provide a link toDefendants' competitivebusiness model, whichcopies language, concepts,product offerings, andideas developed byInventHelp and,separately, new servicesand concepts revealed bySusa in confidence at aNovember 2019 meeting. | Susa invested substantial time,energy, and resources in developing aservices model not previously seen inthe competitive invention servicesindustry. Publicizing the link to thebootlegged services package, whichreflects new, innovative ideas that -individually and as a package - arenot currently available to the publicthrough Susa promotes the broaderdissemination of the purloined tradesecrets. | With the exception ofthe specific referenceto Defendants' websiteaddress referenced atParagraph 43 andelsewhere in theComplaint and itsrelated businessmoniker as expressedin quotation markswithin Paragraph 10 ofthe Complaint, thecontents of Paragraph10 does not revealproprietary orotherwise confidentialinformationappropriate forredaction. |
| No. 4 | ParagraphNos. 33, 35,and 42-56 of theComplaint | Allegations that describein detail the November2019 meeting at whichSusa disclosed his newinvention servicesmodel and the businessplan revealed by Susa,as well as thePowerPoint itself, ascompared to the websitefor Defendants' newbusiness, whichessentially copies theinformation providedduring the November2019 meeting verbatim. | Susa invested substantial time,energy, and resources in developinga services model not previouslyseen in the competitive inventionservices industry. Publicizing theparticulars of the bootleggedservices package, which reflectsnew, innovative ideas that -individually and as a package - arenot being offered to the public -promotes the broader disseminationof the purloined trade secrets.Further, articulating the subjectmatter of the November 2019meeting would result in the publicexposure of protected informationrelayed in confidence to a small,exclusive group of professionals.Understanding that the Complaint'sdescription of Plaintiffs' servicesnecessarily includes informationrevealed at the November 2019meeting (inclusive of references tothe PowerPoint exhibit thatPlaintiffs assert should remainsealed), along with multiplereferences and links to Defendants'website promoting the purloinedtrade secrets, dissemination of thesubject paragraphs would exposethe subject matter of Susa'sNovember 2019 meeting and thePowerPoint to the view of marketcompetitors. | The text of Paragraph 33merely references the existenceof Exhibit B and characterizesits contents as being proprietaryand secret, but the text does notreveal proprietary or otherwiseconfidential informationappropriate for redaction.The redacted portion of the textof Paragraph 35 merelycharacterizes Plaintiffs'proprietary offerings asconfidential, but the text doesnot reveal proprietary orotherwise confidentialinformation appropriate forredaction.The text of Paragraph 42 makesconclusory allegations ofmisappropriation of thecontents of Exhibit B andrelated materials but does notreveal proprietary or otherwiseconfidential informationappropriate for redaction.Paragraph 43 of the Complaintcontains a reference to amechanism whereby the publiccould obtain Plaintiffs'proprietary and confidentialinformation such as thatcontained in Exhibit B. As |
| such, and for the reasonsexpressed regarding Item No. 1above, the Court finds thatParagraph 43 may remainredacted to protect its contentsfrom public disclosure.Paragraph Nos. 44, 53, 55, and56 aver that the materialsDefendants purportedlymisappropriated are proprietaryand confidential, but theseaverments do not reveal theunderlying information andthus do not reveal proprietaryor otherwise confidentialinformation appropriate forredaction.Paragraph Nos. 45-52, and 54contain specific references toPlaintiffs' proprietary andconfidential information as putforth in Exhibit B. As such,and for the reasons expressedregarding Item No. 1 above, theCourt finds that Paragraph Nos.45-52, and 54 may remainredacted to protect theircontents from public disclosure. |
IV. CONCLUSION
In sum, the Court finds that Plaintiffs have shown good cause as to why certain of their proposed redactions should remain under seal. Accordingly, Plaintiffs will be ordered to re-file their Complaint and Brief in Support of their Motion for Preliminary Injunction with the following redactions as specifically reflected in the chart above: as to paragraph 10 of the Complaint, only Defendants' business moniker as expressed in quotation marks in said paragraph shall be redacted; paragraphs 43, 45-52 and 54 of the Complaint shall be redacted in their entirety, Exhibit B to the Complaint shall be filed under seal; and the chart in Plaintiffs' Brief shall be redacted. No other items in Plaintiffs' filings shall be redacted or filed under seal at this juncture.
As stated above, the currently redacted text in Plaintiffs' Brief immediately preceding the chart is not subject to redaction. --------
An appropriate order follows.
W . Scott Hardy
W. Scott Hardy
United States District Judge Date: March 10, 2021 cc/ecf: All counsel of record