Cincom Systems, Inc. v. LABWARE, INC.

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF OHIO

WESTERN DIVISION

CINCOM SYSTEMS, Case No. 1:20-cv-83

Plaintiff,

McFarland, J.

vs Bowman, M.J.

LABWARE, INC.,

Defendant.

ORDER

This civil action is now before the Court on the parties’ motions to file documents

under seal (Docs. 47, 48) and their responsive memoranda (Docs. 49, 50). The motions

will be addressed in turn.

A. Plaintiff’s Motion for Leave to File Confidential Materials Under Seal (Doc. 47)

As noted by Plaintiff, this is a case that involves claims of copyright infringement

and alleged misappropriation of trade secrets regarding Cincom’s proprietary and

exclusively licensed VSE Software, including “highly confidential computer program

source code.” While the Sixth Circuit recognizes a presumption against the sealing of

documents, Shane Grp., Inc. v. Blue Cross Blue Shield, 825 F.3d 299, 305 (6th Cir. 2016),

this presumption may be overcome by “trade secrets, information covered by a

recognized privilege (such as the attorney-client privilege), and information required by

statute to be maintained in confidence[.]” Id. at 308 (citing Baxter Int'l, Inc. v. Abbott Labs.,

297 F.3d 544, 546 (7th Cir. 2002) (emphasis added).

Here, Cincom seeks to file under seal certain deposition transcripts, exhibits, and

other materials from the evidentiary record that have been designated as either

CONFIDENTIAL or ATTORNEYS’ EYES ONLY pursuant to the Stipulated Protective

Order entered in this case. These documents contain confidential information relating to

protected source code of the VSE Software and Cincom’s trade secrets for the VSE

Software documents. Notably, Cincom requests leave to file under seal the following

materials:

Cincom Fact Witness Depositions and Exhibits:

 Aug. 3, 2022 Deposition Transcript of Suzanne Fortman (with Exhibits):

Cincom designated the following select portions of Ms. Fortman’s deposition

transcript as CONFIDENTIAL pursuant to Paragraph 5(c) of the Stipulated

Protective Order: 12:10–19:15; 19:16–24:24; 26:13–28:07; 36:18–39:01; 41:19–

55:22; 59:12–60:25; 62:05–97:22; 99:10–100:16; 103:20–104:13; 110:07–110:14;

110:24–112:03; 139:09–147:10; 151:12–156:16; 184:25–193:23; 196:20–227:03;

230:16–233:17; and 234:19–242:09. In addition, the following portions contain

information marked ATTORNEYS’ EYES ONLY: 28:16–25; 29:01–35:25; 36:01–

15; and 56:01–58:25. These portions of the transcript and the corresponding

exhibits contain information regarding protected source code of the VSE Software,

discuss Cincom’s trade secrets for the VSE Software, or contain other sensitive

commercial information regarding Cincom’s VSE Software.

 Aug. 4, 2022 Deposition Transcript of Jason Ayers (with Exhibits): Cincom

designated the following select portions of Mr. Ayers’ deposition transcript as

CONFIDENTIAL pursuant to Paragraph 5(c) of the Stipulated Protective Order:

16:18–41:20; 42:09–46:19; 48:05–58:04; 58:16–62:11; 73:22–75:24; 78:17–

98:16; 98:17–110:18; 175:04–180:07; 180:08–189:16; and 209:10–227:12. In

addition, the following portions of the transcript contain information marked

ATTORNEYS’ EYES ONLY: 120:15-25; 121:01–167:25; 168:01–22; 190:22–25:

191:01–207:25; and 208:1–10. These portions of the transcript and the

corresponding exhibits contain information regarding protected source code of the

VSE Software, discuss Cincom’s trade secrets for the VSE Software, or contain

other sensitive commercial information regarding Cincom’s VSE Software.

 Aug. 5, 2022 Deposition Transcript of Brian Bish (with Exhibits): Cincom

designated the following select portions of Mr. Bish’s deposition transcript as

CONFIDENTIAL pursuant to Paragraph 5(c) of the Stipulated Protective Order:

12:03–33:20; 36:20–41:19; 44:13–45:05; 44:22–46:07; 47:21–54:12; 55:13–

59:13; 59:23–76:15; 127:02–138:25; 139:21–168:08; 172:01–186:25; 187:17–

229:08; 231:07–234:07; and 255:15–265:17. In addition, the following pages

contain information marked ATTORNEYS’ EYES ONLY: 77:07–25; 78:01–125:25;

and 126:01–21. These portions of the transcript and the corresponding exhibits

contain information regarding protected source code of the VSE Software, discuss

Cincom’s trade secrets for the VSE Software, or contain other sensitive

commercial information regarding Cincom’s VSE Software.

 July 29, 2022 Deposition Transcript of Georg Heeg (with Exhibits): The

entirety of Mr. Heeg’s July 29, 2022 deposition transcript was designated as

ATTORNEYS’ EYES ONLY under the Stipulated Protective Order. (Tr. at 8:02–

06.) Mr. Heeg’s transcript and exhibits contains information regarding protected

source code of the VSE Software, discusses Cincom’s trade secrets for the VSE

Software, or contain other sensitive commercial information regarding Cincom’s

VSE Software.

Cincom Expert Witness Depositions, Reports, and Exhibits:

 Expert Reports of David Buck (Original Report dated Sept. 15, 2022 and

Rebuttal Report dated Nov. 15, 2022) and Dec. 1, 2022 Deposition Transcript

of Mr. Buck (with Exhibits): One of Cincom’s witnesses, Mr. David Buck, is an

expert on VSE and offered opinions based on and developed pursuant to his

review and analysis of ATTORNEYS’ EYES ONLY source code and materials

made available for inspection pursuant to the Source Code Inspection Protocol

(including LabWare’s source code and Cincom’s VSE tools/files that were

available for inspection on LabWare’s computer). Accordingly, Cincom designated

Mr. Buck’s written report as ATTORNEYS’ EYES ONLY pursuant to the Source

Code Inspection Protocol and Stipulated Protective Order. The Court subsequently

downgraded Mr. Buck’s Original Report from ATTORNEYS’ EYES ONLY to

CONFIDENTIAL. Mr. Buck’s Dec. 1, 2022 deposition transcript and corresponding

exhibits further discuss the substance of his opinions in his two expert reports.

 Expert Reports of Georg Heeg (Original Report dated Sept. 15, 2022 and

Rebuttal Report dated Nov. 15, 2022) and Dec. 14, 2022 Deposition Transcript

of Mr. Heeg (with Exhibits): Mr. Heeg’s Sept. 15, 2022 Expert Report contains

detailed discussion and analysis regarding protected source code of the VSE

Software and Cincom’s trade secrets for the VSE Software—and was designated

as ATTORNEYS’ EYES ONLY pursuant to the Stipulated Protective Order.

Similarly, Mr. Heeg’s Nov. 15, 2022 Rebuttal Report was designated

CONFIDENTIAL because it further discusses the VSE Software’s source code and

trade secrets in response to counter opinions from LabWare’s two experts, Dr.

Benjamin Goldberg and Mr. Daniel McGavock. Mr. Heeg’s Dec. 14, 2022

deposition transcript and the corresponding exhibits also discuss the substance of

his expert opinions and analyses relating to Cincom’s VSE Software source code

and trade secrets.

 Rebuttal Expert Report of Brian Bish (dated Nov. 15, 2022) and Dec. 2, 2022

Deposition Transcript of Mr. Bish (with Exhibits): Mr. Bish’s Nov. 15, 2022

Rebuttal Expert Report was offered in response to a counter opinion from

LabWare’s expert Mr. McGavock—both of which were designated as

CONFIDENTIAL under the Stipulated Protective Order. Both Mr. McGavock’s and

Mr. Bish’s reports discuss sensitive commercial information regarding Cincom’s

internal business practices and licensing for the VSE Software. Mr. Bish’s Dec. 2,

2022 deposition transcript and the accompanying exhibits also discuss the

substance of his rebuttal opinions relating to Cincom’s VSE Software.

 Rebuttal Expert Report of Tom Marth (dated Nov. 15, 2022) and Dec. 9, 2022

Deposition Transcript of Mr. Marth (with Exhibits): Mr. Marth’s Nov. 15, 2022

Rebuttal Expert Report was offered in response to a counter opinion from

LabWare’s expert Mr. McGavock—both of which were designated as

CONFIDENTIAL under the Stipulated Protective Order. Both Mr. McGavock’s and

Mr. Marth’s reports discuss sensitive commercial information regarding Cincom’s

internal business practices and licensing for the VSE Software. Mr. Marth’s Dec.

9, 2022 deposition transcript and the accompanying exhibits also discuss the

substance of his rebuttal opinions relating to Cincom’s VSE Software.

LabWare Expert Witness Deposition, Reports, and Exhibits:

 Expert Report of Benjamin Goldberg (dated Oct. 24, 2022) and Dec. 7, 2022

Deposition Transcript of Dr. Goldberg (with Exhibits): LabWare initially

designated the entirety of Dr. Goldberg’s Oct. 24, 2022 Expert Report as

ATTORNEYS’ EYES ONLY. LabWare then downgraded the Report and

accompanying Exhibits to CONFIDENTIAL (with the exception of Exhibit D1 and

D2, which remained designated as ATTORNEYS’ EYES ONLY). Dr. Goldberg’s

Expert Report was offered in response to both Mr. Buck’s Expert Report

(designated CONFIDENTIAL) and Mr. Heeg (designated ATTORNEYS’ EYES

ONLY), and contains information regarding his inspection of Cincom’s source code

and trade secrets for the VSE Software. Dr. Goldberg’s Dec. 7, 2022 deposition

transcript and the accompanying exhibits further discuss his opinions regarding

these matters.

 Expert Report of Daniel McGavock (dated Oct. 24, 2022) and Dec. 16, 2022

Deposition Transcript of Mr. McGavock (with Exhibits): Mr. McGavock’s Oct.

24, 2022 Expert Report was designated CONFIDENTIAL by LabWare under the

Stipulated Protective Order, and contains sensitive commercial information

regarding Cincom’s internal business practices and licensing for the VSE Software.

Mr. McGavock’s Dec. 9, 2022 deposition transcript and the accompanying exhibits

also discuss the substance of his opinions relating to Cincom’s VSE Software.

Written Discovery and Other Materials:

 Cincom’s Aug. 31, 2021 Second Supplemental Response to Interrogatory

No. 4: Cincom’s Second Supplemental Response to Interrogatory No. 4 contains

a 35-page report identifying in detail the trade secrets for the VSE Software.

 Cincom’s Sept. 15, 2022 Supplemental Initial Disclosures: Cincom’s Sept.

15, 2022 Supplemental Initial Disclosure cites testimony from Mr. Bish regarding

Cincom’s VSE Software, including commercially sensitive information regarding

Cincom’s business and licensing of the VSE Software. (See supra.)

 CIN03177–3227 (Schedules to the dated Aug. 27, 1999 Asset Purchase

Agreement between Cincom and ObjectShare): Cincom designated as

CONFIDENTIAL pursuant to the Stipulated Protective Order Schedules 1.1

through 4.15 to the Aug. 27, 1999 Asset Purchase Agreement between Cincom

and ObjectShare. The Schedules are not public and contain commercially

sensitive business information for Cincom.

(Doc. 47, p 2-5).

Defendant LabWare opposes Plaintiff’s motions to seal arguing that Plaintiff

misinterprets the Shane Group standard and its motion to seal is grossly overbroad. (Doc.

49). In this regard, Defendant notes that the Sixth Circuit explicitly distinguished and

rejected designations under a protective order as a basis for sealing. Shane Group, 825

F.3d at 305 (“[T]here is a stark difference between so-called ‘protective orders’ entered

pursuant to the discovery provisions of Federal Rule of Civil Procedure 26, on the one

hand, and orders to seal court records, on the other.”). “Unlike information merely

exchanged between the parties, ‘the public has a strong interest in obtaining the

information contained in the court record.’” Id. (quoting Brown & Williamson Tobacco

Corp. v. F.T.C., 710 F.2d 1165, 1180 (6th Cir. 1983)). Accordingly, Defendant argues

that Cincom’s unilateral designation of documents and testimony as confidential under a

protective order governing discovery between the parties does not establish that those

same documents and testimony ought to be sealed when they are submitted to the Court.

Shane Group requires Cincom to offer more than unilateral designations and conclusory

assertions of confidentiality to justify sealing court records.

LabWare further argues that Cincom does not provide a particularized explanation

as to the need to seal these documents, thus, leaving LabWare to “prove the negative”

and unlawfully shift the burden. (Doc. 49, p3). “The burden of overcoming [the]

presumption [of public access to court records] is borne by the party that seeks to seal

them.” Shane Group, 825 F.3d at 305 (citing In re Cendant Corp., 260 F.3d 183, 194 (3d

Cir. 2001)). LabWare’s contentions are not well-taken.

As noted by Plaintiff Cincom, Defendant LabWare does not dispute that this case

involves Cincom’s “highly confidential computer program source code” for the VSE

Software and Cincom’s trade secrets regarding the VSE Software—which the Sixth

Circuit and this Court have long recognized is a “recognized exception to the right of

public access to judicial records.” Shane Grp., Inc. v. Blue Cross Blue Shield, 825 F.3d

299, 308 (6th Cir. 2016) (quoting Brown & Williamson Tobacco Corp. v. FTC, 710 F.2d

1165, 1180 (6th Cir. 1983); McCleese v. Natorp’s, Inc., No. 1:20-cv-118, 2022 U.S. Dist.

LEXIS 214674, at *3 (S.D. Ohio Nov. 28, 2022) (“The need to protect trade secrets can

overcome the presumption of access. . . . Moreover, this Court has repeatedly recognized

that protecting confidential information that would otherwise allow competitors an inside

look at a company’s business strategies is a compelling reason to restrict public access

to filings.”) (McFarland, J.); Berry v. Firstgroup Am., Inc., No. 1:18-cv-326, 2022 U.S. Dist.

LEXIS 214199, at *3 (S.D. Ohio Nov. 28, 2022) (granting Plaintiff’s motion for leave to file

documents and deposition transcripts under seal because they “contain or reference

confidential or highly confidential information”) (McFarland, J.).

Here, Cincom cited to the Shane Group standard and the well-established

exceptions thereto. The undersigned finds that it met its burden for sealing the respective

documents by explaining why each of the requested materials record should be filed

under seal due to their having confidential information relating to highly confidential

source code of the VSE Software, Cincom’s trade secrets for the VSE Software, or other

sensitive commercial information regarding the VSE Software. (Doc. 47 at PageID 399-

403.)

B. Defendant’s Motion to File Financial Information Under Seal (Doc.48)

Defendant LabWare also asks the court for leave to file documents under seal in

connection with its forth coming motion for summary judgment. Specifically, LabWare

seeks to seal three spreadsheets that detail the revenues, expenses, and net income of

LabWare, its parent company, and their corporate affiliates, all privately held companies,

over the past decade. LabWare contends that those financial details are maintained

confidentially, have already been determined to be properly designated as Attorneys’

Eyes Only under the Stipulated Protective Order, (Doc 18), and do not bear on any liability

determinations that the Court may make on summary judgment.

Upon careful review and in the absence of any opposition, the undersigned finds

that LabWare’s motion satisfies the Shane Group standard and is well-taken.

C. Conclusion

Accordingly, the undersigned finds that Cincom’s motion for leave to file

documents under seal (Doc. 47) is well-taken and herein GRANTED. It is hereby

ORDERED that Cincom shall file the following materials under seal:

 Aug. 3, 2022 Deposition Transcript of Suzanne Fortman (with Exhibits);

 Aug. 4, 2022 Deposition Transcript of Jason Ayers (with Exhibits);

 Aug. 5, 2022 Deposition Transcript of Brian Bish (with Exhibits);

 July 29, 2022 Deposition Transcript of Georg Heeg (with Exhibits);

 Expert Reports of David Buck (Original Report dated Sept. 15, 2022 and Rebuttal

Report dated Nov. 15, 2022) and Dec. 1, 2022 Deposition Transcript of Mr. Buck

(with Exhibits);

 Expert Reports of Georg Heeg (Original Report dated Sept. 15, 2022 and

Rebuttal Report dated Nov. 15, 2022) and Dec. 14, 2022 Deposition Transcript of

Mr. Heeg (with Exhibits);

 Rebuttal Expert Report of Brian Bish (dated Nov. 15, 2022) and Dec. 2, 2022

Deposition Transcript of Mr. Bish (with Exhibits);

 Rebuttal Expert Report of Tom Marth (dated Nov. 15, 2022) and Dec. 9, 2022

Deposition Transcript of Mr. Marth (with Exhibits);

 Expert Report of Benjamin Goldberg (dated Oct. 24, 2022) and Dec. 7, 2022

Deposition Transcript of Dr. Goldberg (with Exhibits);

 Expert Report of Daniel McGavock (dated Oct. 24, 2022) and Dec. 16, 2022

Deposition Transcript of Mr. McGavock (with Exhibits);

 Cincom’s Aug. 31, 2021 Second Supplemental Response to Interrogatory No. 4;

 Cincom’s Sept. 15, 2022 Supplemental Initial Disclosures; and

 CIN03177–3227 (Schedules to the dated Aug. 27, 1999 Asset Purchase

Agreement between Cincom and ObjectShare).

Furthermore, LabWare’s motion to seal (Doc. 48) is also herein GRANTED. It is

ORDERED that LabWare shall file the three financial spreadsheets identified above under

seal.

IT IS SO ORDERED.

s/Stephanie K. Bowman_____

Stephanie K. Bowman

United States Magistrate Judge