The Federal Circuit Helps a Patent Troll Block Public Access to Court Records

For more than three years, EFF has been fighting for public access to court records in a patent case between Uniloc, one of the world’s most prolific patent trolls, and Apple, one of the world’s biggest tech companies. The district court has ruled three different times that the public has a strong presumption of access to these records and has ordered Uniloc, the party asking for secrecy, to make them public.

Last week, however, the Federal Circuit further delayed public access to the court records when it vacated the most recent ruling and sent the case back to the district court for further fact-finding regarding whether any of the materials should remain secret.

EFF is disappointed in the Federal Circuit’s decision, which is both a significant setback to transparency in this case and carries troubling implications for the public’s ability to access court filings in patent litigation more broadly. The public has a constitutional right to access  court records, including records that contain information about patent licenses. But patent litigants routinely disregard that right and seal more than the law allows. District courts have discretion to apply their local rules vigorously to deter litigants from doing so. The Federal Circuit’s decision undermines both the public’s right of access and district courts’ authority to protect it.

We’re also disappointed in Apple. The company had largely taken no position in the case as EFF pressed for public access. But on appeal, Apple joined Uniloc and argued that the public had no right to access these court records, leaving EFF as the only voice for the public.

The years-long fight to get basic facts about Uniloc’s patent litigation campaign

The most recent appeal to the Federal Circuit concerned Uniloc’s efforts to keep two types of court records secret. But it’s important to understand that EFF’s years-long fight has been largely successful in making public lots of court filings that Uniloc had originally claimed must remain secret.

EFF got involved in 2019, after trying to review court filings in the case that were related to Apple’s efforts to dismiss Uniloc’s patent infringement claims. Apple and Uniloc filed nearly all of the evidence and exhibits associated with that fight under seal, making them inaccessible to the public. And the legal briefs were so heavily redacted that no one reading them could understand the key legal issues or arguments made by either side.

EFF intervened in the case and sought to unseal those materials. The district court agreed with EFF and ordered that all of the information under seal must be made public. Uniloc appealed that decision and in 2020, the Federal Circuit overwhelmingly upheld the district court’s order.

The appellate court also ruled that the district court needed to conduct additional fact finding to determine whether one court record could be made public.

That record is a table containing information about approximately 100 licenses Uniloc obtained—specifically, the name of each licensee, the amount paid, and the date.

In 2021, Apple filed a new motion to dismiss Uniloc’s suit based on newly-obtained evidence, including a memorandum prepared by Fortress, the entity that funds Uniloc’s litigation and that of numerous other non-practicing entities (the polite term for patent trolls).

The district court ruled that the presumption of public access required public disclosure of the license table because it contained information that went to the heart of its decision to dismiss Uniloc’s lawsuit—a ruling that occurred amid EFF’s transparency fight.

The district court ruled that the public’s interest in access to the license table was particularly strong because the information in it establishes the dispositive facts in the case: whether Uniloc made enough money in licensing revenue to satisfy its agreement with Fortress and prevent its patents from being transferred to Fortress automatically under the terms of their agreement. That issue is dispositive because the transfer of Uniloc’s patents to Fortress would deprive Uniloc of the exclusive rights required to bring the lawsuit.

The district court also upheld the strong presumption of public access to the Fortress memorandum because Uniloc failed to satisfy the requirements for sealing it. In particular, Uniloc failed to comply with a local rule requiring a Fortress representative to support the sealing, instead relying on a statement from Uniloc’s own lawyer.

Uniloc appealed a second time, arguing that court records containing information about patent licenses are effectively exempt from the strong presumption of public access.

The Federal Circuit’s latest decision jeopardizes public access to patent litigation records

Despite paying lip service to the strong presumption of public access required by the First Amendment, the Federal Circuit’s latest decision puts a patent troll’s desire for secrecy ahead of the public’s right to access court records.

According to the Federal Circuit, the district court erred in relying on the strong presumption of access and Uniloc’s failure to meet its burden of overcoming it. The Federal Circuit remanded for the district court to describe in greater detail why Uniloc’s unsupported assertions about the interests of its licensees and litigation funder were insufficient. It’s not clear from the Federal Circuit’s opinion what more the district court needed to do—its most recent decision already reviewed the materials and explained why the concerns for secrecy did not override the public’s presumptive right to access the materials. The Federal Circuit essentially ordered a do over while providing almost no guidance for the district court on what it needed to do differently.

The Federal Circuit did, however, go to great lengths to criticize the district court’s discussion of the public’s interest in patent licensing information. While we believe the district court was right to emphasize the public’s interest in knowing when non-practicing entities are using the court system to extract nuisance-value settlements, that aspect of the district court’s decision was not central to its ruling that Uniloc had failed to overcome the public’s presumptive right of access.

The Federal Circuit could and should have upheld the district court’s decision for the simple reason that Uniloc failed to satisfy its burden of showing compelling reasons for secrecy. As the dissenting judge on the panel emphasized, controlling precedent, which governs sealing issues, requires that much.

More troublingly, some language in the Federal Circuit’s decision appears to assume that the public has no right to access patent licensing information, even when that information is key to a legal dispute in litigation. That portion of the opinion provides too much cover for Uniloc and other patent trolls to use public courts while keeping most of their filings hidden from the public. And it also potentially frustrates public access in future cases where patent licensing might be a central issue.

We are reviewing the court’s latest decision and look forward to continuing to fight for public access to the records, including once the case heads back to the district court.