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Technology: Protecting confidential information from disclosure in court proceedings

Electronic court filings make it easier than ever for the public to gain access to sensitive business information

One of the fundamental impacts the integration of computer technologies into litigation practice has had on our court system is the increased ease of access to information. The federal court system switched over to electronic filing in the mid-2000s, and now most state court systems have already, or are in the process of, implementing electronic filing.

Previously, locating public court documents took a trip to the clerk’s office, the patience to go through physical papers and the hope that relevant information would be contained in the document. Now, the public has click-of-a-button access to almost any court filing that is not under seal, and the ability to electronically search such records. Combine that with blogs that track important litigations and provide dissemination of information from high-profile cases, and companies may face public relations difficulties, if not worse.

Despite protective orders, keeping sensitive business information confidential can be a challenge. One of the great hallmarks of the judicial system is transparency of the process. This is accomplished in part through public access to judicial proceedings. Consistent with this, in the past several years many courts have begun increasingly requiring a demonstration of “good cause” for entry of protective orders rather than accepting pro forma statements in support of entry.

Likewise, courts also are scrutinizing, and rejecting, individual filings based on the propriety of filing under seal. The result is that extra care must be taken in determining whether or not filing under seal is appropriate under the circumstances, and in certain instances providing justification.

A known but often-overlooked fact is that protective orders only cover information produced during the pre-trial discovery process. Protective orders do not protect information disclosed during court proceedings or trial. Hearings and trials are presumptively open to the public for the sake of transparency. A request to seal the court room and record must be specifically made and ruled on by the court.

However, most judges are not inclined to close such proceedings in civil cases absent a demonstrable likelihood of injury to the party. This might seem like a minor issue since there is little likelihood of competitors or anyone else with an interest showing up at trial, let alone a hearing.

But consider the likelihood that transcripts of the proceedings will be part of the electronic public record. Having a complete record is important for appeal purposes, so there is a high degree of probability that anything presented in open court will be public information.

The only recourse is diligence in protecting highly confidential or sensitive information. Timely requests to the court and reciprocal agreements with opposing counsel to make efforts at keeping information out of the public record are critical. 

Contributing Author

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James Hanft

James E. Hanft is counsel in the Intellectual Property Group of Schiff Hardin LLP. He has been counseling clients and prosecuting and litigating patents for...

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