Judge Declines to Sanction Samsung for Role in Apple-Nokia Patent License Leaks

[MacRumors]

Last October, Apple filed a motion seeking sanctions against Samsung and its outside lawyers, accusing both of unlawfully obtaining sensitive data about Apple's 2011 patent license agreement with Nokia. Samsung responded to the allegations by filing three motions intended to slow the investigation. However, those motions were denied by Judge Lucy Koh, who also proceeded to call Samsung's lack of information about the alleged violation "inexcusable."

Now, FOSS Patents reports that Judge Paul S. Grewal yesterday ruled against imposing sanctions on Samsung, instead choosing to solely penalize its law firm, Quinn Emanuel. By Judge Grewal's order, Quinn Emanuel will be required to reimburse Apple, Nokia, and their legal counsel for all costs and fees incurred during the litigation.

Judge Grewal also explained why some further-reaching and more dramatic sanctions proposed by Apple and Nokia were not appropriate:

The vast majority of these are ludicrously overbroad, such as the suggestion that both Samsung and Quinn Emanuel should be banned from any situation in which they might make use of licensing information for the next two years. Although the evidence has shown Quinn Emanuel failed to notify the relevant parties at the relevant times, and that [Samsung in-house lawyer Daniel] Shim made use of the information, there has been insufficient evidence that this failure to notify or misuse ultimately implicated any issue in this or any other litigation or negotiation.

The decision by Judge Grewal can be appealed to Judge Koh and then on to the Federal Circuit if necessary, where Apple or Nokia could attempt to win additional sanctions. Samsung cannot appeal any part of the decision further as it was not sanctioned.

The ruling comes as a second patent infringement lawsuit between Apple and Samsung is set to begin on March 31, 2014. Notably, Samsung will only have four patents claims to bring to the upcoming trial, as Judge Koh invalidated two of its patent claims last week. Both companies will also partake in a trial centered around Apple's new call for a U.S. ban on Samsung products set for January 30.

Article Link: Judge Declines to Sanction Samsung for Role in Apple-Nokia Patent License Leaks​

 

[macs4nw]

The law firm, Quinn Emanuel paying all Apple and Nokia's legal fees, rather than the more deep-pocketed Samsung? Could be an expensive lesson for the firm. I'm guessing they'll make it up the next round.

 

[Jibbajabba]

So bored of that never ending story. Just get Tim Cook and Kwon Oh Hyun into a white collar arena and let them fight over it like men.

 

[kdarling]

Makes sense. It was the law firm that goofed up and FTP'd the unredacted document to Samsung's servers, where various people read it.

Not that Judge Grewal has ever been known to favor Quinn Emanuel. He is the one who primarily denied all their prior art in the billion dollar trial, because of a technicality.

 

[albusseverus]

Show me the part again, where Samsung didn't illegally obtain information and then use it.

It's not like they didn't know they weren't entitled to it.
It's not like they unknowingly bought stolen goods from someone at the pub.

Samsung sure gets a good run in U.S. courts. Remember everything they did to get a mistrial when they could see things weren't going their way?

I can't see how paying costs, which are mostly imaginary, is any discouragement from offending again. Banning the lawyers and Samsung for 2 years from being in a position to offend sounded extremely lenient.

Good to see lawyers (apparently) being brought to task for malpractice, though. Not that anybody seems to see it as anything other than the cost of doing business.

 

[FloatingBones]

Makes sense. It was the law firm that goofed up and FTP'd the unredacted document to Samsung's servers, where various people read it.

The outside law firm definitely goofed up, but this would not have been a problem unless Samsung did what they did with the information. From the original MR report of this violation:

Licensing executives from Samsung and Nokia held a meeting on June 4, 2013 to discuss a patent license deal between these parties. In that meeting, a Samsung exec, Dr. Seungho Ahn, "informed Nokia that the terms of the Apple-Nokia license were known to him" and according to a declaration from Nokia's Chief Intellectual Property Officer, Paul Melin, "stated that Apple had produced the Apple-Nokia license in its litigation with Samsung, and that Samsung's outside counsel had provided his team with the terms of the Apple-Nokia license". The Melin declaration furthermore says that "to prove to Nokia that he knew the confidential terms of the Apple-Nokia license, Dr. Ahn recited the terms of the license, and even went so far as to tell Nokia that 'all information leaks'.

Samsung execs knew they shouldn't have had that information. They could have chosen to act in an ethical fashion with that ill-gotten information. They did not. They bragged about having it, and used it as a negotiating tool in conversations with Nokia.

Samsung should be punished for those actions.

 

[lolkthxbai]

Wow, how lame. It just doesn't seem very fair that Samsung will be getting away with this. And of course, the money to pay the law firm's penalties will come from Samsung because that's how they do business. Wasn't there a quote about how Nokia was approached with details of the Apple-Nokia licensing agreement...? Isn't that evidence enough of abuse.......?

 

[charlituna]

The law firm, Quinn Emanuel paying all Apple and Nokia's legal fees, rather than the more deep-pocketed Samsung? Could be an expensive lesson for the firm. I'm guessing they'll make it up the next round.

I could see them having to so that. And to me if it would be fair if they were placed on a kind of probation. Slap them with a fine that will be waived so long as they don't try to pull the same crap again. Do it and they pay for it. They do it with criminals why not with civil issues as well.

 

[theBB]

Judges and prosecutors empathize with people in the legal profession, so they tend to be exceptionally lenient towards them for missteps and misjudgments, even though they do not mind ruining other people's lives for not following every letter of some obscure law. It is in human nature. If you think "oh, this could have happened to me just as easily", you tend to be a lot more forgiving.

 

[paul4339]

I think it has more to do with not penalizing a company (Samsung) unless you are sure that they are guilty.

So even though we think and it's maybe likely that Samsung was doing wrong, we still have to base things on evidence in court. And since there is "insufficient evidence that this failure to notify or misuse ultimately implicated any issue in this or any other litigation or negotiation" they can't be penalized. Let's see how the appeal turns out.

.

 

[sailmac]

One way to read this is that judge Grewal just made it easier for Apple and Nokia to ultimately prevail.

By ruling against sanctions at his level of authority, Grewal paves the way for Apple/Nokia to appeal this matter to judge Koh without interference by Samsung. It is clear that Koh sees Samsung's actions for what they are and it is reasonable to think she will find in favor of Apple/Nokia.

I will be surprised if this is the last we hear about it.

 

[Nevaborn]

One way to read this is that judge Grewal just made it easier for Apple and Nokia to ultimately prevail.

By ruling against sanctions at his level of authority, Grewal paves the way for Apple/Nokia to appeal this matter to judge Koh without interference by Samsung. It is clear that Koh sees Samsung's actions for what they are and it is reasonable to think she will find in favor of Apple/Nokia.

I will be surprised if this is the last we hear about it.

Agreed, this will be appealed and will raise it's head again.

 

[BC2009]

Makes sense. It was the law firm that goofed up and FTP'd the unredacted document to Samsung's servers, where various people read it.

Not that Judge Grewal has ever been known to favor Quinn Emanuel. He is the one who primarily denied all their prior art in the billion dollar trial, because of a technicality.

It does make sense to sanction the law firm. I'm sure Apple/Nokia will appeal for sanctions against Samsung though. The law firm screwed up -- Samsung just used the information they wrongfully obtained. Samsung also retained the law firm so I guess you could argue some liability there in an appeal, but ultimately this seems like an attorney being guilty of misconduct.

 

[kdarling]

Judge Grewal also explained why some further-reaching and more dramatic sanctions proposed by Apple and Nokia were not appropriate:

"The vast majority of these are ludicrously overbroad, such as the suggestion that both Samsung and Quinn Emanuel should be banned from any situation in which they might make use of licensing information for the next two years. Although the evidence has shown Quinn Emanuel failed to notify the relevant parties at the relevant times, and that [Samsung in-house lawyer Daniel] Shim made use of the information, there has been insufficient evidence that this failure to notify or misuse ultimately implicated any issue in this or any other litigation or negotiation."

The above left out the second half of that quote from Judge Grewal:

"By the final hearing on December 9, 2013, this lack of clear evidence was obvious in the tone of the moving parties.

"Apple and Nokia's allegations had shifted, acknowledging that the evidence of misuse is 'circumstantial,' must overcome facial 'inconsistencies,' and that even they could only characterize it as 'more likely than not' that the information had been used.

"In short, what began as a chorus of loud and certain accusations had died down to aggressive suppositions and inferences, and without anything more, Quinn Emanuel and Samsung cannot reasonably be subject to more punitive sanctions."

In other words, as the ruling stated throughout, the original Nokia / Apple accusations were a bit overblown.

Most interestingly of all, the ruling notes that the document actually DID have Nokia's name redacted, but that the Samsung negotiation lawyer deduced who they were, anyway, from the amounts and currency (Euros).

As for previous posts talking about lawyers protecting their own, it's true. The ruling decides that:

"It is undisputed that at some point in late March 2012, a junior associate working late one night failed to fully redact Apple’s confidential license terms from an expert report."

... then later...

"That said, every lawyer in this case has acknowledged that these types of mistakes happen. In a case of this size and scope, it would be completely unreasonable to expect every person on every team to perform perfectly at all times. "

So the Judge didn't ding the law firm for the mistake itself. He penalized them because the same junior associate who had goofed up, also realized six months later that he'd made a mistake... yet the firm didn't inform Apple then or later on.

 

[Swytch]

Although the evidence has shown Quinn Emanuel failed to notify the relevant parties at the relevant times, and that [Samsung in-house lawyer Daniel] Shim made use of the information, there has been insufficient evidence that this failure to notify or misuse ultimately implicated any issue in this or any other litigation or negotiation.

This is irrelevant, if they broke the law there should be consequences, just because their action didnt affect the litigation doesnt mean they didnt break the law.

 

[kdarling]

This is irrelevant, if they broke the law there should be consequences, just because their action didnt affect the litigation doesnt mean they didnt break the law.

The ruling said they didn't break the law on purpose, but more because of poor organization.

However, they failed to correct it by telling Apple. That's why they had to pay Apple's and Nokia's fees.

--

The other ruling was that now they have to get Apple/Nokia approval of any redacted documents _before_ sending them anywhere.

Which makes me wonder why that isn't the norm anyway. It would avoid all sorts of potential problems.

 

[sailmac]

The other ruling was that now they have to get Apple/Nokia approval of any redacted documents _before_ sending them anywhere.

Which makes me wonder why that isn't the norm anyway. It would avoid all sorts of potential problems.

That's a great point.

IIRC, Apple/Nokia anticipated the possibility of documents getting transmitted to Samsung (accidentally or otherwise) and that's one reason why the whole thing is so flabbergasting. In advance they sought constraints and protection while allowing for reasonable discovery.

I'm with you, scratching my head wondering why required consent for transmitting redacted docs wasn't in place from the start?...

 

[kdarling]

Oops! Apple's lawyers made an even worse mistake

In one of the most ironic turn of events possible, it turns out that Apple's own law firm had accidentally posted all the same Nokia license details IN PUBLIC last year, and neither Apple nor Nokia noticed the mistake for several months.

Samsung's lawyers naturally want any sanctions for their own junior associate's redaction goof, reduced appropriately, since they weren't the only ones to screw up. Moreover, their internal leak to one company wasn't as bad as Apple's law firm leak to the public.

It's a good guess that Apple's lawyers will now see their request for extreme sanctions against Samsung's lawyers, in a totally different light