updated 10:36 am EDT, Thu October 3, 2013
Samsung allegedly used terms to gain upper hand in negotiations
Samsung executives obtained illicit access to the terms of licensing agreements between Apple and Nokia, and at least Apple is requesting sanctions, according to an Apple v. Samsung court order from Magistrate Judge Paul Grewal. The licensing terms were contained in a non-redacted document marked for use by outside legal counsel with the phrase "Highly Confidential -- Attorneys' Eyes Only." Nokia's Chief Intellectual Property Officer, Paul Melin, charges however that on June 4th, Samsung executives ended up using the document in a negotiation session with his company.
During that meeting, Samsung executive Dr. Seungho Ahn is said to have exploited the document as a negotiating tactic. "Specifically, according to Mr. Melin," the court order reads, "Dr. Ahn 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. Mr. Melin recounts 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.'"
The document traces back to the fact discovery process during the original Apple v. Samsung case, between August 2011 and March 2012. In particular, Apple divulged agreements with Nokia, Sharp, Ericsson, and Phillips. Samsung's counsel -- lawfirm Quinn Emanuel -- is said to have sent the company a draft of a report created by an expert witness, Dr. David J. Teece. Teece included the key points of the four Apple licensing agreements, which should have been redacted by Quinn Emanuel, but weren't for whatever reason.
The report ended up on a Samsung FTP server, and an email explaining how to access the document was sent out to a Quinn Emanuel client distribution list meant to provide Samsung updates about the case. "The information was then sent, over several different occasions, to over fifty Samsung employees, including high-ranking licensing executives," the court order continues. "Specifically, on at least four occasions between March 24, 2012 and December 21, 2012, Samsung's outside counsel emailed a copy of some version of the report to Samsung employees, as well as various counsel representing Samsung in courts and jurisdictions outside the United States."
Grewal notes that he can't say with certainty if Melin's statements are accurate because Samsung isn't providing information that could offer a full account. "Unfortunately, the court cannot say, because Samsung has elected not to provide the court with any sworn testimony from Dr. Ahn or anyone else at the meeting," Grewal explains. "Samsung also has failed to supply the court with any evidence at all regarding other uses of the Apple-Nokia license, or those of the other confidential licenses. In fact, despite acknowledging that many dozens of individuals at Samsung and its other counsel have knowledge of confidential license terms that they had no right to access, at yesterday's hearing, Samsung's counsel repeatedly denied even one violation of the protective order, asserting that such a violation can only occur willfully."
Samsung is holding that formal discovery into the matter is unnecessary. The company is also apparently unable to provide details on who had access to the document, what it was used for, and how and when it was used, but claims it's working on the issue. Samsung has agreed to provide Apple with a log of documents generated as a consequence of the Teece report; it intends to use a collection protocol it negotiated with Nokia in a separate case, however, something that Grewal opposes. The court order demands that Samsung supply at least some emails and other communication relating to the leaked document's distribution, plus depositions by Ahn and other Samsung workers who had file access. A follow-up hearing on possible sanctions is scheduled for October 22nd.