updated 12:27 am EST, Thu January 30, 2014
Slap on the wrist for illegally sharing insider info with client
Late on Wednesday, Magistrate Judge Paul Grewal has ruled on sanctions in another skirmish between Apple and Samsung. In this case, the attorneys for Samsung, Quinn Emanuel -- who have caught flack repeatedly for unprofessional behavior in and out of court -- were accused of allowing confidential information about Apple obtained in the process of discovery to leak to Samsung, which in turn it used to strongarm Nokia in license negotiations.
"Quinn Emanuel shall reimburse Apple, Nokia, and their counsel for any and all costs and fees incurred in litigating this motion and the discovery associated with it, as required by Rule 37 in the absence of 'substantial justification' or other showing of 'harmlessness,' neither of which the court finds here," Judge Grewal wrote, shutting down the firm's insistence that no substantive damage had been done by the leak. "That expense, in addition to the public findings of wrongdoing, is, in the court's opinion, sufficient both to remedy Apple and Nokia's harm and to discourage similar conduct in the future."
The judge noted that initial charges "began as a chorus of loud and certain accusations" but had "died down to aggressive suppositions and inferences," with Apple and Nokia admitting "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." Judge Grewal, who had previously ruled in November that sanctions were warranted (after initially expressing doubt), said that the sanctions proposed by Apple and Nokia were "ludicrously overbroad."
The judge did reiterate that "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," the two companies could not produce sufficient evidence that the breach of the data -- or the firm's failure to notify anyone about it for several weeks -- "ultimately implicated any issue in this or any other litigation or negotiation. By the final hearing on December 9, 2013, this lack of clear evidence was obvious in the tone of the moving parties."
By only imposing a fine of restitution for expenses on Quinn Emanuel, both the law firm and its client Samsung dodged a bullet. The company can continue to represent Samsung in further proceedings without formal sanctions, and Samsung was cleared of any evidence of wrongdoing.
Despite this, Samsung is likely to pick up the tab for any costs Apple and Nokia file with the court over the matter. Apple and Nokia may decide to appeal the judge's ruling, hoping for more sanctions, reports patent case analyst Florian Mueller reports. Quinn Emanuel could ask the judge in the second Apple-Samsung trial, Judge Lucy Koh, to void the sanctions, but this is seen as unlikely, given that the punishment is perceived as light.
The International Trade Commission is also investigating the incident, as well as courts in other jurisdictions affected by the case, leaving open the possibility of addition sanctions. The second Apple-Samsung trial is scheduled to get underway in late March.