Apple and Samsung battle over leaked licensing agreement

There was plenty of outrage, but little in the way of resolution, as attorneys for Apple and Samsung traded blows over allegations that Samsung's legal team intentionally shared confidential information from Apple's patent licensing agreements. Magistrate Judge Paul Grewal heard the arguments in San Jose, California today, with Apple's legal team looking for sanctions against Samsung and its outside counsel, the law firm of Quinn Emanuel Urquhart & Sullivan, LLP.

As part of the discovery process in the epic legal struggles between the two companies, Apple had handed over patent licensing agreements with Nokia, Ericsson, Sharp, and Philips.Those documents, marked "Attorney Eyes' Only," were considered confidential, but it's standard practice in these kind of circumstances for companies to provide documents under the court-ordered mandate that they not be shared with anyone outside the legal team in question.

However, in the course of last year's battle, Samsung's team called upon expert Dr. David J. Teece to help determine how much money Samsung would be due if Apple had infringed upon some of its patents. Teece drew upon the Apple licensing agreements to create his report, but any confidential information should have been redacted before the report was shared beyond Samsung's outside counsel — but in what attorney John Quinn characterized as an "inadvertent disclosure" that "we deeply regret," that protocol wasn't followed.

The full Teece report was placed on an FTP site for download, with login information sent to some Samsung employees. Different versions of the report were also emailed directly to various Samsung executives — including those that handle patent licensing. Apple counsel William Lee claimed that at least 223 unauthorized individuals received versions of the document: over 90 Samsung employees, and more than 130 outside lawyers in various law firms.

Apple has argued that the smoking gun that turns accident into intent is the sworn declaration of Nokia's chief intellectual property officer, Paul Melin. Melin met with Samsung executive Dr. Seungho Ahn on June 4th of this year to negotiate a licensing agreement. Melin claims that during that meeting Ahn used the details of the Nokia-Apple deal as leverage, stating that Samsung's outside counsel had shared the terms with him and that "all information leaks."

Referring to Ahn's own declaration on the matter, Quinn argued that no such statement had ever been made, chalking the issue up to miscommunication across languages (English is a second language for Ahn). Pointing to the executive's own professional history and standing he said it simply wasn't credible that Ahn would have made such incriminating statements. "He just would simply know better," Quinn said. The numbers that were bandied about at that meeting — which didn't precisely match those in the Apple-Nokia document — likely came from other sources, Quinn said, or were explained away by Ahn's own research and knowledge of the industry.

Lee also pointed to Samsung-provided logs that indicated the licensing agreements had been referenced in Quinn Emanuel communications about the Samsung and Apple International Trade Commission case. If Samsung's legal team had used the confidential information that had been disclosed in this trial in order to strategize for the ITC case, he said, it would have been a violation of the court's protective order as well. Quinn Emanuel threaded the needle very precisely in response, stating that the communications had shown up because the licensing agreements were referenced, but that none of the confidential information itself was included.

Despite the contention over motivations, the Quinn Emanuel team was forthright in admitting there had been a number of missteps and accidents when it came to the Teece report. After the unredacted version was put up on the FTP site an incorrectly redacted version of the document was sent out in December of 2012. That error was recognized within 13 hours, Quinn said, and the responsible attorney asked the recipient to delete the document. However, despite recognizing the error nobody at the firm contacted Nokia and Apple about the leak — Quinn characterized it as the type of under-the-radar mistake that occurs at all firms, and not a reason to "blow the whistle" — and no investigation was launched to determine if similar accidents had occurred before. Furthermore, yet another version of the report was sent out the following month that completely redacted the Apple-Nokia information but left confidential information belonging to yet another party available for anyone to see.

Neither argument was enough to spur Judge Grewal into definitive action just yet. "I am not yet satisfied that sanctions are warranted in this matter," he said, but he also wasn't convinced he'd seen enough to make an informed decision either way. The communication logs Samsung provided to Apple had many of their most basic details redacted — enough so that Lee and Nokia attorney Randall Allen claimed that they still weren't able to follow the course of events — and Grewal asked to review a sampling of the documents himself in order to determine what type of protection their contents warranted. Of course, with many of the documents in Korean there will be the issue of translation to deal with — because in the saga of Apple vs. Samsung, nothing is ever easy.