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Judge orders Apple to disclose details of HTC licensing deal

post #1 of 24
Thread Starter 
A federal judge on Wednesday ordered Apple must show Samsung the details of its agreement with HTC, which recently brought an end to ongoing litigation by striking a ten-year patent cross-licensing deal.

Judge Grewal
U.S. Magistrate Judge Paul S. Grewal. | Source: California District Court


Apple v. Samsung Magistrate Judge Paul S. Grewal handed down the order granting Samsung's motion to compel, forcing Apple to reveal an unredacted version of its HTC settlement that will be attorney's-eyes-only, meaning the details will likely remain out of public purview.

From the order:

Accordingly, Samsung?s motion to compel production of an unredacted version of the settlement agreement is GRANTED. Apple shall produce the unredacted document without delay
subject to an Attorneys-Eyes-Only designation under the protective order already in place in this case.


At a hearing held earlier on Wednesday, Samsung argued that it required the complete unredacted version of the agreement as the included licensing terms were needed to effectively oppose Apple's bid for a number of permanent injunctions. In regard to the agreement's financials, the Korean company said the information would be useful in supporting its argument that a royalty settlement is a "more suitable alternative" to a permanent sales ban.

In a response to Samsung's initial motion, HTC filed a response with the court declaring that it would be harmed if it were to divulge the Apple settlement details. Judge Grewal said the court is "not pursuaded" by HTC's assertions. He went on to say that while the court is "more than a little skeptical" of Samsung's own arguments, they are covered under Rule 26 of the Federal Rules of Civil Procedure which describes the "duty to disclose; general provisions governing discovery."

"Many third parties to this case have had their licensing agreements disclosed ?without any redaction of financial terms ? subject to an Attorneys-Eyes-Only designation because the confidential financial terms were clearly relevant to the dispute between Apple and Samsung," Judge Grewal wrote in the order.

Apple and HTC previously agreed to disclose a version of the settlement with all financial details redacted.

The Apple v. Samsung post-trial proceedings will continue when the parties meet at a hearing scheduled for Dec. 6, at which the companies will discuss their respective motion including an Apple-sought ban of eight Samsung products and Samsung's bid to have the whole trial thrown out due to alleged jury misconduct.

post #2 of 24
wasn't there a mention previously about a possible cancellation clause on the contract in event of 3rd party takeover or "change of power"?

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post #3 of 24
What a reasonable person will take away from this: "the court is more than a little skeptical of Samsung's arguments."

What the idiots will take away: "Samsung is granted a motion to see the Apple/HTC agreement that Aple opposed. Apple is hiding something and now the dirty truth will come out."

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post #4 of 24

Oh. Now Samsung is ready to do a royalty deal with Apple.

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post #5 of 24

Judge allows telecoms' collusion deals to remain in absolute secrecy

 

No double standard here.

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post #6 of 24
Quote:
Originally Posted by Suddenly Newton View Post

Oh. Now Samsung is ready to do a royalty deal with Apple.
It's a poison pill. If the court rules to uphold the permanent sales injunction which Samsung wants to avoid, they can argue for a royalty payment based on the HTC terms. Then in the pending patent infringement litigation, Samsung will be forced to accept similar terms should the court find infringement on either party.
post #7 of 24

 I find this very confusing as under a 'Attorneys Eyes Only' designation, NONE of the specific information can be shown to Samsung directly. So really it is the Samsung's attorney who will review and see if the patents are the same or different than ones settled with HTC. If they are the same, they still can not demand equal terms from Apple on non FRAND patents. But is it the judge has the power here? ie decide that if Apple settled with HTC, it must settle with Samsung. Sounds unfair to me - 'if your brother ate the spinach, you will have to as well?'  If  licensed patents are different, I am not sure why anything would change really from the original ruling. And what is the penalty to Samsung if the lawyer 'leaked' the information to them?

post #8 of 24
Quote:
Originally Posted by TeeJay2012 View Post

 I find this very confusing as under a 'Attorneys Eyes Only' designation, NONE of the specific information can be shown to Samsung directly. So really it is the Samsung's attorney who will review and see if the patents are the same or different than ones settled with HTC. If they are the same, they still can not demand equal terms from Apple on non FRAND patents. But is it the judge has the power here? ie decide that if Apple settled with HTC, it must settle with Samsung. Sounds unfair to me - 'if your brother ate the spinach, you will have to as well?'  If  licensed patents are different, I am not sure why anything would change really from the original ruling. And what is the penalty to Samsung if the lawyer 'leaked' the information to them?

 

Unfortunately it was Samsung's attorneys who leaked "closed" information before. I'm sure the same thing will happen here, which is why HTC and Apple didn't want to have to submit the information.

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Disclaimer: The things I say are merely my own personal opinion and may or may not be based on facts. At certain points in any discussion, sarcasm may ensue.
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post #9 of 24
Quote:
Originally Posted by Mac_128 View Post


It's a poison pill. If the court rules to uphold the permanent sales injunction which Samsung wants to avoid, they can argue for a royalty payment based on the HTC terms. Then in the pending patent infringement litigation, Samsung will be forced to accept similar terms should the court find infringement on either party.

 

I hope that Samsung will be forced to accept these terms and they are less desirable than those offered to Samsung by Apple earlier. That's got to burn their neither regions.

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post #10 of 24
Quote:
Originally Posted by TeeJay2012 View Post

 I find this very confusing as under a 'Attorneys Eyes Only' designation, NONE of the specific information can be shown to Samsung directly

The lawyers will simply read it to the Samsung management. Or write a white paper.

post #11 of 24
Quote:
Originally Posted by TeeJay2012 View Post

 I find this very confusing as under a 'Attorneys Eyes Only' designation, NONE of the specific information can be shown to Samsung directly. So really it is the Samsung's attorney who will review and see if the patents are the same or different than ones settled with HTC. If they are the same, they still can not demand equal terms from Apple on non FRAND patents. But is it the judge has the power here? ie decide that if Apple settled with HTC, it must settle with Samsung. Sounds unfair to me - 'if your brother ate the spinach, you will have to as well?'  If  licensed patents are different, I am not sure why anything would change really from the original ruling. And what is the penalty to Samsung if the lawyer 'leaked' the information to them?

If Samsung sells as many handsets as its claims it does, I would assume that's a nice chunk of change for Apple.

HTC's sales seem to be falling off a cliff.....
post #12 of 24
Quote:
Originally Posted by anantksundaram View Post


If Samsung sells as many handsets as its claims it does, I would assume that's a nice chunk of change for Apple.
HTC's sales seem to be falling off a cliff.....

 

I can't see that Apple would enter into a licensing agreement with HTC without having Samsung in mind when doing so.

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post #13 of 24
Quote:
Originally Posted by TeeJay2012 View Post

 I find this very confusing as under a 'Attorneys Eyes Only' designation, NONE of the specific information can be shown to Samsung directly. So really it is the Samsung's attorney who will review and see if the patents are the same or different than ones settled with HTC. If they are the same, they still can not demand equal terms from Apple on non FRAND patents. But is it the judge has the power here? ie decide that if Apple settled with HTC, it must settle with Samsung. Sounds unfair to me - 'if your brother ate the spinach, you will have to as well?'  If  licensed patents are different, I am not sure why anything would change really from the original ruling. And what is the penalty to Samsung if the lawyer 'leaked' the information to them?

It would be very difficult for the judge to order Apple and Samsung to settle. Not impossible, but difficult.

That, however, is not the issue. Apple is arguing for an injunction against Samsung products. In order to get an injunction, they have to show that a fine or penalty would not make them whole. That is, they are arguing that no amount of money would make up for Samsung using their IP. Samsung is arguing that since Apple is willing to license HTC, then there IS an amount of money that would allow someone else to use Apple's IP.

Samsung's argument is, in this context, not unreasonable. I can't say that they'd win (and the judge also appears to be skeptical), but the argument apparently was good enough that the judge will allow them to make it - which is why he allowed them access to HTC's license agreement.

The difficulty is that license agreements such as this are essential, proprietary information. There is a very real risk that if Samsung knows more about HTC's costs that they can damage the company. There is some plausibility to this argument, although the judge didn't buy it.

It's a very complex issue with a lot of complications. My initial reaction was that it wouldn't withstand appeal, but on further consideration, I'm not so sure. There are good arguments on both sides and the decision does appear to fall well within the bounds of judicial discretion, so it may well be upheld on appeal.
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post #14 of 24
Quote:
Originally Posted by jragosta View Post

Apple is arguing for an injunction against Samsung products. In order to get an injunction, they have to show that a fine or penalty would not make them whole. That is, they are arguing that no amount of money would make up for Samsung using their IP. Samsung is arguing that since Apple is willing to license HTC, then there IS an amount of money that would allow someone else to use Apple's IP. Samsung's argument is, in this context, not unreasonable.

The difficulty is that license agreements such as this are essential, proprietary information. There is a very real risk that if Samsung knows more about HTC's costs that they can damage the company. There is some plausibility to this argument, although the judge didn't buy it.

 

Correct.  Injunctive relief is only offered when financial compensation cannot compensate for the damage done by use of the IP.  However even if Samsung can argue that money would compensate Apple can still argue that with Samsung unwilling to license the patents there will be no money and therefor injunctive relief is necessitated. 

Damages can only be awarded for past infringement.  Use of the IP on a go-forward basis requires that a licensing deal be negotiated.  If Samsung is unwilling to agree to license the patents then injunctive relief may still be on the table.

 

Apple and HTC knew that the licensing deal would be entered into the Samsung proceedings, and this knowledge will have been considered when crafting the agreement.  On the surface this ruling looks like Samsung is getting what they want, but really its Apple who has set the agenda here.  Apple wants the HTC agreement entered into the proceedings because it establishes precedent on Apple's terms.  The agreement with HTC is a major blow to Samsung's case.

post #15 of 24
Got it.

Samsung bribed American regulators and judges.

They do bribe Korean politicians very often, a gigantic amount of money.

I am very well aware of it, because I am a Korean man.

Samsung is famous for paying everyone off: the president, congressmen, regulators, judges, and journalists.

I am so disappointed because, apparently, American regulators are as dirty as ours.
post #16 of 24

As Apple reaches agreements with all other players, Samsuck won't be in any position to deny talks with Apple. No court can accuse Apple of bloody mindedness on patent law suits. Samsuck will be painted into a corner and have no choice but enter into talks. The HTC agreement will have some kind of discount clauses that samsuck can't have and will be locked in to paying top dollar per device. This is a very smart strategy by Apple. It's a check mate move.

post #17 of 24
Quote:
Originally Posted by TeeJay2012 View Post

 I find this very confusing as under a 'Attorneys Eyes Only' designation, NONE of the specific information can be shown to Samsung directly. So really it is the Samsung's attorney who will review and see if the patents are the same or different than ones settled with HTC. If they are the same, they still can not demand equal terms from Apple on non FRAND patents. But is it the judge has the power here? ie decide that if Apple settled with HTC, it must settle with Samsung. Sounds unfair to me - 'if your brother ate the spinach, you will have to as well?'  If  licensed patents are different, I am not sure why anything would change really from the original ruling. And what is the penalty to Samsung if the lawyer 'leaked' the information to them?

Read all about it here:

http://www.frostbrowntodd.com/resources-1084.html

 

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Edited by Gatorguy - 11/22/12 at 4:06am
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post #18 of 24
Quote:
Originally Posted by mjtomlin View Post

 

Unfortunately it was Samsung's attorneys who leaked "closed" information before. I'm sure the same thing will happen here, which is why HTC and Apple didn't want to have to submit the information.

 

There was no such leak ever.  QE provided a summary of the evidence rejected by the court when asked by reporters.  Nope, these are for "attorney eyes only."  As judge magistrate Grewal noted there is a little reason why this motion should be rejected, considering that "Many third parties to this case have had their licensing agreements disclosed.."

 

 

http://www.groklaw.net/article.php?story=2012112121031884

post #19 of 24
Quote:
Originally Posted by Fillie View Post

wasn't there a mention previously about a possible cancellation clause on the contract in event of 3rd party takeover or "change of power"?

 

Moot in this case. 

 

Samsung is looking for how much money HTC is paying for SEP patents that Apple holds and/or evidence that Apple is cross licensing/licensing non SEP to HTC to try to somehow force Apple to do the same with them. 

 

That there is a clause in the deal that says it doesn't care over if HTC or Apple is bought by another party doesn't matter for this particular situation 

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post #20 of 24
Quote:
Originally Posted by tooltalk View Post

There was no such leak ever.  QE provided a summary of the evidence rejected by the court when asked by reporters.  Nope, these are for "attorney eyes only."  As judge magistrate Grewal noted there is a little reason why this motion should be rejected, considering that "Many third parties to this case have had their licensing agreements disclosed.."



http://www.groklaw.net/article.php?story=2012112121031884
Are you actually stupid enough to believe that? Judge Koh was "livid" when she found out and she was forced to pause and question jurors to see if they were tainted or had seen the evidence.

Amazing the spin haters will try to put on an event to trivialize it.

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post #21 of 24
Quote:
Originally Posted by charlituna View Post

 

Moot in this case. 

 

Samsung is looking for how much money HTC is paying for SEP patents that Apple holds and/or evidence that Apple is cross licensing/licensing non SEP to HTC to try to somehow force Apple to do the same with them. 

 

That there is a clause in the deal that says it doesn't care over if HTC or Apple is bought by another party doesn't matter for this particular situation 

 

 

My understanding is that these are non-SEP patents held by Apple. Apple's desire is for the [alleged] infringers to stop using the patents and invent/innovate new methods. 

Samsung is trying to use this settlement between Apple and HTC to show that Apple did not suffer irreparable damage by Samsung's [and others'] infringement thus negating the necessity of a permanent injunction. Remember, the stated goal of Samsung is to license Apple's patents, thus allowing them to continue "fast-following" with impugnity. The result of this would probably look much like Apple's attempt to license Classic OS prior to Jobs return.

post #22 of 24
Quote:
Originally Posted by EricTheHalfBee View Post


Are you actually stupid enough to believe that? Judge Koh was "livid" when she found out and she was forced to pause and question jurors to see if they were tainted or had seen the evidence.
Amazing the spin haters will try to put on an event to trivialize it.

 

Not their smartest move. I still have no idea what they had to gain by annoying the judge.

post #23 of 24

not at all, they will just produce a report for Samsung management entitled "what we think numbers should be"

any similarity to the numbers in the HTC document will be purely coincidental, and not caused by copying or infringing on the rights of HTC/Apple

post #24 of 24

Absolutely!!! Apple vs. HTC patent war has been in courts for a long time. Is it a coincidence that both would enter a licensing agreement in the midst of the Samsung war when the US judges seem to side with Apple? Only a fool would think so….This is well planned without any speculative doubt. 

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