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Patents in Apple-HTC settlement must remain unsealed, judge says

post #1 of 13
Thread Starter 
In a late Monday ruling, Apple v. Samsung Judge Lucy Koh said that the patents Apple and HTC are cross-licensing as part of a ten-year deal will not remain sealed, indicating that the public will be privy to the sensitive information.

HTC One X
Future HTC phones like the HTC One X shown here may implement licensed Apple tech.


As noted by CNet, Judge Koh will allow the financial details of the arrangement to remain under wraps, however the patents being licensed by Apple and HTC will not be sealed as the information does not present "a sufficient risk of competitive harm to justify keeping it from the public."

Included in the particulars that may be documented for public review are patents from both Apple and HTC, with some of the properties possibly being closely-guarded "user experience" assets the Cupertino, Calif., company rarely shares.

From the order:

As regards the motion to file under seal, this Court has repeatedly explained that only the pricing and royalty terms of license agreements may be sealed. Only these terms, and not the rest of the agreement, meet the ?compelling reasons? standard articulated by the Ninth Circuit for sealing filings related to dispositive motions and trial. There are compelling reasons to seal pricing and royalty terms, as they may place the parties to the agreement at a disadvantage in future negotiations, but there is nothing in the remainder of the agreement that presents a sufficient risk of competitive harm to justify keeping it from the public. Accordingly, Samsung?s motion to seal is GRANTED with regard to the pricing and royalty terms of the agreement only, and DENIED with regard to the rest of the agreement.


Monday's order comes two weeks after Apple v. Samsung Magistrate Judge Paul S. Grewal handed down a ruling ordering Apple to disclose the details of the company's settlement with HTC. Samsung had filed a motion to compel the then undisclosed agreement in hopes of hindering Apple's post-trial proceedings. As of this writing, only Samsung's lawyers have been allowed access to the documents, however Judge Koh's ruling could reveal that Apple has licensed certain utility patents to HTC, most importantly the '381 "rubber-banding" and '915 "pinch-to-zoom" patents. The two properties were hotly contested during the Apple v. Samsung jury trial which ended with a $1.05 billion decision in favor of Apple.

In November, Apple and HTC ended a series of lawsuits, including two ITC cases, with a ten-year agreement that called for the dismissal of all current and pending litigation.

Post-trial proceedings will continue on Thursday when both companies are scheduled to discuss their respective motions, including an Apple-sought ban of eight Samsung products and Samsung's request to have the whole trial thrown out due to alleged jury misconduct.

post #2 of 13

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post #3 of 13
I see an interlocutory appeal coming from Apple. This clearly violates typical NDAs which every company requires of its employees and contractees. Koh has just made all NDA details discoverable by any litigant.
post #4 of 13
@waldobusman: I'm an Apple user by night (and a student by day). NDA details are discoverable with a simple subpoena and do not have the same protections such as attorney-client or doctor-patient privilege during legal discovery.

Secondly, AppleInsider's article is wrong. Protection of an invention in a patent comes at the cost of making all of it the information public through a filing at the USPTO. That is why we can Google the patents and read them. The only time this doesn't occur is if: 1) the inventor forgoes patent protection or 2) if it falls under the Invention Secrecy Act.

Judge Koh was correct in making the list of patents public since patents are meant to be public. Will this ultimately hurt Apple? Probably. If Apple licensed patents to HTC that they claimed they couldn't license to Samsung then it will undermine their initial argument.

Disclaimer: None of this is legal advice.
post #5 of 13
Quote:
Originally Posted by waldobushman View Post

I see an interlocutory appeal coming from Apple. This clearly violates typical NDAs which every company requires of its employees and contractees. Koh has just made all NDA details discoverable by any litigant.

Yep. It will be appealed. It is not, however, as overreaching as you imply, nor is Apple guaranteed to win an appeal. See below.
Edited by jragosta - 12/3/12 at 7:18pm
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post #6 of 13
Quote:
Originally Posted by tziman View Post

@waldobusman: I'm an Apple user by night (and a student by day). NDA details are discoverable with a simple subpoena and do not have the same protections such as attorney-client or doctor-patient privilege during legal discovery.
Secondly, AppleInsider's article is wrong. Protection of an invention in a patent comes at the cost of making all of it the information public through a filing at the USPTO. That is why we can Google the patents and read them. The only time this doesn't occur is if: 1) the inventor forgoes patent protection or 2) if it falls under the Invention Secrecy Act.
Judge Koh was correct in making the list of patents public since patents are meant to be public. Will this ultimately hurt Apple? Probably. If Apple licensed patents to HTC that they claimed they couldn't license to Samsung then it will undermine their initial argument.
Disclaimer: None of this is legal advice.

You clearly don't understand what Koh did.

As you said, patents are public knowledge. Samsung is free to search the US patent office to see what patents Apple has applied for and received.

But Koh went much further. She stated that the agreement between the companies as to which patents are being licensed must be made public.

As I stated previously, it's a tough call. On the one hand, Apple and HTC have the right to reach any agreement they wish and have an expectation that the agreement would be private. On the other side, though, Samsung is arguing that Apple's willingness to license the patents shows that an injunction is not proper. Technically, an injunction should be granted only when a monetary payment would not correct the injustice. Apple argues that a monetary payment from Samsung would not be sufficient and therefore an injunction is needed. Samsung argues that a fine would be sufficient to rectify any wrong - and believes that the HTC agreement demonstrates that fact.

Of course, HTC is a smaller player and has not made the blatant ripoffs that Samsung has, so they might not win the argument, anyway, but it is a reasonable argument to present.

It could go either way on appeal. It would not surprise me for the appeals court to rule that the agreement doesn't need to be made public but that Samsung's attorneys can see it.
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post #7 of 13

As Jragosta pointed out this is not a simple matter, however, if the judge is ordering the deal made public is not good for business, since companies would not enter into deals if their is a possibility that the details of the deal can be made public at any time just because another company feels the details of the deal could be material to them suing a company. 

 

In this case Samsung should have to show that this is material to their case, and the judge should review their claim outside the public eyes to determine if Samsung is in fact is material to their claims. Even if it is material the details of the deal should not be made public. There is no reason to make the details of the deal public, it servers no public good, in fact it could harms companies. I said this before about Judge Koh, she is making it very hard and expensive for Apple and all the companies that Apple is sueing and also making them think twice about whether they want to take their cases this far. This case we all learned more about how Apple does development than we all learned from Steve Jobs book.

 

The Judge is basically tell Apple and others if they want to play lets sue each other out of existence than you will have all your secrets and dirt laundry aired for everyone to see

post #8 of 13
Quote:
Originally Posted by jragosta View Post


You clearly don't understand what Koh did.
As you said, patents are public knowledge. Samsung is free to search the US patent office to see what patents Apple has applied for and received.
But Koh went much further. She stated that the agreement between the companies as to which patents are being licensed must be made public.
As I stated previously, it's a tough call. On the one hand, Apple and HTC have the right to reach any agreement they wish and have an expectation that the agreement would be private. On the other side, though, Samsung is arguing that Apple's willingness to license the patents shows that an injunction is not proper. Technically, an injunction should be granted only when a monetary payment would not correct the injustice. Apple argues that a monetary payment from Samsung would not be sufficient and therefore an injunction is needed. Samsung argues that a fine would be sufficient to rectify any wrong - and believes that the HTC agreement demonstrates that fact.
Of course, HTC is a smaller player and has not made the blatant ripoffs that Samsung has, so they might not win the argument, anyway, but it is a reasonable argument to present.
It could go either way on appeal. It would not surprise me for the appeals court to rule that the agreement doesn't need to be made public but that Samsung's attorneys can see it.

I should have been more or less specific. Such contracts as between HTC and Apple likely fall into the area of trade secrets, of which NDAs are part. NDA's are likely less protected than other trade secrets since NDAs are often widely offered and not easily enforced. The specific patents that are being cross-licensed are, however trade secrets if the parties treated them as such. The cross-licensing agreement between HTC and Apple are irrelevant as to Samsung because HTC and Apple could have agreed to cross-license IPs that each could argue would be subject to injunction and the parties decided that the agreement removed the injunction risk for each. 

 

This is quite different from Apple v Samsung. There is no agreement, and Apple is claiming to hold IP that argues for an injunction. Is there a legitimate argument that Samsung has IP that would subject Apple to injunction for which they can make a cross-licensing to avoid? No, that is not what Samsung is arguing. Samsung is arguing that if Apple made an agreement with HTC to cross-license some IP, then it must be that monetary damages is sufficient damages for a violation. This argument has no legal nor logical validity on its face. 

post #9 of 13
Quote:
Originally Posted by waldobushman View Post

I should have been more or less specific. Such contracts as between HTC and Apple likely fall into the area of trade secrets, of which NDAs are part. NDA's are likely less protected than other trade secrets since NDAs are often widely offered and not easily enforced. The specific patents that are being cross-licensed are, however trade secrets if the parties treated them as such. The cross-licensing agreement between HTC and Apple are irrelevant as to Samsung because HTC and Apple could have agreed to cross-license IPs that each could argue would be subject to injunction and the parties decided that the agreement removed the injunction risk for each. 

 

This is quite different from Apple v Samsung. There is no agreement, and Apple is claiming to hold IP that argues for an injunction. Is there a legitimate argument that Samsung has IP that would subject Apple to injunction for which they can make a cross-licensing to avoid? No, that is not what Samsung is arguing. Samsung is arguing that if Apple made an agreement with HTC to cross-license some IP, then it must be that monetary damages is sufficient damages for a violation. This argument has no legal nor logical validity on its face. 

 

So why did Samsung refuse to accept a monetary solution, all the times Apple offered, both prior to litigation and during court ordered talks, as the case was proceeding?

 

Meanwhile Ericsson is suing Samsung over their refusal to renew license agreements and seeking injunctions from the ITC, as some of them are based on standard essential patents it will be interesting to see how Samsung can defend themselves, while simultaneously using opposing arguments to attack Apple.

 

One of the things that came out is that Apple is one of Ericsson's and presumably Sony's, licencees.

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post #10 of 13
Quote:
Originally Posted by jragosta View Post
It could go either way on appeal. It would not surprise me for the appeals court to rule that the agreement doesn't need to be made public but that Samsung's attorneys can see it.

According to FOSSPatents and Groklaw, Samsung's attorneys have already seen the agreement in it's entirety including the royalty terms with the document entered into evidence. Only the royalty terms and basis will be kept from the public (which includes Samsung management).

 

If there's any appeal, which there's no indication of, it better be darn fast. After Thursday if won't matter. 


Edited by Gatorguy - 12/4/12 at 5:06am
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post #11 of 13

Sounds like a great hand of cards. Samsung wants it out there, Apple doesn't, Samsung kicks and screams and gets its way.  Then, maybe there are patents that have been licensed and Judge asks Apple why they didn't license to Samsung.  The details get disclosed and it sets payment precedent which is higher than originally offered, checkmate....
 

post #12 of 13
Quote:
Originally Posted by icoco3 View Post

Sounds like a great hand of cards. Samsung wants it out there, Apple doesn't, Samsung kicks and screams and gets its way.  Then, maybe there are patents that have been licensed and Judge asks Apple why they didn't license to Samsung.  The details get disclosed and it sets payment precedent which is higher than originally offered, checkmate....
 

Higher than $30 - $40 a unit or thereabouts, the supposed licensing offer Apple made to Samsung? Hardly likely. Even asking half that figure would stretch credibility as a serious licensing offer IMHO.


Edited by Gatorguy - 12/4/12 at 11:18am
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post #13 of 13
Quote:
Originally Posted by Gatorguy View Post

According to FOSSPatents and Groklaw, Samsung's attorneys have already seen the agreement in it's entirety including the royalty terms with the document entered into evidence. Only the royalty terms and basis will be kept from the public (which includes Samsung management).

 

If there's any appeal, which there's no indication of, it better be darn fast. After Thursday if won't matter. 

With no sign of any appeal and only hours to go before it's a moot point anyway, it certainly looks like there's going to be some details on the agreement made public tomorrow.

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