Samsung execs shown confidential Apple-Nokia patent license terms, allegedly misused information

Posted:
in General Discussion edited January 2014
It came to light on Wednesday that at least fifty Samsung employees retained access to highly confidential Apple-Nokia licensing terms originating from the Apple v. Samsung court trial, information that should not have been disclosed to anyone other than Samsung's outside counsel.

Ahn
Source: Samsung


In a court order filed as part the ongoing Apple v. Samsung court fight, Magistrate Judge Paul S. Grewal outlined the dire situation over which Apple, and possibly Nokia, are requesting sanctions, reports FOSS Patents' Florian Mueller.

Judge Grewal revealed that some of Samsung's licensing executives got their hands on an non-redacted document containing extremely sensitive information describing certain Apple and Nokia licensing deals meant solely for use in litigation by outside counsel. Due to the nature of such documents' contents, which could be used against another corporation as an unfair negotiation tactic, the information is normally redacted and marked as "Highly Confidential -- Attorneys' Eyes Only."

That was apparently not the case with the Apple-Nokia terms, and Samsung executives allegedly leveraged said information against Nokia during a licensing negotiation that took place on June 4, 2013. According to Wednesday's order, Nokia's Chief Intellectual Property Officer, Paul Melin alleges Samsung executive Dr. Seungho Ahn not only mentioned his cognizance of the confidential Apple-Nokia license, but used this knowledge to gain an unfair advantage "by asserting that the Apple-Nokia terms should dictate terms of a Samsung-Nokia license."

From the order:
Specifically, according to Mr. Melin, 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 revelation is somewhat shocking, considering Samsung's action breaches the widely respected rule governing protective court orders. In essence, the breach undermines a court's assurance of confidentiality. These protective orders are crucial for a court to adjudicate properly, and with adequate transparency, the full scope of a case.

Judge Grewal points out the onus to uphold the rule, and thereby the sanctity of the court, falls largely on counsel .

"A casual observer might reasonably wonder what magic a protective order works that allows outside counsel access to confidential information to advance the case without countenancing untoward uses by the client," Judge Grewal writes. "The answer is not a magical one at all: confidential information remains confidential because counsel and clients alike follow court orders. If parties breach this basic rule, the court?s assurances become meaningless."

As for how Samsung execs managed to gain access to the Apple-Nokia deal, the order explains that the document was part of fact discovery produced during the first Apple v. Samsung case between August 2011 and March 2012. In fact, not only did Apple divulge its patent license agreement with Nokia, but also ongoing arrangements with Ericsson, Sharp and Philips.

When the case moved into expert discovery, Samsung's counsel sent the company a draft of a report created by its expert witness Dr. David J. Teece. In said report, which was written in support of Samsung's per-iPhone royalty demands, Teece "included key terms of each of the four Apple license agreements."

David Teece
Expert witness David Teece. | Source: Wikipedia


The Teece report should have been fully redacted due to its inclusion of "attorneys' eyes only" information, but it was not. It is not known if Samsung's outside counsel, law firm Quinn Emanuel led by partner John Quinn, did so intentionally or by mistake.

From there, the document was posted to an FTP server accessible by Samsung personnel and an email detailing how to access the document was sent out to counsel's client distribution list meant to provide the Korean tech giant's employees updates about the case.
The information was then sent, over several different occasions, to over fifty Samsung employees, including high-ranking licensing executives. 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.
What happened to the information after the report's dissemination is unclear, though it is at this point in the timeline of events that the above described declaration from Nokia's Melin comes into play. Judge Grewal notes that the meeting between Nokia and Samsung may have occurred much differently than described by Melin, though he can't be sure because Samsung is not cooperating with court requests for further information.

"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," the order reads. "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's counsel still holds that formal discovery into the matter is unnecessary. Further the company is "unable to provide" evidence regarding who had access to the information, what the information was used for, when it was used, where it was used, or how it was used. Judge Grewal's "who, what, when, where, why, and how" example is underlined by Samsung's apparent lack of respect for the legal process.
"In each instance, the only response available seems to be, 'We?re working on it,'" - Magistrate Judge Paul S. Grewal on Samsung's response questions from the court.
"In each instance, the only response available seems to be, 'We?re working on it,'" the jurist writes.

Samsung has agreed to provide Apple with a log of documents generated as a result of the Teece report, though the company plans to use a collection protocol it first negotiated with Nokia in a separate case. Judge Grewal does not approve.

"Rarely is the fox is permitted to investigate without supervision the disappearance of chickens at the henhouse," he said.

Instead, the court has ordered discovery of at least some emails and communication pertaining to the paper trail, as well as depositions from Ahn and other Samsung employees who had access to the document.

Both Apple and Samsung will meet next on Oct. 22 for a hearing on the requested sanctions.

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Comments

  • Reply 1 of 69
    Good. Fine them 50 billion or something. Destroy them.
  • Reply 2 of 69
    emrulemrul Posts: 26member
    Scamscum just aren't interested in following the law it seems. Interesting that the responsibility (and possibly any liability?) lies with Quinn Emmanuel.

    Would be funny seeing Apple and Nokia take those clowns to the dry cleaners - they're meant to be a top law firm but have acted with less competence than an ambulance chaser!
  • Reply 3 of 69
    Anyone surprised about any of this???
  • Reply 4 of 69
    Disbar the whole lot of Samsung attorneys.. then sue the pants off of Samsung
  • Reply 5 of 69
    The more I hear about Samsung, the less I am inclined to buy any of their products, however well made (or not). Mafia springs to mind.

    For instance if I buy another Android phone it'll be from anyone but them.

    However, its almost impossble to not buy a manufactured electronic item without somethng they've made in it. I guess the best I can do is thnk that at least they don't make anywhere near as much money on a component than on a whole product.
  • Reply 6 of 69
    mad1at35 wrote: »
    <sigh> The more I hear about Samsung, the less I am inclined to buy any of their products, however well made (or not). Mafia springs to mind.

    For instance if I buy another Android phone it'll be from anyone but them.

    However, its almost impossble to not buy a manufactured electronic item without somethng they've made in it. I guess the best I can do is thnk that at least they don't make anywhere near as much money on a component than on a whole product.

    I'm an Android user who buys nexus only. Except the S and the Galaxy versions. I refuse to support Samsung at all. No fridge no television nothing.
  • Reply 7 of 69
    iqatedoiqatedo Posts: 1,606member
    Quote:
    Originally Posted by JustSomDude View Post





    I'm an Android user who buys nexus only. Except the S and the Galaxy versions. I refuse to support Samsung at all. No fridge no television nothing.

     

    ...and if we work you over, maybe a future iOS user!  <img class=" src="http://forums-files.appleinsider.com/images/smilies//lol.gif" /> (We need the numbers... no we don't... Gollum, get lost!)

  • Reply 8 of 69

    Remind me again which Korea is our ally and which is an enemy.  With a government that allows its' companies to result in this level of ethical behavior with regard to our laws.  I don't know which is worse, this, or our probable legal response of "yea but what are you going to do?"  Take the protection our military provides but steal any economic advantage you can over our companies.  With friends like this who needs enemies.  If your going to buy android (which I have no problem with the choice, just the substance of the os) at least buy from HTC, a Taiwanese company.  At least Taiwan behaves grateful for our protection.

  • Reply 9 of 69

    Ahn

    What a load of crap

  • Reply 10 of 69

    Sounds to me as if it was Samsung's legal team that screwed up. If the document "should have been redacted" before being sent to Samsung then Samsung could argue that the fact that it wasn't constituted legal advice (from their own legal team to them) that they were entitled to the information. The fact that Samsung openly (well, in negotiations with Nokia) disclosed that they had the information supports this - if they thought they shouldn't have the information, the last thing they would do is quote it to a competitor. Nokia had no motive to keep quiet and every right to be upset.

     

    It also sounds as though Nokia could be the party most damaged: collateral damage from someone-else's legal battle. Score one for the lawyers then? I wonder who will sue who because the losses here, certainly to Nokia and probably to Apple, could be substantial.

  • Reply 11 of 69
    richlrichl Posts: 2,213member
    Quote:

    Originally Posted by Command_F View Post

     

    Sounds to me as if it was Samsung's legal team that screwed up. If the document "should have been redacted" before being sent to Samsung then Samsung could argue that the fact that it wasn't constituted legal advice (from their own legal team to them) that they were entitled to the information. The fact that Samsung openly (well, in negotiations with Nokia) disclosed that they had the information supports this - if they thought they shouldn't have the information, the last thing they would do is quote it to a competitor. Nokia had no motive to keep quiet and every right to be upset.

     

    It also sounds as though Nokia could be the party most damaged: collateral damage from someone-else's legal battle. Score one for the lawyers then? I wonder who will sue who because the losses here, certainly to Nokia and probably to Apple, could be substantial.


     

    The first sensible post of the thread. :) 

  • Reply 12 of 69
    mdriftmeyermdriftmeyer Posts: 7,282member
    Samsung hopes the $1.1 billion in early trials was absurd. It's rather clear that Apple should and most likely will divert all future manufacturing contracts from them and demand much higher sanctions, including those held under FRAND.
  • Reply 13 of 69
    cnocbuicnocbui Posts: 3,613member

    If Apple counsel or a consultant in their employ had related to to Apple confidential information they shouldn't have, no one would blame Apple - it would rightly be ascribed as the fault of the counsel/consultant.

     

    This sounds like the fault lies with Teece.

  • Reply 14 of 69
    matrix07matrix07 Posts: 1,993member
    Quote:

    Originally Posted by cnocbui View Post

     

    If Apple counsel or a consultant in their employ had related to to Apple confidential information they shouldn't have, no one would blame Apple - it would rightly be ascribed as the fault of the counsel/consultant.

     

    This sounds like the fault lies with Teece.


     

    To be fair, Apple is not a scumbag like Samsung. If Samsung's past behavior is noble then everybody will think twice before blaming them.

  • Reply 15 of 69
    matrix07 wrote: »
    To be fair, Apple is not a scumbag like Samsung. If Samsung's past behavior is noble then everybody will think twice before blaming them.

    Exactly. Samsung gets no benefit of the doubt.
  • Reply 16 of 69
    I would not put other Korean companies in the same bag than Samsung : HTC and LG are pretty forward in their business practices. Samsung executive head, on the other hand, seems to be quite a bunch of liars%u2026

    While Samsung's legal counsel may have screwed up, high ranking Samsung exec chose to pass the document to other executives working on a Samsung-Nokia deal to allow them to strong-arm Nokia in agreeing to their terms. Good luck with explaining they didn't know it gave them an unfair and illegal advantage%u2026

    I sincerely hope US and EU adopt a stronger position against Samsung which does not seem to care about law outside of their country%u2026
  • Reply 17 of 69
    stephane36 wrote: »
    I would not put other Korean companies in the same bag than Samsung : HTC and LG are pretty forward in their business practices. Samsung executive head, on the other hand, seems to be quite a bunch of liars%u2026

    While Samsung's legal counsel may have screwed up, high ranking Samsung exec chose to pass the document to other executives working on a Samsung-Nokia deal to allow them to strong-arm Nokia in agreeing to their terms. Good luck with explaining they didn't know it gave them an unfair and illegal advantage%u2026

    I sincerely hope US and EU adopt a stronger position against Samsung which does not seem to care about law outside of their country%u2026

    HTC is Taiwanese. But yea I agree with you. They do get benefit of the doubt. At least for now. Samsung needs a nationwide injunction until they get their shit together.
  • Reply 18 of 69
    quantzquantz Posts: 94member

    Cosa nostra…

  • Reply 19 of 69
    emrulemrul Posts: 26member
    Quote:
    Originally Posted by Command_F View Post

     

    Sounds to me as if it was Samsung's legal team that screwed up. If the document "should have been redacted" before being sent to Samsung then Samsung could argue that the fact that it wasn't constituted legal advice (from their own legal team to them) that they were entitled to the information. The fact that Samsung openly (well, in negotiations with Nokia) disclosed that they had the information supports this - if they thought they shouldn't have the information, the last thing they would do is quote it to a competitor. Nokia had no motive to keep quiet and every right to be upset.

     

    It also sounds as though Nokia could be the party most damaged: collateral damage from someone-else's legal battle. Score one for the lawyers then? I wonder who will sue who because the losses here, certainly to Nokia and probably to Apple, could be substantial.


     

    Thing is, Samsung were definitely aware that Apple and Nokia did not want to disclose these details in the first place due to commercial sensitivities - they were ordered to disclose by the court and Samsung's counsel was obligated to keep it safe.  Now Quinn Emmanuel may have failed in their obligation, but Samsung can't argue they didn't know they were given something they shouldn't have been. Instead, Samsung went about using the information that'd been inappropriately disclosed to them to seek a commercial advantage improperly.  The proper thing to do would have been to notify their counsel of the disclosed information and take steps to prevent the information being shared with the executives negotiating with Nokia.

     

    Except they didn't do that and now they're back in court and appear to be refusing to cooperate.  Rarely do big corporations refuse to co-operate with the law and when they do it is because a) management have no respect for the law and b) they realise the potential liability could cripple their business.....

  • Reply 20 of 69
    ssls6ssls6 Posts: 49member

    Don't think for a moment it was an "accident".

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