Judge in GT Advanced bankruptcy case skeptical about need for secrecy
At a hearing on Wednesday, U.S. Bankruptcy Court Judge Henry Boroff said he sees little in the way of sensitive trade secrets that would preclude the court from making the terms of Apple's deal with sapphire maker GT Advanced Technologies public.
According to in-court reports from Reuters, Judge Boroff questioned the need to grant Apple's motion to seal documents in the ongoing GT Advanced bankruptcy proceedings.
"I've got a foot-high stack of documents, and it can't be that it all must be sealed," Boroff said.
Apple contends that evidence and its filed objections include sensitive research and development details and secret business dealings that need to be kept out of public purview. Already divulged as part of GT's Chapter 11 filing are Apple's supplier non-disclosure agreements, which for GT consists of a $50 million penalty for each instance of leaking details about an unreleased product.
To the jurist, Apple is seemingly acting like a disgruntled homeowner not satisfied with the results of a construction project.
"I'm seeing what looks incredibly like a construction suit, where a homeowner says to the contractor, 'It didn't come out the way I wanted to,' and the contractor says, 'Well, it would have come out that way if you didn't continue to change the specifications,'" Boroff said.
While the details are unknown, rumors claim Apple was not satisfied with the quality of GT's sapphire material yield. Production goals required for contract payment were also not being met, though Apple reportedly tried to help GT qualify for the last $139 million apportionment.
For its part, GT called the contracts with Apple "oppressive and burdensome" and in documents filed with the court said it believes to have "many claims against Apple arising out of its business relationship with Apple."
After filing for bankruptcy protection earlier this month, GT Advanced announced plans to wind down plant operations at its sapphire production facilities.
Apple said it is dedicated to keeping the jobs created at the Mesa, Ariz. sapphire plant, but has yet to announce a strategy that would see such a transition through.
According to in-court reports from Reuters, Judge Boroff questioned the need to grant Apple's motion to seal documents in the ongoing GT Advanced bankruptcy proceedings.
"I've got a foot-high stack of documents, and it can't be that it all must be sealed," Boroff said.
Apple contends that evidence and its filed objections include sensitive research and development details and secret business dealings that need to be kept out of public purview. Already divulged as part of GT's Chapter 11 filing are Apple's supplier non-disclosure agreements, which for GT consists of a $50 million penalty for each instance of leaking details about an unreleased product.
To the jurist, Apple is seemingly acting like a disgruntled homeowner not satisfied with the results of a construction project.
"I'm seeing what looks incredibly like a construction suit, where a homeowner says to the contractor, 'It didn't come out the way I wanted to,' and the contractor says, 'Well, it would have come out that way if you didn't continue to change the specifications,'" Boroff said.
While the details are unknown, rumors claim Apple was not satisfied with the quality of GT's sapphire material yield. Production goals required for contract payment were also not being met, though Apple reportedly tried to help GT qualify for the last $139 million apportionment.
For its part, GT called the contracts with Apple "oppressive and burdensome" and in documents filed with the court said it believes to have "many claims against Apple arising out of its business relationship with Apple."
After filing for bankruptcy protection earlier this month, GT Advanced announced plans to wind down plant operations at its sapphire production facilities.
Apple said it is dedicated to keeping the jobs created at the Mesa, Ariz. sapphire plant, but has yet to announce a strategy that would see such a transition through.
Comments
For those interested in seeing the MSA,
http://www.sec.gov/Archives/edgar/data/1394954/000110465913082405/a13-19507_1ex10d1.htm
and the SOW
http://www.sec.gov/Archives/edgar/data/1394954/000110465913082405/a13-19507_1ex10d2.htm
"I'm seeing what looks incredibly like a construction suit, where a homeowner says to the contractor, 'It didn't come out the way I wanted to,' and the contractor says, 'Well, it would have come out that way if you didn't continue to change the specifications,'" Boroff said.
Oh snap! Is what Apple is asking really going against the grain of what would be typical in these types of cases?
Ummmm, Mr. Judge, given Apple will sell hundreds of millions of devices that use this tech in a critical way, don't you think, umm, they might just want to be teensy weeny sure that it met the most stringent standards, lest, say, they had to recall and replace tens of millions of devices?
And the SOG35 will be available shortly.
Oh snap! Is what Apple is asking really going against the grain of what would be typical in these types of cases?
no it is not, they just trying to keep what is know as trade secrets, from public eye, these request are usually granted unless their a great good argument that the general public needs to know. The judge is over simplifying, to make his point to the lawyers,
And the SOG35 will be available shortly.
Just to be clear, these agreement are not out of the normal, actually I would say they are well done, and make it clear what is expected. It does not have too much legal mambo jumbo such that you cannot tell who has what risk and what happen is things go wrong.
Case and point, if the supplier can not meet demand required they have to notify Apple immediately and then provide daily update on status and action plan. It not say really bad things will happen if they can not meet demand, This is actually kind of fair an not too one sided.
I would love to see what is not share since it consider confidential, we will need to wait to see how the judge rules.
To me, the critical aspect here is the suggestion that GTAT failed because Apple kept changing the terms,
starting with something GTAT felt confident it could deliver, ending with something they couldn't,
which led to their failure and bankruptcy.
IF the judge is predisposed to seeing it that way, it could be tough sledding for Apple.
IF Apple can demonstrate that they were clear all along on what they required, and GTAT thought they
could sneak under the wire with something similar, that should be clear in the documents both companies provide,
and that would also be why Apple would want that detailed information protected...
AND why GTAT will try to base their case on something they hope Apple would rather settle over than divulge.
This is why companies tend to manufacture outside of the U.S. Wheb you try to bring jobs here the risk of being screwed over and the judges going along with it is super high.
PS. I like these judges who find things so simple and as cheap as some sort of "construction" deals! WTF!
Why do all judges connected to these cases seem terribly clueless?
The judge sounds like a dunderhead.
Why do all judges connected to these cases seem terribly clueless?
They are trained in law not technology.
The Judge said "I can't believe that it all must be sealed" implying that there needs to be a filter on what is sealed/limited and what is public. I don't think that is onerous, and neither would Apple as long as trade secrets remain sealed from the public.
The contractor anecdote certainly doesn't apply.
At least it sounds like he has made up his mind already, like Judge Cote. He appears to have swallowed GTAT's arguments at this early stage.
Because they used to use these things flirting with their GF ... OR BF!
Wonder if still do! :smokey:
If this has been reported correctly then the judge is another media whore pratt judge. It is a FACT, that the analogy that he gave of a 'disgruntled homeowner' not only entirely inappropriate but it already shows a bias against Apple. Just like other judges who do not have the subtle appreciation of design who have ruled against some of Apple's patents because they don't understand it.
Further in my opinion he/she has also revealed a smart ass bias with the comments about having a foot thick stack that can't all be secret. I don't think Apple is saying it's all secret just that there are confidential parts among it.
Judges seem to want to be celebrities these days with regard to Apple.
It goes with the occupation.
While the details are unknown, rumors claim Apple was not satisfied with the quality of GT's sapphire material yield. Production goals required for contract payment were also not being met, though Apple reportedly tried to help GT qualify for the last $139 million apportionment.
Rumors also claim that the Chinese factories which create the finished display covers were getting only about 20% yield out of the sapphire shipped to them by GTAT. Is 20% yield considered normal in this industry? With all the talk about Apple having such high standards, has anyone questioned whether those Chinese factories could do something to improve their yield?