Apple v. Samsung: Court Denies Samsung's Request for Discovery Based on Apple's Alleged Disclosure of Confidential Information

by Jeffer Mangels Butler & Mitchell LLP

In the ongoing patent battle between Samsung and Apple, Samsung, trying to turn the tables on Apple, filed a motion for sanctions based on Apple's disclosure of confidential information. The court had previously sanctioned Samsung for disclosing confidential information.

Prior to addressing the specific Samsung motion, the court went through the factual background of the prior ruling sanctioning Samsung. "On June 4, 2013, Nokia and Samsung met to continue their ongoing negotiations for a license deal. At that meeting, Dr. Seungho Ahn of Samsung told Paul Melin of Nokia that he knew the terms of Nokia's license agreement with Apple; he then recited the terms and indicated that his lawyers had told him what they were. As Dr. Ahn put it, 'all information leaks.'"

In August 2013, Samsung's counsel notified Apple that there had been a breach of the protective order, resulting in the dissemination of information designated as "attorneys' eyes only" within Samsung. "In response, Apple filed a motion for sanctions in this case, as well as a motion for discovery to figure out how far and wide the information had spread. Because progress had been essentially non-existent on the stipulated remedial agreement, the court granted Apple's motion for discovery. 160 days, 50 deposition hours, and 1,000,000+ pages of evidence later, the court granted Apple's motion for sanctions against Samsung and its counsel on two grounds: (1) for failing to institute sufficient safeguards for third-party confidential information and (2) for failing to comply with the notice and cooperation requirements set forth in Section 18(a) of the protective order entered in this case. The court ordered QE to reimburse Apple and Nokia any and all costs and fees incurred in litigating this motion and the discovery associated with it."

Earlier this year, Apple notified both Samsung and the court of its recent discovery that it had inadvertently included the disputed license terms in a public filing on October 10, 2013. Samsung used this disclosure as grounds to challenge the reasonableness of the fees requested by Apple and Nokia.

Samsung then moved for a sworn declaration from Apple addressing "what Nokia and NEC have said in response to Apple's revelation," "the investigation Apple performed before it informed the court and Samsung that it had no information that 'the document was distributed on the Internet," and "the names and titles of the persons involved in the inadvertent disclosure, and what each of them did" on the filing at issue.

Samsung set forth two arguments as to why it was entitled to the discovery sought. First, it argued that the information would reveal whether Nokia has been seeking "legitimate protection" of its license terms, or whether its outrage at their dissemination may have been feigned. The court rejected this argument out of hand. "But nothing in the protective order requires that a party whose information is disclosed be "legitimately" outraged in order to pursue protections; in fact, there is no requirement that it be outraged at all. The order is only concerned with the fact of the disclosure and the responses by the disclosing party, not the level of indignation that the disclosure caused."

Second, Samsung argued that "the confidentiality of th[e] licensing information at the time Apple and Nokia were aggressively pursuing sanctions is relevant to the propriety and amount of the fees awarded." The court also disagreed with this argument. "Once again, this is simply not correct. The confidentiality of the information at the time of its disclosure is the relevant inquiry, not its status at whatever late date the parties manage to seek a remedy. None of the information sought is at all probative of the information's status between March 24, 2012 and June 4, 2013. The continued status of the information might be relevant if the court had imposed an additional fine to compensate Apple and Nokia for the continuing harm suffered by having the information potentially out in the open, but it did not. The sanctions imposed reimburse Apple and Nokia for the costs of investigating past disclosures; no more and no less."

Apple Inc. v. Samsung Electronics Co. LTD, Case No. 5:11-cv-01846-LHK (PSG) (N.D. Cal. June 6, 2014)


Written by:

Jeffer Mangels Butler & Mitchell LLP

Jeffer Mangels Butler & Mitchell LLP on:

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