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Judge rules on sanctions against Samsung law firm

updated 12:27 am EST, Thu January 30, 2014

Slap on the wrist for illegally sharing insider info with client

Late on Wednesday, Magistrate Judge Paul Grewal has ruled on sanctions in another skirmish between Apple and Samsung. In this case, the attorneys for Samsung, Quinn Emanuel -- who have caught flack repeatedly for unprofessional behavior in and out of court -- were accused of allowing confidential information about Apple obtained in the process of discovery to leak to Samsung, which in turn it used to strongarm Nokia in license negotiations.

"Quinn Emanuel shall reimburse Apple, Nokia, and their counsel for any and all costs and fees incurred in litigating this motion and the discovery associated with it, as required by Rule 37 in the absence of 'substantial justification' or other showing of 'harmlessness,' neither of which the court finds here," Judge Grewal wrote, shutting down the firm's insistence that no substantive damage had been done by the leak. "That expense, in addition to the public findings of wrongdoing, is, in the court's opinion, sufficient both to remedy Apple and Nokia's harm and to discourage similar conduct in the future."

The judge noted that initial charges "began as a chorus of loud and certain accusations" but had "died down to aggressive suppositions and inferences," with Apple and Nokia admitting "that the evidence of misuse is 'circumstantial,' must overcome facial 'inconsistencies,' and that even they could only characterize it as 'more likely than not' that the information had been used." Judge Grewal, who had previously ruled in November that sanctions were warranted (after initially expressing doubt), said that the sanctions proposed by Apple and Nokia were "ludicrously overbroad."

The judge did reiterate that "the evidence has shown Quinn Emanuel failed to notify the relevant parties at the relevant times, and that [Samsung in-house lawyer Daniel] Shim made use of the information," the two companies could not produce sufficient evidence that the breach of the data -- or the firm's failure to notify anyone about it for several weeks -- "ultimately implicated any issue in this or any other litigation or negotiation. By the final hearing on December 9, 2013, this lack of clear evidence was obvious in the tone of the moving parties."

By only imposing a fine of restitution for expenses on Quinn Emanuel, both the law firm and its client Samsung dodged a bullet. The company can continue to represent Samsung in further proceedings without formal sanctions, and Samsung was cleared of any evidence of wrongdoing.

Despite this, Samsung is likely to pick up the tab for any costs Apple and Nokia file with the court over the matter. Apple and Nokia may decide to appeal the judge's ruling, hoping for more sanctions, reports patent case analyst Florian Mueller reports. Quinn Emanuel could ask the judge in the second Apple-Samsung trial, Judge Lucy Koh, to void the sanctions, but this is seen as unlikely, given that the punishment is perceived as light.

The International Trade Commission is also investigating the incident, as well as courts in other jurisdictions affected by the case, leaving open the possibility of addition sanctions. The second Apple-Samsung trial is scheduled to get underway in late March.

14-01-29 Apple v. Samsung Order on Sanctions for Disclosures



By Electronista Staff
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Comments

  1. Sanjiv Sathiah

    MacNN Staff

    Joined: 06-05-13

    Hard to believe that Samsung's lawyers passing the details of a sealed confidential licensing agreement between Apple and Nokia to Samsung's executive, which is then used by Samsung's executives in a licensing negotiation with Nokia only cops this level of penalty. Hardly what you would call a deterrent.

  1. prl99

    Dedicated MacNNer

    Joined: 03-24-09

    The problem Apple and Nokia have is demonstrating harm. Everyone knows there has been harm because the confidential information has been leaked but how does anyone quantify the harm? If someone was cheating on their wife and they were exposed, how do you quantify the harm? Apple and Nokia would have to prove they lost money, a potential contract or it cost them more to license patents. The problem with this scenario is that a simple penalty doesn't deter someone form doing it again. Just like speeding. As long as you're not in an accident, you only get a fine and maybe have your license revoked. You rarely go to jail or pay a heavy fine so people continue to do it. Unless the court makes a major statement and sanctions Quinn Emanuel big time, they'll continue to do whatever they want to. Legal costs are nothing compare to losing their business or losing a court battle. I'd put a bunch of them in jail and throw away the key for several years. That would teach them to play by the rules.

  1. Inkling

    Dedicated MacNNer

    Joined: 07-25-06

    Too bad. It'd have been great if the court had used this squabble and others like it to dismiss both their lawsuits 'with prejudice.' Then both would have to focus their attention on creating good products at good prices and not going to court. In law, that would be applying the unclean hands doctrine. Here's how Wikipedia describes it: ----Unclean hands, sometimes called the clean hands doctrine or the dirty hands doctrine,[1] is an equitable defense in which the defendant argues that the plaintiff is not entitled to obtain an equitable remedy because the plaintiff is acting unethically or has acted in bad faith with respect to the subject of the complaint—that is, with "unclean hands".[2] The defendant has the burden of proof to show the plaintiff is not acting in good faith. The doctrine is often stated as "those seeking equity must do equity" or "equity must come with clean hands".----A defendant's unclean hands can also be claimed and proven by the plaintiff to claim other equitable remedies and to prevent that defendant from asserting equitable affirmative defenses. In other words, 'unclean hands' can be used offensively by the plaintiff as well as defensively by the defendant. Historically, the doctrine of unclean hands can be traced as far back as the Fourth Lateran Council.---

  1. msuper69

    Professional Poster

    Joined: 01-16-00

    Why show a picture of a different judge?
    For those not familiar with the cases, this could be confusing.

  1. slapppy

    Fresh-Faced Recruit

    Joined: 03-23-08

    No wonder Samsung and Google are not afraid to break the rules and play unfair.

  1. Charles Martin

    MacNN Editor

    Joined: 08-04-01

    msuper69: you raise a good point. Although Judge Koh is the supervising judge in the case, it was Judge Grewal who made this ruling. I'll try and find a picture of Grewal and swap it out. Thanks for catching that.

  1. Charles Martin

    MacNN Editor

    Joined: 08-04-01

    Inkling: am I understanding you correctly that you believe Apple (or Samsung, or Nokia, or anyone) should just ignore when others steal/copy their patents, or engage in illegal activity to gain an advantage, and just "focus on making good products?" That it is okay for lawyers to violate their oaths in service to their clients? That the courts should not waste their time punishing those who have broken laws and orders?

    I think you've confused Judge Grewal for Judge Cote ...

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