updated 11:37 pm EDT, Mon June 23, 2014
Lawyers for Samsung ordered to pay all legal costs spent investigating malfeasance
Apple has won another legal victory over its rival Samsung, this time against both the Galaxy phone maker and its legal team, Quinn Emanuel, led by John Quinn. A $2 million penalty has been levied against both QE and Samsung, related to the former's mishandling and leaking of confidential patent-licensing data between Apple and Nokia. Samsung executives later abused the leak to leverage knowledge of the Apple-Nokia licensing terms to strongarm Nokia in similar negotiations.
An investigation into the leak established that Samsung's attorneys -- who fielded several charges of flaunting court orders during the first Apple-Samsung trial, which the firm badly lost -- violated the court's order that the confidential information, needed during the discovery process between Apple and Samsung. The data was marked "for attorney's eyes only" and was not to be passed on to Samsung itself -- it was provided only so that Quinn Emanuel attorneys would know if Apple mischaracterized its licensing process with other companies during testimony in the Apple-Samsung patent trial.
Instead, the documents were shared with Samsung executives by its attorneys. Dr. Seungho Ahn later told Nokia's Chief Intellectual Property Officer Paul Melin that Samsung's attorneys had shared Apple's negotiations with him, and even recited points of the deal to prove that he wasn't bluffing. Dr. Ahn, later questioned about the incident, attempted to deny the incident but was not believed by the court.
U.S. District Magistrate Judge Paul Grewal found Quinn Emanuel guilty of "failure to institute sufficient safeguards for third-party confidential information, and failure to comply with the notice and cooperation requirements set forth in Section 18(a) of the protective order entered in this case." Grewal then ordered Samsung and Quinn Emanuel to reimburse Apple and Nokia for "any and all costs and fees incurred in litigating this motion and the discovery associated with it" within the next 30 days. Nokia is to get the bulk of the judgement, $1.145 million, while Apple will receive $893,825.
The law firm had fought stridently to get the finding reversed and the damages reduced, denying everything and noting that at one point Apple accidentally posted an unredacted version of the Nokia-Apple licensing agreement on its website. However, it could not overcome the fact that the abuse QE and Samsung executives engaged in took place months before the accidental posting -- and that Quinn Emanuel neglected to report the breach of trust as legally required for months.
The stonewalling and denials from Quinn and Samsung took a while to untangle, resulting in further legal fees for both Apple and Nokia as they investigated the incident. Over numerous objections by Samsung and QE, the court found that the two companies' "willful failure to institute sufficient safeguards for the information warrants sanctions when considered in light of the vast distribution of confidential information that occurred because such protections were not in place."