Apple Inc. appears poised to win a ruling that lawyers for Samsung Electronics Co. at Quinn Emanuel Urquhart & Sullivan shared a highly confidential Apple business document among dozens of Samsung employees. No sanctions have been awarded yet, but the judge overseeing the dispute had plenty of tough words this week for Samsung and its lawyers.
U.S. Magistrate Judge Paul Grewal in San Jose addressed Apple’s allegations in a six-page order issued on Wednesday, one day after a hearing that pitted Apple lawyer William Lee of Wilmer Cutler Pickering Hale and Dorr against Quinn Emanuel’s Susan Estrich. Grewal declined to sanction Samsung for the time being, concluding that he needs to review all the evidence. But he certainly seemed receptive to Apple’s arguments. To get to the bottom of the mess, Grewal ordered Samsung to produce internal e-mails and to make a high-ranking executive available for deposition.
“[C]onfidential information remains confidential because counsel and clients alike follow court orders. If parties breach this basic rule, the court’s assurances become meaningless,” Grewal wrote. “There is reason to believe the rule has been breached in the present case.”
The discovery spat arises out of Apple’s big patent infringement case against Samsung, which climaxed in a (now-trimmed) $1 billion jury win for Apple in the summer of 2012. At Quinn Emanuel’s request, during the litigation Apple produced a licensing agreement it reached with Nokia Corp. Apple designated the document “for attorneys eyes only” because it didn’t want Samsung deriving a business advantage from the intelligence. Under the terms of a protective order issued by Judge Grewal, Quinn Emanuel was allowed to use the agreement to advance the litigation and couldn’t share it with its client.
Apple moved for sanctions against Samsung and Quinn Emanuel in August, arguing that contents of the Nokia agreement were shared with a high-ranking licensing executive at Samsung named Dr. Seungho Ahn, who allegedly bragged about his intel to Nokia’s chief IP officer, Paul Melin. In an affidavit, Melin swore that Ahn was able to recite all the terms of the Apple-Nokia agreement. (According to Melin, Ahn said “all information leaks.”) Apple also alleges that more than 50 Samsung employees and lawyers learned the terms of the Apple-Nokia deal because an unredacted expert report containing the information was uploaded to a widely used server.
Quinn Emanuel filed its response to the sanctions motion under seal, so it’s hard to divine Samsung’s defense. According to Grewal, it doesn’t amount to much. He wrote that Quinn Emanuel “acknowledge[es] that many dozens of individuals at Samsung and its other counsel have knowledge of confidential license terms that they had no right to access.” But, the judge continued, Quinn Emanuel “denied even one violation of the proactive order, asserting that such a violation can only occur willfully.” According to Grewal, Samsung has been unable to explain exactly what happened and why. “In each instance, the only response available seems to be, ‘we’re working on it,’” wrote the judge.
Quinn Emanuel’s Estrich didn’t immediately return a call seeking comment. We also didn’t hear back from Quinn partner Robert Becher.
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