Samsung Called Before Court For Alleged Leak Of Apple Secrets

Samsung has been ordered to produce documents related to an alleged breach of a protective order involving secret patent licensing documents between Apple and licensees Nokia, Ericsson, Sharp and Phillips.

The court order, issued last week, relates to secret documents produced by Apple during the fact discovery process in a patent case between Apple and Samsung between August 2011 and March 2012. Those documents included a June 2011 licence between Apple and Nokia, as well as similar patent licence agreements with Ericsson, Sharp and Philips, according to the order.

Draft report

Then, in March of last year, Samsung’s outside counsel sent the company a draft expert report concerning damages to be awarded over Apple’s alleged infringement of Samsung patents.

“Because it addressed highly confidential, attorneys’-eyes-only information, the report should have been fully redacted of that information before it was sent,” US Magistrate Judge Paul S. Grewal of the US District Court for the Northern District of California, San Jose division, wrote in his order. “However, intentionally or inadvertently, it was not. The report as distributed included key terms of each of the four Apple license agreements.”

Samsung’s outside counsel placed the report on an FTP site accessible by Samsung personnel, and emailed instructions for accessing the site to the regular client distribution list used by counsel to provide Samsung personnel updates regarding this case, according to the court order. The information was sent to more than 50 Samsung employees, including high-ranking licensing executives, according to the order.

More seriously, Samsung then allegedly proceeded to use the secret information against Nokia in licence negotiations with the Finnish mobile phone maker, according to a declaration from Nokia’s chief intellectual property officer, Paul Melin, cited in the order.

Information leak

In a meeting between Nokia and Samsung in June of this year, Samsung licensing executive Dr. Seungho Ahn allegedly informed Nokia that the terms of the Apple-Nokia licence were known to him, stating that the terms had been provided to him via documents provided in the litigation between Samsung and Nokia.

Dr. Ahn allegedly recited the terms of the licence, before using the information to gain an unfair advantage in the negotiations by asserting that the Samsung-Nokia licence should follow similar terms, the order said.

Dr. Ahn “even went so far as to tell Nokia that ‘all information leaks'”, Judge Grewal wrote.

He said Samsung has to date refused to provide the court with sworn testimony from Dr. Ahn or anyone else at the meeting, or with other evidence regarding the use of the confidential licence agreements.

“In fact, despite acknowledging that many dozens of individuals at Samsung and its other counsel have knowledge of confidential license terms that they had no right to access, at yesterday’s hearing, Samsung’s counsel repeatedly denied even one violation of the protective order,” Judge Grewal wrote.

He said Samsung had denied the need for any formal discovery into the matter, in spite of the company’s inability to answer “the most basic questions”. “The only response available seems to be, ‘We’re working on it.’,” Judge Grewal wrote.

Investigation

He said Samsung’s efforts to investigate the incident on its own were “insufficient”.

“Rarely is the fox… permitted to investigate without supervision the disappearance of chickens at the henhouse,” he wrote.

As a result, he ordered Samsung to provide all emails and communications related to the incident by 16 October, and to make Dr. Ahn and other Samsung employees involved in the matter available for questioning. Nokia is to be permitted to participate in the proceedings.

The parties involved are to provide the court with briefs by 21 October ahead of a 22 October hearing.

Samsung did not immediately respond to a request for comment.

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