A court in California has decided not to sanction Samsung Electronics for the leak of confidential Apple licensing information, stating that the information had not been misused in patent negotiations.
The court has, however, asked the external counsel to reimburse costs and fees incurred by Apple and Nokia on litigating the motion and related discovery.
Magistrate Judge Paul S. Grewal of the U.S. District Court for the Northern District of California ruled Wednesday that Samsung could not have benefited from the leaked information for its license negotiations with Nokia or Ericsson, pointing out that Samsung had argued that it already knew the terms of the agreement ahead of the leak.
The court said in November that it was considering sanctions against Samsung and its lawyers in view of allegations of the suspected breach of confidential information, including information on Apple's patent licensing agreements with Nokia, Ericsson, Sharp and Philips, which were marked for viewing by the attorneys alone.
Key terms of the four patent license agreements were contained in a draft expert report on damages that was forwarded to Samsung without redaction by its external counsel Quinn Emanuel Urquhart & Sullivan.
The counsel posted the expert report on an FTP (file transfer protocol) site that was accessible by Samsung staff, and emailed instructions for accessing the site, which over 50 Samsung employees including licensing executives are said to have accessed.
Apple had provided the information to Quinn Emanuel during the discovery phase of a lawsuit in California in which Apple was awarded damages of US$1.05 billion against Samsung, later whittled down to about $930 million.
Samsung explained that Ericsson told it the terms of its license with Apple in the course of their mediations. "Given that no representative from Ericsson or anyone else has come forward to refute that assertion, the court credits the testimony and accepts this explanation," Judge Grewal wrote in his order. He said he was also not persuaded, despite Samsung's "tenuous" explanations, that the South Korean company had used the confidential information in the expert report.
With regard to Quinn Emanuel, the court found that the reimbursement of costs, in addition to the public findings of wrongdoing was sufficient "both to remedy Apple and Nokia's harm and to discourage similar conduct in the future." Quinn Emanuel will also be responsible for ensuring that all copies of the expert report "containing confidential information are deleted, erased, wiped, or otherwise permanently removed from Samsung's control within fourteen days of this order."
"It is undisputed that at some point in late March 2012, a junior associate working late one night failed to fully redact Apple's confidential license terms from an expert report," Grewal said about Quinn Emanuel's role. "One inadvertent mistake resulted in the widespread distribution of confidential information to hundreds of people who were not authorized to have access to it."
Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.