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Judge sanctions Samsung and counsel over release of confidential info in big-bucks Apple patent suit

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Judge sanctions Samsung and counsel over release of confidential info in big-bucks Apple patent suit

Jan 31, 2014, 12:30 pm CDT

Saying that a major law firm handled proprietary information covered by a confidentiality order in big-bucks patent litigation over smartphone technology as if it were "a trapeze artist flying high without a net," a federal magistrate judge in California has imposed sanctions on Quinn Emanuel Urquhart & Sullivan and its client, Samsung Electronics Co.

However, U.S. Magistrate Paul Grewal rejected as "ridiculously overbroad" the remedies sought by litigation opponent Apple Inc. and Nokia, whose licensing agreement with the technology Goliath was widely revealed within Samsung when a confidential expert report containing that information was posted by a junior Quinn associate on a company website, according to Bloomberg and Courthouse News.

Instead, in a Wednesday order in the San Jose case, Grewal is requiring Samsung and Apple to pay their opponent's cost of litigating the discovery dispute and take measures to eliminate all copies of the expert report that are under Samsung's control within two weeks. Among the measures the judge rejected was a call by Nokia for the court to ban Quinn Emanuel from litigating against Nokia for ten years.

Noting that name partner John Quinn had "candidly and tellingly described his firm in court as '650 lawyers wide and one lawyer deep,'" Grewal faulted the firm for adopting and using a system that permitted a report marked "Highly Confidential, Attorney Eyes Only" to be distributed via email in a manner that foreseeably allowed it to become widely known. A total of 90 Samsung employees were given access instructions, but some 200 eventually got hold of the information, his opinion says.

"The information traded by Apple and Samsung in this case was considered sufficiently valuable by both parties to merit an interlocutory appeal to the Federal Circuit to keep it protected from the public, the vast majority of whom have absolutely no interest in it and no ability to use the information even if they were to discover it," Grewal wrote. "It is sufficiently valuable to merit hundreds and hundreds of pages of sealing motions, with thousands of pages more in supporting declarations. If keeping this information from the public is worth all of that, then surely, logically, it would be worth a second, or even a third, round of review before producing it to a competitor corporation, who would know exactly how to exploit it. Yet this basic precaution was not put in place. Because of this 'one lawyer deep' structure, a single inadvertent mistake led to confidential information being widely distributed within Samsung. This is unacceptable."

The judge also noted, concerning Quinn Emanuel's role in the leak, that “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,” reports a PC World article about the sanctions ruling. “One inadvertent mistake," the judge continued, "resulted in the widespread distribution of confidential information to hundreds of people who were not authorized to have access to it.”

Quinn has said in court that the disclosure of the proprietary information was inadvertent and he contended that Apple exaggerated the harm the leak caused as the company forced the law firm to spend millions of dollars investigating what happened and sought draconian sanctions, recounts Bloomberg.

In a written statement Thursday he said the court's decision made clear that "unsupported accusations" had fueled the discovery dispute. “We are pleased that Judge Grewal concluded that nothing done by either Quinn Emanuel or Samsung ‘ultimately implicated any issue in this or any other litigation or negotiation,’” Quinn said.

Samsung and Apple declined to comment when contacted by Bloomberg.

Additional and related coverage:

ABAJournal.com: "Judge mulls possible sanctions for Samsung and counsel over Apple info disclosure"

ABAJournal.com: "Apple awarded $290M in Samsung infringement-damages retrial; a ‘speed bump’ on the way to appeal?"

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