Apple Seeks Sanctions from Samsung over Illegal Disclosure of Apple-Nokia Licensing Terms

High-level Samsung employees, including licensing experts, got access to highly confidential Apple-Nokia licensing terms, which by the way were highly confidential documents for attorney’s eyes only and originating from the Apple-Samsung trial, Foss Patents reports.

The extremely confidential business information leak — which obviously gave an unfair advantage to Samsung’s licensing experts when they sat down with Nokia to talk about licensing their technology — came into light after Magistrate Judge Paul S. Grewal of the United States District Court for the Northern District of California has entered an order after he held hearings on an Apple (and possibly Nokia) request for sanctions against Samsung for violation of a protective order.

Licensing executives from Samsung and Nokia held a meeting on June 4, 2013 to discuss a patent license deal between these parties. In that meeting, a Samsung exec, Dr. Seungho Ahn, “informed Nokia that the terms of the Apple-Nokia license were known to him” and according to a declaration from Nokia’s Chief Intellectual Property Officer, Paul Melin, “stated that Apple had produced the Apple-Nokia license in its litigation with Samsung, and that Samsung’s outside counsel had provided his team with the terms of the Apple-Nokia license”. The Melin declaration furthermore says that “to prove to Nokia that he knew the confidential terms of the Apple-Nokia license, Dr. Ahn recited the terms of the license, and even went so far as to tell Nokia that ‘all information leaks.'”

How could Samsung execs get access to Apple-Nokia licensing terms? While the court is yet to find answers, there is a likely scenario as described by Foss Patent’s Florian Müller. The whole story starts with Dr. David J. Teece’s report that supported Samsung’s ridiculous 2.4% per iPhone royalty demand and included key terms of each of the four Apple license agreements — in this case, the agreements with Nokia, Ericsson, Sharp, and Philips.

In March 24, 2012, the full report was sent to Samsung through an FTP server where every Samsung employee involved with the Apple vs. Samsung patent litigation got access, as well as Samsung lawyers representing the company in other cases. Furthermore, the report also was sent to over 50 Samsung employees, and that included high-ranking licensing executives as well.

All of this is really, really bad, but the court, in order to determine sanctions, wants to know more. Judge Grewal does not rule out at a hypothetical, intellectual level that “Dr. Ahn’s encounter with Mr. Melin [the meeting in which Samsung told Nokia all the key terms of the Apple license] occurred very differently”. But Samsung has been uncooperative so far. According to the order “Samsung has elected not to provide the court with any sworn testimony from Dr. Ahn or anyone else at the meeting” and “also has failed to supply the court with any evidence at all regarding other uses of the Apple-Nokia license, or those of the other confidential licenses”. But it has acknowledged that “many dozens of individuals at Samsung and its other counsel have knowledge of confidential license terms that they had no right to access”.

While Samsung will likely be sanctioned, the court is awaiting evidence, as the judge ordered discovery. The next hearing on this motion for sanctions is scheduled for October 22.