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Apple and Samsung spar over leaked license contracts

Apple says Samsung has used the leaked documents to its competitive advantage

By , IDG News Service
October 23, 2013 04:06 AM ET

IDG News Service - Apple and Samsung Electronics exchanged heated words in court Tuesday over allegations that Samsung's lawyers leaked details of confidential Apple licensing agreements to Samsung executives.

Apple asked the court to impose "severe sanctions" against Samsung for the disclosures, which it says allowed the South Korean firm to gain unfair leverage in negotiations with Apple and other companies.

William Lee, an attorney for Apple, said there had been a "massive disclosure of highly confidential information" by one of Samsung's outside law firms.

"What we've discovered is remarkable in scope and remarkable in the extent of the violations," he told Magistrate Judge Paul Grewal at the U.S. District Court for the Northern District of California in San Jose.

Samsung's lawyers shared the information, including terms of an Apple license contract with Nokia, with more than 200 people, according to Lee, including 90 Samsung employes and attorneys at 19 different law firms, some of which are involved in lawsuits against Apple.

"It talks about Apple's negotiating strategy, it talks about how they view licenses. That information is now in the head of every single Samsung licensing executive. We need to come up with a remedy that will address that," Lee said.

The law firm in question, Quinn Emanuel Urquhart & Sullivan, doesn't deny disclosing the information but says it did so "inadvertently." It says far fewer Samsung employees read the documents than Apple suggests and that any consequences were minimal.

"We're deeply sorry about what happened," John Quinn, a partner with Quinn Emanuel, told the judge. "It shouldn't have happened. But these folks are exploiting it to make the most out of it."

The dispute has become an unexpected sideshow in a worldwide legal battle in which Apple accuses Samsung of infringing its patents and trademarks for the iPhone and iPad.

Companies keep terms of their licensing deals strictly confidential for competitive reasons. That's especially true for Apple and Samsung, who as Lee told the court Tuesday are currently trying to negotiate an end to their worldwide legal dispute.

It's not known what sanctions or remedies Apple will seek, and Lee declined to speculate when asked outside the courtroom Tuesday. Court documents show that Apple has also complained to the U.S. International Trade Commission about the leak, according to Florian Mueller at the FOSS Patents blog, who calls the affair "Patentgate."

For now, Apple and Nokia, which has joined Apple for this part of the case, want the court to force Samsung to comply with its order to provide them information about the extent of the leaks, which they say it has failed to do. Quinn Emanuel has essentially been investigating itself, an attorney for Nokia told the judge. "It has completely, utterly failed," he said.

Grewal wasn't ready to decide on the matter Tuesday. "I am not yet satisfied that sanctions are warranted in this matter," he said. But he hasn't ruled out the possibility either, and said he would review more documents before making his decision.

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