Tuesday, July 12, 2011

Samsung wants some or potentially all of Apple's external lawyers disqualified over alleged conflict of interest

The wide-ranging intellectual property spat between Apple and Samsung is full of acrimony and controversy at all levels. They can't even agree on schedules, and there's no d├ętente in sight: Samsung has asked the U.S. District Court for the Northern District of California to disqualify at least some or potentially even all of Apple's outside lawyers from the case, citing concerns over a conflict of interest and the treatment of privileged and confidential information gathered in the past.

Samsung's motion is 20 pages long. The gist of it is that Samsung wants the recently-founded law firm of Bridges & Mavrakakis barred from the case because at least five of its lawyers -- including one of its founders, Kenneth Bridges -- previously represented Samsung while they were with another firm, Kirkland & Ellis. Samsung then goes on to argue that this fact "taints all attorneys at Bridges & Mavrakakis through imputation". But not enough: Samsung additionally demands that Apple's two other law firms involved with this federal lawsuit (Morrison & Foerster and Wilmer Hale) "provide affidavits confirming they have not received any Samsung confidential information from attorneys at Bridges & Mavrakakis" while those firms were coordinating Apple's representation so far or, absent such assurance, be disqualified as well.

I'd like to stress that I have no reason to assume that there's any wrongdoing by Apple's outside attorneys. Samsung's filing states that those attorneys don't think there is a conflict of interest because they believe their "prior representation of Samsung was not substantially related to the current matter". They argue that technology evolves rapidly in this industry, and they say that they won't use any of the confidential information they received from Samsung in the past. Samsung, however, argues that the relevant legal criterion is not whether they intend to use that information but whether they have obtained it in the first place.

Samsung's allegations are very detailed and worth reporting on, and I can't rule out that someone might have made an error in judgment somewhere. Apple's lawyers will certainly respond to this, and the judge will have to decide whether there is a conflict of interest, and if so, what the consequences should be.

Samsung's conflict-of-interest theory

The collective work of the five ex-Kirkland lawyers on Samsung's behalf allegedly amounted to "almost 9,000 hours, including time spent earlier this year", and in Samsung's opinion they could use some of the confidential information with which Samsung entrusted them back then.

Samsung argues that there are overlaps between those lawyers' past efforts on its own behalf and their work for Apple on this new case in terms of

  • some of the technologies at issue, which Samsung claims those lawyers analyzed in the past on its behalf,

  • at least one of the patents Samsung asserts against Apple, and

  • a legal question called "FRAND" ("fair, reasonable and non-discriminatory", which is a framework for licensing terms related to many industry standards).

Apparently the most important dispute in which the five lawyers in question represented Samsung involved Ericsson and Sony-Ericsson, and a total of 42 patents. In that dispute, Samsung asserted U.S. Patent No. 6,928,604 on a "turbo encoding/decoding device and method for processing frame data according to QOS", a patent that Samsung also asserts in its counterclaims against Apple in California. In that dispute, Samsung also faced allegations of failure to honor its commitments to standard-setting organizations such as the European Telecommunications Standard Institute (ETSI) to license its patents essential to certain standards on the aforementioned FRAND conditions. Samsung expects Apple to raise that defense now as well. In fact, Apple already raised FRAND defenses against Nokia and Motorola.

In addition to the Ericsson matter, one of the five Bridges & Mavrakakis attorneys worked for Samsung in its dispute with Dicam, and two others in its dispute with Spansion.

Samsung's rhetoric: outrage over betrayal

It's possible that Samsung primarily hopes to throw a wrench into the works of Apple's litigation effort. But in its motion, Samsung displays a lot of outrage over what it suggests is a major betrayal of its trust.

Here are some quotes that show this approach (and I recommend reading them with a healthy dose of skepticism concerning possible exaggerations):

"Samsung is confronted with the incredulous situation of now finding these former trusted counsel working on behalf of Apple. Over the years, these attorneys not only provided Samsung with in-depth legal advice regarding global litigation strategy, but also detailed technical analysis of Samsung mobile devices. Their work included preparing and overseeing claim construction charts, working with experts, coordinating with Samsung's in-house and business teams to craft strategy and develop facts relating to patent litigation about Samsung's mobile devices, including fair, reasonable, and non-discriminatory term ('FRAND') arguments, analyzing Samsung's patent portfolio relating to mobile technology, and reviewing technical specifications and other documents, including privileged documents relating to Samsung's mobile technology patents. Through their representation of Samsung, these attorneys obtained unfettered access and insights into Samsung’s approach to patent litigation."

"Samsung does not bring this motion lightly. It recognizes the importance of allowing litigants in most cases to be represented by counsel of their own choice. In this case, however, Apple retained Samsung's former counsel to litigate against Samsung. It is inevitable that Samsung's confidential information--including not only the legal strategies implemented by Samsung in a prior litigation, but also other accumulated insights such as the decision-making tendencies and pressure points of Samsung's internal legal team--will be used to advance Apple's interests against Samsung in this litigation."

"As a result of [the work performed by some of those lawyers on the Spansion and Dicam cases], the Attorneys were privy to every aspect of Samsung’s fundamental strategies for defending against these lawsuits, many of which will be highly relevant here and play into Apple's ultimate advantage."

We will know soon how Apple's lawyers respond. They won't plead guilty for sure. Here are some passages from Samsung's representation of Apple's lawyers' position:

"Apple's Counsel Denies There is a Conflict."

"Bridges & Mavrakakis responded that any prior representations by its lawyers of Samsung were not related to the current litigation. [...] On behalf of Bridges & Mavrakakis, Mr. Pieja asserted that there was not a relationship between the technology and products at issue in the previous representations, specifically the Ericsson Matters, due to the 'rapid pace of change in the relevant industry.'"

"Mr. Bridges also claimed that the scope of Bridges & Mavrakakis' representation of Apple did not pertain to the '604 patent or any technology related to the Attorney's past representation of Samsung."

"Samsung also wrote to Apple's other counsel in these matters, Morrison & Foerster and Wilmer Hale, to request confirmation that they had not received Samsung confidential information from Bridges & Mavrakakis and to explain their working relationship with any attorneys from Bridges & Mavrakakis. [...] Both Morrison & Foerster and Wilmer Hale denied having received Samsung confidential information, but refused to disclose their relationship and interaction with Bridges & Mavrakakis on privilege grounds."

Samsung wants a court hearing on this by August 18 (or shortly thereafter). In the meantime, there'll be an exchange of pleadings related to this motion, and there'll certainly be other skirmishes.

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