Tuesday, August 2, 2011

Apple opposes Samsung's motion to disqualify some or all of Apple's lawyers

In the literally world-spanning dispute between Apple and Samsung, the two parties leave no stone unturned to gain a tactical advantage. One such sideshow is Samsung's motion to disqualify some (or potentially all) of Apple's external lawyers working on the California case. If you're not yet familiar with that effort, please click on the previous link to read the story. To keep this blog post focused (as a quick update), I'll simply presume in the remainder of this post that the relevant information is known to you at this point.

Yesterday Apple's lawyers filed their opposition brief. While Samsung's motion described the situation almost as a big-time betrayal, Apple's response is rather dismissive of Samsung's accusations.

Apple's lawwyers contradict Samsung's alleged facts, declaring that the firm of Bridges & Mavrakakis is entirely focused on how to assert Apple's patent portfolio against Android, a capacity in which the relevant attorneys can't make any use of whatever they may have learned while representing Samsung against Ericsson years ago (basically at the end of the pre-iPhone era). Based on the declarations presented by Apple, there are different law firms working on the California part of the dispute with different areas of responsibility. Bridges & Mavrakakis apparently supports the efforts led by Morrison & Foerster -- that's basically Apple's attack group, but doesn't participate in the slightest way in Apple's defense against Samsung's counterclaims.

Those two tracks used to be two separate lawsuits until Samsung recently consolidated the two cases by dropping its separate countersuit and simultaneously incorporating the essence of the countersuit into Apple's lawsuit as counterclaims. Apple hired a different law firm -- Wilmer Hale -- for its defense against Samsung's countersuit. Shortly after consolidation, Samsung apparently tried to take advantage of the new situation by alleging a conflict of interest on Bridges & Mavrakakis' part. But Apple's lawyers argue that what amounted to a consolidation of the two cases under one case number hasn't changed anything about the different responsibilities of those firms.

I don't know whether Samsung's lawyers are going to take the position that the declarations submitted by several Apple lawyers as well as a legal ethics expert have any shortcomings. The way I read those declarations, they seem pretty clear and consistent. It really looks like Bridges & Mavrakakis didn't assist Wilmer Hale in any way in its defense of Apple against Samsung's allegations but focused entirely on Apple's assertions against Samsung. Also, it appears that they advised Apple early on as to their past relationship with Samsung in terms of how it would limit their ability to help Apple in this dispute.

Apple argues that a general "playbook" theory (meaning that those lawyers learned a lot about Samsung's litigation strategies and the way its legal department operates) is too vague to warrant disqalification. Apple's position is that Samsung's motion must be denied because Samsung failed to make a clear connection between those lawyers' past work for Samsung and the limited scope of their current work for Apple.

Legal standards

There's an important discrepancy between Samsung's motion and Apple's opposition brief in terms of the legal standard for disqualification:

  • Apple's brief stresses that Samsung just seeks a tactical advantage and should not be allowed "to unilaterally alter the scope of Apple's attorney-client relationships, defeat its choice of counsel, and prejudice its prospects in this litigation--all without any showing of actual or threatened harm to Samsung." At the very start of its brief, Apple streses that "[d]isqualification is designed to remedy actual conflicts, not illusory ones". Apple argues in favor of a fairly high hurdle for disqualification, coming from the position that clients should be free to choose their lawyers and lawyers should be free to work for clients unless there's a very serious reason why not.

  • By contrast, Samsung's original motion argued that even a potential breach of confidentiality is allegedly sufficient so satisfy the legal requirements for disqualification:

    "Even if somehow, for the entire pendency of this action, [the Bridges & Mavrakakis lawyers working for Apple on this matter] could perform the mental gymnastics necessary to prevent the use and disclosure of Samsung's confidential information, the law does not permit such an ethical high-wire act. The test is whether the attorneys have obtained confidential information material to this litigation; not whether they will use it. Bridges & Mavrakakis' attorneys thus should not be permitted to represent Apple in this litigation."

So this comes down to a line-drawing exercise: at which point is one (former) client's confidential information in clear and present danger so that some other (current) client's choice of attorney (and the attorney's liberty to accept such an assignment) must be restricted?

Samsung will now get to reply to Apple's opposition. Then there will be a hearing, and a decision.

In the event that the judge agrees with Samsung that the conflict of interest should be avoided, Apple proposes an alternative to disqualification: the case could be severed, which would turn Samsung's counterclaims once again into a separate lawsuit. In that case, Apple believes it is in a better position to get its motion for an expedited trial granted since its own case would basically be streamlined by separating Samsung's allegations against Apple from it.

There are clearly some tactical interdependencies here. Just like Samsung tried to take advantage of consolidation, Apple now tries to turn Samsung's strategy against the Korean company by suggesting as a possible outcome a structure that Samsung would certainly not like. Separating Samsung's allegations from Apple's lawsuit would not only increase the likelihood of an expedited trial for Apple's claims: even without such an expedited trial for Apple's lawsuit, Samsung would have a significant risk that its own California claims against Apple would be decided much later. That's because the FRAND issue I recently explained might turn a separate Samsung lawsuit into a more complex and time-consuming one.

It's interesting to see those two companies fight each other on so many fronts, but ultimately the most important decisions are going to be on the substance of the infringement assertions. Are the patents (or other intellectual property rights) valid? Are they infringed? Are there licensing obligations (such as FRAND) in place, and if so, to what extent do they limit a right holder's flexibility? Those questions represent what this dispute is really about. Everything else is only meant to indirectly influence the probability of certain outcomes concerning those key questions. But with so much at stake, even indirect effects can be very important to the parties and to the industry at large.

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