Monday, October 28, 2013

Australian federal judge losing patience with Samsung over Patentgate affair

In California, Samsung has a deadline today for delivering to the court copies of all English-language documents that will be reviewed in camera in connection with the "Patentgate" scandal of improperly-disclosed terms of Apple's highly confidential patent license agreements with Nokia, Ericsson, Sharp, and Philips.

Late on Friday, Apple's lawyers sent a letter to Magistrate Judge Paul S. Grewal "to apprise the Court of four matters that [they had] learned since the hearing on Tuesday that are relevant to the current sanctions proceedings". One of the four items is completely redacted so I have no idea what it relates to. Another one relates to privilege logs. The first one says that even Apple's counsel received only a redacted version of Samsung's main brief filed on Monday in preparation of the Tuesday hearing, apparently relying "on its non-disclosure agreement with Nokia". I guess Apple's counsel will soon get to see the entire pre-hearing brief.

The most interesting item in Apple's letter relates to a hearing held by Justice Annabelle Bennett of the Federal Court of Australia on Thursday, October 24, over the Patentgate matter. The Australian court is concerned because it's currently holding an extensive Samsung v. Apple FRAND trial, and Samsung may have made use of otherwise confidential information in Australia. Apple's lawyers attached an Australian hearing transcript to their letter to the San Jose court (this post continues below the document):

13-10-24 Australian Apple v. Samsung Court Hearing Transcript by Florian Mueller

Apple had already told the U.S. court on Monday that (quoting now from Apple's Friday letter) "Samsung recently acknowledged to the court in Australia that its Australian lawyers violated the confidentiality regime in the Australian court by disclosing an improperly redacted version of a draft Teece Report to four Samsung executives, including Daniel Shim, and to unauthorized Samsung outside counsel". The Thursday hearing was apparently the first hearing on this matter, but a follow-up. The transcript I published covers only the public portion of the hearing in Australia; there is an additional "transcript-in-confidence". The public part is interesting enough all by itself.

At this point the Australian judge appears to be far more determined to order sanctions against Samsung than Judge Grewal in California. She also took Samsung's counsel to task for not having been more forthcoming more quickly. Here are a couple of quotes from the Australian judge:

HER HONOUR: Just one question while you're on your feet. Has the American court been told about the breaches in Australia?


HER HONOUR: Can I just make one observation? I cannot believe – I really cannot believe that Samsung has not put itself in a position of being able to answer virtually any question – these are obvious questions – whether Samsung has not put itself in a position to be able to answer those questions immediately in Australia. I find that incomprehensible. I would have thought Samsung would have been – Ashurst [Samsung's Australian law firm in this case] would have been bending over backwards to ensure that everything about these confidentiality breaches was known and available and the information be made available to this court, and it would have been offered to the American court.


HER HONOUR: I want to know whether the American court is aware that the similar – similar confidential information was breached in Australia in relation to the same person's report.

HER HONOUR: Yes, but I would have thought that work that they're doing with what's happening in overseas – in the overseas situation would be having them look into all aspects of it. And I would have thought, quite frankly, from their perspective that it is an important matter that Australia also had a disclosure of the same area of subject matter, if not the same precise document. And I would be – I mean, I would be surprised if, in their obligations in the United States they haven't made that disclosure.

There's definitely some pressure on Samsung down under and it has to answer some questions now. In the meantime, various stakeholders are working on submissions to the European Commission concerning Samsung's proposed antitrust settlement. Samsung's proposal is insufficient in its own right, and it's even more problematic when considering that Samsung has been improperly provided with confidential licensing information involving multiple companies (three of them European companies) that it could abuse in secret arbitration proceedings.

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