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To read comments to this article, go here
Judge Koh Rules: HTC-Apple Agreement Will Not Be Sealed, Exc. for Royalty Terms ~pj
Tuesday, December 04 2012 @ 03:52 AM EST

The judge in the Apple v. Samsung case, the Hon. Lucy Koh, has just ruled that the HTC-Apple license agreement that was signed on November 11 will be made public, the only exception being the pricing and royalty terms, which will be sealed. Samsung's lawyers have already gotten to see them, but we won't. But we will get to see the list of patents covered by the agreement. If the patents on the list are the same patents as in this case, it will make it much easier for Samsung to avoid an injunction. As you just saw in the Microsoft v. Motorola case in Seattle, if money can make you whole, you normally can't get an injunction. And if they aren't, there is a Samsung argument that customers don't care about those features enough to pay for them, which could impact the damages figure. This will be part of what is discussed at the hearing on the 6th.

And Judge Koh has also ruled that a discovery dispute between the parties that has arisen in litigation between Samsung and Apple in Japan is related to this case. The cases being related means that the issue about doing the discovery will be handled by Judge Koh and Magistrate Paul Grewal, mostly the latter. Samsung is asking for four items:

  • All documents that evidence, reflect or refer to the sale, transfer, lease, or offer for sale of any iPhone to any person or entity prior to June 29, 2007;
  • Physical exemplars of any iPhone that was made available for sale, transfer, lease, or offer for sale to any person or entity prior to June 29, 2007;
  • A physical exemplar of the iPhone that was used in the presentation by Steve Jobs at MacWorld on January 9, 2007; and
  • A physical exemplar of the iPhone that was used in the video "iPhone guided tour" posted to Apple's website on June 22, 2007.

Samsung says it needs these items to aid it in defending itself from Apple's claims of patent infringement in Japan, not to mention similar patent infringement actions between these two companies in 5 countries in addition to the US, the UK, Australia, Japan, South Korea, and the Netherlands.

The Declaration by Hideaki Kibayashi states why they need the items with a bit more precision:

The requested materials to be produced are highly relevant and necessary for Samsung's invalidity defenses in the Japanese Actions because it is highly possible that the operation of the requested iPhones is the same as the invention of the claims described in the patent-in-suit in the Apple/Samsung Litigation pending in Japan, and thus these claims can be invalidated based on the requested materials on the ground of novelty and/or obviousness (Japanese Patent Law, Article 29, Section 1,2).
The discovery dispute is under U.S.C. § 1782, basically the procedure for asking for discovery in one country for use in another:
28 USC § 1782 - Assistance to foreign and international tribunals and to litigants before such tribunals

(a) The district court of the district in which a person resides or is found may order him to give his testimony or statement or to produce a document or other thing for use in a proceeding in a foreign or international tribunal, including criminal investigations conducted before formal accusation. The order may be made pursuant to a letter rogatory issued, or request made, by a foreign or international tribunal or upon the application of any interested person and may direct that the testimony or statement be given, or the document or other thing be produced, before a person appointed by the court. By virtue of his appointment, the person appointed has power to administer any necessary oath and take the testimony or statement. The order may prescribe the practice and procedure, which may be in whole or part the practice and procedure of the foreign country or the international tribunal, for taking the testimony or statement or producing the document or other thing. To the extent that the order does not prescribe otherwise, the testimony or statement shall be taken, and the document or other thing produced, in accordance with the Federal Rules of Civil Procedure.

A person may not be compelled to give his testimony or statement or to produce a document or other thing in violation of any legally applicable privilege.

(b) This chapter does not preclude a person within the United States from voluntarily giving his testimony or statement, or producing a document or other thing, for use in a proceeding in a foreign or international tribunal before any person and in any manner acceptable to him.

Samsung has to ask the California court for the discovery, because that is where Apple is headquartered and because Japan has no process for making a person outside of Japan hand over materials in discovery, as you can see by the Application [PDF]. Evidently Apple isn't willing to voluntarily provide the discovery. So Samsung has to go through the process of getting letters rogatory before it can get what is asking for. So when that's the situation, U.S.C. 1782 is the way you make them, if you can get the court to agree. It's not a guarantee.

Here's the docket in that discovery matter:

U.S. District Court
California Northern District (San Jose)
CIVIL DOCKET FOR CASE #: 5:12-mc-80275-LHK

Assigned to: Hon. Lucy H. Koh
Referred to: Magistrate Judge Paul Singh Grewal
Relate Case Case: 5:11-cv-01846-LHK

Date Filed: 11/29/2012
Date Terminated: 11/29/2012
Movant: Samsung Electronics Co., Ltd. represented by Dylan Ruga
Steptoe & Johnson LLP
[address, phone, fax, email]
LEAD ATTORNEY
ATTORNEY TO BE NOTICED

Michael Richard Heimbold
Steptoe & Johnson LLP
[address, phone, fax, email]
ATTORNEY TO BE NOTICED

11/29/2012 - 1 - Ex Parte Application for an Order Pursuant to 28 U.S.C. 1782 Granting Leave to Obtain Discovery for Use in Foreign Proceedings; Memorandum of Points and Authorities in Support Thereof (filing fee $46.00, receipt #54611012878) filed by Samsung Electronics Co., Ltd. (dhmS, COURT STAFF) (Filed on 11/29/2012) (Entered: 11/29/2012)

11/29/2012 - 2 - Declaration of Hideaki Kobayashi in Support of 1 Ex Parte Application for an Order Pursuant to 28 U.S.C. 1782 Granting Leave to Obtain Discovery for Use in Foreign Proceedings filed by Samsung Electronics Co., Ltd.. (Related document(s) 1 ) (dhmS, COURT STAFF) (Filed on 11/29/2012) (Entered: 11/29/2012)

11/29/2012 - 3 - Proposed Order re 1 Ex Parte Application for an Order Pursuant to 28 U.S.C. 1782 Granting Leave to Obtain Discovery for Use in Foreign Proceedings by Samsung Electronics Co., Ltd.. (dhmS, COURT STAFF) (Filed on 11/29/2012) (Entered: 11/29/2012)

12/03/2012 - 4 - ORDER RELATING CASE. This case is related to 11-cv-01846. Signed by Judge Lucy H. Koh on 12/3/12. (mpb, COURT STAFF) (Filed on 12/3/2012) (Entered: 12/03/2012)

12/03/2012 - Pursuant to Signed Related Case Order ( 4 ). Case Reassigned to Magistrate Judge Paul Singh Grewal for all discovery matters. Magistrate Judge Howard R. Lloyd no longer assigned to the case. (tsh, COURT STAFF) (Filed on 12/3/2012) (Entered: 12/03/2012)

So after this, it will be Judge Grewal handling it, subject to appeal to Judge Koh, but basically it's his baby now. The idea behind relating cases is, as Lexis-Nexis explains, to avoid redundancy. That's great unless the first judge you get has a bug up her nose about you, in which case you are stuck with her anyway, and whatever she does, she will keep on doing it and it will stick to the same issues wherever they show up. I'm not describing this situation; just explaining in general terms that it is a great system if you have a judge who understands the issues and your side of the story. Then you don't have to explain it all to a different judge all over again, with the risk of two judges reaching different conclusions. If not, it's kind of like a pebble in a pond. The reach of your problem reverberates outward.

Here are the items on the Apple v. Samsung docket:

2178 - Filed & Entered: 12/03/2012
ORDER by Judge Lucy H. Koh granting [2175] Motion to Relate Case. Case 12-mc-80275 is related to this case. (mpb, COURT STAFF) (Filed on 12/3/2012)

2179 - Filed & Entered: 12/03/2012
ORDER by Judge Lucy H. Koh granting in part and denying in part [2177] Administrative Motion to File Under Seal (lhklc2, COURT STAFF) (Filed on 12/3/2012)

2180 - Filed & Entered: 12/03/2012
Administrative Motion to File Under Seal Samsung's Renewed Administrative Motion to Seal filed by Samsung Electronics America, Inc.(a New York corporation), Samsung Electronics Co. Ltd., Samsung Telecommunications America, LLC. (Attachments: # (1) Declaration of Jon Steiger, # (2) Exhibit 1 to the Steiger Declaration)(Maroulis, Victoria) (Filed on 12/3/2012)

Here's the order regarding the HTC license agreement, as text:

ORDER RE: MOTION FOR LEAVE TO
FILE HTC LICENSE; MOTION TO FILE
UNDER SEAL

Before the Court is Samsung’s motion for leave to file the Declaration of Robert J. Becher Regarding Samsung’s Submission of HTC Settlement Agreement In Support of Opposition to Apple’s Motion for Permanent Injunction and for Damages Enhancement (“motion for leave to file HTC license”). ECF No. 2177-2. Also before the Court is Samsung’s motion to file under seal both portions of the motion for leave to file HTC license, and the license agreement itself. Because the parties require a ruling on these motions quickly, the Court will keep its discussion and analysis brief.

The HTC agreement did not exist until November 11, 2012, and Samsung did not receive it until Judge Grewal granted Samsung’s motion to compel on November 21, 2012, ECF No. 2158 and Apple produced the document five days later. The Court agrees that the license agreement may be relevant to the permanent injunction analysis, and that Samsung could not have presented it sooner. Accordingly, Samsung’s motion for leave to file HTC license is GRANTED. Further, the Court finds that the relevance of the agreement can be adequately addressed at the December 6, 2012 hearing, without further briefing.

As regards the motion to file under seal, this Court has repeatedly explained that only the pricing and royalty terms of license agreements may be sealed. See, e.g., ECF Nos. 1649, 2168. Only these terms, and not the rest of the agreement, meet the “compelling reasons” standard articulated by the Ninth Circuit for sealing filings related to dispositive motions and trial. See Kamakana v. City and Cnty. of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006). There are compelling reasons to seal pricing and royalty terms, as they may place the parties to the agreement at a disadvantage in future negotiations, but there is nothing in the remainder of the agreement that presents a sufficient risk of competitive harm to justify keeping it from the public. Accordingly, Samsung’s motion to seal is GRANTED with regard to the pricing and royalty terms of the agreement only, and DENIED with regard to the rest of the agreement.

Samsung also seeks to redact the motion for leave to file HTC license. However, none of Samsung’s proposed redactions cover information that is properly sealable under the “compelling reasons” standard. The proposed redactions cover only: (1) the fact that Apple has made an argument regarding license agreements in its permanent injunction motion; and (2) which patents are covered by the agreement. Apple has already articulated its argument concerning license agreements in two publically filed documents. See ECF Nos. 1982-1 at 10; 2127-2 at 7. Thus, this information is not confidential. And the Court has just explained that the only sealable terms of the license agreement are the payment and royalty terms. Thus, the list of patents covered by the agreement does not meet the “compelling reasons” standard. Accordingly, Samsung’s motion to file under seal is DENIED with regard to the proposed redactions to the motion for leave to file HTC license.

IT IS SO ORDERED.

Dated: December 3, 2012

[signature]
LUCY H. KOH
United States District Judge


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