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Summary:

Samsung and its outside law firm will have to pay for an embarrassing incident involving lawyers who disclosed a confidential document.

A federal judge this week ordered Samsung and its law firm to pay over $2 million for disclosing the contents of a highly confidential licensing agreement between Apple and Nokia, which Samsung had obtained in the course of its never-ending patent fights with Apple.

The punishment, set out in an order by U.S. Magistrate Judge Paul Grewal, requires Samsung and Quinn Emanuel to pay Apple nearly $900,000 in legal costs and another $1.15 million to Nokia over the incident, which came as an embarrassment to the prestigious law firm.

Nokia discovered the disclosure last July when a Samsung executive stated that lawyers had informed him of the terms of the agreement between Apple and Nokia, and added that “all information leaks.”

The leak was a serious matter because only a handful of people from the law firm and one expert witness were supposed to see the confidential document, which Apple provided under the legal process known as discovery. Instead, a lawyer from Quinn Emanuel made the licensing agreement available on a Samsung website for dozens of employees to see.

The judge imposed the $2 million sanctions despite protestations by Samsung and the law firm that it was an honest mistake by a junior lawyer, and no big deal in any event. Judge Grewal took a dimmer view, concluding that the company and the lawyers had failed to safeguard confidential information and also disregarded court orders. The judge decided to impose the sanctions in January but, since Samsung had challenged the amount, the final order only came this week.

The fuss over the leak is mostly inside baseball, but it does shed rare light on the delicate role of lawyers in the technology industry where secrecy is so often paramount. While the lawyers are ethically and professionally bound not to share the confidential information they learn from competitors during litigation, the Samsung episode shows how easily that professional wall can come down.

Here is the order from the colorful pen of Judge Grewal, who describes the process of awarding fees as “mundane” and a “tedious business.”

Quinn Sanctions