Dec 5 (Reuters) - A U.S. court error on Friday offered a
brief glimpse at information that Apple Inc and Samsung
Electronics have tried to shield from the public during their
high-stakes patent litigation.
The material appears to be less important for what it says
about the companies than what it reveals about efforts to keep
court proceedings secret.
In denying Apple's bid to stop Samsung from selling its
Galaxy smartphone and tablets in the United States, U.S.
District Judge Lucy Koh's ruling inadvertently included details
she had intended to black out. The judge's staff quickly
realized the error, sealed the electronic document and posted a
redacted version four hours later.
The fuller version, which Reuters obtained while it was
publicly available, did not expose the technical inner workings
of the iPad -- or anything close. Rather, it contained internal
company analysis about the smartphone market, as well as some
details about Apple's patent licensing relationships with other
tech companies.
The lawsuit, which Apple filed in April in a San Jose,
California, federal court, says Samsung's Galaxy products
"slavishly" copy the iPhone and iPad. The South Korean
electronics maker says Apple's arguments lack merit.
The case is scheduled for trial next year. The Friday
ruling means Samsung can continue selling Galaxy products for
now.
(For a column on why Judge Koh refused to bar Samsung from
selling Galaxy phones and tablets, click on.)
Sealing documents has become standard in intellectual
property cases. Investors, academics and other observers have
expressed concern that some judges too readily accede to
litigants' claims that documents contain trade secrets and must
be kept private.
Judges have wide latitude in granting company sealing
requests, and Koh has granted all of Apple and Samsung's
requests to keep documents secret in the case.
Some crucial legal briefs from both companies were kept
entirely secret for months, and then released with redactions.
After an inquiry from Reuters last week, Koh issued new
guidelines so that redacted briefs become public much sooner.
Timothy Holbrook, an intellectual property professor at
Emory Law in Atlanta who reviewed Koh's Friday ruling at
Reuters' request, said there did not appear to be any trade
secrets among the blacked-out portions.
"Most of it just seems like it was sealed out of an
abundance of caution," Holbrook said.
In an email on Monday, Koh declined to comment on a pending
case. Representatives for Apple and Samsung also declined to
comment.
SMARTPHONE, TABLET BATTLE
The California case is just one battleground in Apple and
Samsung's bruising legal war, which includes more than 20 cases
in 10 countries as they jostle for the top spot in the
smartphone and tablet markets.
Global tablet sales are expected to explode to more than 50
million in 2011. Apple, which has sold more than 30 million
iPads so far, is expected to continue to dominate the market in
the near term.
While Amazon.com has also entered the fray with its Kindle
Fire tablet, Samsung's Galaxy line-up is widely deemed the
closest rival to the iPad in terms of capability and design.
In her 65-page ruling denying Apple's request for a
preliminary injunction against Samsung, Koh attempted to redact
nearly two dozen sentences or short fragments. But because of a
formatting characteristic in the prior electronic version, the
redacted material can be viewed by copying text from the PDF
and pasting it into another document.
The version now available to the public canot be viewed in
such a manner.
According to the redacted portions, Apple's own studies
show that existing customers are unlikely to switch from
iPhones to Samsung devices. Instead, the evidence suggests an
increase in sales of Samsung smartphones is likely to come at
the expense of other smartphones with Android operating
systems, Koh wrote.
In arguing against the injunction, Samsung -- which is also
a huge components supplier to Apple -- said Apple's supply
cannot keep up with market demand for smartphone products. Koh
recounted the argument in the redacted portions of the ruling.
But Koh then called Samsung's argument "dubious," given
rebuttal evidence presented by Apple regarding its ability to
keep up with demand in the long term.
The redacted portions also refer to licensing deals that
Apple struck with other high-tech companies over one of its key
patents. Issued in December 2008, the patent covers the method
of scrolling documents and images on Apple's touch-screen
devices.
Apple has already licensed the patent to IBM and Nokia,
according to the ruling. A technology blog, The Verge, first
reported this detail on Saturday; the blog said it had been
shown two statements that were redacted from the ruling.
Scant information has previously been made available about
Apple's licensing deals with Nokia or IBM.
While Apple and Nokia publicly announced a patent
settlement for an undisclosed sum in June, they did not divulge
any specifics, except to say the agreement resolved all
litigation between the companies and that Apple would make a
one-time payment to Nokia and pay future royalties. At the
time, the settlement was viewed as a victory for Nokia.
There appears to be no reference to any patent-licensing
deal for mobile technology between IBM and Apple either in news
archives or company regulatory filings.
"Apple doesn't license much, and it could be that they
don't want people to know who the licensees are," said
Holbrook, the IP professor.
Representatives for IBM and Nokia did not immediately
respond to requests for comment on Monday.
Samsung was also offered a royalty license during
negotiations with Apple in November 2010, the ruling says, five
months before Apple wound up suing Samsung in the United
States.
Apple has brought claims against Samsung based on design
patents -- which protect the look and feel of a device -- and
so-called "utility" patents, which cover engineering
innovations.
A footnote in the ruling says "it does not appear" that
Apple and Samsung discussed design patents during their
negotiations that preceded the lawsuit.
Yet since much of Koh's opinion covers design patents, the
mistakenly released data does not reveal much about the inner
workings of the technology, said Holbrook.
"There was nothing I saw that was shocking, just stuff that
is not (otherwise) available to the public," he said.
The case in U.S. District Court, Northern District of
California is Apple Inc v. Samsung Electronics Co Ltd et al,
11-1846.
For Apple: Michael Jacobs of Morrison & Foerster.
For Samsung: Charles Verhoeven of Quinn Emanuel Urquhart
Oliver & Hedges.
(Reporting by Dan Levine and Carlyn Kolker; Additional
reporting by Jeremy Pelofsky)
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