After the recent global settlement between Apple and HTC, the
terms of which Apple and HTC agreed to keep confidential, Samsung
requested production of the agreement from Apple. Samsung moved to
compel the production of the agreement.
Samsung sought discovery of the agreement with HTC to support
its opposition to Apple's motion for a permanent injunction.
Samsung asserted that the settlement agreement undermined
Apple's assertion that an injunction is a more appropriate
remedy than monetary damages. Apple responded by stating that it
was willing to provide the settlement agreement but asserted that
HTC objected to the production of the agreement because the
agreement's financial terms had competitive value.
During the hearing, Samsung explained the reasons it needed the
unredacted version of the settlement agreement. "Despite
Samsung's assertions that consumers' willingness to pay a
premium for patented features of a product is not relevant to a
consumer demand inquiry, it argues that the degree Apple prevails
on the contrary argument, the licensing fees with HTC are relevant
to the degree of consumer demand for Apple's patented
HTC asserted in response that the probative value of the terms
was outweighed by the risk to HTC from disclosure of the terms. The
court was not persuaded. "Although the court is more than a
little skeptical of Samsung's arguments regarding the financial
terms, Rule 26 supplies a broad standard of relevance. Many third
parties to this case have had their licensing agreements disclosed
- without any redaction of financial terms - subject to an
Attorneys-Eyes-Only designation because the confidential financial
terms were clearly relevant to the dispute between Apple and
Samsung. HTC is not entitled to special treatment, especially when
it has recognized the general sufficiency of the protective order
and the integrity of Samsung's outside counsel."
Accordingly, the court granted the motion to compel over
Apple, Inc. v. Samsung Electronics Co., LTD, Case No. C 11-1846
LHK (PSG) (N.D. Cal. Nov. 21, 2012)
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Finjan is particularly instructive in the trade secret context because information transferred electronically can still embody highly valuable info even if the information is not transcribed in a physical medium.
Current patent reform efforts in Congress center around two pieces of legislation. One, pending in the House of Representatives is sponsored by Rep. Bob Goodlatte (R-VA) (H.R. 9, known as the "Innovation Act").