In a January 29, 2014 opinion in Apple, Inc. v. Samsung, the US District Court for the Northern District of California sanctioned Samsung's outside counsel for violating a court-issued protective order (No. 11-01846 (N.D. Cal. Jan. 29, 2014). The court found that outside counsel had not properly redacted a document containing the terms of an Apple/Nokia licensing agreement, and that the outside counsel had made this document widely available to Samsung employees. Sanctions were warranted because Samsung's outside counsel failed to set up a system that would prevent such violations from occurring. The court ordered Samsung's outside counsel to pay all costs and fees incurred by other parties associated with litigating the motion for sanctions and the attendant discovery.

Apple v. Samsung involved various patent claims between two competitors. Prior to discovery, the court issued a protective order, under which, the parties could produce documents marked "Highly Confidential -- Attorney Eyes' Only" that would be seen only by the opposing party's outside counsel. Apple produced a number of its patent license agreements to Samsung's outside counsel with this designation. Samsung's outside counsel had an expert report prepared which compared the terms of these license agreements, including the Apple/Nokia license agreement. A junior associate at the outside counsel uploaded the report without redacting the confidential information to a site that could be accessed by at least 90 Samsung employees. Months later, outside counsel also e-mailed the unredacted report to Samsung. In the end, over 200 people not authorized by the protective order received the report with the confidential license terms.

The court found that while uploading the confidential material constituted a breach of the protective order, this relatively minor error did not warrant sanctions. Instead, the court determined that sanctions were appropriate because Samsung and its outside counsel:

The court chastised Samsung's outside counsel for apparently having no person responsible for knowing what documents had been sent to the client. It found that outside counsel had further violated the terms of the protective order by failing to act when it learned of the problem.

In determining the appropriate sanctions, the court noted that the ideal remedy would further both the remedial and deterrent goals of sanctions. The court found that despite the violations of the protective order, neither Apple nor Nokia provided sufficient evidence that they had been adversely impacted in any related litigation or negotiation. The court, therefore, ordered Samsung's outside counsel to reimburse Apple, Nokia and their attorneys for all costs and fees incurred in litigating the motion for sanctions and the discovery associated with it.

Practitioners facing cases involving highly confidential discovery material should remember to: