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Quinn Emanuel Whacked for Spilling Apple’s Secrets

Aug. 31, 2016, 10:21 PM

The U.S. International Trade Commission on Wednesday publicly reprimanded Quinn Emanuel Urquhart & Sullivan for “pervasive problems at the firm” in safeguarding confidential business information from Apple Computers that it obtained while representing Samsung in patent litigation against the computer company.

No monetary sanctions attached to the reprimand, which stemmed from the fact that the firm breached an administrative protective order issued by the ITC.

The ITC summarized its reprimand:

The Commission determined that the law firm of Quinn Emanuel Urquhart & Sullivan breached the Administrative Protective Order by failing to adequately control access to confidential business information (‘‘CBI’’) in the investigation and litigation in [San Jose federal court]. As a result, Quinn Emanuel attorneys and [Samsung] employees ... improperly disclosed CBI to more than 140 unauthorized persons over a 14-month period. Quinn Emanuel is being publicly reprimanded for pervasive problems at the firm in safeguarding CBI.

The ITC also provided a more detailed version of events that related how a junior associate at Quinn Emanuel failed to redact confidential information in one document, which was then repeatedly shared with Samsung employees and at one point was disseminated in an Italian Court.

Firm chair John Quinn issued the following statement:

As stated in the ITC order, we had an associate who did not fully redact a small amount of information that had been designated as confidential from an expert report before sending it to our client. Although, as the Commission found, this was inadvertent, it was a serious matter. Unfortunately, we missed opportunities to discover and remedy the problem, which was compounded when the report was later forwarded to many other lawyers and consultants working on related matters and some of the information was unknowingly included in other documents which were similarly distributed.

“A public reprimand like this is rare,” said Jennifer Hillman, a visiting professor at Georgetown Law who formerly sat on the ITC. “Most of the time what happens is a private letter of reprimand and it goes up and up in sanctions.”

Although the ITC could impose monetary sanctions, Hillman said it can also bar an offender, such as a law firm, from appearing and practicing before it for a period of time — a potentially more damaging punishment.

She said that breaches of protective orders shared, it not only hurts the company but also damages the ITC’s credibility, she said. Eventually, companies will stop providing confidential information to the ITC, said Hillman.

“What the commission expects is that the second you discover a breach, you are under an obligation to immediately report it to the commission and all the parties,” she said, “to immediately do everything in your power to the documents get back … to do anything and everything you can to make sure it doesn’t get out.”

In 2014, a federal magistrate judge in San Jose — where the case took place — ordered Quinn Emanuel and Samsung to pay $2 million as a sanction for the same leak at issue with the ITC. It related to “a report Quinn Emanuel sent via e-mail that disclosed Apple’s patent-license agreements with Nokia, including ‘highly confidential financial terms,’” to Samsung employees, Bloomberg reported.

The ITC said it considered “several aggravating factors” in making its reprimand, including that the breaches were discovered by a third party and “Quinn Emanuel’s failure and delay in reporting to the Commission the disclosures when they were discovered.”

It also noted mitigating factors — that the leaks were inadvertent and that Quinn Emanuel has implemented “a firm-wide policy to help prevent unauthorized disclosures,” and that a federal district court already sanctioned the disclosures and conduct underlying the breaches.