Case 1:13-cv-00919-JLH Document 538 Filed 05/03/23 Page 1 of 11 PageID #: 55548
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
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`C.A. No. 13-919-JLH
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`ARENDI S.A.R.L.,
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`Plaintiff,
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`v.
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`GOOGLE LLC,
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`Defendant.
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`NON-PARTY APPLE INC.’S MOTION FOR SANCTIONS
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`Non-party Apple Inc. (“Apple”), by and through its attorneys, hereby moves for sanctions
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`of Plaintiff Arendi S.A.R.L. (“Plaintiff”), Plaintiff’s counsel Susman Godfrey, and its damages
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`expert Mr. Weinstein because of a flagrant breach of the Protective Order in this matter and in
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`Arendi S.A.R.L. v. Apple Inc., C.A. No. 1:12-cv-01596 (D. Del.) (the “Apple Lawsuit”).1
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`I.
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`INTRODUCTION
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`Apple attended the trial between Plaintiff and Google because of Apple’s fears that
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`Plaintiff would disregard the Protective Order and mistreat Apple’s confidential business
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`information. And Plaintiff did just that during the re-direct examination of Plaintiff’s damages
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`expert, Mr. Roy Weinstein when Mr. Seth Ard (Plaintiff’s counsel) elicited, and Mr. Weinstein
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`provided, testimony in open court that divulged details of the Apple Agreement. This exchange
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`also publicly disclosed Apple confidential information from the Apple Lawsuit, violating
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`Plaintiff’s obligations under the Protective Orders entered in this case and the Apple Lawsuit.
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`1 Apple and Arendi settled that matter on September 15, 2021. While the matter appears to still
`be open on Pacer, the Honorable Judge Leonard P. Stark is now a United States Judge for the
`Court of Appeals for the Federal Circuit. This Court was the Magistrate Judge entrusted to hear
`discovery disputes in the Apple Lawsuit. See Apple Lawsuit Dkt. No. 158.
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`Case 1:13-cv-00919-JLH Document 538 Filed 05/03/23 Page 2 of 11 PageID #: 55549
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`Indeed, Plaintiff did not request to seal the courtroom before eliciting such testimony about the
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`Apple Agreement or the Apple Lawsuit, and did not seek any corrective measures after the fact
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`to mitigate the harm to Apple even after being asked to do so by Apple’s counsel.
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`Apple brings this Motion reluctantly, but given the flagrant violations at issue here, and
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`Plaintiff’s inaction to remedy the situation, it is necessary. In particular, Apple respectfully asks
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`the Court to issue an order (i) finding that Plaintiff, Plaintiff’s counsel Susman Godfrey, and
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`Plaintiff’s damages expert Mr. Weinstein violated the Protective Order in this case by disclosing
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`designated information without authorization, and admonishing them for doing so, and
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`(ii) awarding Apple its fees in connection with filing this Motion and any other fees or costs that
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`the Court sees fit.
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`II.
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`STATEMENT OF FACTS
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`The Protective Order governs the production of discovery materials in this matter.2
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`Designated material “shall be used by a Receiving Party solely for this case, and shall not be
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`used directly or indirectly for any other purpose whatsoever.” See Dkt. No. 16-1 at 4. Plaintiff
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`may not share protected material of one defendant with any other defendant “in this litigation or
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`any other litigation initiated by Plaintiff, absent express written permission from the producing
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`Defendant.” Id.
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`Apple and Plaintiff (among other licensors) executed the September 13, 2021 Settlement
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`and License Agreement (the “Apple Agreement”) to resolve the Apple Lawsuit in 2021 after
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`nearly nine years of litigation. Section 7 of the Apple Agreement requires Plaintiff to keep the
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`2 The Protective Order in the present litigation is the same as that entered in the Apple Lawsuit.
`Compare Dkt. No. 16-1 to Apple Lawsuit Dkt. No. 31-1.
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`Case 1:13-cv-00919-JLH Document 538 Filed 05/03/23 Page 3 of 11 PageID #: 55550
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`terms of the agreement strictly confidential with certain, limited exceptions, none of which are
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`relevant to this Motion. (See PX0066, Apple Agreement, § 7.1.)
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`On September 15, 2021, Plaintiff’s counsel contacted Apple in-house counsel and
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`requested Apple’s consent to produce the Apple Agreement in all of Plaintiff’s litigations in this
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`District, including Plaintiff’s litigation with Google. (Declaration of Garrett Sakimae in support
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`of Apple’s Motion for Sanctions (“Sakimae Decl.”) ¶ 2.) Apple consented to that production
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`provided that Plaintiff designated the document CONFIDENTIAL OUTSIDE COUNSEL
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`ONLY under the Protective Order and agreed to supplemental protections:
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`• That Arendi would provide Apple with notice and the opportunity to object before it
`disclosed the Apple Agreement to any experts disclosed under the operative Protective
`Order;
`• That Arendi would provide Apple with notice at the time exhibit lists are first exchanged
`if the Apple Agreement appeared on a party’s exhibit list; and
`• That, if the Apple Agreement is used at a hearing or trial, Arendi agreed to use reasonable
`efforts to seal the courtroom and redact any related transcript portions.
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`(Id. ¶ 3.) Plaintiff’s counsel agreed to both of those conditions that same day, and Plaintiff
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`thereafter produced the Apple Agreement appropriately designated under the Agreed Protective
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`Order. (Id. ¶ 4; Dkt. No. 16-1).
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`On April 4, 2023, Plaintiff indicated to Apple that it intended to use the Apple Agreement
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`at trial in this case, but that “the courtroom will be sealed during discussion of its terms other
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`than the total payment amount.” (Declaration of Hannah L. Cannom in support of Motion for
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`Sanctions (“Cannom Declaration”) ¶ 2.) Apple’s counsel immediately responded and over the
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`course of the weeks leading up to trial, proposed solutions that allowed Plaintiff to not seal the
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`courtroom while also protecting Apple’s confidential information, including the amount of
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`consideration Apple paid to Plaintiff in the Apple Agreement. (Id.) Unable to agree upon a
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`resolution, Apple’s counsel informed Plaintiff’s counsel that if Plaintiff intended to disclose the
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`terms of the Apple Agreement in open court, Apple would raise it with the Court on the first day
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`of trial. (Id. ¶ 3.) Apple then had outside counsel and in-house counsel attend the trial to monitor
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`this issue. (Id. ¶ 4.) At no point has Apple ever agreed to de-designate or downgrade the
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`confidentiality designation on the Apple Agreement, nor has Apple ever consented to publicly
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`disclosing the monetary terms of the Apple Agreement. (Id.)
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`As this Court knows, on the first morning of trial, the parties agreed that they would give
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`the jury printouts of the slides that disclosed the amount of the Apple Agreement so the jury
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`could privately understand the monetary terms while avoiding their publication to the world.
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`While not perfect, Apple accepted this solution. Nevertheless, during the April 26 redirect
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`examination of Plaintiff’s damages expert, Mr. Roy Weinstein, Plaintiff elicited, and
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`Mr. Weinstein provided, testimony that publicly disclosed the monetary terms of the Apple
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`Agreement, without requesting that the courtroom be sealed, violating their obligations under the
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`Protective Order.
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`In particular, in response to questions from Plaintiff’s counsel, Mr. Weinstein (despite his
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`own obligations under the Protective Order) openly testified about the Apple Agreement and
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`disclosed its monetary terms. (See 4/26/23 Transcript at 641:23-24.) Plaintiff’s counsel did not
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`ask to seal the courtroom either before or after Mr. Weinstein’s disclosure of Apple confidential
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`information. Instead, Plaintiff’s counsel pursued further questioning in which Plaintiff’s counsel
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`disclosed additional Apple confidential information — namely, the total amount of damages
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`Mr. Weinstein opined Apple would owe Plaintiff should it have prevailed in the Apple Lawsuit
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`—and elicited further testimony from Mr. Weinstein about his damages analysis in the Apple
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`Lawsuit. (See id. at 642:15-19.) This further testimony also violated the Protective Order in the
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`Apple Lawsuit. As a non-party to this litigation—and having been outside of the courtroom for
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`Case 1:13-cv-00919-JLH Document 538 Filed 05/03/23 Page 5 of 11 PageID #: 55552
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`the sealed part of Mr. Weinstein’s testimony— Apple’s counsel had no ability to anticipate that
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`Plaintiff and Mr. Weinstein would publicly disclose Apple confidential information. (Cannom
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`Decl. ¶ 5.)
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`Plaintiff still failed to take any corrective measures after Mr. Weinstein’s additional
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`testimony, despite being asked to do so by counsel for Apple. During the break, when counsel
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`for Apple approached Plaintiff’s counsel about improperly disclosing Apple confidential
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`information, Mr. Ard said he would “deal with this later.” (Id. ¶ 6.) Plaintiff’s counsel never,
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`however, “deal[t] with” the unauthorized disclosure. Instead, it was Apple’s counsel, monitoring
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`trial to protect against just this type of violation, who asked the Court to seal the portions of the
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`transcript in which Mr. Weinstein and Plaintiff’s counsel disclosed Apple confidential
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`information (which the Court conditionally approved), and thereafter Apple filed a motion to seal
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`the same (which remains pending, see Dkt. No. 491).
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`III. ARGUMENT
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`“Civil contempt is a sanction to enforce compliance with a court order or to compensate
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`for losses or damages sustained by noncompliance.” See Invista North America S.A.R.L. v. M&G
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`USA Corp., Case No. 11-cv-1007-SLR-CJB, 2014 WL 1908286, *4 (D. Del. Apr. 25, 2014).
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`Where the United States Magistrate Judge exercises consent jurisdiction in civil cases under 28
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`U.S.C. § 636(c), the Magistrate Judge may enter an order of civil contempt. Id. In addition,
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`federal courts have inherent power to impose sanctions for a party’s misconduct. See In re Intel
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`Corp. Microprocessor Antitrust Litig., 562 F. Supp. 2d at 610-11; see also Citrix Sys., Inc. v.
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`Workspot, Inc., No. CV 18-588-LPS, 2020 WL 5884970, at *6 (D. Del. Sept. 25, 2020). When
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`exercising discretion under its inherent sanction powers, a court is guided by the considerations
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`including: (1) the nature and quality of the conduct at issue; (2) whether the attorney or the client
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`Case 1:13-cv-00919-JLH Document 538 Filed 05/03/23 Page 6 of 11 PageID #: 55553
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`is responsible for the culpable conduct; (3) whether there was a pattern of wrongdoing requiring
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`a stiffer sanction; (4) the sanctioned party’s ability to pay; (5) whether the wrongdoing actually
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`prejudiced the wrongdoer’s opponent or hindered the administration of justice; and, (6) the
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`existence of mitigating factors. Intel Corp. Microprocessor Antitrust Litig., 562 F. Supp. 2d at
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`610.
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`1. Plaintiff Has Violated the Protective Orders, Its Supplemental Agreement
`with Apple, and the Confidentiality Provisions of the Apple Agreement.
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`Here, there is no question that Plaintiff, its counsel, and Mr. Weinstein violated the
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`Protective Orders, the supplemental agreement between Apple and Plaintiff, and the
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`confidentiality provision of the Apple Agreement—both in publicly disclosing facts contained in
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`documents marked as CONFIDENTIAL OUTSIDE COUNSEL ONLY and in failing to seek
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`immediate (or any) corrective measures when requested by Apple. Apple requests the Court
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`fashion an appropriate sanction to address Plaintiff’s blatant violation of its confidentiality
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`obligations to Apple, including (i) an acknowledgment and admonishment on the record that
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`Plaintiff’s counsel, Susman Godfrey and its damages expert Mr. Weinstein violated its
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`supplemental agreement with Apple, the protective order in the Apple Litigation, and other
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`confidentiality obligations to Apple, and (ii) Apple’s fees in connection with bringing this
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`Motion.
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`2. Plaintiff’s Misconduct Harms Apple and Impairs the Integrity of these
`Proceedings.
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`Plaintiff’s unapologetic violation of the Protective Orders and the confidentiality
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`provision of the Apple Agreement harms Apple as a non-party and impairs the integrity and
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`fairness of these proceedings. Sanctions are therefore warranted.
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`Case 1:13-cv-00919-JLH Document 538 Filed 05/03/23 Page 7 of 11 PageID #: 55554
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`First, as a common target of patent litigation, Apple’s confidential business information,
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`including, for example, its license and settlement agreements, are often produced in litigation to
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`which Apple is not a party. In those instances, Apple requests, and parties generally agree, to
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`supplemental protections to protect the dissemination and treatment of Apple’s confidential
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`information. In the instance where parties refuse to agree, Apple will seek court intervention to
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`obtain these supplemental protections. See Elm 3DS Innovations LLC v. Samsung Electronics
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`Co. Ltd. et al., Case No. 1:14-cv-01431-LPS (D. Del.), Dkt. No. 327, 322 (granting contested
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`supplemental protective order of Apple). Moreover, Mr. Weinstein is a recurrent damages expert
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`against Apple and in those cases has access to a broad range of Apple confidential information
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`including but not limited to Apple financial information. As such, Apple must be vigilant about
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`the mishandling of its confidential business information by Mr. Weinstein.
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`Out of necessity, Apple must rely on other litigants to abide by the protective orders and
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`the supplemental agreements with Apple to protect Apple confidential business information
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`during discovery and at trial. Apple cannot possibly attend each trial at which its confidential
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`information is presented where it is not a party. Apple’s role as a non-party makes the disclosure
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`of its confidential business information more egregious and sanctions are therefore warranted.
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`Second, Plaintiff’s violation of the Protective Orders and the confidentiality provision of
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`the Apple Agreement, and its failure to mitigate this improper disclosure when initially
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`requested, harm the integrity of these proceedings. Indeed, the threat of future violations by
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`Plaintiff’s counsel is real especially where, as here, at no point since the disclosure has Plaintiff
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`attempted to rectify its mistake.
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`Plaintiff’s violations are made all the more serious by the fact that they involve the
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`sensitive and confidential materials of Apple, a non-party to the litigation with no insight into
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`how or when its confidential information will be used at trial. As explained in the Declaration of
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`Matthew R. Clements, filed in support of Apple’s Request to Seal Portions of the Trial
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`Transcript from April 26, 2023, the amount of the Apple Agreement is among Apple’s most
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`highly sensitive and protected business information, the public disclosure of which to potential
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`licensors, litigants, and/or Apple’s competitors would seriously harm Apple in the marketplace.
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`(Dkt. No. 491, Declaration of Matthew R. Clements in support of Motion to Seal (“Clements
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`Decl.”) ¶¶ 4-6.) As a result, Apple expends significant time and resources to maintain the
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`confidentiality and nonpublic nature of the Apple Agreement and similar documents and
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`information. (Id. ¶ 8.) Even within Apple, the Apple Agreement is not disseminated or accessible
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`except to a small group of Apple employees who maintain its confidentiality. (Id. ¶ 9.) Plaintiff’s
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`disclosure in this case of information produced by Apple in the Apple Lawsuit together with the
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`amount that Apple settled that lawsuit for also harms Apple in its negotiations with litigants and
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`patent holders in the future. (Id. ¶ 10.) There is no serious question that public dissemination of
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`such information is harmful to Apple or that those documents contain proprietary information.
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`On the other hand, Plaintiff and its counsel have strong motivations to push the envelope
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`on “inadvertently” disclosing Apple’s confidential information so that the public can know how
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`much Apple paid to license Plaintiff’s patents, to the ultimate benefit of Plaintiff’s licensing
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`regime and Plaintiff’s counsel’s litigation strategy in this and other cases. In light of the
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`sensitivity of the information and as a non-party, Apple must have confidence that counsel will
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`follow the rules set forth by this Court and to which it agrees with parties to a litigation even
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`when Apple is not there to observe. But Plaintiff has shown that it cannot or will not provide
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`such assurance and it should therefore face sanction.
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`3. Courts in Other Districts Have Awarded Sanctions for Similar Behavior.
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`The United States District Court for the Northern District of California’s Order on
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`Apple’s Motion for Sanctions in the matter In re Apple Inc. Device Performance Litigation is
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`instructive here. Case No. 5:18-md-02827-EJD (Davila, J.), Dkt. No. 350. There, plaintiffs’
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`counsel twice (and flagrantly) disclosed protected materials in open court and failed to take
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`seriously the harm suffered by Apple because of such disclosures, instead characterizing the
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`dispute as “silliness.” Id. at 3. In determining the appropriate sanctions for counsel, the court
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`recognized that it was counsel’s responsibility to advise the court, at the time of its introduction,
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`that it intended to disclose protected material and that failure to do so warrants sanctions. Id. at 4.
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`The court therefore sanctioned plaintiffs’ counsel that it could not “submit any billing requests
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`for any work related to [the sanctions motion practice]” and that any award of attorneys’ fees to
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`Plaintiffs would be reduced by the amount of Apple’s fees and costs related to the sanctions
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`motion. Id. at 5. The court further ordered that counsel for plaintiff was not permitted to argue
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`motions before the court without prior permission from the court. Id.
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`Here, similar sanctions are warranted. During Mr. Weinstein’s testimony, Mr. Ard did
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`not request to seal the courtroom before he and Mr. Weinstein cooperated to disclose Apple
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`confidential information. (Cannom Decl. ¶ 5.) And neither took any steps to remedy the situation
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`after, including after being called upon to do so by Apple’s representative. Indeed, Mr. Ard, like
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`plaintiffs’ counsel in In re Apple Inc., dismissed Apple’s concerns and said he would “deal with”
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`the issue later (he never has). As a non-party—and having been sent outside of the courtroom for
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`a portion of Mr. Weinstein’s testimony—Apple’s counsel had no insight into the line of
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`questioning to anticipate that Apple confidential information would be disclosed. (Id.) After
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`Mr. Weinstein disclosed Apple confidential information, Mr. Ard, pursed a follow-up line of
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`questioning in which he disclosed additional Apple confidential information and elicited further
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`testimony from Mr. Weinstein regarding his damages analysis with respect to Apple in the Apple
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`Lawsuit. (See 4/26/23 Transcript at 641:20 to 642:22.)
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`More egregiously, Plaintiff failed to take any corrective measures after Mr. Weinstein’s
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`additional testimony, despite being asked to do so by counsel for Apple. But confidentiality
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`provisions and protective orders exist for a reason. Non-parties such as Apple should not have to
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`monitor all court proceedings to which they are not a party but where their confidential
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`information is produced to ensure that the parties to those litigations fulfill their obligations
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`under protective orders and license agreements. Had Apple not sent in-house counsel and outside
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`counsel to trial to police this issue, further violations would have arisen and the violations that
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`occurred would have not been corrected.
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`The facts of this case, including Plaintiff’s and it’s counsel’s failure to prevent public
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`disclosure of Apple’s confidential information, demonstrate why sanctions are especially
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`appropriate here. This is especially true where, as here, the bad actors are frequently involved in
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`patent litigations that may invoke Apple’s confidential business information. Admonishing this
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`behavior and an award of fees associated with the Motion, will deter future bad acts. In view of
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`the foregoing, sanctions are warranted.
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`IV. CONCLUSION
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`For the foregoing reasons, Apple requests that its Motion for Sanctions be GRANTED
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`and that this Court enter an order (i) finding that Plaintiff, Plaintiff’s counsel, and Mr. Weinstein
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`violated the Protective Order in this case by disclosing designated information without
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`authorization, and admonishing them for doing so, and (ii) award Apple its fees in connection
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`with filing this Motion and any other fees or costs that the Court sees fit.
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`Case 1:13-cv-00919-JLH Document 538 Filed 05/03/23 Page 11 of 11 PageID #: 55558
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`Dated: May 3, 2023
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`Respectfully submitted,
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`DLA PIPER LLP (US)
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`/s/ Brian A. Biggs
`Brian A. Biggs (No. 5591)
`1201 North Market Street, Suite 2100
`Wilmington, DE 19801
`Tel: (302) 468-5700
`brian.biggs@us.dlapiper.com
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`Attorney for Non-party Apple Inc.
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