Apple vs Samsung court ruling reveals secret trade details

A court error 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, District Judge Lucy Koh’s ruling inadvertently included details she had intended to black out.

The judge’s staff quickly realised 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.

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.

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 cannot 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.