Apple Inc. v. Samsung Electronics Co. Ltd. et al

Filing 1394

*** FILED IN ERROR WITH CONFIDENTIAL INFORMATION. DOCUMENT LOCKED. *** Administrative Motion to File Under Seal filed by Qualcomm Incorporated. (Attachments: # 1 Declaration of Eric Reifschneider, # 2 Exhibit 1 to the declaration of Eric Reifschneider, # 3 Proposed Order, # 4 Certificate/Proof of Service)(Kays, David) (Filed on 7/26/2012) Modified on 7/30/2012 (fff, COURT STAFF).

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DAVID A. KAYS, ESQ. (SBN 120798)
FREEDA Y. LUGO, ESQ. (SBN 244913)
MORGAN, FRANICH, FREDKIN & MARSH
99 ALMADEN BOULEVARD, SUITE 1000
SAN JOSE, CALIFORNIA 95113-1613
TELEPHONE: [phone]
FACSIMILE: [phone]
ATTORNEYS FOR NON-PARTY
QUALCOMM INCORPORATED

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN JOSE DIVISION

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Plaintiff,

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Case No. 11-cv-01846-LHK

APPLE INC., a California corporation,

v.

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SAMSUNG ELECTRONICS CO., LTD., a
Korean corporation; SAMSUNG ELECTRONICS
AMERICA, INC., a New York corporation; and
SAMSUNG TELECOMMUNICATIONS
AMERICA, LLC, a Delaware limited liability
company,

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Defendants.

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DECLARATION OF ERIC
REIFSCHNEIDER IN SUPPORT OF
NON-PARTY QUALCOMM
INCORPORATED’S
ADMINISTRATIVE MOTION TO
SEAL CONFIDENTIAL
INFORMATION PURSUANT TO
CIVIL L. R. 7-11 & 79-5

Judge: Hon. Lucy H. Koh

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I, ERIC REIFSCHNEIDER, DECLARE:

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1.

I am the Senior Vice President and General Manager of Qualcomm

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Technology Licensing (“QTL”), a division of Qualcomm Incorporated (“Qualcomm”).

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I submit this declaration in support of Qualcomm’s motion to seal:

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§

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those portions of Exhibits 3A and 3B to the Expert Report of David Teece
dated March 22, 20121 (the “Teece Report”) designated as potential trial

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Qualcomm does not have access to the Teece Report, and Qualcomm’s only information about the proposed
trial exhibits is what has been disclosed by counsel for Defendants Samsung et al. in a letter dated July 21, 2012, a
Case No.: 11-CV-01846-LHK
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DECLARATION OF ERIC REIFSCHNEIDER

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exhibits by Defendants Samsung Electronics Co. et al. in Trial Exhibit 630

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that disclose terms of the Samsung Agreements (as defined below);
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any text of any Samsung Agreement also included in or attached to the
Teece Report;

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any other document or testimony entered into evidence by either party to

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the above-captioned action that discloses the terms of the following

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agreements between Qualcomm and Samsung Electronics Co. Ltd.

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(“Samsung”) (collectively the “Samsung Agreements”):
•

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the Infrastructure and Subscriber Unit License Agreement dated
August 31, 1993 and subsequent amendments thereto2;

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the Side Agreement dated August 31, 1993;

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the Strategic Agreement dated May 18, 1999; and

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the Patent Assignment dated November 27, 2009.

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2.

The Samsung Agreements have been negotiated and entered into over a

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period of nearly two decades and disclose in minute detail the complex terms of the heavily

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negotiated licensing and commercial relationship between Samsung and Qualcomm. As is true

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of the license terms between Qualcomm and almost all its licensees, the terms of the Samsung

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Agreements are subject to strict confidentiality obligations binding upon both parties because the

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parties view these terms—which include financial terms as well as terms concerning other

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consideration, the nature and scope of rights granted, the length of the term, assignability,

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grounds for termination, and more—as trade secrets, the disclosure of which could place them at

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a disadvantage in their relations with competitors or other licensees or licensors.

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3.

Indeed the specific terms of Qualcomm’s many patent licensing

agreements are consistently considered to be, and carefully guarded as, highly valuable trade

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copy of which is attached as Exhibit 1 to this Declaration. Thus, Qualcomm cannot be more specific in identifying
potential disclosure of its confidential information in that Report.
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Agreements amending the Infrastructure and Subscriber Unit License Agreement dated August 31, 1993 have
been entered by the parties effective November 17, 1997; March 29, 2004; December 26, 2005; October 29, 2007;
and January 1, 2009.
Case No.: 11-CV-01846-LHK
DECLARATION OF ERIC REIFSCHNEIDER

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secrets. Qualcomm takes care that essentially all its license agreements contain strict

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confidentiality clauses and does not disclose the details of individual license agreements.

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Certain high level information concerning the Samsung Agreements is in

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the public record, as a result of disclosures required by SEC regulations, or by agreement

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between Qualcomm and Samsung. In particular, certain up-front fees, pass through rights, and

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the valuation of certain patents relating to the Samsung Agreements are on the public record.

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However, most terms of the Samsung Agreements, including most of those apparently referenced

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in the Teece Report, have remained confidential up to the present, and by the terms of the

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Samsung Agreements both Qualcomm and Samsung are obliged to keep those terms

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confidential.
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For the reasons that follow, it would be seriously damaging to Qualcomm

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if the highly sensitive, confidential business information contained in the Samsung Agreements

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were disclosed to third parties through use in court in the absence of an appropriate sealing order.

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6.

First, the Samsung Agreements contain highly confidential and sensitive

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financial terms unique to Qualcomm and Samsung and painstakingly negotiated over the course

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of a long-term commercial relationship, including royalty rates, royalty bases, royalty caps, and

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other financial terms. These financial terms disclose the careful balancing of past, current, and

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future value exchanged in the Qualcomm-Samsung relationship. It would impede the ability of

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Qualcomm to compete in the future in its markets if its competitors and current and potential

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customers had such detailed knowledge of these terms. Such disclosure would also make it more

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difficult to negotiate other sensitive and complex agreements with Samsung and with other

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parties in the future, as Qualcomm and its counterparties would have to weigh the increased risk

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that terms would become public as a result of third-party litigation, despite the confidentiality

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guarantees that the parties to any such agreement might make.

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Second, the Samsung Agreements contain unique and painstakingly

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negotiated provisions under which Qualcomm receives rights to practice Samsung’s patents. It

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would impede the ability of Qualcomm to compete in the future in its markets and to negotiate

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Case No.: 11-CV-01846-LHK
DECLARATION OF ERIC REIFSCHNEIDER

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advantageous terms for other patent license agreements if its competitors and current and

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potential customers had knowledge of these terms.

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Third, the Samsung Agreements include the confidential and sensitive

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terms under which Samsung assigned a substantial number of patents to Qualcomm as a

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component of a broader agreement between the parties. It would impede Qualcomm’s ability to

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negotiate such arrangements on competitive terms in the future if the terms under which

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Qualcomm agreed to obtain certain patents from Samsung were available to third parties.

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Fourth, the Samsung Agreements include confidential, sensitive, and

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extensively negotiated provisions setting forth how and under what conditions the parties’

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intersecting rights under these long-term agreements may be terminated. It would impede

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Qualcomm’s ability to negotiate to obtain such terms in the future if these provisions from the

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Samsung Agreements are accessible to third parties.

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I declare under penalty of perjury under the laws of the United States of America

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and the State of California that the foregoing is true and correct. Executed this 26th day of July,

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2012 at San Diego, California.

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/s/ Eric Reifschneider

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Eric Reifschneider

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I hereby attest that I have on file all holograph signatures of any signatures indicated by a
“conformed” signature (/S/) within this e-filed document.

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Dated:

July 26, 2012

By:

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Case No.: 11-CV-01846-LHK
DECLARATION OF ERIC REIFSCHNEIDER

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/S/
DAVID A. KAYS