Apple betrayed by its own law firm | Hacker News Reader

Apple betrayed by its own law firm

arstechnica.com

177 pointsmxfh59 comments

> And how many other big-firm lawyers are entwined with "start-ups" that are actually holding companies, created to attack the very corporations they are supposed to be defending?

Considering you can't even by stock at a large firm without clearing it, I'm going to guess: almost nobody.

There is no way mlb knew about the nature of this business. Firms survive on reputation. Nobody hires a firm with a bad reputation for keeping client confidences. Why would the other partners risk their income so this guy's wife could make a buck? It makes no sense, especially considering how much money there is in representing apple as a repeat customer.

I have to agree.

Most of this story is the typical "try to conflict out any law firm that opposes you by any means necessary" that large companies practice.

The only interesting twist is that they may have a valid point for once :)

> There is no way mlb knew about the nature of this business.

I'm not so sure. I can think of several not so implausible scenarios, most of them involving some combination of the following:

1) The parent firm has a silent stake in the troll firm

2) John McAleese truly believed and somehow convinced his partners that he/they wouldn't be implicated in this

3) John McAleese had some sort of leverage over the firm

It might not make sense to any of us, but despite that, John McAleese appears to have been employed there as recently as last week, despite his wife operating a company that has openly been trolling around its touchscreen patent for years.

It might make sense to them if they thought Apple wouldn't be able to connect the dots or hold them responsible, and/or they had some sort of incentive that outweighed what they perceived to be the potential fallout. I doubt we'll ever learn for sure what the true story was.

"despite his wife operating a company that has openly been trolling around its touchscreen patent for years."

I'm not sure why this is relevant. It's not like they are Apple's corporate counsel. It seems very odd to expect a law firm to keep track of what it's partners' wives are doing.

Particularly since it turns out to be very easy to hide ownership/etc of this kind of thing, in a way that the law firm would never have discovered it.

Actually, when entities regulate their employees' trades in public and non-public equities, they typically also require pre-clearance for an member of one's household. At least that was the case for me. As a client paying sometimes in excess of $1,000 per hour, I think one has a right to expect this also.

FWIW: It wasn't the case for me, even in situations where my trades were regulated :)

The law firm was aware of that, it's mentioned in the article.

Citation needed. As mentioned a few times, the article makes a bare assertion that he told the law firm, and it's not clear if this is what one of the people said, the author's personal view, or what.

"One thing that is clear: some at Morgan Lewis knew what McAleese was doing. He told the firm's then-general counsel that the company he invested in was going to sue Apple, and he sent a follow-up note after the lawsuit was filed."

Since it mentions people in specific positions at Morgan Lewis and a particular follow-up note, I assume it's the part of proceedings.

Would it make sense for Arthur Andersen to help Enron cook the books and when it inevitably exploded go down with it? Probably not, yet it still happened.

Arthur Andersen is a very salient example. It went from $10 billion/year in revenues to nothing overnight because of the damage to the brand (who wanted the Arthur Andersen name on their public financial statements after Enron?)

Yet, their implosion was the result of a conviction for obstruction of justice that was overturned by the Supreme Court: http://en.wikipedia.org/wiki/Arthur_Andersen_LLP_v._United_S... ("In the court's view, the instructions allowed the jury to convict Andersen without proving that the firm knew it had broken the law or that there had been a link to any official proceeding that prohibited the destruction of documents."). See also the relevant e-mail used for convicting the company: http://en.wikipedia.org/wiki/Nancy_Temple ("The Supreme Court's unanimous reversal of the conviction reinforces the opinion that the jury should not have inferred any liability on Arthur Andersen based solely upon the October 16 memo.")

In reality, it's unlikely that Arthur Andersen (as an entity) knew or directed any destruction of documents. What happened was that the lead partner on the Enron account (a high up guy within the company) did so, without the knowledge or approval of the company's management (as a general rule, professional services firms have very diffuse power structures with important partners having almost complete autonomy). Andersen definitely helped Enron cook the books, but it was the partner on the Enron account, and those under his employment, that engaged in the wrongdoing. That definitely helped his bottom line, but at the expense of creating a risk that ultimately brought the entire firm down.

He notified the lead counsel at his employer before and after suing Apple. So the question is, why did he still work there until recently?

The article does not say this. It says "He had told Morgan Lewis' general counsel at the time about the lawsuit"

It doesn't cite a source. The rest around it is in quotes, so it's not clear if this is the article author's interpretation of what John McAleese's said, or the article author's personal view. If it's the former, you have to be very very careful, because they are all lawyers.

The literal wording is "He had told Morgan Lewis' general counsel at the time about the lawsuit". It does not say "He had told Morgan Lewis' general counsel at the time of his involvement in the lawsuit".

He could have emailed the general counsel saying "Hey, it looks like apple got sued again. I bet we'll make some money from them on this!"

etc

It doesn't say what he told them. There is, by itself, nothing unethical about a lawyer's wife suing a company who is a client of the lawyer's firm in a different practice area, as long as appropriate measures are taken to maintain client confidences. It's not 1870 and husbands and wives aren't considered the same person anymore.

I've only read the linked-to article once, but this doesn't seem nearly as bad as it sounds (minus the patent trolling aspect).

Here's how I think it happened -- and, for sake of clarity, I worked at a large-ish law firm, have a bunch of friends who worked in the huge ones, and even know a partner at the named firm.

1) Lawyer and his wife start (with others) a company. Company invents something (kind of) and lawyer, being a lawyer, files for a patent.

2) Someone else comes along and creates something kind of/sort of like what they did. They have a patent so they look at suing the other company.

3) Lawyer works at a law firm which represents the target company. The law firm has 1,300 lawyers and two dozen offices around the world. He tells his firm's general counsel about the issue, likely to set up "chinese walls" as to not run afoul of any ethical obligations. Note that he's kind of stuck otherwise -- his company is going to be adverse to the law firm's client, and he's stuck in the middle.

4) When the firm's client hears about this, they freak the eff out and demand that the attorney in question be fired. He's fired.

This guy should be disbarred, he and his wife should end up paying Apple damages to cover all the costs in all lawsuits that this company was involved in. Good luck getting any of that to happen.

As for the schadenfreude in this thread: I don't like Apple much, they've done a lot of bad things in the last couple of years but I see absolutely no reason to wish any of this on them.

That seems pretty harsh considering the attorney in question didn't work on anything remotely related to Apple (or even patents). There are 1,300 attorneys at his firm, I'm sure you could find a conflict with nearly any investment.

Now if he were billing to Apple's account while also running the lawsuits that he was defending, that would be something worth discussion. Alas, he was not.

My reading is that what appears, on the allegations, to be a breach of fiduciary duty by various lawyers and firms will give Apple some more space for tactical manoeuvering. They can use it to delay or restart various aspects of the case.

But it won't necessarily break the patent in question. Eventually it'll come to trial.

(IANAL, TINLA)

It very well may be that this what you said and to make the McAleeses incur more litigation costs. Sadly, the only way to fight these "troll patent companies" (as Jennifer McAleese states) is to wrap the cases up in endless movements, discovery, witnesses, etc. so that some minor detail comes to light eventually.

Sounds like this lawyer is going to find it hard to find work. Ever again.

You are confused. He is an environmental litigator. He will wait 5 months, and then be a partner somewhere else, at worst, on a different coast. No one will care.

At most, he'll be censured.

But he's from their philadelphia office, so my guess is PA will do nothing.

If he's licensed in Maryland, he may face real problems (Maryland takes this kind of thing very seriously in a way most states do not).

I predict this is going to be as much fun to watch as the Prenda Law case!

I certainly hope so...

Seems like it was one lawyer, which the firm then kicked out.

But more interestingly, it appears that the law firm may have known about the activities of this lawyer and not done anything about it.

You have to remember these guys are lawyers, and so they represent what happened in whatever the best light to them is.

IE when you read "He says he informed the firms general counsel about it", you may think this means "he emailed the firm's general counsel with details about a pending lawsuit he had against one of the clients". It may in fact mean "he texted the general counsel's broken cell phone at 3am while drunk, saying that he was suing someone that mattered, with half the words misspelled"

This was an environmental litigator. One who should be disbarred for this but won't be.

And so the lizard cuts off its tail to survive...

tldr of various reactions to the troll looking for partners:

Google: did not answer

Nokia: sounded super interested

They say that litigation is often a last ditch effort by companies that know that they are in trouble in the long run. Google and Nokia's respective behaviors certainly reflect their current predicaments accurately.

Or they want to know who they are dealing with, and are reeling them in to find out more about who might sue them next.

That is pretty egregious. I wonder if there is going to be a great "cleansing" and anyone not completely spotless in the big firms will find themselves on the outs.

Something strange about how long it persisted though. I've worked with one of the big firms as an expert, Quinn Emmanuel, and they were very very strict about communications. I presumed this was standard practice.

Can this act be called unethical? This is bad. Using law for profit is like pimping.

If only we devs can learn how to do this, we'd actually could become rich.

You're experiencing observation bias. Crime sometimes does pay, but in many cases it does not, and these cases are usually aren't reported as widely because they are routine and uninteresting. If you try to abuse your position for personal profit, you might get rich, but most probable outcome would be you initially get somewhat rich and then ruin the rest of your life. And you only have one. Do you think it's worth it?

This is not a crime.

It is not (always) a legal crime, but it is a breach of trust comparable to crime and would have similar consequences.

This is certainly a bad thing that shouldn't happen to any company, but at the same time I can't help but think this is some kind of poetic justice Apple is receiving for all the "patent trolling" they've done over the past few years with some very bogus claims. Maybe karma is real. When you breed a certain kind of culture in the industry or in your company, this is what you get out of it.

> Maybe karma is real.

The Just World Hypothesis is antithetical to how justice works because it causes us to shortchange the process of always establishing, from scratch and without bias, the good or bad of any given case.

    This is because people are uncomfortable believing that suffering
    is often random, that sometimes bad things happen for no reason at
    all. Instead, we prefer to believe that people must have done
    something to deserve what they get. This is obviously a reassuring
    and comforting belief, which explains its wide appeal. (‘If bad
    things only happen to those who deserve them, and I’m a good
    person, then I can be sure that nothing bad will happen to me‘,
    Ulpian notes at one point). For us moderns, belief in the just
    world can be thought of as a failure to apply the null hypothesis
    in the moral domain: rejecting the explanation of chance, we
    prefer to believe that everything that happens is deserved. As
    should be obvious, the just world hypothesis manifests as the
    doctrine of karma in a number of religious traditions.

http://skepticlawyer.com.au/2013/06/01/n-guilty-men-a-medita...

If this is karma, it's karma that travelled backwards in time and attacked Apple 3 years before any of the patent law suits Apple filed against other companies in the current mobile device IP war.

So no, it's not karma or poetic justice. It's just another symptom of the same underlying problem of patents and the ridiculous farce it has made out of the tech business.

The lawsuit was filed in 2012. How is that "3 years before" Apple became a patent bully themselves?

I may be misinterpreting, but I believe this is referring to when the conflict of interested started, not when the lawsuit was filed. I could be wrong as I'm reading the article as stating that the mess started in 2007 (days after iPhone release) when is a lot longer than 3 years.

I find your comment to be incredibly immature, in a very sad way. There are so many interesting things to discuss about this case, and yet you couldn't find anything to say other than "haha, I love how they are being given a taste of their own medicine!!!"

edit: bring on the downvotes. The HN crowd certainly loves brainless cheerleading.

I second your opinion.

He has commented earlier that he is in his teens.

It's not considered trolling when you're defending your own products. What do you think patents are for?

It's not patent trolling unless the company suing makes a living out of it. Apple actually makes some stuff, you know.

A company is not a "patent troll" unless the company makes a living only doing it. However, what Apple brought against Samsung and what is being described here is a pretty clear-cut case of patent trolling.

It's not patent trolling if you sue based on patents you implemented in your own products either. That's the whole point of the patent system, dammit.

I don't think you know what patent trolling means, neither how patents work.

Click this patent[1]. Click "Original document". Tell me with a straight face that this is not patent trolling.

They patented "the ornamental design for an electronic device" which is a "thin rectangular cuboid with rounded corners"[2]. Tell me with a straight face this is the point of the patent system.

[1] http://worldwide.espacenet.com/textdoc?DB=EPODOC&IDX=USD...

[2] http://en.wikipedia.org/wiki/Apple_Inc._v._Samsung_Electroni...

This is an industrial design patent, and there are many like that. [1] Try coping the Coke bottle and you´ll be sued. Try coping the iPhone and you´ll be sued. Simple.

[1] http://en.wikipedia.org/wiki/Design_patent

You do not understand the term "patent trolling". Give up.

So you _do_ think that this is a valid, enforceable patent that represents how the system _should_ work?

It is not clear cut at all. Your bias is showing.

They invented the stuff they protected. The system, as it stands, only works if the owner of the patent/trademark/IP takes step to defend it.

Did they? It sounds like they had access to confidential Apple documents, which allowed them to rewrite their patent in a way to make it look like Apple infringed on technology they invented. Remember, the point of a patent is to disclose new inventions.

My argument's premise is that Apple is not a patent troll - the notion of poetic justice isn't quite applicable here.

Not saying anything about the lawyers.

"They" = Apple

It's not karma. When there's a gang war, most people getting shot are gangsters. Not because it's karma, but because that's a gang war, what you'd expect? In the same way, when there's a rampant patent trolling war, patent trolls are getting sued too. Unfortunately, just as in gang war, innocent people get their quality of life severely degraded and sometimes are caught in the crossfire too.

> Maybe karma is real.

It isn't.

i think karma is very real, but its not this mysterious mythic thing people think it is. people misunderstand "karma". If one sows good will, and creates many positive connections, one is much more likely to have better "luck" throught ones life, simply because one has a better support network, or less players willing to act against your party. thats not to say bad thing dont still randomy happen, or that everything really does even out in the end. but your chances of success are much greater if one practices good karma.

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