Tuesday, May 20, 2014

(BN) Apple, Google Shaped by Silicon Valley Judge Koh’s Gavel

(Bloomberg ) Lucy H. Koh's fingerprints are on your Gmail account, your smartphone, and, if you're a Silicon Valley engineer, possibly your prospects for changing jobs.

Koh, the California federal judge overseeing the three-year patent battle between Apple Inc. (AAPL) and Samsung Electronics Co. (005930), has so far thwarted the iPhone maker's bid to keep Galaxy phones off the market. Now, after a jury found early this month that both companies infringed patents, the firms are poised to take new runs at persuading Koh to order sales bans on the other.

Koh also has made a mark presiding over privacy suits against Google Inc. (GOOGL), LinkedIn Corp. (LNKD) and Yahoo! Inc. (YHOO) In March, she blasted Google's privacy policy as vague and possibly misleading. Not long after, Google changed its terms.

Koh's ascent to influence in Silicon Valley has been swift. The 45-year-old daughter of Korean immigrants was nominated to the federal bench by President Barack Obama in 2010, making her one of the youngest appointees among more than 600 active federal judges and the first Korean-American U.S. district court judge.

Decades after the dawn of the Internet -- and 20 years into the age of the Web and ecommerce -- Koh is attempting to reconcile wiretap laws written in the landline-phone era with users' concerns about how companies use the troves of data generated when people send e-mails and surf online. No other judge has broken so much ground, lawyers and scholars say.

"Hot Seat"

"She's more on the hot seat on questions of Internet technology and business models, and their impact on consumer privacy, than any other judge in the U.S. today," said Tracy Beth Mitrano, director of the Internet Culture, Policy and Law Program at Cornell University.

It is Koh's seat on the federal bench in San Jose, with jurisdiction over Silicon Valley, that positions her to hear such cases. In federal courts, cases are generally assigned at random, so it was largely by chance that so many closely watched suits were assigned to her from among San Jose's handful of federal judges.

If luck is the residue of design, there is little accidental about Koh's journey to the bench.

Koh progressed quickly from Vicksburg, the Mississippi town where she worked in her father's wig shop, to undergraduate and law-school degrees at Harvard University. In 2000, at the technology boom's peak, she left Los Angeles -- where she had served for three years as a federal prosecutor -- and relocated to Silicon Valley.

Technology Cradle

The move brought her closer to her grandparents, and to a cradle of technology. Working at two law firms, she represented local companies and focused on intellectual property.

With more than 350 civil and criminal cases on her docket at times, Koh has shown little patience for lawyers who pile on paperwork. Amid a smartphone technology trial in 2012, she toldBill Lee, a lawyer representing Apple, that he should know better than to submit 75 pages about witnesses who weren't testifying -- "unless you're smoking crack."

"We're wasting the jury's time because you all are being unreasonable," she said.

The crack comment, which she and Lee joked about in court the next day, leavened a proceeding in which Koh has been watched for how she has applied legal theories to a patent battle with big implications for sales.

Patent Battles

In Apple's first U.S. patent-infringement suit against Samsung, filed in 2011, Koh rejected Apple's requests to ban sales of Samsung's phones -- even after the iPhone maker won a jury verdict finding that Samsung had infringed six of its patents.

The legal basis for her decision, Koh explained, was that Apple failed to draw a close enough connection between Samsung's infringement of patented features, and the sales Cupertino, California-based Apple claimed it had lost.

An appeals court said Koh had set the bar too high and urged her to reconsider. Koh held her ground. In March 2014, she again said Apple hadn't marshaled enough evidence to win a sales ban.

While many of the phones in question have already been phased out, Apple has said that Suwon, South Korea-based Samsung has sold tens of millions of Galaxy phones that use similar technology. Apple and Samsung are the world's top two smartphone vendors, according to the International Data Corp., which expects global shipments to reach 1.2 billion smartphones this year, from 1 billion last year.

As she has considered sales bans, Koh showed a preference for preserving commerce over curbing the public's choice of devices, said Brian Love, a law professor at Santa Clara University. Taking a phone off the market for infringement of what may be relatively minor features would represent a "gross mismatch between the patent owner's award and its actual contribution to society," he said.

"Vague at Best"

Meanwhile, Koh is at the center of discussions with potentially broad repercussions, over whether big Internet companies are violating users' privacy.

Plaintiffs suing Mountain View, California-based Google said the Internet search giant didn't make clear that it electronically scans messages to build user profiles and create targeted advertising. Google argued that e-mail users understand and accept that the company does such scanning and said its terms of service shielded it from liability.

Koh disagreed. Google's privacy policies, she said in September, weren't clear enough.

In March, Koh scrutinized Google's procedure for gaining consent from students who use the company's e-mail through their schools. Google's privacy policies are "vague at best and misleading at worst," she said, adding they could "actively obscure Google's interceptions" of e-mail content.

Spelling It Out

Not long after, Google said it would stop scanning some e-mails -- not only those sent through Apps for Education, used by more than 30 million students, but also messages sent by its business and government customers.

While Google would continue scanning the messages of general users of its Gmail service, it amended its terms of service to spell out its scanning regime.

"Our automated systems analyze your content (including emails)" to help provide personalized ads and search results, its newer terms of service read. "This analysis occurs as the content is sent, received, and when it is stored."

While some privacy experts say they are waiting for more evidence that Google isn't otherwise profiling student, government and business users, they credit Koh's rulings for bringing the issue to light.

Exposing Google

"The Google policy shift is a really big deal," Chris Jay Hoofnagle, a law professor at the University of California at Berkeley, said in an e-mail. "This lawsuit exposed Google's scanning and stopped it."

Google, in a statement, said the recent changes were "a continued evolution of our efforts" to serve users, including students.

Also in March, Koh refused to grant class-action status to the suit against Google, giving the company a tactical advantage. Hundreds of millions of privacy plaintiffs, unified behind one group of lawyers with pooled resources, would have had great leverage against Google. Koh said lumping different types of users together like that would be too unwieldy.

Still, privacy experts say they were encouraged when Koh expressed enthusiasm to have a jury hear plaintiffs' concerns about Google's alleged wiretap violations.

"This case raises really important issues," she told lawyers at an April 24 hearing in the case. "It's been hard fought. You know, if you want to see it to the end, I'm right there with you."

20 Boxes

Koh also presided over an antitrust suit in which workers alleged that Apple, Google, Intel Corp. (INTC) and Adobe Systems Inc. (ADBE) conspired to suppress salaries by not recruiting one another's workers. Late last month, the companies agreed to pay $324 million to settle claims.

In order to review e-mail messages between Silicon Valley chiefs discussing non-poaching agreements, Koh and her staff combed through more than 20 boxes containing 3,000 pages of documents each, said lawyers familiar with the case. Many judges take attorneys at their word about the nature of such evidence, these lawyers said.

Such intensity is typical of Koh, say those who know her.

At Harvard, she organized rallies to push the school to hire minorities and women as professors. The interest stemmed from her experience growing up as the only Asian-American in all-black, all-white and integrated towns and cities in Mississippi and Oklahoma, according to an article she wrote in a 1995-96 law-school publication.

Left, Right

In Silicon Valley, Koh was a senior associate at Wilson Sonsini Goodrich & Rosati PC in Palo Alto before moving to McDermott Will & Emery in Menlo Park. As a McDermott partner, Koh became the "go-to person" for important motions, said Vera Elson, a Wilson Sonsini partner who worked with Koh at both firms.

In 2008, California's then-governor Arnold Schwarzenegger, a Republican, appointed Koh to the state court in San Jose. Two years later, Obama nominated her the federal bench. With several left-leaning internships under her belt and recommendations from Republican Governor William Weld and Patriot Act co-author Viet Dinh, the Senate confirmed her 90-0.

Koh lives in a home on the campus of Stanford University with her husband, Mariano-Florentino Cuellar, a professor at the university's law school, and their two children. Cuellar described 2012 as "enormously challenging" for the family as Koh's father was ill with cancer.

His stomach was removed, and on Aug. 24, the day the jury in the first Apple-Samsung trial delivered its verdict, Koh was told by the doctors that her father was terminally ill. He moved into the Koh's living room and died about a month later.

After each day of the patent trial, Koh came home to spend time with her father and children and would then "plunge back into work," Cuellar said. She didn't tell lawyers in the case about her father and didn't consider pausing the trial, he said.

"She was very determined to do her duty," he said. "You want to do your best, and you want to deliver justice on time."

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