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

Filing 1047

Administrative Motion to File Under Seal Apple's Reply in Support of Motion for Adverse Inference Jury Instructions Due to Samsung's Spoliation of Evidence (Dkt. 895) filed by Apple Inc.. (Attachments: #1 Proposed Order, #2 Apple's Reply Brief, #3 Declaration of Esther Kim)(Jacobs, Michael) (Filed on 6/5/2012)

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HAROLD J. MCELHINNY (CA SBN 66781)
[e-mail]
MICHAEL A. JACOBS (CA SBN 111664)
[e-mail]
JENNIFER LEE TAYLOR (CA SBN 161368)
[e-mail]
ALISON M. TUCHER (CA SBN 171363)
[e-mail]
RICHARD S.J. HUNG (CA SBN 197425)
[e-mail]
JASON R. BARTLETT (CA SBN 214530)
[e-mail]
MORRISON & FOERSTER LLP
425 Market Street
San Francisco, California 94105-2482
Telephone: [phone]
Facsimile: [phone]

WILLIAM F. LEE
[e-mail]
WILMER CUTLER PICKERING
HALE AND DORR LLP
60 State Street
Boston, MA 02109
Telephone: [phone]
Facsimile: [phone]
MARK D. SELWYN (SBN 244180)
[e-mail]
WILMER CUTLER PICKERING
HALE AND DORR LLP
950 Page Mill Road
Palo Alto, California 94304
Telephone: [phone]
Facsimile: [phone]

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Attorneys for Plaintiff and
Counterclaim-Defendant APPLE INC.

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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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APPLE INC., a California corporation,

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Plaintiff,
v.
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,

Case No. 11-cv-01846-LHK (PSG)
APPLE’S REPLY IN SUPPORT OF
MOTION FOR ADVERSE
INFERENCE JURY INSTRUCTIONS
DUE TO SAMSUNG’S SPOLIATION
OF EVIDENCE
Date:
Time:
Place:
Judge:

June 21, 2012
10:00 a.m.
Courtroom 5, 4th Floor
Hon. Paul S. Grewal

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Defendants.
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PUBLIC REDACTED VERSION
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TABLE OF CONTENTS

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Page

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TABLE OF AUTHORITIES .......................................................................................................... ii

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INTRODUCTION .......................................................................................................................... 1

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I.

SAMSUNG DESTROYED EVIDENCE IT WAS OBLIGATED TO PRESERVE ......... 2

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A.

Samsung’s Duty to Preserve Arose Before April 2011 .......................................... 2

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B.

Samsung Destroyed Emails It Was Obligated to Preserve ..................................... 3

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C.

Samsung Destroyed “iPhone Countermeasure Related Report Materials” In
Connection with Its Obstruction of the KFTC Investigation.................................. 6

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II.

SAMSUNG ACTED WITH A CULPABLE STATE OF MIND....................................... 7

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A.

Bad Faith Is Not Required ...................................................................................... 7

B.

Samsung Acted With a Culpable State of Mind ..................................................... 8

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III.

SAMSUNG DESTROYED EVIDENCE RELEVANT TO APPLE’S CLAIMS ............ 12

IV.

THE COURT SHOULD ISSUE ADVERSE INFERENCE INSTRUCTIONS............... 13

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CONCLUSION ................................................................................................................. 15

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TABLE OF AUTHORITIES

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Page(s)

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CASES

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AdvantaCare Health Partners, LP v. Access IV,
2004 U.S. Dist. LEXIS 16835 (N.D. Cal. Aug. 17, 2004)...................................................... 13

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AMF, Inc. v. Sleekcraft Boats,
599 F.2d 341 (9th Cir. 1979)................................................................................................... 10
Byrd v. ABC Prof’l Tree Serv.,
2011 U.S. Dist. LEXIS 60189 (M.D. Tenn. June 6, 2011) ....................................................... 6
Consol. Aluminum Corp. v. Alcoa, Inc.,
244 F.R.D. 335 (M.D. La. 2006)........................................................................................... 8, 9
Dong Ah Tire & Rubber Co., Ltd. v. Glasforms, Inc.,
2008 U.S. Dist. LEXIS 111150 (N.D. Cal. Sept. 19, 2008) ................................................... 13
FTC v. Lights of Am. Inc.,
2012 WL 695008 (C.D. Cal. Jan. 20, 2012) ................................................................... 2, 8, 10
Glover v. BIC Corp.,
6 F.3d 1318 (9th Cir. 1993)................................................................................................. 8, 13

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Gonzalez v. Las Vegas Metro. Police Dep’t,
2012 U.S. Dist. LEXIS 46601 (D. Nev. Apr. 2, 2012) ........................................................... 15
Hamilton v. Signature Flight Support Corp.,
2005 U.S. Dist. LEXIS 40088 (N.D. Cal. Dec. 20, 2005) ...................................................... 15
Hynix Semiconductor, Inc. v. Rambus Inc.,
591 F. Supp. 2d 1038 (N.D. Cal. 2006), rev’d on other grounds,
645 F.3d 1336 (Fed. Cir. 2011)............................................................................................... 12
IO Grp. v. GLBT Ltd.,
2011 U.S. Dist. LEXIS 120819 (N.D. Cal. Oct. 19, 2011)....................................................... 9
Keithley v. Homestore.com, Inc.,
2008 U.S. Dist. LEXIS 92822 (N.D. Cal. Nov. 6, 2008).......................................................... 8
Kronisch v. United States,
150 F.3d 112 (2d Cir. 1998).................................................................................................... 12
Lindy Pen Co. v. Bic Pen Corp.,
982 F.2d 1400 (9th Cir. 1993)................................................................................................. 10

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Medical Lab. Mgmt. Consultants v. ABC,
306 F.3d 806 (9th Cir. 2002)................................................................................................... 15
Micron Technology, Inc. v. Rambus Inc.,
645 F.3d 1311 (Fed. Cir. 2011)......................................................................................... 13, 15
MOSAID Techologies, Inc. v. Samsung Electronics Co.,
348 F. Supp. 2d 332 (D.N.J. 2004) ............................................................................... 1, 7, 8, 9
Powertech Technology Inc. v. Tessera, Inc.,
660 F.3d 1301 (Fed. Cir. 2011)............................................................................................... 15
Premier Displays & Exhibits v. Cogswell,
2009 U.S. Dist. LEXIS 119462 (C.D. Cal. Dec. 23, 2009) .................................................. 4, 5
Religious Technology Center v. Netcom On-Line Comm. Serv., Inc.
1997 WL 34605244 (N.D. Cal. Jan. 6, 1997) ......................................................................... 11
U.S. v. Vidacak,
553 F.3d 344 (4th Cir. 2009)..................................................................................................... 6

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UMG Recordings, Inc. v. Hummer Winblad Venture Partners (In re Napster, Inc.
Copyright Litig.)
462 F. Supp. 2d 1060, 1078 (N.D. Cal. 2006) .................................................................... 9, 11
Zeigler v. Fisher-Price, Inc.,
302 F. Supp. 2d 999 (N.D. Iowa 2004)..................................................................................... 6

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Zubulake v. UBS Warburg LLC,
220 F.R.D. 212 (S.D.N.Y. 2003) .................................................................................... 2, 9, 11

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STATUTES

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15 U.S.C. § 1117 ........................................................................................................................... 10

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Fed. R. Evid. 803(8)........................................................................................................................ 6

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INTRODUCTION
Samsung does not contest that it has continued to use

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. Samsung

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characterizes its conduct as a

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at 16.) Yet courts have issued adverse inference instructions precisely because of comparable

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failures—including in a case against Samsung. In MOSAID Techology, Inc. v. Samsung

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Electronics Co., 348 F. Supp. 2d 332 (D.N.J. 2004), the court issued “spoliation inference”

(Opp.

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instructions because, after the litigation was filed, Samsung “never placed a ‘litigation hold’ or

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‘off switch’ on its document retention policy concerning email,” which, “[u]nchecked . . . allowed

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e-mails to be deleted, or at least to become unaccessible, on a rolling basis.” Id. at 333-34, 340.

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Notwithstanding the adverse inference instructions issued in MOSAID, Samsung failed to

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suspend auto-deletion of emails after litigation was filed in the Fractus case. (Dkt. No. 895-2,

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Ex. 37 (filed under seal) (May 20, 2011 trial transcript referring to

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Once again, Samsung has adhered to its

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auto-deletion policy in this case, long after it

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and to this day. Adverse inference instructions are warranted here, as they were in MOSAID and

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numerous other cases in which parties failed to suspend auto-deletion policies when under a duty

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to preserve.

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Samsung relies heavily on an order from the ITC, yet Samsung previously took the

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position that the motion filed in this Court “is a different motion and asks for different remedies.”

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(Dkt. No. 899-3 at 1.) Moreover, in the ITC,

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; here, in contrast,

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the Court is determining whether to instruct the jury that it can adopt an adverse inference, and

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bad faith is not required.

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Further, Samsung barely even acknowledges its deliberate destruction of documents

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concerning “iPhone countermeasure” materials in connection with obstructing a Republic of
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Korea’s Fair Trade Commission (“KFTC”) investigation. Adverse inference instructions are

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warranted in light of that spoliation as well.

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I.

SAMSUNG DESTROYED EVIDENCE IT WAS OBLIGATED TO PRESERVE

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A.

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Samsung asserts that its “preservation duty . . . arose no earlier than April 15, 2011, when

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Samsung’s Duty to Preserve Arose Before April 2011

Apple filed its Complaint,” and the

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(Opp. at 4.) The only case that Samsung cites for
this proposition contradicts its position. See FTC v. Lights of Am. Inc., No. SACV 10-1333, 2012

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WL 695008, at *2 (C.D. Cal. Jan. 20, 2012) (“The obligation to preserve relevant evidence

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attaches when litigation is ‘pending or reasonably foreseeable.’”) (cited in Opp. at 2 n.16);1 see

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also Zubulake v. UBS Warburg LLC, 220 F.R.D. 212, 217 (S.D.N.Y. 2003) (“duty to preserve

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attached at the time that litigation was reasonably anticipated”) (cited in Opp. at 18 n.20).

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Here,

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As Apple’s motion noted, Samsung thereby “acknowledged its

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obligation to preserve documents related to Apple’s claims . . . in August 2010” (Mot. at 10);

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thus, Samsung is wrong that Apple “admits” that the preservation duty arose in April 2011. (Opp.

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at 14-15 (citing Mot. at 10).) Samsung offers no basis to conclude that it did not anticipate

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litigation

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Lights of America does not support Samsung. In that case, the court rejected the
defendants’ contention that the FTC’s duty to preserve attached when it first initiated an
investigation against them, because an investigation was merely the procedure the FTC used to
obtain information about a product, before it could decide whether litigation was warranted.
2012 WL 695008, at *3, 11-12.

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Moreover, Samsung does not contend that Apple automatically
deletes emails after 14 days, or at all.

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B.

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Samsung does not contest that

Samsung Destroyed Emails It Was Obligated to Preserve

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Nor does Samsung contest that

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Apple demonstrated that some

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custodians did not preserve all relevant emails, because they failed to preserve emails that they

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sent or received that were produced by other custodians. (Mot. at 4-6.) As Apple argued, those

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documents are likely only the tip of the iceberg, as Apple cannot possibly know how many other

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documents these custodians (and others) failed to preserve.2 (Id.) Indeed, Samsung identifies

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even more instances

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(Dkt. No. 987-39 ¶ 19.)
Samsung falls far short of demonstrating that, despite the

, it somehow

preserved all emails it was obligated to preserve.

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Samsung does not contend that Apple uses an email system that automatically deletes
emails. Accordingly, while Samsung’s custodians’ failure to preserve emails when Samsung has
is highly
relevant, Samsung s assertion that some Apple witnesses did not produce some emails has no
relevance whatsoever.

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First, Samsung does not contest Apple’s showing that

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, but argues the failure to preserve does not

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matter because it had no duty to preserve them. (Opp. at 4, 14-15.) That argument fails because

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all of the documents were created after Samsung

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acknowledging that litigation was reasonably foreseeable. (Mot. at 4-6.)

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Second, Samsung argues that those custodians’ failures to preserve documents created
before April 2011 does not matter because they supposedly had not
(Opp. at 10-14.) This argument flatly contradicts the four versions of the
transparency disclosures Samsung previously served in this case, all of which

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(Dkt. No. 895-2 Ex. 9; Declaration of

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Esther Kim in Support of Samsung’s Reply in Support of Motion for Adverse Inference

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Instructions (“Kim Reply Decl.”) Exs. 1-3

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After Apple filed its motion,
Samsung filed a new amended disclosure,
. (Dkt. No. 987-37 (filed under seal) Ex. 33, at Ex. T;

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Dkt. No. 987-43 Ex. 4.) The Court should not credit this after-the-fact change. See, e.g., Premier

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Displays & Exhibits v. Cogswell, No. SACV 09-354, 2009 U.S. Dist. LEXIS 119462, at *22-29

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(C.D. Cal. Dec. 23, 2009) (applying “sham affidavit” rule and disregarding declaration

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contradicting earlier deposition testimony). Even if credited,

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further demonstrates that Samsung has not paid adequate attention to its

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preservation obligations (and disclosures to Apple). Regardless, Samsung had an obligation to

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preserve relevant evidence once litigation was reasonably foreseeable; if Samsung failed to do so

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because it did not send hold notices to the right people, that is Samsung’s problem, not Apple’s.

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Third, contradicting the testimony of its twice-deposed corporate witness on document
retention, Kyu Hyuk Lee, Samsung identifies new facts about its
The Court should disregard Samsung’s new facts.
See, e.g., Premier Display, 2009 U.S. Dist. LEXIS 119462, at *22-29.

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Even if considered, the new facts do not show that Samsung preserved all relevant emails

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In conjunction with its opposition, Samsung belatedly produced

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(Footnote continues on next page.)

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C.

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Samsung Destroyed “iPhone Countermeasure Related Report
Materials” In Connection with Its Obstruction of the KFTC
Investigation

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Apple’s motion emphasized Samsung’s deliberate destruction of “Korean roadmap iPhone

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countermeasure related report materials,” as well as “all the relevant files that came up in a search

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for SKT-related files,” as documented in the KFTC press release. (Mot. at 1-2, 6-7, 11, 13-14;

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Dkt. No. 895-2 Ex. 1.) Samsung does not deny the destruction. (See Dkt. No. 987-48 (filed under

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seal).)

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Contrary to Samsung’s characterization (Opp. at 20), the KFTC document is not hearsay.
It is a government report that relies on Samsung Vice President

admissions quoted

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above, which were stated in an email he sent to EVP

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id. Ex. 24 at S-ITC-003006126; Mot. at 6-7.) These statements are admissible as party

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admissions in a report of an official investigation that Samsung has not denied. See, e.g., U.S. v.

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Vidacak, 553 F.3d 344, 351 (4th Cir. 2009) (International Criminal Tribunal investigation records

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admissible under Fed. R. Evid. 803(8)); Byrd v. ABC Prof’l Tree Serv., No. 1:10-DV-0047,

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2011 U.S. Dist. LEXIS 60189 at *11 n.3 (M.D. Tenn. June 6, 2011) (government press release

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admissible under Rule 803(8) as “factual findings resulting from an investigation made pursuant

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to authority granted by law”); Zeigler v. Fisher-Price, Inc., 302 F. Supp. 2d 999, 1021 (N.D. Iowa

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2004) (consumer agency press release admissible as party admission and as agency report under

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Rule 803(8)(C)). Indeed,
(Dkt. No. 987-58 (filed under seal) ¶ 5.)

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Samsung alleges that the destroyed documents were limited to
(Opp. at 20-21.) Yet Samsung’s “iPhone

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. (Dkt. No. 895-2 Ex. 1 at 5;

(Footnote continued from previous page.)

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Samsung fails to show that any of the witnesses
identified in Apple s motion preserved all relevant documents. (See id. Ex. 4.)

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countermeasure” documents, and the “SKT-related files” (apparently referring to SK Telecom,

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the largest Korean carrier) likely address issues such as what iPhone features are most appealing

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to consumers; whether Samsung should offer similar features; and whether Samsung’s

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smartphones are similar to Apple’s.

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Samsung sells basically the same infringing

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“Galaxy S” smartphones in Korea and the U.S. Thus, Samsung should have preserved and

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produced its “iPhone countermeasure” communications with both Korean and U.S. carriers.

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The destruction of documents in connection with the KFTC investigation is an
independent, sanctionable act of bad faith spoliation; that it did not involve “the mySingle

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system” (Opp. at 21) is irrelevant. It also shows that Samsung executives knew of this

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destruction, and undermines

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given that he was informed of this destruction yet produced no emails and merely 18

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documents. (See Mot. at 4-5, 7; Dkt. No. 987-58 (filed under seal) ¶ 6.)

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II.

SAMSUNG ACTED WITH A CULPABLE STATE OF MIND

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A.

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Samsung asserts that Apple must show that Samsung engaged in a “scheme” to destroy

Bad Faith Is Not Required

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relevant evidence “to gain a litigation advantage,” and argues that it did not act in bad faith.5

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(Opp. at 3-4.) Ninth Circuit law is clear that “a finding of ‘bad faith’ is not a prerequisite to

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[adverse inference instructions].” Glover v. BIC Corp., 6 F.3d 1318, 1329 (9th Cir. 1993).

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“Simple notice of ‘potential relevance to the litigation’” is enough. Id. Consistent with this

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In sanctioning Samsung for failing to suspend its auto-deletion of emails, the MOSAID
court rejected a similar argument, stating, “Samsung provides no, and this Court did not find any
case law in [the Third Circuit] that requires a finding of bad faith before allowing a spoliation
inference.” 348 F. Supp. 2d at 337.

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authority, district courts in this circuit have awarded corrective adverse inference sanctions based

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on a showing of negligence, gross negligence, or conscious disregard for discovery obligations,

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including where a party has failed to suspend the automatic deletion of emails after litigation is

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filed. (See Mot. at 7-8, 13-15 (citing cases).

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Indeed, Samsung has cited authority holding that “[t]he ‘culpable state of mind’ [required

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for adverse inference sanctions] includes negligence.” Lights of Am. 2012 WL 695008, at *2;

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Keithley v. Homestore.com, Inc., No. C-03-04447, 2008 U.S. Dist. LEXIS 92822 at *27 (N.D.

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Cal. Nov. 6, 2008) (“In drawing an adverse inference, a court need not find bad faith arising from

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intentional, as opposed to inadvertent, conduct.”). Its out-of-circuit case law on culpability (Opp.

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at 9 & 21) is not persuasive because, unlike the Ninth Circuit, those other circuits require bad

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faith for adverse inference sanctions. See, e.g., Consol. Aluminum Corp. v. Alcoa, Inc.,

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244 F.R.D. 335, 344 (M.D. La. 2006) (“gross negligence” not enough because Fifth Circuit

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requires “‘bad faith’ or intentional conduct by the spoliating party”).

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B.

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Although bad faith is not required, Samsung’s destruction of documents in connection

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Samsung Acted With a Culpable State of Mind

with the KFTC investigation was clearly in bad faith. Samsung does not contend otherwise.
Samsung’s failure to suspend its

for employees whom Samsung

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identified as likely to have relevant documents also establishes the requisite culpability.

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Although bad faith is not required, Samsung did act in bad faith by continuing to use its

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after: (1) it had been sanctioned for doing so in the MOSAID case; (2) the

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plaintiff in the Fractus case had raised Samsung’s auto-deletion of emails; and (3) Apple had

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specifically raised the issue with Samsung at the outset of this case. Samsung’s attempt to

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distinguish MOSAID as issuing sanctions based on Samsung’s failure to implement a litigation

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hold is disingenuous. (Opp. at 20.) The reference to a litigation hold in that case concerns the

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auto-deletion of email; Samsung was sanctioned for failing to “place[] a ‘litigation hold’ or ‘off

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switch’ on its document retention policy concerning email,” which, “[u]nchecked . . . allowed

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e-mails to be deleted, or at least to become unaccessible, on a rolling basis.” MOSAID, 348 F.

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Supp. 2d at 332 (emphasis added).6

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After litigation is anticipated, the failure to turn off automatic deletion amounts to a

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conscious disregard of discovery obligations that justifies adverse inference instructions. See

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UMG Recordings, Inc. v. Hummer Winblad Venture Partners (In re Napster, Inc. Copyright

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Litig.), 462 F. Supp. 2d 1060, 1070 (N.D. Cal. 2006) (“even if Hummer’s ‘long standing policies’

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included deleting emails, Hummer was required to cease deleting emails once the duty to preserve

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attached in May 2000”); IO Grp. v. GLBT Ltd. , No. C-10-1282, 2011 U.S. Dist. LEXIS 120819,

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at *19-20 (N.D. Cal. Oct. 19, 2011) (party “consciously disregarded” its discovery obligations by

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failing to turn off its automated deletion function); Zubulake, 220 F.R.D. at 218. Here,

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Samsung is wrong that the defendant in Zubulake “fail[ed] to implement a litigation hold.”

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(Opp. at 16.) In fact, the defendant had specifically instructed its employees to preserve relevant

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evidence, but the court held that the duty to preserve requires both suspending any “routine

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document retention/destruction policy and put[ting] in place a ‘litigation hold.’” 220 F.R.D.

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at 218 (emphasis added). Thus, the court found that the destruction of relevant documents

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pursuant to the defendant’s regular document destruction practices showed a sufficiently culpable

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state of mind to warrant adverse inference instructions. Id. Samsung attempts to distinguish IO

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Group on the ground that the defendant “did not suspend the automatic deletion function until

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July 2011, over a year after the lawsuit was filed” (Opp. at 16), but

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Fractus shows that Samsung had notice of the impropriety of continuing to auto-delete
emails when under a preservation duty. That the Fractus court summarily denied a request to
issue adverse inference instructions with no reasons given (Dkt. No. 987-35 Ex. 31) hardly
demonstrates that Samsung’s use of its auto-delete policies when it is under a duty to preserve is
permissible. Fractus is from a district court within the Fifth Circuit, which requires a showing of
bad faith before allowing a spoliation inference. See, e.g., Consol. Aluminum, 244 F.R.D. at 344.

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Samsung cites Lights of America, but there, the party accused of spoliation submitted

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sworn declarations stating that all relevant documents had been preserved, and the moving party

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presented no evidence that relevant documents had been destroyed. See 2012 WL 695008, at *3.

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In contrast,

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¶ 19.) And many of Samsung’s declarants

(Dkt. No. 987-39

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That Samsung’s document policies may serve a “legitimate business purpose” does not

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establish that Samsung lacked a culpable state of mind when it continued

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at 15-16.) This motion does not challenge document destruction policies in the normal course of

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business; it concerns a party’s obligations after litigation is anticipated. Similarly, Samsung

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addresses the costs of

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of employees Samsung identified as having relevant documents.7 And while Samsung cites the

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Federal Circuit’s Model Order on E-Discovery in Patent Cases (Opp. at 2 n.3), those limits would

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not control here, where deliberate copying is probative of Apple’s trade dress claims. See AMF,

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Inc. v. Sleekcraft Boats, 599 F.2d 341, 349 (9th Cir. 1979); Lindy Pen Co. v. Bic Pen Corp.,

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982 F.2d 1400, 1405 (9th Cir. 1993); 15 U.S.C. § 1117.

(Opp.

for all employees, but not for the subset

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7

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Nor does Samsung show that it could not gain
consent from employees in order to implement a proper preservation program.

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It is Samsung’s culpability, not the

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intent of individual employees, that is at issue. See, e.g., In re Napster, 462 F. Supp. 2d at 1070

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(deciding question of whether investment company had violated duty to preserve); Zubulake,

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220 F.R.D. at 218 (discussing whether UBS had violated its duties). Samsung’s

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provide evidence of at least grossly negligent if not reckless misconduct and bad faith.

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As the relevant case law holds, Samsung’s actions were sufficiently culpable to justify an adverse

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inference instruction.

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Finally, Apple objects to the inadmissible opinions of Samsung’s putative expert attorney

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(Dkt. No. 987-65 (filed under seal)) as to the reasonableness of Samsung’s conduct. See, e.g.,

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Religious Tech. Ctr. v. Netcom On-Line Comm. Servs., Inc., No. C-95-20091, 1997 WL

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34605244, at *8 (N.D. Cal. Jan. 6, 1997) (sustaining objections to attorney declarations in

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connection with preliminary injunction, stating “interpretations and explanations of the law are

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not proper subjects of expert testimony”).

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III.

SAMSUNG DESTROYED EVIDENCE RELEVANT TO APPLE’S CLAIMS

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Apple showed that it is entitled to a presumption that the destroyed evidence was

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favorable to Apple. (Mot. at 9-10, 13 (citing cases).) Samsung attempts to distinguish only one

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of Apple’s cited cases, Hynix Semiconductor, Inc. v. Rambus Inc., 591 F. Supp. 2d 1038, 1060

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(N.D. Cal. 2006), rev’d on other grounds, 645 F.3d 1336, 1344-47 (Fed. Cir. 2011), on the

8

ground that the court addressed the spoliation issue in the context of its discussion of unclean

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hands. But that context does not change the meaning of its clear holding that “if spoliation is

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shown, the burden of proof logically shifts to the guilty party to show that no prejudice resulted

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from the spoliation” because that party “is in a much better position to show what was destroyed

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and should not be able to benefit from its wrongdoing.” 591 F. Supp. 2d at 1060.

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Even without the presumption, Apple has produced sufficient evidence to show that

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destroyed documents were potentially relevant to the lawsuit. See Kronisch v. U.S., 150 F.3d

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112, 128 (2d Cir. 1998) (party must produce only “some evidence suggesting” that the documents

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were potentially relevant). Indeed, Samsung establishes the relevance of the documents discussed

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in Apple’s motion by describing them as

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(Opp. at 4.) Moreover, Samsung’s production of documents from other custodians
establishes that they were relevant and responsive.
Nor does Samsung rebut the relevance of specific examples referenced in Apple’s motion.
For example, in response to Apple’s showing tha

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IV.

THE COURT SHOULD ISSUE ADVERSE INFERENCE INSTRUCTIONS
Adverse inference instructions are considered a “lesser” sanction and a “corrective

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procedure” that help restore the prejudiced party to the position it would have occupied had the

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evidence not been destroyed. Glover, 6 F.3d at 1329; see AdvantaCare Health Partners, LP v.

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Access IV, C-03-04496, 2004 U.S. Dist. LEXIS 16835 (N.D. Cal. Aug. 17, 2004); Dong Ah Tire

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& Rubber Co., Ltd. v. Glasforms, Inc., No. C 06-3359, 2008 U.S. Dist. LEXIS 111150, at *12

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(N.D. Cal. Sept. 19, 2008). As shown in Section II.B, courts have issued such instructions where,

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as here, a party has failed to suspend its document destruction policies—specifically including the

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auto-deletion of emails—while under a duty to preserve evidence.

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Samsung claims that, to give the particular “bad faith” instruction that Apple requests,

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“the district court must find that the spoliating party intended to impair the ability of the potential

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defendant to defend itself,” citing Micron Technology, Inc. v. Rambus Inc., 645 F.3d 1311, 1326
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(Fed. Cir. 2011). (Opp. at 20.) But Micron addressed the requirements for terminating sanctions,

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not adverse inference instructions. As discussed above, Samsung’s conduct, including its

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continued

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sanctioned before for doing exactly that, and its willful destruction of evidence in response to the

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KFTC’s investigation, establishes bad faith.

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while under a duty to preserve evidence, despite having been

Samsung is wrong that Apple has suffered no prejudice because any documents would

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have been cumulative to documents produced. Apple points to documents that should have been

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produced from certain custodians to expose that they once possessed relevant documents that they

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did not preserve, not because Apple wants more copies of the same documents. While Apple can

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present evidence of duplicative documents that were destroyed by pointing to copies in the

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possession of other custodians, there is no way for Apple to do so for the unique documents that

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were destroyed and in the possession of only these custodians (or that that multiple custodians

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failed to preserve). In light of Samsung’s previous representations that documents were not de-

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duplicated across custodians, there is only one inference to raise from the fact that duplicative

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copies of documents were not produced from these custodians: they were not produced because

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they were destroyed.

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The prejudice to Apple from the destruction of unique documents is obvious. This Court

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has ruled that Samsung’s strategy of denying copying renders copying evidence highly probative.

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(Dkt. No. 267 at 3.) Copying evidence also is relevant to issues such as non-obviousness and

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willfulness. Samsung’s destroyed evidence could include even stronger or more direct evidence

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that Samsung deliberately copied Apple’s designs, or could address additional features at issue.

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Apple should have had the full panoply of copying evidence so that it could select the best

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evidence for its affirmative case, as well as to have the full evidence available to rebut Samsung’s

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response.

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Moreover, even where others have produced documents, the failure of particular

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custodians to preserve them may prejudice Apple’s ability to establish admissibility and relevance

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where a particular witness disclaims knowledge of the document or the events described therein.

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This too appears to be Samsung’s strategy. (See, e.g., Dkt. No. 799-2 (filed under seal) at 11APPLE’S REPLY ISO MOTION FOR ADVERSE INFERENCE JURY INSTRUCTIONS
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12 & 14-15 (discussing

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citing Dkt. No. 799-4 Ex. 40 at 88 & 112-121; Ex. 6 at 34-36; Ex. 7 at 74-77).) The jury should

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be instructed that it can infer that the destroyed evidence would have shown that Samsung

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deliberately copied each of Apple’s designs and features at issue into the accused products.8

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Finally, the ITC decision on which Samsung so heavily relies is not binding on this Court.

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See, e.g., Powertech Tech. Inc. v. Tessera, Inc., 660 F.3d 1301, 1308 (Fed. Cir. 2011) (an ITC

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decision, even one addressing same issues as subsequent litigation, has no preclusive effect).

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Indeed, Samsung itself stated that the motion in this Court “is a different motion and asks for

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different remedies.” (Dkt. No. 899-3 at 1.) Nor is it persuasive authority, as

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(Dkt. No. 987-5 (filed under seal) Ex. 1 at 6 (citing

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Micron Tech. 645 F.3d at 1326-28).) Here, in contrast, the Court is determining whether to

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instruct the jury that it may draw an adverse inference, and bad faith is not required to warrant an

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instruction. Moreover, as discussed above, the Micron Technologies case on which the ALJ

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relied involved terminating sanctions and does not apply here. Further, Apple had no reply brief

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or oral argument in the ITC case to show, as it does here, the myriad failings in Samsung’s

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opposition arguments and evidence.

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V.

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CONCLUSION
The Court should grant Apple’s motion and issue adverse inference jury instructions as a

sanction for Samsung’s spoliation of evidence.

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Samsung’s cited authority on prejudice is inapposite. See Gonzalez v. Las Vegas Metro.
Police Dep’t, No. 2:09-cv-00381, 2012 U.S. Dist. LEXIS 46601, at *24 (D. Nev. Apr. 2, 2012)
(defendants had produced precise information that plaintiff claimed she did not receive); Medical
Lab. Mgmt. Consultants v. ABC, 306 F.3d 806, 824 (9th Cir. 2002) (no prejudice from accidental
loss of laboratory slides where plaintiff had access to digital images of slides and to medical
records concerning slides); Hamilton v. Signature Flight Support Corp., No. C-05-0490, 2005
U.S. Dist. LEXIS 40088, at *23-24 (N.D. Cal. Dec. 20, 2005) (no prejudice from destruction of
portions of surveillance video showing altercation where missing video footage was irrelevant to
plaintiff's claims and plaintiff had two eye witnesses who saw entire incident).

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Dated: June 5, 2012

MORRISON & FOERSTER LLP
By:

/s/ Michael A. Jacobs
Michael A. Jacobs
Attorneys for Plaintiff
APPLE INC.

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