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

Filing 1242

OPPOSITION to ( #1216 MOTION Samsung's Motion for Relief from Nondispositive Pretrial Order of Magistrate Judge re #1144 Order Granting-in-Part and Denying-in-Part Motionis to Strike Expert Reports ) filed by Apple Inc.. (Attachments: #1 Declaration Of Raymond M. Hasu In Support Of Apples Opposition To Samsungs Motion For Relief From Nondispositive Pretrial Order Of Magistrate Judge, #2 Exhibit 1)(Jacobs, Michael) (Filed on 7/16/2012) Modified text on 7/17/2012 (dhm, COURT STAFF).

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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]

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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]

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,
Plaintiff,

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

Case No.

11-cv-01846-LHK (PSG)

APPLE’S OPPOSITION TO
SAMSUNG’S MOTION FOR
RELIEF FROM
NONDISPOSITIVE PRETRIAL
ORDER OF MAGISTRATE
JUDGE

Defendants.

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APPLE’S OPP. TO SAMSUNG’S MOT. FOR RELIEF FROM NONDISPOSITIVE ORDER OF MAG. JUDGE
CASE NO. 11-CV-01846-LHK (PSG)
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Samsung moved in January for leave to amend its infringement contentions, which this

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Court denied because amendment would “leave little opportunity for Apple to explore and

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respond to Samsung’s new contentions.” (Dkt. 836 at 10.) Having learned not to ask permission,

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Samsung nonetheless larded its expert reports with non-infringement and invalidity theories it had

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not disclosed during fact discovery. Apple moved to strike, and in reviewing a voluminous

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record on cross-motions to strike, Judge Grewal struck theories of both parties to ensure the

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litigation was “fair.” (Dkt. No. 1144 at 3.) Samsung cannot overturn the results of this fact-

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intensive review as “clearly erroneous.”
The “clearly erroneous” standard applies because Samsung seeks review of Judge

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Grewal’s findings on factual issues—whether various invalidity and non-infringement theories

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were disclosed to Apple during discovery. See Fed. R. Civ. P. 72(a). Samsung does not argue

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that Judge Grewal made any purely legal errors.1

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I.

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JUDGE GREWAL DID NOT CLEARLY ERR IN FINDING THAT SAMSUNG
DID NOT “OTHERWISE MAKE KNOWN” THE EXCLUDED CONTENTIONS.
Apple’s Interrogatory Nos. 11 and 12, propounded in November 2011, sought disclosure

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of Samsung’s invalidity and non-infringement theories for Apple’s design patents. (Dkt. No.

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939-4 ¶ 22 & Ex. 25.) Samsung did not disclose any theories in response to those Interrogatories

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until March 19, 2012, long after the close of discovery. Samsung argues that many of its theories

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were “otherwise made known” to Apple in various ways outside Samsung’s Interrogatory

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responses. But a theory is “otherwise made known” only if it is “clear and unambiguous.” (See

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Dkt. No. 1054 at 11 (citing cases).) Under that standard—which Judge Grewal adopted and

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Samsung does not challenge—none of the materials on which Samsung relies disclosed the

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theories struck by Judge Grewal.

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Contrary to Samsung’s suggestion, the Court’s review of Judge Grewal’s order does not
become less deferential because he adopted Apple’s proposed factual findings. See Silver v.
Executive Car Leasing Long-Term Disability Plan, 466 F.3d 727, 733 (9th Cir. 2006). Nor is bad
faith relevant since Judge Grewal did not impose sanctions amounting to dismissal of a claim.
See, e.g., Yeti by Molly, Ltd. v. Deckers Outdoor Corp., 259 F.3d 1101, 1106 (9th Cir. 2001); R &
R Sails, Inc. v. Ins. Co. of Pa., 673 F.3d 1240, 1247 (9th Cir. 2012).
APPLE’S OPP. TO SAMSUNG’S MOT. FOR RELIEF FROM NONDISPOSITIVE ORDER OF MAG. JUDGE
CASE NO. 11-CV-01846-LHK (PSG)
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Preliminary Injunction Proceedings. Samsung argues that its preliminary injunction

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papers disclosed some of the excluded contentions. The Court should reject this argument for

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multiple reasons. Samsung’s briefing to Judge Grewal did not argue that the challenged

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contentions based on the JPD1178470, 1994 Fidler, and Compaq TC1000 references were

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disclosed during the preliminary injunction proceedings. With respect to these references

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Samsung’s argument thus fails, as a party may not present arguments or evidence that it chose to

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omit from the record below. See, e.g, Paddington Partners v. Bouchard, 34 F.3d 1132, 1137-38

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(2d Cir. 1994); Lerma v. URS Fed. Support Servs., 2011 WL 2493764, at *3 (E.D. Cal. June 22,

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2011).
On the merits, Samsung’s argument fails as well. With regard to the 1994 Fidler and

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Compaq TC1000 references, Samsung’s preliminary injunction papers disclosed invalidity

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theories, which Apple did not challenge. (See Dkt. No. 939-12 at 6-9.) But Samsung did not

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argue non-infringement based on this art, and disclosure of invalidity theories did not “clearly and

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unambiguously” disclose non-infringement theories based on the same references.
As to the other references Samsung’s argument fails because, to the extent Samsung’s

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preliminary injunction papers discussed those references at all, it was to provide background

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concerning the history of tablet and smartphone design. (Dkt. No. 429 at 2-4.) Judge Grewal did

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not clearly err in finding that Samsung’s general statements about these references did not

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“clearly and unambiguously” disclose invalidity and non-infringement theories based on those

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references. 2

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Other Purported Disclosures. Samsung argues that it disclosed certain prior art

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references in various other ways, including through filings in this action and the ITC action and

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through third-party discovery. (Dkt. No. 1216 at 3:7-21.) This argument fails. Those purported

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disclosures of the existence of certain references did not disclose—let alone “clearly and

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unambiguously” disclose—the excluded theories that were based on the references.

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Samsung submits two charts purporting to show disclosures of prior art references during
discovery, including many disclosures not mentioned in its brief and not presented by Samsung in
its briefing below. (Dkt. No. 1216-2; Dkt. No. 1216-3.) Apple submits a corresponding chart
responding to the assertions in Samsung’s charts. (Hasu Decl. Ex. 1.)
APPLE’S OPP. TO SAMSUNG’S MOT. FOR RELIEF FROM NONDISPOSITIVE ORDER OF MAG. JUDGE
CASE NO. 11-CV-01846-LHK (PSG)
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For example, instead of identifying the Nokia Fingerprint as invalidating prior art or

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explaining how it anticipates or renders obvious any asserted Apple patent, Samsung buried a

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declaration from its designer in more than 29,000 pages of documents. (Dkt. No. 939-1 at 16;

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Dkt. No. 1054 at 12.) Samsung listed the designer as a potential witness on “prior art,” but did

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not identify his design, mention his declaration, specify an Apple patent, or disclose any theory as

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to its invalidity or non-infringement. (Dkt. No. 1011-0 Ex. 4 at 6.) In mid-March, Samsung gave

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three days’ notice that it would depose Mr. Vilas-Boas in London in connection with the ITC

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Investigation (not this case), and still gave no indication of the significance of his work. Because

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of the late notice, Apple was able to send to the deposition only a London-based attorney

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unfamiliar with the case and with design patent law. Judge Grewal correctly concluded that these

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tactics, which put the burden on Apple to “comb through the extraordinarily voluminous record”

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to piece together Samsung’s theories, did not “clearly and unambiguously” disclose Samsung’s

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invalidity theories based on the Nokia Fingerprint. (Dkt. No. 1144 at 2-3; Dkt. No. 1054 at 12.)

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The same analysis applies to the other purported disclosures cited by Samsung.

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Samsung’s preliminary injunction papers disclosed the 035 Mockup only as “material[] relevant

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to infringement analysis” of the D’889 Patent. (Dkt. No. 456 at 5 (cited by the Court at Dkt. No.

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1170 at 6).) Because neither those papers nor the motion to compel cited by Samsung (Dkt. No.

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346) disclosed any invalidity theories based on that reference, Judge Grewal did not err in striking

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such theories from Mr. Sherman’s invalidity report. Similarly, Samsung’s disclosure of prior art

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references in the ITC Investigation did not “clearly and unambiguously” disclose any theories

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advanced in Samsung’s expert reports in this action, since the design patents in the two

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proceedings are not the same. (Dkt. No. 1054 at 11-12.) Many of those references were also

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excluded from the ITC proceedings as not timely disclosed, including the Nokia Fingerprint. (See

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Dkt. No. 939-11 at 2-5; Hasu Decl. ¶ 2.) Samsung cannot rely on untimely disclosures in the ITC

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to establish timely disclosure here. Lastly, Samsung does not and cannot contend that any

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subpoenas it issued to third parties disclosed invalidity or non-infringement theories. Indeed, the

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only evidence it cites on this point—a Samsung subpoena to Bloomberg L.P.—presents no

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theories of any kind, does not identify any references as prior art, and does not otherwise explain
APPLE’S OPP. TO SAMSUNG’S MOT. FOR RELIEF FROM NONDISPOSITIVE ORDER OF MAG. JUDGE
CASE NO. 11-CV-01846-LHK (PSG)
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the significance that Samsung attached to those references. (Dkt. No. 1011-3.) Samsung does not

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and cannot identify any deposition questioning of those third parties that “clearly and

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unambiguously” disclosed Samsung’s contentions. See Primos, Inc. v. Hunter’s Specialties, Inc.,

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451 F.3d 841, 850-51 (Fed. Cir. 2006).

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II.

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JUDGE GREWAL DID NOT CLEARLY ERR IN FINDING THAT SAMSUNG’S
RESPONSE TO APPLE’S INTERROGATORY NO. 12 DID NOT DISCLOSE
SAMSUNG’S INVALIDITY THEORIES.

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Samsung argues that it disclosed certain prior art references in its response to Apple’s

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Interrogatory No. 12. (Dkt. No. 1216 at 3:1-6.) That argument fails because Interrogatory No. 12

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sought disclosure of Samsung’s theories of anticipation, obviousness, and other grounds for

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invalidity. Samsung does not argue that its interrogatory response disclosed any of those theories.

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Any such argument would be foreclosed by abundant case law holding that a mere recitation of

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document labels—which is all Samsung “disclosed” in its response—does not disclose a party’s

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contentions. (Dkt. No. 939-1 at 17-18; Dkt. No. 1054 at 11.) That is especially true here.

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Samsung’s response listed over 5,600 pages of documents that contained 595 prior art references.

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Apple could not possibly divine which of those references Samsung would rely upon, nor could it

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determine how Samsung would use those references in support of its invalidity theories. (Dkt.

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No. 939-1 at 18.) Under these circumstances, Judge Grewal did not clearly err in finding that

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Samsung’s response to Interrogatory No. 12 did not disclose the excluded theories.

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III.

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JUDGE GREWAL DID NOT CLEARLY ERR IN FINDING SAMSUNG’S
VIOLATION OF RULE 26(E) NOT SUBSTANTIALLY JUSTIFIED OR
HARMLESS.

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Samsung appears to argue for the first time that it was substantially justified in violating

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Rule 26(e). Specifically, Samsung suggests that its interrogatory responses did not disclose the

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non-infringement theories presented by Messrs. Lucent and Anders because those theories were

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made in rebuttal to “detailed analysis” in Apple’s expert reports, and “it was impossible for

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Samsung or its experts to predict the detailed contents of Apple’s opening reports.” (Dkt. No.

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1216 at 4.) That argument fails at the outset because Samsung did not make this (or any other)

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“substantial justification” argument below. Paddington Partners, 34 F.3d at 1137-38.

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This argument also fails on the merits because Apple’s interrogatory responses, which
APPLE’S OPP. TO SAMSUNG’S MOT. FOR RELIEF FROM NONDISPOSITIVE ORDER OF MAG. JUDGE
CASE NO. 11-CV-01846-LHK (PSG)
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spanned 58 pages, fully disclosed its infringement theories, and Apple never “admitted[]”

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otherwise. (Dkt. 1216 at 5.) Rather, Apple observed that it did not disclose “every detail” in

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support of its theories, and had no duty to do so. (Dkt. No. 996-4 at 10; see also Dkt. No. 1000-0

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at 2 (Samsung taking identical position on scope of disclosure duty).) Samsung could and should

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have disclosed its non-infringement arguments based on that information.
Samsung also fails to show that Judge Grewal erred in finding that Samsung’s violation of

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Rule 26(e) was not harmless. As Apple explained below, Samsung’s untimely disclosure of its

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theories deprived Apple of the ability to investigate them and develop relevant evidence during

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fact discovery. (Dkt. No. 939-1 at 16-17; 21-22.) Apple identified specific ways in which it

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would have conducted discovery differently, and cited numerous cases excluding invalidity and

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non-infringement theories that were not disclosed in time to allow meaningful fact discovery.

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(Id.; Dkt. No. 1054 at 10.) Samsung has never responded to those points, and does not even

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attempt to show that Judge Grewal erred in accepting these facts.
Samsung argues that any delay in its disclosures was harmless because the disclosures

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preceded the close of expert discovery, the dispositive motion deadline, and the trial date. This

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argument mischaracterizes the law. There is no rule allowing parties to delay disclosure of their

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contentions until the close of fact discovery. Rather, as Apple explained below, such delay is

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only warranted where the party cannot formulate a response without full discovery. (Dkt. No.

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1054 at 9-10.) That was not the case here. Samsung admits that it developed many of its

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invalidity and non-infringement theories long before the close of discovery. (Dkt. No. 1000-0 at

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18-19, 21-22.) Instead of disclosing them, Samsung chose to “hide the ball.” As Judge Grewal

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noted, this is an “unacceptable” practice (Dkt. No. 1144 at 3), and Samsung fails to show that this

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finding was erroneous.3
Samsung’s motion should, accordingly, be denied.

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None of the authorities cited in footnotes 8 and 9 of Samsung’s motion authorizes disclosure of
contentions after the close of fact discovery where, as here, such late disclosure indisputably
prevented a party from pursuing relevant fact discovery.
APPLE’S OPP. TO SAMSUNG’S MOT. FOR RELIEF FROM NONDISPOSITIVE ORDER OF MAG. JUDGE
CASE NO. 11-CV-01846-LHK (PSG)
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Dated: July 16, 2012

MORRISON & FOERSTER LLP

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By:

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

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APPLE’S OPP. TO SAMSUNG’S MOT. FOR RELIEF FROM NONDISPOSITIVE ORDER OF MAG. JUDGE
CASE NO. 11-CV-01846-LHK (PSG)
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