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

Filing 1388

MOTION Adverse Inference Jury Instruction filed by Samsung Electronics America, Inc.. Responses due by 8/9/2012. Replies due by 8/16/2012. (Attachments: # 1 Declaration, # 2 Exhibit, # 3 Exhibit, # 4 Exhibit, # 5 Proposed Order)(Maroulis, Victoria) (Filed on 7/26/2012)

1 QUINN EMANUEL URQUHART & SULLIVAN, LLP
Charles K. Verhoeven (Cal. Bar No. 170151)
2 [e-mail]
50 California Street, 22nd Floor
3 San Francisco, California 94111
Telephone: [phone]
4 Facsimile: [phone]
5 Kevin P.B. Johnson (Cal. Bar No. 177129)
[e-mail]
6 Victoria F. Maroulis (Cal. Bar No. 202603)
[e-mail]
7 555 Twin Dolphin Drive 5th Floor
Redwood Shores, California 94065
8 Telephone: [phone]
Facsimile: [phone]
9
Michael T. Zeller (Cal. Bar No. 196417)
10 [e-mail]
865 S. Figueroa St., 10th Floor
11 Los Angeles, California 90017
Telephone: [phone]
12 Facsimile: [phone]
13 Attorneys for SAMSUNG ELECTRONICS
CO., LTD., SAMSUNG ELECTRONICS
14 AMERICA, INC. and SAMSUNG
TELECOMMUNICATIONS AMERICA, LLC
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16

UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA, SAN JOSE DIVISION

18 APPLE INC., a California corporation,
Plaintiff,

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20

vs.

21 SAMSUNG ELECTRONICS CO., LTD., a
Korean business entity; SAMSUNG
22 ELECTRONICS AMERICA, INC., a New
York corporation; SAMSUNG
23 TELECOMMUNICATIONS AMERICA,
LLC, a Delaware limited liability company,
24
Defendants.
25

CASE NO. 11-cv-01846-LHK (PSG)
SAMSUNG’S NOTICE OF MOTION AND
MOTION FOR SPOLIATION ADVERSE
INFERENCE INSTRUCTION AGAINST
APPLE;
DECLARATION OF ALEX BINDER;
PROPOSED ORDER
[Motion to Shorten Time Filed Concurrently]

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Case No. 11-cv-01846-LHK (PSG)
SAMSUNG’S MOTION FOR ADVERSE INFERENCE INSTRUCTION AGAINST APPLE

1

NOTICE OF MOTION

2

TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD:

3

PLEASE TAKE NOTICE that Defendants Samsung Electronics Co., Ltd., Samsung

4 Electronics America, Inc., and Samsung Telecommunications America, LLC (collectively
5 “Samsung”) shall and hereby do move the Court, pursuant to this Court’s inherent powers, and
6 Magistrate Judge Grewal’s July 24, 2012 Order Granting-in-Part Apple’s Motion for an Adverse
7 Inference Jury Instruction, to give an adverse inference instruction to the jury regarding Apple’s
8 spoliation of evidence, and specifically, its failure to issue litigation hold notices until after filing
9 its complaint in this matter on April 15, 2011.

This motion is based on this notice of motion and

10 supporting memorandum; the supporting Declaration of Alex Binder, and such other written or
11 oral argument as may be presented at or before the time this motion is taken under submission by
12 the Court.
13
14

RELIEF REQUESTED
Samsung seeks an Order that the jury will be given the same adverse inference instruction

15 with respect to Apple’s spoliation as may be given with respect to Samsung based on the relevant
16 preservation date of August 23, 2010.
17
18 DATED: July 26, 2012
19

QUINN EMANUEL URQUHART &
SULLIVAN, LLP

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By /s/ Victoria Maroulis
Charles K. Verhoeven
Kevin P.B. Johnson
Victoria F. Maroulis
Michael T. Zeller
Attorneys for SAMSUNG ELECTRONICS CO.,
LTD., SAMSUNG ELECTRONICS AMERICA,
INC., and SAMSUNG
TELECOMMUNICATIONS AMERICA, LLC

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Case No. 11-cv-01846-LHK (PSG)
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1

MEMORANDUM OF POINTS AND AUTHORITIES

2

PRELIMINARY STATEMENT

3

Holding one party to a legal standard as to which its adversary is excused is manifestly

4 reversible error.

Yet that is precisely what is contemplated in Magistrate Judge Grewal’s July 24,

5 2012 Order.
6

Magistrate Judge Grewal concluded that the relevant date triggering Samsung’s duty to

7 preserve in this case was August 23, 2010.

Noting the evidence that Apple did not issue a

8 litigation hold notice until April 2011 (and in many cases, long after), Judge Grewal stated
9 “Samsung has always been free to argue, at the appropriate time, that Apple too is guilty of
10 spoliation.” (Order at 16, n.82.) Now is the appropriate time.

Until this time, Samsung had

11 no occasion to file a motion inconsistent with its position, accepted by the ITC, that neither side
12 had an obligation to preserve evidence based on the discussions between the parties in August
13 2010.

Indeed, if any party was on notice that litigation was likely to result, it was the putative

14 plaintiff, Apple, not Samsung.
15

If Samsung is to be held to a duty to preserve evidence effective August 23, 2010 by virtue

16 of Apple making a so-called “infringement presentation” to Samsung on August 4, 2010, Apple
17 must be held to the same standard.

Because it is undisputed that Apple did not issue any

18 litigation hold notices before April 2011, and because of the same evidence of prejudice—a
19 striking lack of emails from key Apple inventors and other custodians that suggest significant
20 deletion of relevant information—the same spoliation adverse inference instructions issued against
21 Samsung must also be issued against Apple.
22

STATEMENT OF FACTS

23

Magistrate Judge Grewal’s Order Granting Adverse Inference Instructions Against

24 Samsung.

On July 24, 2012, Magistrate Judge Grewal issued an order granting Apple’s motion

25 for an adverse inference jury instruction against Samsung based on spoliation of evidence.
26 Dkt. No. 1321, hereinafter, “Order”.)

(See

In his order, Judge Grewal found that an August 4, 2010

27 meeting between Apple and Samsung in which Apple accused Samsung of infringement triggered
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Case No. 11-cv-01846-LHK (PSG)
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1 Samsung’s duty to preserve evidence potentially relevant to this litigation.

(Order at 15-17.)

2 Judge Grewal found that the duty to preserve was triggered by the following:
Apple delivered, in person, a comprehensive summary of its specific patent
infringement claims against specific Samsung products. Whatever hopes Samsung
might have subjectively held for a license or other non-suit resolution, this would
certainly put a reasonably prudent actor on notice that litigation was at least
foreseeable, if not “on the horizon.”

3
4
5
6

7 (Order at 16:3-7.)

Immediately following the above passage, Judge Grewal wrote a footnote

8 stating that Apple’s “fail[ure] to issue litigation hold notices in August 2010 is irrelevant to the
9 court’s determination here.

Samsung has always been free to argue, at the appropriate time, that

10 Apple too is guilty of spoliation.”
11

Apple Failed to Issue Litigation Hold Notices.

Although in August 2010 Samsung had no

12 way of knowing the intended scope or likelihood of Apple filing this lawsuit in April 2011,
13 Samsung issued a limited litigation hold notice based on Apple’s August 4, 2010 discussions with
14 Apple—good-faith efforts to preserve that Apple has now successfully used against Samsung.
15 (See Order at 13 n.34; 16-17.) That notice did not say that Samsung knew that litigation was
16 likely: it stated that “[i]n light of the recent discussions between Samsung Electronics Co., Ltd.
17 (“Samsung”) and Apple Inc. (“Apple”), there is a reasonable likelihood of future patent litigation
18 between Samsung and Apple unless a business resolution can be reached.” (emphasis added).
19 Judge Grewal simply ignored the italicized words, not to mention the long history of the two
20 companies reaching just such “business resolutions,” effectively punishing Samsung for being
21 more vigilant than Apple regarding protecting potential evidence.
22

In contrast, Apple—the plaintiff in the initial lawsuit who certainly knew the likelihood of

23 filing its own lawsuit—issued no litigation hold notice at all until after filing its lawsuit in April
24 2011.1

Even worse, Apple did not issue litigation hold notices to critical designers and inventors

25 of the very patents it asserted were infringed until January 2012 and later.

(Binder Decl., ¶¶ 8-

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See Declaration of Alex Binder, filed concurrently (“Binder Decl.”), Exs. 1-2.
Case No. 11-cv-01846-LHK (PSG)
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1 12.) For example, four Apple design witnesses did not receive litigation hold notices until
2 January 11, 2012.

(Binder Decl., ¶ 8; Exs. 1-2.) One Apple inventor, Brian Huppi, did not

3 receive a hold notice until January 11, 2012.

(Id. at ¶ 9.)

In fact, Apple did not complete

4 delivery of over 25 percent of its litigation hold notices until after January 30, 2012.
5 Steve Jobs, a named inventor on 8 patents, never received a hold notice.

(Id. at ¶ 27.)

(Id. at ¶ 10.) And

6 many of the individuals listed on Apple’s own Initial Disclosures in this case did not receive hold
7 notices until September and December 2011, and in some cases January 2012.
8

(Id. at ¶ 12.)

Relevant Evidence Was Lost as a Result of Apple’s Failure to Issue Litigation Hold

9 Notices.

In finding that Apple had been prejudiced by Samsung’s failure to issue litigation hold

10 notices, Magistrate Judge Grewal pointed to evidence of “statistical contrast” presented by certain
11 Samsung witnesses who did not appear to have produced sufficient numbers of emails.

(See

12 Order at 20-21.) As discussed below in Section III, even more serious statistical contrasts are
13 evidenced by Apple’s own production.
14
15

ARGUMENT
Samsung is separately appealing Judge Grewal’s decision as beyond his authority and

16 contrary to law and fact.

If that decision is not reversed after the required de novo review, then

17 Samsung is entitled to have the very same adverse inference instruction given as against Apple as
18 any to be given against Samsung.
19 I.

APPLE’S DUTY TO PRESERVE WAS TRIGGERED—AT THE LATEST—AT

20

THE SAME TIME AS SAMSUNG’S

21

As the plaintiff-patentee in this litigation, Apple’s duty to preserve triggered at least as

22 early as Samsung’s.
23 2011).
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See Micron Tech., Inc. v. Rambus Inc., 645 F.3d 1311, 1325 (Fed. Cir.

In Micron, the Federal Circuit held:
[Rambus] was the plaintiff-patentee . . . and its decision whether to litigate or not
was the determining factor in whether or not litigation would in fact ensue. In
other words, whether litigation was reasonably foreseeable was largely dependent
on whether Rambus chose to litigate. It is thus more reasonable for a party in
Rambus’s position as a patentee to foresee litigation that does in fact commence,
than it is for a party in the manufacturers’ position as the accused.

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Case No. 11-cv-01846-LHK (PSG)
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1 As Judge Grewal himself found, Apple was aware of the scope of its claims even before Samsung
2 was.

See Order at 16 (“Apple delivered, in person, a comprehensive summary of its specific

3 patent infringement claims against specific Samsung products. Whatever hopes Samsung might
4 have subjectively held for a license or other non-suit resolution, this would certainly put a
5 reasonably prudent actor on notice that litigation was at least foreseeable, if not ‘on the
6 horizon.’”).2

It was Apple that prepared this presentation (prior to the initial meeting) and Apple

7 that chose to litigate.

Under Micron, it would be reversible error—which threatens to infect this

8 entire trial—to impose a duty on the accused and no duty at all on the patentee.
9 II.

UNDER MAGISTRATE JUDGE GREWAL’S ORDER, APPLE DESTROYED

10

EVIDENCE WITH A CULPABLE STATE OF MIND

11

In his Order, Judge Grewal held that although the record did not establish any bad faith on

12 Samsung’s part, an adverse inference instruction can be supported by a lesser showing of
13 “conscious disregard.”

Id. at 18:10.

He did not base this finding on Samsung’s “prudence and

14 responsibility in regards to its post-complaint preservation efforts” (Order at 16:15-18), but found
15 conscious disregard based on Samsung’s failure “to send litigation hold notices in August 2010,
16 beyond a select handful of employees, when its duty to preserve relevant evidence arose” and its
17 failure to provide “follow-up” until April 2011, after Apple filed its complaint.

Id. at 19:1-5.

18 According to Judge Grewal, this “is more than sufficient to show willfulness.” Id. at 19:6.
19

These arguments apply with far greater force to Apple’s conduct.

Apple issued no

20 litigation hold notices until after it filed its complaint, and, as discussed in more detail above,
21 Apple did not issue hold notices to many key inventors and other fact witnesses until months after
22 filing its complaint, despite being in the better position to know that it intended to initiate litigation,
23 and the likely scope of its claims.

(See Binder Decl., ¶¶ 7-12.)

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26

2

In fact, as detailed in Samsung’s appeal of Judge Grewal’s order, that presentation was
27 limited to utility patents, most of which Apple did not ultimately include in its April 2011
complaint.
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Case No. 11-cv-01846-LHK (PSG)
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1 III.

APPLE’S FAILURE TO ISSUE LITIGATION HOLD NOTICES CAUSED

2

RELEVANT EVIDENCE TO BE DESTROYED

3

In granting Apple’s motion for an adverse inference instruction, Judge Grewal found that

4 relevant evidence must have been destroyed because of the limited number of emails produced by
5 14 Samsung fact witnesses.

(See Order at 19-21.) Applying this same analysis to Apple’s

6 production, many of the most important Apple witnesses—including the named inventors of many
7 of the patents at issue—suffer from this same infirmity to even greater degrees:
8

Custodian

Relevance

9 Bartley Andre

named inventor of
D270, D899, D087,
and D677patents
named inventor of
‘607
model builder

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11 Brian Huppi

No. of Emails in
No. of Documents in
Custodial Production Custodial Production
14
135

0

104

0

0

named inventor of
D677, D270, and
D889 patents
software engineer

15

38

30

30

named inventor of
D087, D677, D270,
and D899 patents
named inventor of
D087, D677, D270,
and D899 patents
Designer

41

130

36

146

0

21

45

173

22 Mark Buckley

named inventor of
D087, D677, D270,
and D899 patents
finance analyst

0

100

23 Mark Lee

manager, model shop

8

10

24 Matthew Rohrbach

named inventor of
D087, D677, D270,
and D889 patents
named inventor of
D270
patent

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385

56

190

12 Chris Harris
13 Chris Stringer
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15 Curt Rothert
16 Duncan Kerr
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18
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20

Eugene Whang

Evans Hankey
Jonathan Ive

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26 Peter Russell-Clarke
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Case No. 11-cv-01846-LHK (PSG)
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1
Apple in-house
attorney, prosecutor of
‘949, and ‘757 patents
named inventor of
D087, D677, D270,
and D889 patents
named inventor of
D889, D087, D677,
D270, and D899
patents
named inventor of
‘163 patent
named inventor of
‘949, ‘678, D087,
D677, D270, D889,
D757, and D678
patents; former CEO
technical director

Quinn Hoellwarth
2
3

Rico Zorkendorfer

4
5 Shin Nishibori
6
7

Stephen Lemay

8
Steve Jobs
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10
11

Wei Chen

0

0

15

62

18

94

43

59

51

54

12

37

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16
17
18
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21
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(See Binder Decl., ¶ 13.)

between August 2010 and April 2011—of all the above-listed 19 key custodians, Apple produced
a combined total of approximately 66 emails dated between August 2010 and April 2011 (an
average of less than four emails per custodian during this critical time period).

email chains containing significant amounts of duplication.

(Id.)

If the limited production from

certain Samsung witnesses is sufficient to establish that relevant evidence was destroyed, the same
is true—to a greater degree—as to Apple’s witnesses.
Similarly, Judge Grewal pointed to evidence that some emails involving Samsung
custodians were found not in those custodians’ productions, but in the productions of other
Samsung witnesses.

(Order at 21:6.)

Once again, this same infirmity exists in Apple’s

productions, but to an even greater degree:
Witness
Chris Stringer

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(Binder Decl., ¶

14.) And of these approximately 66 emails, more than 20 are simply various permutations of

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Moreover, very few of the custodial documents fall within the period

Relevance
named inventor of
D677, D270, and
D889 patents

Non-Custodial Emails
475

Custodial Emails
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Case No. 11-cv-01846-LHK (PSG)
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1
Former industrial
design creative lead
and design manager
named inventor of
D087, D677, D270,
and D899 patents
named inventor of
D087, D677, D270,
and D899 patents
named inventor of
D087, D677, D270,
and D889 patents
Named inventor of
‘163 patent
named inventor of
D889, D087, D677,
D270, and D899
patents
named inventor of
‘163 patent
named inventor of
‘949, ‘678, D087,
D677, D270, D889,
D757, and D678
patents; former
CEO

Douglas Satzger
2
3

Eugene Whang

4
5 Jonathan Ive
6
7 Matthew Rohrbach
8
Scott Forstall
9
10

Shin Nishibori

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12 Stephen Lemay
13 Steve Jobs
14
15
16

133

0

144

36

759

45

112

31

1,676

172

43

18

2,028

40

2,042

51

17
18
19
20
21
22
23
24
25
26
27
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(See Binder Decl., ¶ 14.)

Likewise, Judge Grewal noted that “the majority of the accused

products at issue here [were] released prior to April 15, 2011,” when the suit was filed and the
notices sent.

(See Order at 21.) The same is true for Apple, which as discussed above, did not

even send litigation hold notices to key custodians until months after filing suit.
IV.

IF ANY ADVERSE INFERENCE INSTRUCTION IS GIVEN AS TO SAMSUNG,
THE SAME INSTRUCTION SHOULD BE GIVEN AS TO APPLE
Samsung had not previously requested an adverse inference instruction because it believed

(and continues to believe) that both parties’ duties to preserve evidence were triggered when
Apple filed this lawsuit in April 2011, not in August 2010.

However, if Judge Grewal’s ruling

that the infringement discussions between Apple and Samsung in August 2010 triggered a duty to
preserve is upheld, Apple’s undisputed failure to issue any litigation hold notices until after it filed
Case No. 11-cv-01846-LHK (PSG)
-8SAMSUNG’S MOTION FOR ADVERSE INFERENCE INSTRUCTION AGAINST APPLE

1 this lawsuit in April 2011 (in contrast to Samsung’s limited litigation hold notices in August 2010),
2 requires that any adverse inference instruction given as against Samsung must be given as against
3 Apple as well.

Samsung further requests that, because Apple was the plaintiff-patentee who

4 initiated this lawsuit, the adverse inference instruction as against Apple contain the following
5 additional language:
6
7
8

Apple initiated this lawsuit, and you should presume that it was more reasonable
for a party in Apple’s position to foresee litigation than it was for a party in
Samsung’s position.
See Micron Tech., Inc. v. Rambus Inc., 645 F.3d 1311, 1325 (Fed. Cir. 2011).

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CONCLUSION
For these reasons, Samsung respectfully requests that the Court grant adverse inference
jury instructions against Apple in the same manner and in the same language that it gives any such
instruction with respect to Samsung.

Samsung further requests that the Court instruct the jury, as

above, that it should presume that it was more reasonable for Apple to foresee this litigation than it
was for Samsung to do so.

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17 DATED: July 26, 2012
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Respectfully submitted,
QUINN EMANUEL URQUHART &
SULLIVAN, LLP

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By /s/ Victoria Maroulis
Charles K. Verhoeven
Kevin P.B. Johnson
Victoria F. Maroulis
Michael T. Zeller
Attorneys for SAMSUNG ELECTRONICS CO.,
LTD., SAMSUNG ELECTRONICS AMERICA,
INC. and SAMSUNG
TELECOMMUNICATIONS AMERICA, LLC

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Case No. 11-cv-01846-LHK (PSG)
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