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

Filing 1600

REPLY in Support of ( 1388 MOTION Adverse Inference Jury Instruction ) filed by Samsung Electronics America, Inc.(a New York corporation), Samsung Electronics Co. Ltd., Samsung Telecommunications America, LLC. (Maroulis, Victoria) (Filed on 8/7/2012) Modified text on 8/8/2012 (dhm, COURT STAFF).

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1 QUINN EMANUEL URQUHART & SULLIVAN, LLP Charles K. Verhoeven (Cal. Bar No. 170151) 2 50 California Street, 22nd Floor 3 San Francisco, California 94111 Telephone: (415) 875-6600 4 Facsimile: (415) 875-6700 5 Kevin P.B. Johnson (Cal. Bar No. 177129) 6 Victoria F. Maroulis (Cal. Bar No. 202603) 7 555 Twin Dolphin Drive 5th Floor Redwood Shores, California 94065 8 Telephone: (650) 801-5000 Facsimile: (650) 801-5100 9 Michael T. Zeller (Cal. Bar No. 196417) 10 865 S. Figueroa St., 10th Floor 11 Los Angeles, California 90017 Telephone: (213) 443-3000 12 Facsimile: (213) 443-3100 13 Attorneys for SAMSUNG ELECTRONICS CO., LTD., SAMSUNG ELECTRONICS 14 AMERICA, INC. and SAMSUNG TELECOMMUNICATIONS AMERICA, LLC 15 16 UNITED STATES DISTRICT COURT 17 NORTHERN DISTRICT OF CALIFORNIA, SAN JOSE DIVISION 18 APPLE INC., a California corporation, Plaintiff, 19 20 vs. CASE NO. 11-cv-01846-LHK (PSG) SAMSUNG’S REPLY IN SUPPORT OF MOTION FOR SPOLIATION ADVERSE INFERENCE INSTRUCTION AGAINST APPLE 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 26 27 28 Case No. 11-cv-01846-LHK (PSG) SAMSUNG’S REPLY ISO MOTION FOR ADVERSE INFERENCE INSTRUCTION AGAINST APPLE 1 TABLE OF CONTENTS 2 Page 3 4 I. PRELIMINARY STATEMENT ........................................................................................... 1 5 II. ARGUMENT ........................................................................................................................ 2 6 A. Apple Offers No Basis To Conclude That Its Preservation Duty For Its Own Claims Only Arose Months After Samsung Became Subject To That Same Duty ........................................................................................................................... 2 8 B. Apple Destroyed Evidence With A Culpable State Of Mind.................................... 5 9 C. Apple’s Admitted Failure To Preserve Evidence, While Encouraging Deletion Of Email, Resulted In Destruction Of Relevant Evidence ......................... 9 D. The Evidence At Trial So Far Confirms That Apple’s Spoliation Has Prejudiced Samsung ................................................................................................ 14 7 10 11 12 III. CONCLUSION ................................................................................................................... 15 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. 11-cv-01846-LHK -iSAMSUNG’S MOTION TO COMPEL APPLE TO PRODUCE RECIPROCAL EXPEDITED DISCOVERY 1 TABLE OF AUTHORITIES 2 3 Page Cases 4 Consol. Aluminum Corp. v. Foseco Int'l Ltd., 910 F.2d 804 (Fed.Cir.1990) ......................................................................................................14 5 Hynix Semiconductor, Inc. v. Rambus Inc., 6 591 F. Supp. 2d 1038 (N.D. Cal. 2006), ...................................................................................14 7 Micron Tech. v. Rambus, Inc., 645 F.3d 1311 (Fed. Cir. 2011) ......................................................................................1, 3, 4, 14 8 Stewart v. Ragland, 9 934 F.2d 1033 (9th Cir. 1991) ....................................................................................................15 10 Therasense, Inc. v. Becton, Dickinson and Co., 649 F.3d 1276 (Fed Cir. 2011) ...................................................................................................14 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. 11-cv-01846-LHK -iiSAMSUNG’S MOTION TO COMPEL APPLE TO PRODUCE RECIPROCAL EXPEDITED DISCOVERY 1 I. PRELIMINARY STATEMENT 2 Why was August 2010 the right date triggering Samsung’s obligation to preserve 3 documents while the right date for Apple was not until April 2011? 4 In its opposition to Samsung’s request for equal treatment – what this Court twice 5 described, in the earlier spoliation argument, as a “terrific motion” – Apple argues it was entitled 6 to rely on the “longstanding business relationship between the parties” to assume there would be 7 no lawsuit, but Samsung was not. Yet Apple knew that it considered products Samsung had 8 already released as of August 2010 to be infringing; Apple admits this. Opp. at 12. And it was 9 only Apple that knew this, and only Apple that knew that it planned to accuse such products of 10 infringement, for Apple’s design patents were not even a part of its August 2010 presentation to 11 Samsung. Apple’s position that Samsung was on notice of the claims Apple ultimately decided 12 to bring eight months before Apple was, despite Apple’s admitted belief that Samsung had already 13 infringed Apple’s design patents, is unprecedented, unsupported, and directly contrary to the 14 Federal Circuit’s teachings in Micron. 15 Thus, the case for a duty to preserve as of August 2010 is much stronger as to Apple than 16 Samsung; if Samsung had a duty, plainly Apple did as well. Despite this duty, Apple admits that 17 it issued no litigation holds whatsoever and took no steps to preserve documents in connection 18 with this case until at least eight months had passed since the duty to preserve was triggered. 19 Apple argues that its failure to preserve caused no prejudice because it did not have an automatic 20 delete policy in place. But it had an automatic reminder to delete policy, which regularly 21 reminded and indeed “encouraged” employees to delete emails in order “to keep their email 22 accounts below certain limits.” Opp. at 2. Apple did not “turn off” its automatic deletion 23 encouragement system until at least April 2011. No case has ever held that it is perfectly okay to 24 destroy relevant documents despite an obligation to preserve so long as the destruction is “opt in” 25 versus “opt out”; plainly that is not the law. 26 Moreover, that Apple’s “encouragement” of email destruction actually caused prejudice is 27 apparent here. Nowhere does Apple deny that among the 19 key custodians Samsung identified 28 in its motion, Apple has produced only 66 emails from the August 2010 to April 2011 period. Case No. 11-cv-01846-LHK (PSG) -1SAMSUNG’S REPLY ISO MOTION FOR ADVERSE INFERENCE INSTRUCTION AGAINST APPLE 1 And the trial testimony so far has confirmed that employees for whom Apple’s production was 2 remarkably scant had key roles in the development of the products at issue, and likely would have 3 had emails discussing the Samsung products Apple claims were released during the time Apple 4 admits it failed to take any preservation steps related specifically to this case. 5 This also answers Apple’s vague assertions about other litigation holds it has issued in 6 connection with other unnamed cases. Whatever Apple’s preservation and collection activities 7 not connected to this case have been, they demonstrably did not preserve evidence relevant to this 8 case because so little Apple evidence from the August 2010-April 2011 period has been produced. 9 Indeed, as the charts below demonstrate, none of the people called out by Apple for receiving 10 repeated notices in other cases made substantial productions in this one. Moreover, documents 11 that Apple destroyed through its policy of encouraging email deletions surely were relevant; Apple 12 monitored, analyzed and benchmarked Samsung’s products during the time period when it utterly 13 ignored its duty to preserve relevant evidence. Without question, documents that Apple 14 destroyed contained product comparisons and admissions that should have been preserved and 15 produced for Samsung’s use in this case. 16 The evidence demonstrates that Apple destroyed and did not produce relevant evidence, 17 particularly from the August 2010-April 2011 time period. Apple’s admitted failure to take steps 18 to preserve evidence during this period and its policy of encouraging email deletions where no 19 litigation hold is in place explains this. As a matter of law, Apple had a duty to preserve 20 evidence relating to its own unasserted claims if Samsung did. The elements for a permissive 21 adverse inference are therefore met, and such an instruction should be given. 22 II. ARGUMENT 23 A. 24 25 Apple Offers No Basis To Conclude That Its Preservation Duty For Its Own Claims Only Arose Months After Samsung Became Subject To That Same Duty Apple admits it made no effort at document preservation relevant to this case until after the 26 complaint was filed in April 2011. Yet it claims that does not matter because it had no 27 preservation obligations until it filed its complaint, while Samsung’s obligations on those very 28 same claims arose more than seven months earlier. How can that possibly be? Apple’s Case No. 11-cv-01846-LHK (PSG) -2SAMSUNG’S REPLY ISO MOTION FOR ADVERSE INFERENCE INSTRUCTION AGAINST APPLE 1 untenable response is that Samsung was on notice of Apple’s claims before Apple was. This 2 turns the law on its head, for Apple has no answer to the Federal Circuit’s holding that it is the act 3 of a “plaintiff-patentee,” who makes the “decision whether to litigate or not,” that is “the 4 determining factor in whether or not litigation would in fact ensue. In other words, whether 5 litigation was reasonably foreseeable was largely dependent on whether [Apple] chose to litigate. 6 It is thus more reasonable for a party in [Apple]’s position as a patentee to foresee litigation that 7 does in fact commence, than it is for a party in the manufacturers’ position as the accused.” 8 Micron Tech. v. Rambus, Inc., 645 F.3d 1311, 1325 (Fed. Cir. 2011). 9 Apple defends its request for a seven-month deferral of the preservation duty it claims 10 arose as to Samsung in August 2010 by claiming that “[i]t was only after Samsung announced a 11 new round of infringing products in Spring 2011 that Samsung made clear to Apple that it would 12 not stop copying Apple’s products.” Opp. at 9 (emphasis added). But Apple admits that it 13 believed Samsung had already released “infringing products when the parties started negotiating 14 in August 2010” (Opp. at 12), and in fact eight separate Samsung products that Apple ultimately 15 accused as infringing were released between July 2010 and April 2011.1 Apple thus knew (1) 16 what Samsung’s products looked like, (2) how broadly it construed its own patents, and (3) that it 17 believed Samsung’s products were infringing—which is more than enough, under the Court’s 18 prior ruling and the Federal Circuit’s Micron decision, to trigger a duty to preserve. It is also 19 much more notice of forthcoming claims than Samsung had since Samsung had no idea that Apple 20 broadly construed its design patents or planned to sue Samsung for allegedly infringing them. If 21 the products Samsung issued after August 2010 were so different as to give rise to an entirely 22 distinct set of claims, such that Apple’s preservation obligation only arose after those new 23 products were issued, then that same logic compels the conclusion that Samsung had no 24 preservation obligation on the claims Apple ultimately brought until those claims were filed. 25 1 These are the Vibrant (released 7/15/10); Captivate (7/18/10); Fascinate (9/8/10); Mesmerize (10/27/10); Continuum (11/11/10) Galaxy S Showcase (i500) (11/15/10); Galaxy S 4G 27 (2/23/11); and Gem (4/1/11). (See Joint Pretrial Statement and Proposed Order (Dkt. 1189) at 23 and 11-12.) 28 26 Case No. 11-cv-01846-LHK (PSG) -3SAMSUNG’S REPLY ISO MOTION FOR ADVERSE INFERENCE INSTRUCTION AGAINST APPLE 1 After all, it is notice of specific claims that triggers the preservation duty. Apple’s argument that 2 Samsung was on notice of Apple’s own undisclosed claims before Apple was is incoherent, and 3 wrong. 4 Apple also argues that it “was entitled to rely on the parties’ long-standing, mutually 5 beneficial business relationship” and their ongoing licensing negotiations as a justification to defer 6 a preservation obligation for seven months after it made its so-called infringement presentation to 7 Samsung. Opp. at 10 n.1. But Apple offers no explanation for why Samsung was not entitled 8 to rely on the same ongoing negotiations on which Apple purportedly relied other than to say that 9 Samsung “knew” it had infringing products in development. Actually, Samsung has never 10 “known” its products are infringing—they are not, and Samsung has never believed otherwise. 11 The question is whether Apple was going to sue, and Apple, on the other hand, indisputably did 12 know of its own overbroad constructions of its design patents—something Samsung knew nothing 13 about as of the parties’ August 2010 negotiations. If anyone was entitled to rely on the parties’ 14 licensing negotiations, it was Samsung, not Apple. 15 Apple points, lastly, to Samsung’s limited document retention notice from August 2010 to 16 distinguish the parties. It is true that Samsung made at least some efforts to preserve documents 17 starting in August 2010, while Apple made none. Yet this could not possibly mean that Samsung 18 had a one-way preservation obligation on claims that Apple contemplated bringing, but had not 19 even threatened to bring at that time. As the Federal Circuit has explained, “[t]he important 20 inquiry is not whether a particular document made litigation reasonably foreseeable, but whether 21 the totality of the circumstances as of the date of document destruction made litigation reasonably 22 foreseeable.” Micron, 645 F.3d at 1325. Samsung issued a limited document retention notice 23 in August 2010 based on a presentation made by Apple in the course of licensing negotiations—a 24 presentation that did not discuss, or threaten, litigation on any of Apple’s design patents. Dkt. 25 418, Ex. B. If that presentation and statement triggered a duty to preserve as to infringement 26 claims brought by Apple eight months later, plainly Apple too had a duty to preserve as of August 27 2010, for it was only Apple, and not Samsung, that knew it was broadly construing its design 28 patents and intended to sue on them. Case No. 11-cv-01846-LHK (PSG) -4SAMSUNG’S REPLY ISO MOTION FOR ADVERSE INFERENCE INSTRUCTION AGAINST APPLE 1 Apple admits it thought that Samsung’s already-released products were infringing by 2 August 2010, and it ultimately sued on those products. Apple had a duty to preserve by that date. 3 B. 4 In the context of Apple’s motion for adverse inference, conscious disregard was found Apple Destroyed Evidence With A Culpable State Of Mind 5 based on Samsung’s failure “to send litigation hold notices in August 2010, beyond a select 6 handful of employees, when its duty to preserve relevant evidence arose” and its failure to provide 7 “follow-up” until April 2011, after Apple filed its complaint. 8 arguments apply with far greater force to Apple’s conduct. Dkt. 1321 at 19:1-5. These Apple issued no litigation hold 9 notices until after it filed its complaint, and did not issue hold notices to key inventors and other 10 fact witnesses until months after filing its complaint. (See Dkt. 1388-1 Binder Decl., ¶¶ 7-12.) 11 Likewise, Apple has shown no evidence that it ever “checked whether even a single [Apple] 12 custodian was at all in compliance with the given directives.” Dkt. 1321 (Order) at 19:4-5. 13 Apple’s complete failure to take steps to preserve evidence relevant to this case during a lengthy 14 period when it had an obligation to do so reflects conscious disregard of its obligations. 15 Apple does not even attempt to defend its admitted failure to take any preservation steps 16 until after the Complaint was filed. 17 post-Complaint efforts. Apple’s state of mind argument begins and ends with its Opp. at 10-12. Even as to the post-April 2011 period, Apple’s 18 corporate designee and declarant Beth Kellerman testified on behalf of Apple that she “can’t speak 19 specifically to what we did in this case,” so it is not surprising that her declaration does not even 20 address this key question. Kellerman 30(b)(6) Deposition at 51:13-14. As for its pre- 21 Complaint conduct—during the period August 2010 to April 2011 when Apple was subject to a 22 preservation obligation—here is what we now know, courtesy of Ms. Kellerman’s declaration: 23 We know that Apple’s preservation system only kicks in with the issuance of a formal litigation 24 hold. It is only “[a]fter a legal hold issues, [that] counsel may conduct individual data collection 25 interviews” and other procedures are followed. See Kellerman Decl., ¶ 4 (emphasis 26 added). Apple’s admission that its “rigorous measures” are triggered by the issuance of a 27 litigation hold renders them irrelevant, as nowhere does Apple dispute that it did not issue any 28 hold in connection with this case, to anyone, prior to the filing of the Complaint, and that some Case No. 11-cv-01846-LHK (PSG) -5SAMSUNG’S REPLY ISO MOTION FOR ADVERSE INFERENCE INSTRUCTION AGAINST APPLE 1 witnesses did not receive holds until much later than that. Nor does Apple contend that it 2 followed any of these steps here before April 2011, despite the preservation obligations that 3 applied much earlier. Samsung followed these same procedures and more after it issued litigation 4 holds. See Dkt. 987 (Samsung Opp. to Motion for Adverse Inference) at 7:7-9:9. If conducting 5 such procedures after this lawsuit started did not suffice for Samsung, so too for Apple. 6 We also know that before a hold is formally issued, and therefore during the seven months 7 prior to April 2011, Apple employed an automatic reminder system that encourages employees to 8 delete emails. According to Ms. Kellerman, employees are affirmatively “encouraged to keep 9 the size of their email accounts below certain limits, and “may receive automatic notices 10 requesting that they reduce the size of their email accounts.” Id. ¶ 5 (emphasis 11 added). “Employees who are under document retention do not receive such notices,” id., but no 12 employees were under document retention in connection with this case for at least eight months 13 before Apple sued. Encouraging witnesses to destroy emails in order to save space even after a 14 duty to preserve has been triggered is, far from a rigorous process that “ensure[s] that relevant 15 emails and other evidence are preserved” (Opp. at 1), conscious disregard of the obligation to 16 preserve relevant evidence. 17 Apple trumpets its claims that it “has no automatic email deletion policies or systems” and 18 “has no policy requiring employees to delete particular emails,” proclaiming “[t]here simply is no 19 automatic email deletion system or policy at Apple, period.” Opp. at 2. But Apple’s reminder 20 system is as automatic as Samsung’s—emails encouraging reduction of email in-boxes are sent 21 automatically. Moreover, the question for the Court is not whether records were destroyed 22 pursuant to an “automatic email deletion system”; it is whether they were destroyed when there 23 was an obligation to preserve them, period. Apple records plainly were destroyed despite a 24 preservation obligation here, as the sheer lack of emails from the August 2010 to April 2011 25 period shows. Apple’s point is thus not that it did not destroy evidence—it plainly did. Its point 26 is that it did not automatically destroy evidence (“opt-out”), and instead encouraged its personnel 27 to do so manually (“opt-in”). It is no surprise that Apple cites no authority that such a distinction 28 Case No. 11-cv-01846-LHK (PSG) -6SAMSUNG’S REPLY ISO MOTION FOR ADVERSE INFERENCE INSTRUCTION AGAINST APPLE 1 matters when it comes to spoliation. Obviously manual destruction of relevant evidence counts as 2 spoliation when there is a duty to preserve. 3 So we know that Apple did not put in place any preservation methods from August 2010 to 4 April 2011, and that during that time, employees were encouraged to delete emails to reduce the 5 size of their in-boxes. But Apple still claims none of this matters and does not show that it acted 6 with a culpable state of mind, because some witnesses received litigation hold notices relating to 7 other lawsuits at other periods of time regarding other products. Why Apple believes a 8 discussion of unspecified litigation holds issued in other cases satisfies its obligations in this case 9 is unclear—especially since Apple itself admits “the subject matter of the documents subject to the 10 prior retention notices may not have overlapped entirely with those of the instant case and many 11 would have expired”. Opp. at 5. Apple offers no evidence of either the subject matter of its 12 other cases or the time frame of the holds it issued, and does nothing to answer the question of 13 what it did to preserve documents relevant to this case from August 2010, when it had a duty to 14 preserve, until it finally issued litigation hold notices after April 2011. 15 Moreover, despite Apple’s claim that its litigation hold notices in other cases “greatly 16 reduced any risk that relevant information was destroyed” (Opp. at 5), Apple cites prior litigation 17 hold notices for only 11 of the 21 custodians discussed in Samsung’s motion, omitting Mr. Jobs 18 and others from this discussion. And even as to the custodians Apple identifies, the fact remains 19 undisputed that each produced very low numbers of total emails in this litigation—showing that 20 other-case hold notices did not preserve this-case evidence: 21 Custodian 22 23 24 25 26 27 28 Bart Andre Brian Huppi Christopher Stringer Duncan Kerr Eugene Whang Jonathan Ive Matthew Rohrback Rico Zorkendorfer Shin Nishibori Steven Lemay Number of Litigation Holds Received 19 3 14 Total Number of Emails Produced 16 8 41 17 1 3 32 41 36 45 32 15 18 43 14 0 15 Case No. 11-cv-01846-LHK (PSG) -7SAMSUNG’S REPLY ISO MOTION FOR ADVERSE INFERENCE INSTRUCTION AGAINST APPLE 1 Scott Forstall 78 172 2 (Dkt. 1593 (Kellerman Decl.), ¶ 7; Dkt. 1388-1 (Binder Decl.), ¶¶13 and 15). 3 Apple also claims that the emails of some witnesses were completely collected in 4 connection with other cases and that it followed other procedures to preserve Mr. Jobs’ emails. 5 Opp. at 5. Yet here as well Apple raises more questions than it answers, for it neither identifies 6 these other cases nor states when the emails were collected nor states what Mr. Jobs was instructed 7 to preserve or when his emails accounts were copied. And Apple identifies only three witnesses 8 for whom these alternative means of preserving evidence purportedly apply – Steve Jobs, Jonathan 9 Ive, and Scott Forstall – meaning this argument is utterly irrelevant as to every other witness in 10 this case and does nothing to show that Apple, as a party, satisfied its preservation obligations. 11 Even as to these three witnesses Apple cannot make a case, for the numbers belie Apple’s 12 claim that alternative preservation means adequately replaced an actual litigation hold. Apple 13 produced zero Steve Jobs emails from the key August 2010 to April 2011 period (and 51 emails 14 overall), and nine emails from Mr. Ive (45 overall) from that period. Dkt. 1388-1 (Binder Decl.) 15 at ¶ 14. These are absolutely critical witnesses—it is inconceivable that Mr. Jobs, CEO of Apple 16 during a portion of the relevant time period and inventor of the ’949, ’678, D’087, D’677, D’270, 17 D’889, D’757 and D’678 patents, actually had so few emails on issues in this case and none 18 between August 2010 and April 2011. Apple’s purportedly “rigorous, thorough and state of the 19 art” (Opp. at 3), preservation efforts were no substitute for the simple remedy of a litigation hold 20 notice, and insufficient in light of its ongoing, automatic encouragement of its witnesses to destroy 21 their emails. 22 Apple also attempts to minimize its failure to issue hold notices until January 2012 as to 23 five individuals, including one inventor and four members of its industrial design group. 24 11. Opp. at That argument of course has no impact on Apple’s failure to issue hold notices to any 25 witnesses for this case for the eight months between August 2010 and April 2011. Moreover, 26 these five individuals possess information concerning the functionality of Apple’s asserted 27 designs, CAD drawings of the products at issues, and a host of other information concerning the 28 designs Apple claims to own and for which it is seeking billions of dollars—all five were deposed Case No. 11-cv-01846-LHK (PSG) -8SAMSUNG’S REPLY ISO MOTION FOR ADVERSE INFERENCE INSTRUCTION AGAINST APPLE 1 in this case.2 Indeed, every one of them is listed on Apple’s Transparency Disclosures as 2 custodians whose documents were searched for purposes of this litigation, demonstrating that they 3 are undoubtedly among the individuals who should have received litigation hold notices. 4 Apple similarly argues that one of the custodians included in Samsung’s charts, Brian 5 Huppi, was an inventor on Apple’s ’607 patent, which Apple dismissed from the case. But that 6 dismissal did not occur until July 2012, so it cannot possibly excuse the earlier failure to issue a 7 hold. More importantly, if dismissal of patents from the case cures any prejudice, no adverse 8 inference should be made as against Samsung: Of all the patents included in Apple’s 9 presentation to Samsung in August 2010 (which supposedly triggered Samsung’s duty to preserve), 10 all but one have been dismissed from the case. 11 Compare Dkt. 418, Ex. B with Dkt. 1189 at 1-2. In short, Apple acted with at least a conscious disregard of its preservation obligations 12 when, during the period from August 2010 when it made its presentation to Samsung through 13 April 2011 when it issued hold notices, it (1) did not undertake any preservation efforts at all 14 relevant to this case, and (2) actively encouraged employees to delete emails to maintain the size 15 of their mailboxes. 16 C. Apple’s Admitted Failure To Preserve Evidence, While Encouraging Deletion Of Email, Resulted In Destruction Of Relevant Evidence 17 Samsung’s motion relied on the very same analysis presented by Apple and accepted by 18 this Court to raise a sufficient inference that relevant evidence was destroyed as a result of Apple’s 19 admitted failure to follow any preservation steps from August 2010 until after the Complaint was 20 filed. Just as this Court concluded that “the nature of the auto-delete function is such that the 21 Court will never know how much relevant material was lost,” (Dkt. 1321 at 21), the nature of 22 Apple’s automatic reminders for employees to delete emails from their accounts prevents the 23 Court and Samsung from ever knowing how much relevant material Apple destroyed. Apple’s 24 attempt to diminish the import of Samsung’s charts is unpersuasive. 25 26 2 Mark Lee was deposed on February 28, 2012, Brian Huppi was deposed on October 18, 27 2011, Chris Prest was deposed on March 8, 2012, Christopher Harris was deposed on March 6, 2012 and Christopher Hood was deposed on March 6, 2012. 28 Case No. 11-cv-01846-LHK (PSG) -9SAMSUNG’S REPLY ISO MOTION FOR ADVERSE INFERENCE INSTRUCTION AGAINST APPLE 1 Samsung’s first chart (Mot. at 6) outlined the custodians with deficient custodial 2 productions. Without conceding Apple is correct, even after removing all the individuals for 3 whom Apple contends there are innocent explanations, 13 key Apple personnel (of the 19 in the 4 original chart) remain, as shown below: 5 Custodian 6 Bartley Andre 7 8 Chris Stringer 9 10 11 12 Curt Rothert Duncan Kerr Eugene Whang 13 14 Jonathan Ive 15 16 Matthew Rohrbach 17 18 19 Peter Russell-Clarke Rico Zorkendorfer 20 21 Shin Nishibori 22 23 Stephen Lemay 24 25 Steve Jobs 26 27 28 Wei Chen Relevance named inventor of D270, D899, D087, and D677patents named inventor of D677, D270, and D889 patents software engineer 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 D899 patents named inventor of D087, D677, D270, and D889 patents named inventor of D270 patent 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 No. of Emails in No. of Documents in Custodial Production Custodial Production 14 135 15 38 30 30 41 130 36 146 45 173 32 385 56 190 15 62 18 94 43 59 51 54 12 37 Case No. 11-cv-01846-LHK (PSG) -10SAMSUNG’S REPLY ISO MOTION FOR ADVERSE INFERENCE INSTRUCTION AGAINST APPLE 1 2 (Dkt. 1388, at 6-7 (deleting the individuals referenced in Dkt. 1591, at 6-7)). 3 For Samsung’s second chart, Apple challenges some of the numbers for non-custodial 4 email production, but does not dispute the far more important custodial email production figures. 5 The custodial email production demonstrates what an individual custodian actually preserved; the 6 noncustodial production provides a relevant reference point for what they could have preserved. 7 Thus a significantly larger noncustodial production provides a “statistical contrast” that shows—as 8 the Court previously recognized—prejudice from a failure to preserve. (Dkt. 1321, at 21:6.) 9 The chart below incorporates Apple’s figures from its opposition, and fully supports an adverse 10 inference. 11 Witness 12 Chris Stringer 13 14 Eugene Whang 15 Jonathan Ive 16 17 Matthew Rohrbach 18 19 Scott Forstall 20 Shin Nishibori 21 22 Stephen Lemay 23 24 25 26 Steve Jobs Relevance named inventor of D677, D270, and D889 patents 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 Non-Custodial Emails Custodial Emails 519 15 149 36 688 45 103 32 1,027 172 136 18 1,029 43 1,670 51 27 28 (Dkt. 1388, at 7-8 (incorporating the figures from Dkt. 1592, at ¶ 2)). Case No. 11-cv-01846-LHK (PSG) -11SAMSUNG’S REPLY ISO MOTION FOR ADVERSE INFERENCE INSTRUCTION AGAINST APPLE 1 Apple argues that Samsung fails to account for the fact that it used different search 2 parameters in searching different employees’ documents and, thus, “it can be perfectly appropriate 3 for one employee to produce a document that another does not.” (Opp. 8:1-8.) The same is true 4 of Samsung, and it was still found by this Court to have failed to preserve and produce relevant 5 evidence. (See Samsung’s Third Supplemental and Amended Identification of Custodians, 6 Litigation Hold Notices and Search Terms (Dkt. 987-33) at 3-13 (identifying unique search terms 7 for each Samsung witness based on the witness’ role in the case).) 8 Apple attempts to excuse its spoliation by asking the Court to focus on the number of 9 documents it was able to preserve prior to August 2010 (Opp. at 8:9-2), instead of on the number 10 of documents (or lack thereof) from Apple between August 2010 to April 2011. However, 11 evidence of limited preservation prior to August 2010 is not proof Apple met its preservation 12 obligations between August 2010 and April 2011. In fact, comparing the number of documents 13 Apple produced per month between the time period before August 2010 and after August 2010 is 14 instructive because it demonstrates two time periods of document production where Apple says it 15 did not change its document preservation policies. 16 Looking at this comparison, as the chart below demonstrates, it is clear that after August 17 2010 – during the critical time when Apple was gearing up to file its claims against Samsung and 18 Samsung was allegedly releasing a wave of accused products – the amount of Apple’s relevant 19 documents produced per month decreased. What Apple failed to address in its Opposition is 20 how that number could possibly decrease as it got closer to filing its claims without the destruction 21 of evidence. If Apple employees believed Samsung products were competing unfairly using 22 Apple’s intellectual property, it would be reasonable to expect the number of responsive emails to 23 spike; instead, based on Apple’s document production, it plummeted. 24 25 26 27 28 Case No. 11-cv-01846-LHK (PSG) -12SAMSUNG’S REPLY ISO MOTION FOR ADVERSE INFERENCE INSTRUCTION AGAINST APPLE 1 2 3 4 5 6 7 8 9 10 Custodian Total Number of Average Projected Actual Number Months Number Custodial Custodial of PreApple of Emails Email Email 8/23/2010 Searched Per Production Production Emails Documents Month for August 1, for August Produced Prior to Before 2010 through 1, 2010 August 23, August 23, March 31, through 2010 2010 2011 Based March 31, on Pre2011 August 23, 2010 Average Christopher 388 87 4.45 35.6 4 Stringer Jonathan 522 87 6.00 48.00 5 Ive Steve Jobs 1183 32 36.96 295.68 3 11 (Dkt. 1592, at ¶ 2; Apple’s Transparency Disclosures, Feb. 22, 2012, at 1-4.) 12 Apple attempts to explain this result, claiming that it “has few documents created between 13 August 2010 and April 2011 that are relevant to this dispute,” but Apple itself proves that 14 statement false a few lines later, arguing that Samsung “had just launched its first round of 15 infringing products when the parties started negotiating in August 2010.” 16 12:23-24. Opp at 12:13-14; id. at Of course, many of the most relevant documents in Apple’s possession would be 17 documents reflecting Apple’s reactions to the “launch” of Samsung’s “first round of infringing 18 products.” The record is clear that when Samsung products are released, Apple discusses them, 19 analyzes them, and those non-privileged discussion are critical to defenses such as invalidity. 20 See, .e.g., Defense Trial Exhibit 715 (August 10, 2010 Apple document entitled “Mini-Teardown: 21 Samsung Galaxy S (T-Mobile Vibrant)”); Defense Trial Exhibit 687 (January 20, 2011 Email 22 from Christopher Stringer to Evans Hankey regarding “CES-Tablet Summary,” summarizing 23 tablet competitors including the Samsung Galaxy Tab); see also Defense Trial Exhibit 586 24 (October 5, 2010 presentation entitled “Samsung-Apple licensing discussion”). In short, what 25 were Apple’s own internal assessments of Samsung products when they were released? 26 Other custodians would have had relevant documents for different reasons. For example 27 Stephen LeMay had relevant documents in the August 2010 to April 2011 time period because he 28 was an inventor on Apple’s ’163 patent, and that patent did not issue until January 4, 2011. The Case No. 11-cv-01846-LHK (PSG) -13SAMSUNG’S REPLY ISO MOTION FOR ADVERSE INFERENCE INSTRUCTION AGAINST APPLE 1 inventors’ duty to disclose prior art to the patent office and other obligations extend until the 2 patent issues. Therefore, key documents and communications relevant to inequitable conduct and 3 invalidity would have been in Mr. LeMay’s possession during this time. Moreover, Apple filed a 4 continuation application on December 29, 2010 (App. No. 12/981,433). Mr. LeMay’s disclosure 5 obligations extend to continuations, and inequitable conduct committed with respect to a patent 6 family member renders the entire patent family unenforceable. See, e.g., Therasense, Inc. v. 7 Becton, Dickinson and Co., 649 F.3d 1276, 1288-1289 (Fed Cir. 2011) (“Moreover, the taint of a 8 finding of inequitable conduct can spread from a single patent to render unenforceable other 9 related patents and applications in the same technology family. See, e.g., Consol. Aluminum Corp. 10 v. Foseco Int'l Ltd., 910 F.2d 804, 808–12 (Fed.Cir.1990).”). 11 Apple’s failure to issue a litigation hold to any witnesses means that these documents were 12 – consistent with Apple’s policies encouraging its employees to delete documents absent a 13 litigation hold – destroyed. 14 D. The Evidence At Trial So Far Confirms That Apple’s Spoliation Has Prejudiced Samsung 15 Under Apple’s interpretation of the case law, Apple’s spoliation of evidence gives rise to a 16 presumption in favor of Samsung that it has been prejudiced by Apple’s misconduct. Dkt. 1531, 17 at 5 (citing Hynix Semiconductor, Inc. v. Rambus Inc., 591 F. Supp. 2d 1038, 1060 (N.D. Cal. 18 2006) (stating “if spoliation is shown, the burden of proof logically shifts to the guilty party to 19 show that no prejudice resulted from the spoliation” because that party “is in a much better 20 position to show what was destroyed and should not be able to benefit from its wrongdoing”), 21 rev’d on other grounds, 645 F.3d 1336, 1344-1347 (Fed. Cir. 2011)). Even the few days of trial 22 that already have occurred confirm the actual prejudice Apple’s spoliation has caused. 23 For example, Scott Forstall recently testified at trial about his membership in Apple’s 24 Executive Committee and his efforts leading the project to develop the iPhone’s software, yet he 25 produced only 172 emails. (See 8/31/12 Trial Tr. 741:18-743:15, 725:6-7; Binder Decl. ¶ 15 (Dkt. 26 1388-1.) Christopher Stringer, a named inventor on three Apple design patents and one of only 27 four Apple employees who testified in Apple’s case-in-chief, produced only 15 emails. (7/31/12 28 Case No. 11-cv-01846-LHK (PSG) -14SAMSUNG’S REPLY ISO MOTION FOR ADVERSE INFERENCE INSTRUCTION AGAINST APPLE 1 Trial Tr. 469:24-470:16, 471:9-11; Binder Decl. ¶ 15 (Dkt. 1388-1).) And the late Steve Jobs 2 produced 51 emails despite being a named inventor on several patents-in-suit and the former 3 Apple CEO. (Binder Decl. ¶ 15 (Dkt. 1388-1).) These individuals, among others cited in 4 Samsung’s Motion, are “particularly noteworthy” examples of key Apple employees who failed to 5 preserve relevant emails. Opp. at 13 (citing Dkt. 1321 at 19-20). Thus, while Apple’s attempts 6 to point the finger back at Samsung when calling out Minyouk Lee and Dr. Won Pyo Hon’s 7 purported failure to preserve documents, this simply underscores the glass house problem it 8 has. Opp. 12-13. The production of emails for Apple’s most important custodian witnesses is 9 more deficient, and Samsung is if anything even more prejudiced by Apple’s actions. 10 III. CONCLUSION 11 The Court is required to instruct the jury where the facts warrant a legal instruction 12 Stewart v. Ragland, 934 F.2d 1033, 1042 (9th Cir. 1991) (finding error for failure to give 13 Instruction because a party “is entitled to an instruction concerning his theory of the case if it is 14 supported by the law and has some foundation in the evidence”). The facts here warrant an 15 adverse inference instruction as to Apple, and Samsung respectfully requests that the Court grant 16 adverse inference jury instructions against Apple that mirror any that it gives against Samsung. 17 Samsung further requests that the Court instruct the jury that it should presume that it was more 18 reasonable for Apple to foresee this litigation than it was for Samsung to do so. 19 DATED: August 7, 2012 Respectfully submitted, 20 QUINN EMANUEL URQUHART & SULLIVAN, LLP 21 22 23 24 25 26 27 28 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 Case No. 11-cv-01846-LHK (PSG) -15SAMSUNG’S REPLY ISO MOTION FOR ADVERSE INFERENCE INSTRUCTION AGAINST APPLE

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