Apple Inc. v. Samsung Electronics Co. Ltd. et al
Filing
2690
ORDER RE: ALTERNATIVE NOTICE DATES. Signed by Judge Lucy H. Koh on 11/9/2013. (lhklc5, COURT STAFF) (Filed on 11/9/2013)
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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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United States District Court
For the 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,
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v.
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SAMSUNG ELECTRONICS CO., LTD., A
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Korean corporation; SAMSUNG
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ELECTRONICS AMERICA, INC., a New York )
corporation; SAMSUNG
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TELECOMMUNICATIONS AMERICA, LLC, )
a Delaware limited liability company,
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Defendants.
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Case No.: 11-CV-01846-LHK
ORDER GRANTING APPLE’S
MOTION TO STRIKE EXPERT
OPINION OF DAMAGES BASED ON A
NOTICE PERIOD OTHER THAN THE
DATES SET BY THE COURT’S
MARCH 1, 2013 ORDER
In its March 1, 2013 order granting Samsung a new trial on damages, the Court set forth the
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“correct notice dates” based on Samsung’s theory as to when Samsung received notice of Apple’s
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infringement allegations. Apple, Inc. v. Samsung Elecs. Co., 926 F. Supp. 2d 1100, 1114 (2013).
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Those dates defined the scope of the damages period for the retrial. Subsequently, Samsung’s
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damages expert (Michael Wagner) updated his damages calculation for the retrial, and Apple now
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moves to strike Wagner’s report to the extent it uses alternative damages periods to those
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previously suggested by Samsung and set by the Court. Michael Wagner’s Updated Report at
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¶ 181; see ECF No. 2381 at 2 (Apple’s motion to strike). Because Samsung forfeited reliance on
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this alternative argument as to the appropriate damages period, and pursuant to Federal Rule of
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Evidence 403 balancing, Apple’s motion is GRANTED.
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Case No.: 11-CV-01846-LHK
ORDER RE: ALTERNATIVE NOTICE PERIOD
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I.
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BACKGROUND
Under 35 U.S.C. § 287(a), a patentee that sells a patented article in the United States may
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not recover damages for periods during which it has failed to provide constructive or actual notice
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of the infringement to the accused infringer. A patentee may provide constructive notice by
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marking its product with the patent number or it may provide actual notice by charging the
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defendant “of infringement of specific patents by a specific product or group of products.” Funai
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Elec. Co. v. Daewoo Elecs. Corp., 616 F.3d 1357, 1373 (Fed. Cir. 2010). Because Apple
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indisputably did not mark its products, this case has focused on Apple’s actual notice to Samsung.
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In its original complaint, filed April 15, 2011, Apple asserted the ’381, ’915, and D’677
United States District Court
For the Northern District of California
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patents and accused Samsung’s Captivate, Continuum, Epic 4G, Indulge, Nexus S, Gem,
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Transform, and “Galaxy family of phones,” as well as Samsung’s Galaxy Tablet. ECF No. 1 at
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¶¶ 24, 54, 56. In its amended complaint, filed June 16, 2011, Apple added the ’163 and D’305
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patents and added as accused products the Droid Charge, Exhibit 4G, Galaxy Prevail, Infuse 4G,
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Nexus S 4G, and Replenish. See ECF No. 75 at ¶¶ 28-29, 92. The jury in the 2012 trial found that
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all of these accused products infringed at least one of the patents in the original complaint.
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The jury awarded damages to Apple, but based its damages award on an August 4, 2010
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notice date for all the patents-in-suit. See Apple, Inc. v. Samsung Elecs. Co., 926 F. Supp. 2d 1100,
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1115 (2013). As evidence of actual notice by that date, Apple relied on a presentation given to
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Samsung on August 4, 2010, that accused Samsung’s Galaxy S phone of infringing the ’381 patent,
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among other patents not at issue in this case. See id. at 1113; PX52. Samsung filed a motion for a
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new trial and remittitur, arguing that Samsung did not have notice of Apple’s claims of design-
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patent infringement until Apple listed the design patents in its complaints. See ECF No. 2013 at 25-
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26.
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On March 1, 2013, this Court issued an order agreeing with Samsung that, except for the
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’381 patent (the patent in Apple’s August 2010 presentation), Apple failed to provide actual notice
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to Samsung of the patents-in-suit until Apple included each patent in its complaints. See 926 F.
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Supp. 2d at 1114 (“Apple cites no evidence whatsoever that any patent-in-suit other than the ’381
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Patent was specifically identified during the meeting.”). Accordingly, the Court concluded that the
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Case No.: 11-CV-01846-LHK
ORDER RE: ALTERNATIVE NOTICE PERIOD
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“correct notice dates” for the infringing products varied based on when Samsung received notice of
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the patents. Id. The Court ordered a new trial to recalculate damages, see id. at 1120, and allowed
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the parties to update their expert reports to set out their new damages calculations only, see ECF
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No. 2316 at 3 (prohibiting the parties from expanding the scope of the new trial by relying on new
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methodologies or data). 1
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In his Updated Rebuttal Expert Report for New Trial on Damages (“Updated Report”),
Wagner calculated damages based on the dates in the Court’s new trial order, but also revealed that
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Samsung planned to argue at the new trial that the notice dates should be based on the dates “Apple
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specifically identified [each accused] product in its Complaint or Amended Complaint.” Updated
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United States District Court
For the Northern District of California
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Report ¶ 181 (emphasis added). Wagner included an alternative set of calculations based on those
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later dates but noted that he was “not offering an opinion on the correct notice dates.” Id. Apple
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now moves to strike those alternative calculations. See ECF No. 2381 at 2.
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II.
DISCUSSION
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1.
Samsung Forfeited a Product-Based Notice Theory
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Samsung’s theory of notice based on Apple’s identification of each accused product is new.
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The Court relied on Samsung’s previous arguments directed to Apple’s identification of the
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patents-in-suit to set the damages period for the retrial. Samsung cannot now introduce a new
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theory of damages to reduce the damages period even further. In complex litigation such as this,
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the Court must be able to rely on arguments that the parties have made (and those they have not
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made) to set the scope of future proceedings. “[T]he value of waiver and forfeiture rules . . . ensure
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that parties can determine when an issue is out of the case, and that litigation remains, to the extent
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possible, an orderly progression.” Exxon Shipping Co. v. Baker, 554 U.S. 471, 487 (2008).
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Reexamining the correctness of the notice dates set out in the Court’s new trial order would be a
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step backward. It also would violate the Court’s ground rules for the new trial, which prohibit the
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introduction of new evidence absent exceptional circumstances. See, e.g., 2316 at 2-3.
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Because Apple’s damages expert passed away in December 2012, the Court permitted Apple to
substitute a new damages expert, but prohibited her from relying on “(1) new sales data . . . (2) new
products; and (3) new methodologies or theories.” ECF No. 2316 at 3.
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Case No.: 11-CV-01846-LHK
ORDER RE: ALTERNATIVE NOTICE PERIOD
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Throughout this case—during the first trial, during post-trial briefing, and leading up to the
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retrial—Samsung has framed its arguments as to actual notice under section 287(a) by highlighting
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the dates Apple notified Samsung of each asserted patent, not the dates Apple accused a particular
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product.
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During the first trial, Samsung focused its notice arguments to the jury only on the patents-
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in-suit. In its joint pretrial statement, Samsung did not list its notice of the accused products as a
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disputed fact. See ECF No. 1189 at 11-12. Samsung did not object to (and in fact proposed) the
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jury instructions that tied the latest possible notice date to Apple’s identification of the patents-in-
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suit. See ECF Nos. 1821-1 at 16 (Samsung’s proposal); 1903 at Instrs. 42 (“Apple’s lawsuit
United States District Court
For the Northern District of California
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provided Samsung such notice for the ’381 and ’915 patents no later than April 15, 2011 . . . .”) &
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57 (“Apple’s lawsuit provided Samsung such notice for the D’677 patent by no later than April 15,
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2011 . . . .”) (emphases added). To the extent Samsung elicited any factual testimony on a product-
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based notice theory, it counseled against Samsung’s current position that Apple’s failure to name
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particular products makes a difference. See Tr. at 949-50 (Samsung’s chief strategy officer’s
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testimony that the Infuse 4G was “part of the Galaxy family of phones”). Neither Samsung nor
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Wagner presented a factual basis for the jury to conclude that Apple failed to notify Samsung of
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the infringement until Apple accused particular products. Although Wagner presented a set of
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calculations to the jury that proposed different damages based on product-based notice dates for
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Apple’s design patents, he did not explain why or how the jury should apply those calculations. See
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DX781; Trial Tr. at 3033 (proposing numbers only “in case the jury wants to look at that” but
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conceding that “I have no information as to when actual notice occurred”). Moreover, Wagner
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nowhere suggested that the “actual notice” standard required Apple to accuse individual products
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of infringing Apple’s utility patents (as opposed to its design patents). Yet now Samsung is arguing
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that, even for the utility patents, Apple failed to provide notice until it named particular products in
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its complaints. See ECF No. 2529 at 2.
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In its post-trial briefs, Samsung did not suggest that Apple’s identification of accused
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products was relevant to the correct notice dates. To the contrary, Samsung repeatedly proposed
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remittitur based only on the dates Apple asserted each patent. See ECF No. 2013 at 25 (proposing
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Case No.: 11-CV-01846-LHK
ORDER RE: ALTERNATIVE NOTICE PERIOD
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“Reductions . . . To Reflect Correct Notice Dates”). In moving for a new trial and for remittitur,
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Samsung relied on a declaration from Wagner in which he also proposed a reduction to the jury
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verdict for the “[c]orrect [n]otice [d]ates” based only on the dates Apple asserted the patents-in-
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suit. ECF No. 1990-20 at ¶ 31 (“Wagner Decl.”); see ECF No. 1990-22 at 3 (Wagner exhibit
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making “[a]djustment [f]or [c]orrect [n]otice [d]ates”); see also Wagner Decl. ¶ 22 (“I’ve been
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asked to assume that the earliest notice Samsung received of the ’915 and D’677 patents . . . was
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Apple’s filing of the April 15, 2011 complaint, and that the earliest notice Samsung received of the
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’163 [and] D’305 . . . patents was Apple’s filing of the June 16, 2011 amended complaint.”).
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Neither Samsung nor Wagner suggested the “correct notice dates” were tied to the dates that Apple
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For the Northern District of California
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listed a specific product in its complaint.
In its new trial order, the Court sided with Samsung and adopted almost all of Samsung’s
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proposed dates as the “correct notice dates.” 926 F. Supp. 2d at 1114. Although the Court
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considered Samsung’s request for remittitur, the Court concluded that it could not fairly remit a
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new damages award for certain phones because it lacked sufficient information to prorate the jury
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award. Id. at 1117-20. Instead, the Court ordered an “extremely limited” trial to “correct the
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erroneous notice dates.” ECF No. 2316 at 3; see 926 F. Supp. 2d at 1119.
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At this late stage, not even Samsung’s counsel is prepared to present a product-based notice
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theory to the Court, much less explain it to the jury. Samsung’s inconsistent characterization of one
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of the accused products, the Infuse 4G, suggests that Samsung has not even settled on its own
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position. As noted, Samsung’s chief strategy officer testified at the first trial that the Infuse 4G was
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“part of the Galaxy family of phones.” Trial Tr. at 949-50. Consistent with that statement,
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Samsung’s counsel plainly told the Court at a pretrial conference that the Infuse 4G is a Galaxy
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phone. See 10/10/13 Hr’g Tr. at 70 (“Court: You’re saying Infuse 4G is not part of the Galaxy
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family of phones? [Samsung’s Counsel]: It is part of the Galaxy.”). On further briefing a few days
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later, however, Samsung reversed course, stating that the Infuse 4G was “not part” of the Galaxy
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family. ECF No. 2529 at 1 (Oct. 14, 2013) (emphasis in original). Apple challenged that conclusion
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by pointing to Samsung’s own website that listed the phone as “Samsung Galaxy S Infuse 4G™.”
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See ECF No. 2541-1 (emphasis added). At the October 17, 2013 pretrial conference, Samsung’s
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Case No.: 11-CV-01846-LHK
ORDER RE: ALTERNATIVE NOTICE PERIOD
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counsel tried to defend its new characterization of the phone, stating that Apple had cited a
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Canadian website, that in the United States the phone’s title is “carrier driven,” and that U.S.
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carriers do not describe the Infuse 4G as a Galaxy. 10/17/13 Hr’g Tr. at 109. The Court ordered
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Samsung to make a 30(b)(6) witness available to address the classification of certain Samsung
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phones, see ECF No. 2552 at 4-5, and Samsung’s witness agreed under oath that, although the
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carriers do choose the final name, “it would have been appropriate if the carriers had decided to
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call [the Infuse 4G a] Galaxy S phone[],” ECF No. 2601-8 at 27. Following that testimony,
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Samsung dropped its argument that the Infuse 4G was not a Galaxy phone. See ECF No. 2615 at 2.
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Samsung’s inconsistency underscores the Court’s conclusion that Samsung failed to pursue this
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For the Northern District of California
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theory in the 2012 trial and highlights the unfair prejudice that Apple would incur if the Court were
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to allow Samsung to pursue it at this late stage.
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2.
The Relevance of Samsung’s New Notice Arguments Is Substantially
Outweighed by the Risk of Waste of Time, Confusion of the Issues, and Undue
Prejudice
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Reviewing Apple’s motion to strike on the merits, the Court also concludes that Federal
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Rule of Evidence 403 precludes Wagner’s testimony and any new factual arguments in support.
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None of the evidence Samsung has adduced lends much support to a theory that Apple failed to
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establish actual notice until it accused particular phones. “If a patentee’s initial notice is
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sufficiently specific to accuse one product of infringement, ‘ensuing discovery of other models and
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related products may bring those products within the scope of the notice.’” K-TEC, Inc. v. Vita-Mix
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Corp., 696 F.3d 1364, 1379 (Fed. Cir. 2012) (quoting Funai, 616 F.3d at 1373). Samsung seeks to
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argue that Apple failed sufficiently to accuse the Galaxy Prevail because, even though Apple’s
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August 2010 presentation to Samsung targeted the Galaxy S, see PX52, and the original complaint
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listed the “Galaxy family of mobile phones,” ECF No. 1 ¶ 56 (“Orig. Compl.”), Apple did not
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specifically identify the Galaxy Prevail until the amended complaint. See ECF No. 2529 at 2. The
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theory that Samsung was unaware that the Galaxy Prevail was a Galaxy phone strains credulity.
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Samsung also seeks to argue that Apple’s naming of the “Nexus S” in its original complaint failed
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sufficiently to accuse the Nexus S 4G. Id. This theory is similarly weak. Moreover, Samsung has
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not proffered any evidence to suggest that these slight name differences matter. Also questionable
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Case No.: 11-CV-01846-LHK
ORDER RE: ALTERNATIVE NOTICE PERIOD
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is Samsung’s plan to rely on Verizon’s selection of the name “Droid Charge,” for a phone that
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Samsung appears to have promoted to Verizon as a Galaxy phone, see ECF No. 2601-16 at
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SAMNDCA10212499, to contend that Samsung lacked notice of Apple’s infringement claim, see
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ECF No. 2615 at 2. Section 287 is meant to “assure that the recipient knew of the adverse patent
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during the period in which liability accrues,” not a third party. Minks v. Polaris Industries, Inc.,
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546 F.3d 1364, 1376 (Fed. Cir. 2008) (emphasis added; internal quotation marks omitted).
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The slight probative value of this evidence is substantially outweighed by the unfair
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prejudice that Apple would incur in mounting a defense at this late stage. Apple appropriately
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assumed the new trial would not involve further notice issues and, as the parties’ development of
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For the Northern District of California
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the record over the Infuse 4G shows, would have to scramble to garner additional evidence to
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support the notice dates in the Court’s new trial order if Samsung were allowed to challenge those
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dates now. Moreover, Samsung’s change-of-position as to the Galaxy or non-Galaxy status of the
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Infuse 4G and the untenable nature of Samsung’s Galaxy Prevail, Nexus S 4G, and Droid Charge
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theories demonstrates that opening this line of argument would subject the parties, the Court, and
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the jury to confusion of the issues, minimal probative evidence, wasted time, and unnecessary
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satellite litigation.
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III.
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CONCLUSION
Because Samsung has forfeited its argument that it did not receive actual notice of Apple’s
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infringement claims until Apple listed that specific product in its pleadings, and pursuant to Federal
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Rule of Evidence 403 balancing, Apple’s motion to strike Wagner’s opinions in support of that
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theory is GRANTED.
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IT IS SO ORDERED.
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Dated: November 9, 2013
_________________________________
LUCY H. KOH
United States District Judge
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Case No.: 11-CV-01846-LHK
ORDER RE: ALTERNATIVE NOTICE PERIOD
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