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

Filing 535

ORDER by Judge Paul S. Grewal granting in part and denying in part 482 Motion to Permit Expert Review of Designated Documents (psglc2, COURT STAFF) (Filed on 12/22/2011)

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1 2 3 4 5 6 7 8 United States District Court For the Northern District of California 9 UNITED STATES DISTRICT COURT 10 NORTHERN DISTRICT OF CALIFORNIA 11 SAN JOSE DIVISION 12 13 14 15 16 17 18 19 20 APPLE INC., ) ) Plaintiff, ) v. ) ) SAMSUNG ELECTRONICS CO., LTD, a ) Korean corporation; SAMSUNG ) ELECTRONICS AMERICA, INC., a New York ) corporation; and SAMSUNG ) TELECOMMUNICATIONS AMERICA, LLC, ) a Delaware limited liability company, ) ) ) Defendants. Case No.: C 11-1846 LHK (PSG) ORDER GRANTING-IN-PART DEFENDANT’S MOTION TO PERMIT DEFENDANT’S EXPERT TO REVIEW DESIGN MATERIALS DESIGNATED UNDER THE PROTECTIVE ORDER (Re: Docket No. 482) In this patent infringement suit, Defendants Samsung Electronics Co., Ltd., Samsung Electronics America, Inc., and Samsung Telecommunications America, LLC (collectively 21 "Samsung") move to permit Samsung’s expert Itay Sherman (“Sherman”) to review certain 22 23 materials that Plaintiff Apple Inc. (“Apple”) has designated confidential or highly confidential 24 under the interim protective order. Sherman is Samsung’s design expert, having been retained to 25 testify on the design – as opposed to utility – patents-in-issue. Samsung argues that Apple is 26 misusing the protective order to prevent Samsung from being able to share relevant documents 27 with an expert who is able to meet the rigorous standards of Fed. R. Evid. 702 and Daubert. Apple 28 1 Case No.: C 11-1846 LHK (PSG) ORDER GRANTING-IN-PART DEFENDANT’S MOTION TO PERMIT DEFENDANT’S EXPERT TO REVIEW DESIGN MATERIALS 1 has refused to allow the disclosure of any of Apple’s confidential information to Sherman because 2 of what it deems an undue risk of commercial harm posed by Sherman’s work in the smart phone 3 market. 4 5 6 Apple takes issue with Sherman’s status as CEO and founder of DoubleTouch, a company that licenses multi-touch technology invented by Sherman. According to Apple, this places Sherman in (too) close proximity to Apple’s competitors in the handheld devices market. Apple 7 8 United States District Court For the Northern District of California 9 points out that (1) Sherman is the named inventor on patents and patent applications practiced by devices that compete directly with Apple’s products, and (2) Sherman’s business includes recent 10 and ongoing consulting arrangements with several of Apple’s competitors in the smart phone 11 market. According to Apple, “the damage to Apple from disclosing Apple’s confidential 12 information to Sherman, whose business and commercial activities compete with Apple, would 13 greatly outweigh any possible prejudice to Samsung from denying this motion.” 14 Samsung responds that, as a licensing company, DoubleTouch does not compete with 15 16 Apple and is not involved in the design or sale of consumer electronics.1 Samsung nevertheless has 17 offered to limit Sherman to the review of only design-related materials that it argues reveal nothing 18 about Apple’s utility patents or multi-touch technology. Because Sherman will review materials 19 and testify only on design functionality, not multi-touch technology, Samsung argues that Apple 20 has no legitimate basis to interfere. Samsung insists that Sherman be permitted to review four 21 categories of design-related material: (1) CAD files; (2) design patent inventor sketchbooks; 22 (3) design patent inventor deposition transcripts; and (4) Apple’s presentations and other internal 23 24 documents showing that design features are functional. Apple disputes that Samsung can effectively segregate design-related information, arguing 25 26 that the heart of Sherman’s previous testimony was that design and functionality are inextricably 27 1 28 See Docket No. 481-1 & 19 (Sherman Decl.). 2 Case No.: C 11-1846 LHK (PSG) ORDER GRANTING-IN-PART DEFENDANT’S MOTION TO PERMIT DEFENDANT’S EXPERT TO REVIEW DESIGN MATERIALS 1 intertwined. Apple argues that Sherman will inevitably gain insights from reviewing Apple’s 2 sensitive design documents that will benefit Sherman’s own patent strategy, as well as his ongoing 3 consulting work with Apple’s competitors. 4 The parties appeared for hearing on December 16, 2011. Having considered the arguments 5 and evidence presented by both sides, the court finds that Sherman may appropriately review those 6 categories of confidential, design-related materials that bear insufficient risk of revealing utility- 7 8 side details that would benefit Sherman’s work with DoubleTouch. Under the parties’ stipulated interim protective order, Apple bears the burden of proving United States District Court For the Northern District of California 9 10 that the risk of harm posed by disclosure outweighs Samsung’s interest in disclosing the material – 11 under the suggested safeguards – to Sherman.2 The court agrees that Apple’s interest in preventing 12 disclosure of its highly confidential design files and processes to competitors is substantial. But the 13 court does not find that the risks presented by the limited disclosure agreed to by Samsung 14 outweighs Samsung’s substantial interest in retaining and preparing an expert with relevant 15 16 industry experience and availability.3 This is especially true given that many other potentially 17 qualified experts may be conflicted out of testifying in this high-profile dispute between two global 18 companies, that Apple itself has placed its design patents in issue, and that Samsung’s counsel has 19 agreed to limit the nature of confidential materials to be disclosed. 20 21 In weighing the risks and interests at issue, the court notes that of the four categories of information identified by Samsung, the CAD files, designer sketchbooks, and design patent 22 23 2 24 25 26 27 28 See Docket No. 76 & 7(c) (Stipulation to Modification of Patent L.R. 2-2 Interim Protective Order for Purposes of Expedited Discovery). 3 See Advanced Semiconductor Materials Am. Inc. v. Applied Materials Inc., No. 95-20169 RMW (EAI), 1996 WL 908654 (N.D. Cal. Oct. 28, 1996) (finding defendant’s concern that plaintiff’s expert would consult in the relevant industry in the future and misuse confidential information insufficient to deny the expert access under the terms of the protective order); Telular Corp. v. VOX2, Inc., No. 00 C 6144, 2001 WL 641188, at *1 (N.D. Ill. June 4, 2001) (same). 3 Case No.: C 11-1846 LHK (PSG) ORDER GRANTING-IN-PART DEFENDANT’S MOTION TO PERMIT DEFENDANT’S EXPERT TO REVIEW DESIGN MATERIALS 1 inventor deposition transcripts are not subject to any ambiguity in their identification, and further 2 present an insufficient likelihood of containing technical information pertaining to multi-touch or 3 other utility functions. In contrast, the category of “presentations and other internal documents 4 [purportedly] showing that design features are functional” is more ambiguous and suggests 5 material of a nature that is not strictly design-oriented and that may contain input from a broader 6 range of Apple’s people and processes. Accordingly, 7 8 United States District Court For the Northern District of California 9 The court hereby GRANTS Samsung’s motion as it pertains to the disclosure only of (1) CAD files, (2) design patent inventor sketchbooks, and (3) design patent inventor deposition 10 transcripts. The court DENIES all other requested relief. Samsung’s disclosure of Apple’s 11 confidential and highly confidential materials to Sherman – as limited by this order – is further 12 contingent upon Sherman’s agreement to be bound by the provisions of the interim protective order 13 and any subsequent protective order in this case. 14 IT IS SO ORDERED. 15 16 Dated: December 22, 2011 17 _________________________________ PAUL S. GREWAL United States Magistrate Judge 18 19 20 21 22 23 24 25 26 27 28 4 Case No.: C 11-1846 LHK (PSG) ORDER GRANTING-IN-PART DEFENDANT’S MOTION TO PERMIT DEFENDANT’S EXPERT TO REVIEW DESIGN MATERIALS

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