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

Filing 759

Administrative Motion to File Under Seal filed by Apple Inc.. (Attachments: #1 Proposed Order, #2 Redacted Public Version of Apple's Rule 37(b)(2) Motion Re Samsung's Violation of January 27, 2012 Damages Discovery Order, #3 Proposed Order, #4 Public Redacted Version of Declaration of Erik J. Olson, #5 Public Redacted Version of the Declaration of Eric R. Roberts)(Jacobs, Michael) (Filed on 2/28/2012)

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HAROLD J. MCELHINNY (CA SBN 66781)
[e-mail]
MICHAEL A. JACOBS (CA SBN 111664)
[e-mail]
JENNIFER LEE TAYLOR (CA SBN 161368)
[e-mail]
ALISON M. TUCHER (CA SBN 171363)
[e-mail]
RICHARD S.J. HUNG (CA SBN 197425)
[e-mail]
JASON R. BARTLETT (CA SBN 214530)
[e-mail]
MORRISON & FOERSTER LLP
425 Market Street
San Francisco, California 94105–2482
Telephone: [phone]
Facsimile: (415) 268–7522

WILLIAM F. LEE
[e-mail]
WILMER CUTLER PICKERING
HALE AND DORR LLP
60 State Street
Boston, MA 02109
Telephone: [phone]
Facsimile: (617) 526–5000
MARK D. SELWYN (SBN 244180)
[e-mail]
WILMER CUTLER PICKERING
HALE AND DORR LLP
950 Page Mill Road
Palo Alto, California 94304
Telephone: [phone]
Facsimile: (650) 858–6100

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Attorneys for Plaintiff and
Counterclaim–Defendant APPLE INC.

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN JOSE DIVISION

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APPLE INC., a California corporation,
Plaintiff,

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

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Defendants.
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Case No. 11–cv–01846–LHK (PSG)
APPLE’S RULE 37(b)(2) MOTION RE
SAMSUNG’S VIOLATION OF
JANUARY 27, 2012 DAMAGES
DISCOVERY ORDER;
MEMORANDUM OF POINTS AND
AUTHORITIES IN SUPPORT
THEREOF

Date:
Time:
Place:
Judge:

April 3, 2012
10:00 a.m.
Courtroom 5, 4th Floor
Hon. Paul S. Grewal

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REDACTED PUBLIC VERSION

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APPLE’S RULE 37(b)(2) MOTION RE SAMSUNG’S VIOLATION OF JAN. 27, 2012 DAMAGES DISCOVERY ORDER
CASE NO. 11-CV-01846-LHK (PSG)
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TABLE OF CONTENTS
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Page
TABLE OF AUTHORITIES .......................................................................................................... ii
NOTICE OF MOTION AND MOTION ....................................................................................... iii
RELIEF REQUESTED.................................................................................................................. iii
APPLE’S CERTIFICATION PURSUANT TO FEDERAL RULE OF CIVIL
PROCEDURE 37 AND LOCAL RULES 37–1 AND 37–4.............................................. iv
STATEMENT OF ISSUES TO BE DECIDED ............................................................................ iv
MEMORANDUM OF POINTS AND AUTHORITIES ................................................................ 1
I.
INTRODUCTION .............................................................................................................. 1
II.
FACTUAL BACKGROUND ............................................................................................. 2
A.
Apple’s Requests for Production of Sales and Financial Information
Relevant to Establishing Damages.......................................................................... 2
B.
Apple’s Motion to Compel ..................................................................................... 2
C.
Samsung’s Assurances to the Court That It Would Provide All the
Requested Information ............................................................................................ 4
D.
The Court’s Order ................................................................................................... 5
E.
Samsung’s February 3, 2012 Production ................................................................ 5
F.
Samsung Refuses to Provide Any Additional Information..................................... 7
III.
LEGAL STANDARD......................................................................................................... 7
IV.
ARGUMENT ...................................................................................................................... 8
A.
Samsung’s Meager Production Violated the Court’s Discovery Order .................. 8
1.
The Order Reflects Samsung’s Broad Assurances to the Court That
Samsung Would Produce What Apple Requested ...................................... 8
2.
No Single Document Can Satisfy the Order ............................................... 9
3.
Samsung’s Production Omits Numerous Categories of Documents ........ 10
4.
Samsung’s Production Fails to Provide a Complete Set of Critically
Important Internal Accounting and Financial Information ....................... 11
5.
Is Inconsistent with the
.................................................................................................. 12
6.
The
Is Riddled with Errors.................................................... 12
B.
Samsung Intentionally Withheld Specific Documents Created in the
Ordinary Course That Apple Requested and That Are Subject to the
Court’s Order ........................................................................................................ 12
C.
Samsung’s Violation Has Prejudiced and Will Continue to Prejudice Apple ...... 14
D.
The Court Should Impose Sanctions for Samsung’s Violation ............................ 16
V.
CONCLUSION ................................................................................................................. 18

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APPENDIX: [Proposed] Order Granting Apple’s Motion to Compel Production of
Documents and Things, Dkt. No. 616

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TABLE OF AUTHORITIES

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Page(s)

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CASES

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Bergstrom v. Sears, Roebuck & Co.,
496 F. Supp. 476 (D. Minn. 1980) .......................................................................................... 14

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Computer Task Group, Inc. v. Brotby,
364 F.3d 1112 (9th Cir. 2004)................................................................................................... 8
In re Phenylpropanolamine (PPA) Prods. Liab. Litig.,
460 F.3d 1217 (9th Cir. 2006)................................................................................................... 8
Lundy Enters., LLC. v. Wausau Underwriters Ins. Co.,
No. 06–3509–MVL–SS, 2010 WL 323571 (E.D. La. Jan. 21, 2010)..................................... 15
Tacori Enters. v. Beverlly Jewellery Co.,
253 F.R.D. 577 (C.D. Cal. 2008) ........................................................................................ 7 n.4

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Unigard Sec. Ins. Co. v. Lakewood Eng’g & Mfg. Corp.,
982 F.2d. 363 (9th Cir. 1992).................................................................................................... 7

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STATUTES

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15 U.S.C.
§ 1117...................................................................................................................................... 14

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35 U.S.C.
§ 284
§ 289........................................................................................................................................ 14

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OTHER AUTHORITIES

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Federal Rule of Civil Procedure
37(b)(2) ..................................................................................................................................... 7
37(b)(2)(A).......................................................................................................................... 8, 17

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NOTICE OF MOTION AND MOTION

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TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD:

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PLEASE TAKE NOTICE that on April 3, 2012, at 10:00 a.m., or as soon as the matter

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may be heard by the Honorable Paul S. Grewal in Courtroom 5, United States District Court for

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the Northern District of California, Robert F. Peckham Federal Building, 280 South 1st Street,

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San Jose, CA 95113, Apple Inc. (“Apple”) shall and hereby does move the Court pursuant to

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Federal Rule of Civil Procedure 37(b)(2), Local Rule 37–4, and the Court’s inherent authority for

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further orders arising from the material violation, by Defendants Samsung Electronics Co., Ltd.

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(“SEC”), Samsung Electronics America, Inc.’s (“SEA”), and Samsung Telecommunications

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America, LLC’s (“STA”) (collectively, “Samsung”) of Section D(4) of the Court’s January 27,

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2012 Order re Discovery Motions (Order), addressing “Sales and financial information relevant to

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establishing damages.”

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This Motion is based on this Notice of Motion and Motion and supporting Memorandum

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of Points and Authorities; the Declarations of Erik J. Olson (“Olson Decl.”) and Eric R. Roberts

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(“Roberts Decl.”) in Support of Apple’s Rule 37(b)(2) Motion Re Samsung’s Violation of

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January 27, 2012, Order and the exhibits attached thereto; all other papers and pleadings on file in

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this action; and such other written or oral argument as may be presented at or before the time this

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Motion is taken under submission by the Court.

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RELIEF REQUESTED
Pursuant to Federal Rule of Civil Procedure 37(b)(2), Local Rule 37-4, and the Court’s
inherent authority, Apple seeks:
1. An order requiring that, within one week after the order is entered, Samsung produce

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all the documents identified in Section V of Apple’s proposed order submitted with its

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January 11, 2012 Motion to Compel, entitled “Financial Information Relevant to

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Damages.” (See [Proposed] Order Granting Apple’s Motion to Compel Production of

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Documents and Things, (Dkt. No. 616), attached hereto as Appendix A.)

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2. An order permitting Apple’s damages experts to base their opinions to be offered at
trial on the documents identified in Paragraph 1 above without providing a new expert
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report and without being deposed after production of those documents, and precluding

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Samsung from cross-examining Apple’s damages experts based on their expert

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reports, which are due before the hearing on this Motion and therefore will be

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prepared without access to those documents.

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3. An order permitting Apple to depose a Samsung Rule 30(b)(6) witness on the newly-

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produced documents set forth in Paragraph 1 for a total of no more than ten hours (not

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to count against Apple’s allotted deposition hours).

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4. An order precluding any of Samsung’s expert and other witnesses from testifying
regarding Samsung’s sales or profitability based on any document other than the
document labeled

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5. An order precluding Samsung from seeking a continuance or extension of the trial date

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or any other case deadline, or seeking to delay any deadline or obligation that

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Samsung faces in this action, based in whole or in part on orders issued in connection

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with this Motion or on any party’s actions in compliance with those orders.

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6. An order finding that Samsung materially violated the January 27, 2012, Order

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(Order).
APPLE’S CERTIFICATION PURSUANT TO FEDERAL RULE OF CIVIL
PROCEDURE 37 AND LOCAL RULES 37–1 AND 37–4

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In accordance with Federal Rule of Civil Procedure 37 and Local Rules 37-1 & 37-4,

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Apple hereby certifies that it has in good faith conferred with Samsung in an effort to obtain

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Samsung’s full compliance with the Order without further Court action. Apple’s efforts to

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resolve this dispute without Court intervention are described in the Olson Declaration and its

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attached exhibits. (See Olson Decl. ¶¶ 13, 16, 18, 20–24, Exs. 11, 13–18.)

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STATEMENT OF ISSUES TO BE DECIDED
Whether Samsung has violated the Court’s January 27, 2012, Order (Order) by failing to

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produce the damages–related documents it committed and was obligated to produce.

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Dated: February 28, 2012

MORRISON & FOERSTER LLP

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By:

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

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MEMORANDUM OF POINTS AND AUTHORITIES
I.

INTRODUCTION
When Apple moved in January to compel Samsung to produce sales and financial

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information relevant to establishing Apple’s damages, Samsung claimed that the motion was

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moot because Samsung had agreed to produce the information that Apple wanted. The Court

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accepted Samsung’s promises and ordered Samsung make a complete production by February 3,

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2012 (the “Order”). But Samsung did not comply. Instead of the robust production that Samsung

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promised, Samsung

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nearly all the Order requires regarding sales, expenses, and profits associated with the accused

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. That

supposedly addresses

products. It does not do so. It is a
statement representing what Samsung wants Apple

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to have. It is not what the Order requires and not what Apple needs to build its damages model

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and prove its damages case.

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There is no doubt that Samsung could readily provide the information that Apple
requested and that Samsung told the Court it would produce.

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Indeed, despite Samsung’s adamant refusal to produce such documents in this case,
Samsung recently produced in the parallel ITC action

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It is not clear why Samsung refuses to produce all

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the documents that Apple seeks in this case—notwithstanding this Court’s Order—when it has

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produced

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Samsung’s reasons, we now know with certainty not only that these types of documents exist but

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also that Samsung can and will produce them when it suits Samsung’s agenda to do so.

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in the ITC action. Regardless of

Samsung thus has no good excuse for its failure to produce. But Samsung’s strategy is
plain: Samsung seeks to dribble out its production even of core documents such as the financial
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information at issue here—and then try to leverage delays to its advantage in seeking a

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postponement of the trial date. Apple seeks enforcement of the Order and mitigating sanctions.

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Samsung should be required to produce the full range of documents that Apple sought in its

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Motion to Compel and a witness to testify regarding them (not counted against Apple’s allotted

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deposition time). Moreover, because expert reports are due on March 22, 2012, before this

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Motion is heard, Apple’s damages experts’ reports will be prepared based on Samsung’s deficient

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production and without benefit of the full production sought by this Motion. Accordingly,

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Apple’s experts should be allowed to base their opinions to be offered at trial on the newly-

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produced documents without a new expert report and without being deposed on those documents,

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and Samsung should be precluded from cross-examining Apple’s damages experts based on their

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reports. Samsung should be required to base its damages testimony solely on

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it contends provided Apple with all that it needed. Samsung should also be found to have

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materially violated the Order.

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II.

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FACTUAL BACKGROUND
A.

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that

Apple’s Requests for Production of Sales and Financial Information Relevant
to Establishing Damages

On August 26, 2011, and October 26, 2011, Apple propounded detailed requests for the

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production of financial documents evidencing Samsung’s U.S. and worldwide revenue, unit sales,

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selling price, gross margins, various expenses and operating profits, and other financial data for

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the accused products. (Olson Decl. ¶ 2, Exs. 1–2.) This information is, of course, fundamental to

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the calculation of Apple’s damages. (Id. ¶ 26.) Samsung has never questioned the relevance of

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Apple’s requests. (See, e.g., id. Ex. 6; see also January 27, 2012, Order (Order) (“Order”) at 15.)

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B.

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When, by mid–December, Samsung had produced nothing more than a smattering of

Apple’s Motion to Compel

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, Apple repeatedly requested immediate production of the documents. (Olson

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Decl. ¶ 3, Exs. 3, 4, 5.) Samsung dragged its feet. (Id. ¶ 3.) On January 10, nearly a month after

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Apple’s initial letter and faced with Apple’s threatened motion to compel to be filed the next day,

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Samsung suggested that it would make a full and complete production of all of the documents

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Apple requested by February 3. (Id. ¶ 4, Ex. 6.)

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To ensure that Samsung would, in fact, provide all of the documents that Apple had

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requested, and would do so in time for Apple to use those documents when deposing Samsung’s

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financial controller on January 24, Apple filed a Motion to Compel on January 11. (Dkt. No.

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613.) Apple’s motion included a detailed proposed order with a comprehensive list of the

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documents and information that it needed, a copy of which is included as an Appendix A to this

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Motion. The following examples reflect the detail with which information was requested:

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A. Documents evidencing Samsung’s U.S. and worldwide revenue, unit sales and
selling price for the accused products (smartphones and tablets), including:

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1. Samsung’s U.S. and worldwide revenues for the accused products (1)
per smartphone or tablet (2) per carrier (3) per quarter.
***

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C. Reports showing gross profit and Samsung’s costs of goods sold:

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1. For each accused product, costed bills of materials and financial reports
provided to U.S. or corporate management reflecting Samsung’s calculation of its
gross margin for the accused products from June 2009 to the present.

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2. To the extent the reports are not prepared on a product–by–product
basis, reports reflecting gross margins or gross profit consolidated for the accused
products, for tablets and for smartphones or for Galaxy S and Galaxy S II line of
phones as reflected on a quarterly or monthly basis.
3. Based on standard accounting and financial conventions, these reports
should show both standard costs for the components that make up the phones and
allocations of other expenses (such as freight, variances, and manufacturing
overhead) to calculate a consolidated cost of goods sold.
D. Reports reflecting operating costs and profitability with respect to
smartphones:
1. Consolidated reports provided to U.S. and corporate management
reflecting any expenses not included in costs of goods sold that Samsung incurs or
allocates to U.S. smartphone or tablet products, including any research and
development expenses, sales and marketing expenses, and general and
administrative expenses.
2. Consolidated reports that reflect how such expenses for the accused
products compare to U.S. expenses for mobile phones more generally and/or to
worldwide expenses.

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3. Consolidated reports on operating profit for any of the accused phones,
for smartphones, and for mobile phones more broadly reflecting the foregoing
expenses.

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***

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G. Documents sufficient to show relevant expense for research and development
and to design around any patent, including:

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1. Any consolidated reports on the expense[s] Samsung incurred to
develop any of the accused products.

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2. Any reports or financial information that reflect the actual or projected
expense[s] to design around any patent.

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H. Any quarterly, annual or multi–year business plans prepared for the accused
products or the divisions of Samsung that sell the accused products.
(Appendix A at 8–10.) Apple sought the production no later than January 23, explaining: “Given
that the initial exchange of expert reports is set for March 22, 2012, it is imperative that Apple
timely receive documents containing such information.” (Dkt. No. 613–1 at 22.)
At the hearing, Apple’s counsel explained that Apple required the requested documents to
create a damages model that measures Samsung’s profits from sales of the accused products. He
specifically explained Apple’s need to obtain financial information from all Samsung entities
(because Samsung could move revenue and allocate costs in ways that might benefit Samsung for
tax or other reasons) and to obtain information at a “fairly granular” level, including information
for each product on a month–by–month level, G&A allocations, and costed bills of material
(because not all Samsung products are at issue and products are rolled in and out). (Olson Decl.
Ex. 8 at 154:13–156:18.) And the Court specifically focused on Apple’s request “for the bill of
materials for each of the individual units that infringe.” (Id. at 156:5–11.)

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C.
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Samsung’s Assurances to the Court That It Would Provide All the Requested
Information

Samsung opposed Apple’s motion on the sole ground that it was unnecessary and “moot.”
(Dkt. No. 642–3 at 15.) In its Opposition, in its counsel’s supporting declaration, and at the
hearing, Samsung repeatedly and unequivocally assured the Court that Samsung would provide
the requested information. (Id. at 4–9, 11–12, 14; Dkt. No. 642–4 ¶¶ 6, 17, 18, 24, 36, 40; Olson

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Decl. Ex. 8 at 168:3–12, 168:22–169:3.) Samsung’s Opposition stated that it had “agreed to

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produce nearly every category of financial documents that Apple requested—with a few

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exceptions for duplicative or non–existent information—by February 3, 2012.” (Dkt. No. 642

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at 4 (emphasis added).) At the hearing, Samsung’s counsel asserted that “all those financial

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documents are going to be produced and have been and we have agreed to produce

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them. . . relating to the financial categories involved for the three named defendants.” (Olson

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Decl. Ex. 8 at 168:5–12) (emphasis added.) Samsung not only made these general promises as to

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the categories of information that Apple sought, it also specifically promised to produce costed

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bills of materials, information at the product level, and worldwide information about its sales.

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(See, e.g., id. at 168:2–7, 168:22–169:3, 169:21–25.)

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D.

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The Court relied on Samsung’s commitments. On January 27, 2012, the Court entered the

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The Court’s Order

following Order:

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Apple seeks a number of categories of sales and marketing
information, including U.S. and worldwide sales and revenues,
selling price per accused product, gross margin, expenses and
operating profit, and Samsung’s audited or unaudited financial
reports. Apple argues that Samsung’s production to date has
provided scattered and piecemeal financial information that does
not offer any consistent record for Apple to draw from. Samsung
does not dispute that sales and profitability information is relevant
to Apple’s damages, if any. Samsung has agreed to supplement its
production to date and provide responsive documents to all of the
categories listed by Apple. The court finds Samsung’s proposed
production to be sufficient to meet Apple’s legitimate requests for
this category of documents.

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(Order at 15 (footnote omitted).) The Order required: “All production subject to this order must

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be completed on a rolling basis and no later than February 3, 2012.” (Id. at 2.)

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E.

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Samsung’s production fell far short of the Court’s Order. Although the Order required

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Samsung to produce “responsive documents to all of the categories listed by Apple” (Order at

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15), Samsung did not produce the documents and reports that Apple requested. The only

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document provided on February 3 that was at all responsive to Apple’s requests quoted above is

Samsung’s February 3, 2012 Production

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(Roberts Decl. Ex. A.)1 Samsung did not

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produce a comprehensive set of any type of “reports” at all.
Samsung failed to produce a comprehensive set of documents responsive to many of the

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specific categories or subcategories of Apple’s requests, including “costed bills of materials”;

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“reports provided to U.S. or corporate management” reflecting “Samsung’s calculation of its

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gross margin” or “any expenses not included in costs of goods sold that Samsung incurs or

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allocates to U.S. smartphone or tablet products”; and “business plans prepared for the accused

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products or the divisions of Samsung that sell the accused products.” (Olson Decl. ¶ 20, Ex. 15;

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Appendix A at 9–10.) The production does not “moot” Apple’s requests and does not comply

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with the Court’s Order.
Despite Apple’s request for reports and documents provided to Samsung management in
the U.S. and Korea,

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On February 3,

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Even apart from these errors,

fails to provide the information necessary

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for Apple to complete a comprehensive damage analysis. (Roberts Decl. ¶¶ 5–6.) Samsung is

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intentionally thwarting Apple’s efforts to obtain relevant damages information.

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F.

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Beginning on January 27, Apple asked Samsung to produce specific categories of

Samsung Refuses to Provide Any Additional Information

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financial documents that, as

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prepares and provides to management in the ordinary course of business. (Olson Decl. ¶ 11, Exs.

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10, 11, 13, 15–17.) Samsung refused to produce these documents, claiming “Samsung has

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fulfilled its obligation to produce financial documents, as required by the [Order].” (Id. ¶ 23,

Samsung

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Ex. 18.) According to Samsung, Apple cannot see relevant financial reports or materials created

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inside Samsung because the

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obligations under the Order, and Samsung has no other obligations to respond to Apple’s requests

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for production of damages information. (Id.) Samsung also ignored Apple’s letters asking

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Samsung to provide the Bates ranges of any financial documents it believed were responsive to

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these requests. (Olson Decl. ¶ 18, Exs. 14, 16.)

satisfies all of Samsung’s

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Samsung has not—and could not—claim that the requested reports are unavailable. Apple

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has located a handful of some of these specifically requested documents in Samsung’s production

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in the ITC 794 action. (Olson Decl. ¶¶ 28–29.) Although these files reflect only some of the

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categories of information that Apple requested and only for certain months, they show

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conclusively that Samsung has the kinds of reports to management that Apple seeks, that they are

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not privileged, and that they contain the detailed information that, if produced in full, would allow

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Apple to obtain a more complete picture of the damages that it is incurring. (Id.; Roberts Decl.

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¶ 29.)

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III.

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LEGAL STANDARD
A court has inherent authority to sanction a party for discovery misconduct even absent a

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prior court order. Unigard Sec. Ins. Co. v. Lakewood Eng’g & Mfg. Corp., 982 F.2d. 363, 368

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(9th Cir. 1992). Where a party violates a discovery order, Federal Rule of Civil Procedure

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37(b)(2) authorizes a court to impose sanctions. “Failure to produce documents as ordered . . . is
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1

considered sufficient prejudice” to establish sanctionable conduct. Computer Task Group, Inc. v.

2

Brotby, 364 F.3d 1112, 1116 (9th Cir. 2004). A court may issue “further just orders” to address a

3

party’s failure to comply with discovery orders. Fed. R. Civ. P. 37(b)(2)(A); see, e.g., In re

4

Phenylpropanolamine (PPA) Prods. Liab. Litig., 460 F.3d 1217, 1229 (9th Cir. 2006) (upholding

5

dismissal of action for failure to comply with discovery order and noting alternative sanctions

6

include warnings, counsel reprimands and suspensions, fines, imposition of costs and fees, and

7

claim/defense preclusion).

8

IV.

9
10

ARGUMENT
A.

Samsung’s Meager Production Violated the Court’s Discovery Order.
1.

11
12

The Order Reflects Samsung’s Broad Assurances to the Court That
Samsung Would Produce What Apple Requested.

Samsung opposed Apple’s Motion to Compel solely on the ground that the motion was

13

unnecessary and “moot” because Samsung promised to provide the information that Apple’s

14

motion sought. (Dkt. No. 642 at 15.) With full knowledge of exactly what information Apple

15

was moving to compel—as set forth in Apple’s detailed proposed order (Appendix A)—Samsung

16

unequivocally and repeatedly represented to the Court that:

17
18
19
20
21
22
23

•

It had “agreed to produce all of the financial information that Apple
request[ed].” (Dkt. No. 642 at 14 (emphasis added).)

•

It had “agreed to produce nearly every category of financial documents that
Apple requested—with a few exceptions for duplicative or non–existent
information—by February 3, 2012.” (Id. at 4 (emphasis added)).

•

“Again, Apple’s motion is moot.” (Id. at 15.)

•

It had “agreed to produce nearly every category of financial documents that
Apple requested, by February 3, 2012.” (Dkt. No. 642–4 ¶ 24.)

•

Its “offer [is] that for the accused defendants which would include STA which
is a subsidiary of SEC, that all those financial documents are going to be
produced and have been and we have agreed to produce them.” (Olson Decl.
Ex. 8 at 168:3–7 (emphasis added).)

•

“[T]here’s not been a refusal on Samsung’s part to produce documents relating
to the financial categories involved for the three named defendants.” (Id. at
168:9–12.)

24
25
26
27
28

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•

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19

Samsung would produce “information at the product level,” “bills of
materials,” and “worldwide” sales and revenue data for the accused products.
(Id. at 168:22–169:25.)

The Order explicitly recognized that Apple sought “a number of categories” of financial
documents and pointed to Samsung’s promise to produce “responsive documents to all of the
categories listed by Apple.” (Order at 15.) Accordingly, the Court resolved Apple’s motion by
ordering Samsung to produce all of the documents it had agreed to produce by February 3. (Id. at
2, 15.)  
Despite Samsung’s broad representations that it would produce the information that Apple
had requested, Samsung now claims that the Order narrowly requires production only of materials
specifically identified on page 14 of Samsung’s Opposition Brief and its January 10 letter to
Apple. (Olson Decl. ¶ 23, Ex. 18.) That interpretation flatly contradicts the Order’s reference to
Samsung’s promise to produce “responsive documents to all of the categories listed by Apple.”
(Order at 15.)
Samsung’s interpretation likewise contradicts its forceful assurances to the Court that it
would provide documents responsive to all the categories that Apple requested. The Court
should reject Samsung’s bait–and–switch tactics. If Samsung intended to produce anything less
than all that “Apple has requested” it should have said so, rather than make repeated promises to
the Court and to Apple intended to render Apple’s Motion to Compel “moot.” If it intended to
produce

, it should have said so, clearly and unequivocally. It did not.

20
2.
21
22
23
24
25
26
27

No Single Document Can Satisfy the Order.

It is simply not possible for

to provide all the information that Apple

sought in its Motion to Compel and that Samsung committed to produce. As the Court noted,
Apple’s requests included “a number of categories of sales and marketing information, including
U.S. and worldwide sales and revenues, selling price per accused product, gross margin, expenses
and operating profit, and Samsung’s audited or unaudited financial reports.” (Order at 15.)
Apple’s proposed order referred to “documents,” “reports,” “consolidated reports,” “bills of
materials,” and “business plans.” (Appendix A at 8–10.) That is the universe of documents that

28
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1

Samsung committed to produce when it made the broad assurances discussed above and that the

2

Court ordered when requiring production of “responsive documents” that would address “all of

3

the categories listed by Apple.” (Order at 15.)

4

In light of Apple’s detailed requests and Samsung’s representations, no one document—

5

no matter how good or how comprehensive—could satisfy the Order. Samsung’s production

6

violates the Order on this ground alone.

7
8
9

3.

Samsung’s Production Omits Numerous Categories of Documents.

Samsung withheld multiple categories of documents that were specifically identified in
Apple’s proposed order, including: (1) “costed bills of materials”—documents explicitly

10

discussed at the hearing and explicitly promised by Samsung (Olson Decl. Ex. 8 at 167:16–

11

169:11, 169:15–18); (2) “financial reports provided to U.S. or corporate management”;

12

(3) reports showing “standard costs for the components that make up the phones and allocations

13

of other expenses (such as freight, variances, and manufacturing overhead) to calculate a

14

consolidated cost of goods sold”; (4) “consolidated reports provided to U.S. and corporate

15

management reflecting any expenses not included in costs of goods sold that Samsung incurs or

16

allocates to U.S. smartphone or tablet products”; (5) “consolidated reports on the expense

17

Samsung incurred to develop any of the accused products”; (6) “reports or financial information

18

that reflect the actual or projected expense to design around any patent”; and (7) the 2012

19

“business plans prepared for the accused products or the divisions of Samsung that sell the

20

accused products.” ((Olson Decl. ¶ 29; Appendix A at 9–10) (emphasis added).)

21
22

Apple’s requests sought the production of materials created in the ordinary course of
business or given to management. (Appendix A at 8–10; Dkt. No. 613–1 at 19–21.)2 In contrast,

23

.

24
25
2

26

Apple’s production provided a detailed production on financial issues, including reports
provided to management in the ordinary course of business. (Olson Decl. ¶ 30.)

27
28

as the financial reports to management that Apple requested.
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1

(Roberts Decl. ¶ 7.) Samsung was not entitled unilaterally to exclude the more detailed

2

documents created by Samsung’s financial professionals that Apple’s proposed order identified.

3

Finally, Samsung’s

omitted any information on at least the following accused

4

products: the Galaxy S II Skyrocket, the Galaxy S II Epic 4G, the Galaxy S II (T–Mobile

5

edition), the Galaxy S II (AT&T edition) and the Galaxy Tab 10.1 LTE. (Roberts Decl. ¶ 5.)

6

With no data at all on sales of these products, Apple cannot calculate damages for the

7

infringement they represent. (Olson Decl. ¶ 26.) Samsung’s production for this reason alone

8

cannot be complete.

9

4.

10
11

Samsung’s Production Fails to Provide a Complete Set of Critically
Important Internal Accounting and Financial Information.

Even the information that Samsung purports to

is incomplete.

12

For example, Apple had requested detailed information on expenses, including “costed bills of

13

material” and reports showing “standard costs for the components that make up the phones,”

14

“allocations of other expenses (such as freight, variances, and manufacturing overhead) to

15

calculate a consolidated cost of goods sold,” and “expenses not included in the costs of goods

16

sold . . . including any research and development expenses, sales and marketing expenses, and

17

general and administrative expenses.” (See Appendix A at 8–10; see also id., Ex. 8 at 168:22–

18

169:3.) Yet

19
20
21

Where Apple requested detailed information on cost of goods sold, such as information
on standard costs, freight, variances, and other items,

22
23
24
25
26

. (See Roberts
Decl. ¶ 15.)

27
28
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1

Apple also asked for revenue and other sales information by carrier. (Olson Decl. Ex. 3.)

2

Samsung promised it, but

3

which carriers’ phones were sold, and its prior productions were so scattershot that Apple cannot

4

create meaningful data from them. (Olson Decl. Ex. 15.) Apple is entitled to know which phones

5

Samsung sold to major carriers, which phones were sold to regional or local carriers, and which

6

phones were sold apart from any carrier relationship. These divisions may affect the opinion of

7

Apple’s expert, are likely to affect the opinion of Samsung’s expert, and may affect the manner in

8

which the jury evaluates the marketplace and the scope of the harm that Samsung’s infringement

9

imposed on Apple.

10

5.

does not provide any indication as to

Is Inconsistent with the

11
12
13
14
15
16
17
18
19

6.

The

Is Riddled with Errors.

suffers from an exceptional number of errors and inconsistencies that

20

makes it both incomplete and inadequate as a reliable record of Samsung’s financial performance.

21

(See, e.g., Roberts Decl. ¶ 19.)

22
23
24
25
26
27
28

The declaration of Eric Roberts provides a more detailed
description of these issues, which are too numerous to describe in full here.
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1

B.

Samsung Intentionally Withheld Specific Documents Created in the Ordinary
Course That Apple Requested and That Are Subject to the Court’s Order.

2
3
4

Samsung’s conduct cannot be explained by a lack of responsive documents. The
deposition of

5
6
7
8
9
10
11
12

These are documents that Samsung maintains in the ordinary course of business.

13
14
15
16
17
18
19
According to

20
21

Samsung, the Court’s Order is so narrow, and

22

combination preclude Apple from requesting additional relevant financial documents. This

23

position turns the meaning of the Order on its head, converting an order to produce everything

24

responsive to Apple’s request into a means to prevent Apple from obtaining the documents it

25

needs to prepare its damages case.

26
27

Apart from the deficient

is so comprehensive, that they in

that Samsung contends fulfills its obligations under

the Order, Apple has located sporadic, haphazard productions of a

28
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1
2
3
4
5
6

. (Roberts Decl. ¶ 26.) The complete production

7

is precisely what Apple was looking for and will provide an appropriate

8

foundation on which to evaluate the damage caused by Samsung’s infringing conduct and to test

9

the

10

Samsung’s sporadic production (predominantly in a different action) demonstrates that

11

Samsung has the documents that Apple seeks but made a deliberate decision to withhold them,

12

notwithstanding the Court’s Order.

13

C.

14

By limiting its production to

Samsung’s Violation Has Prejudiced and Will Continue to Prejudice Apple.
, Samsung has substantially prejudiced

15

Apple’s ability to prepare its damages case. Samsung’s sales of the accused products are the

16

infringing act. Information on Samsung’s sales, gross margin, various expenses, and operating

17

profit form the basis for any available remedy and are key to establishing Apple’s damages. See

18

35 U.S.C. §§ 284, 289; 15 U.S.C. § 1117; Bergstrom v. Sears, Roebuck & Co., 496 F. Supp. 476,

19

497 (D. Minn. 1980) (rejecting defendant’s method of “apply[ing] the percentage of profit on all

20

of its merchandising operations to the figure which represents the total sales of the [infringing

21

product] in order to determine the net profit for [the] particular [infringing] product” to establish

22

damages from design patent infringement). Samsung does not contend otherwise. (See Order at

23

15.)

24
25
26
27
28

Allowing Samsung to produce only a
, substantially prejudices Apple’s preparation of its
damages case. A determination of accounting and profits is not a matter of just putting
(Roberts Decl. ¶ 15.) It involves an evaluation of what expenses
make up that calculation, why they were (or were not) associated with an accused product, and
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1

whether or not they vary with the number of units sold. (Id. ¶ 12.) Contrary to the Order,

2
3
4

. This turns discovery on its head. See Lundy Enters., LLC. v.

5

Wausau Underwriters Ins. Co., No. 06–3509–MVL–SS, 2010 WL 323571, at *3 (E.D. La. Jan.

6

21, 2010) (awarding evidentiary sanctions against party that produced Excel spreadsheet related

7

to damages but “did not provide any foundational documents for it”).

8

Further,

9
10

(See Olson Decl. Ex. 9 at 51:11–52:18, 74:6–75:6.)

11
12
13
14
15

(Roberts Decl. Ex. A.) This is exactly what Apple intended to overcome when it asked for
the documents provided to Samsung’s management, including its management in Korea.

16
17
18
19
(Roberts Decl. ¶ 7.)3

20
21

Moreover, even if Samsung is now ordered (again) to produce the information that Apple

22

needs for its damages analysis, Apple will continue to be prejudiced by Samsung’s failure to have

23

provided the information earlier. (See Olson Decl. ¶¶ 25, 26.) Samsung’s failure to provide

24

meaningful damages discovery forced Apple to file its Motion to Compel. (Id. ¶ 5). Apple’s

25
26
27
28

3

Apple is also prejudiced in its defense of Samsung’s counterclaims. Apple served its
ninth set of interrogatories requesting Samsung to provide specificity concerning its claims for
patent damages, but in its responses dated February 17, 2012, Samsung refused to provide any
substantive answers. Whether Samsung’s damages theory on its counterclaims is reasonable
royalty or lost profits, the financial information discovery that it has failed to produce is highly
relevant to Apple’s defense.
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1

motion sought production of documents by January 23, which would have allowed Apple to use

2

the documents in the

3

at 8–10.) But Apple did not have the requested information for that deposition; instead, Apple

4

was forced to use limited deposition time to identify the categories of relevant financial and sales

5

data that Samsung keeps but has refused to produce. (Olson Decl. ¶ 9.) Now, because Samsung

6

failed to comply with the Order’s February 3 deadline, any additional Court–ordered production

7

will take place after Apple has deposed Samsung’s 30(b)(6) witness (which is scheduled to occur

8

before March 8, 2012) and after Apple’s damages experts will have prepared their reports (which

9

are due on March 22, 2012). (Olson Decl. ¶ 25.) Thus, Apple will suffer additional prejudice

10

because its damages analysis will not have the benefit of basic, reliable information in the areas

11

required by the Court’s Order.

12

deposition of

. (Appendix A

Apple will be further prejudiced if Samsung produces new, corrected, or additional

13

information at some future point. (Id. ¶ 26.) Samsung has repeatedly claimed to have complied

14

with a Court–ordered deadline to produce documents, only to produce such documents after that

15

deadline passed. (See, e.g., Dkt. No. 537 at 3 (setting new deadline for Samsung to produce

16

documents subject to Sept. 28, 2011 order); Dkt. No. 715-1.) Apple will have to address a

17

constantly moving target if Samsung again doles out only the information that it wants to give, on

18

a schedule of its own choosing.

19

D.

20

There is no ready cure for the prejudice to Apple discussed above. The Court set an

The Court Should Impose Sanctions for Samsung’s Violation.

21

expedited trial date at Apple’s request and over Samsung’s objections. Apple is the only party

22

invested in keeping the expedited trial date set by the Court. Thus, when Samsung drags its feet

23

in meeting its discovery obligations and complying with the Court’s orders, Samsung knows

24

Apple will not ask to move case deadlines, and therefore will be hamstrung by getting

25

information long after it was needed.

26
27
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1

Although the prejudice to Apple cannot be eradicated, it could be mitigated. Accordingly,

2

as “further just orders” pursuant to Rule 37(b)(2)(A) and the Court’s inherent authority, Apple

3

seeks the following orders.4

4

1.

An order requiring that, within one week after the order is entered, Samsung

5

produce all the documents identified in Section V of Apple’s proposed order submitted with

6

its Motion to Compel. There is no more time for the parties to negotiate what documents

7

Samsung should be required to produce or for Samsung to make more promises about what it will

8

produce. Samsung had its chance to make the robust production that it promised when it asserted

9

that Apple’s Motion to Compel was moot. We now know the motion was not moot. Samsung

10

should now be required to give Apple all the relief that it had sought in that motion. (See

11

Appendix A at 8–10.)

12

2.

An order permitting Apple’s damages experts to base their opinions to be

13

offered at trial on the documents sought by this Motion without providing a new expert

14

report and without being deposed after production of those documents, and precluding

15

Samsung from cross-examining Apple’s damages experts based on their expert reports.

16

Had Samsung complied with the Order, Apple and its experts would have had information to

17

allow preparation of complete and timely reports. Instead, they will have to base the reports on

18

Samsung’s

19

the opinions they reach on the basis of the documents that they should have had before preparing

20

their reports. Samsung should be precluded from deposing the experts after the documents are

21

produced and from crossing Apple’s experts about their original reports that were prepared based

22

on Samsung’s deficient production.

23
24
25
26
27
28

. Apple’s experts should be permitted to testify at trial based on

4

In a related suit pending before the International Trade Commission, the ITC
Administrative Law Judge has twice ordered Samsung to comply with Apple’s discovery
requests. (Olson Decl. ¶ 27.) In its most recent order, the ITC ALJ found that there, like here,
Samsung had attempted to improperly and “unilaterally limit discovery.” (Olson Decl. ¶ 27,
Ex. 19 at 6.) The ALJ stated that Samsung “attempts to turn discovery on its head” and noted that
Samsung “has a duty to ensure that Samsung’s discovery responses are accurate.” (Id.) See also,
Tacori Enters. v. Beverlly Jewellery Co., 253 F.R.D. 577, 582 (C.D. Cal. 2008) (“The Court may,
in deciding whether to grant a motion for sanctions, ‘properly consider all of a party’s discovery
misconduct . . . , including conduct which has been the subject of earlier sanctions.’”) (quoting
Payne v. Exxon Corp., 121 F.3d 503, 508 (9th Cir. 1997)).
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1

3.

An order permitting Apple to depose a Rule 30(b)(6) witness on the newly

2

produced documents set forth in Paragraph 1 above for a total of no more than ten hours

3

(not to count against Apple’s allotted deposition time). Apple should have the opportunity to

4

depose one witness authorized to speak on Samsung’s behalf with respect to the new financial

5

documents it produces. This is particularly important because Apple will need a person who can

6

speak on behalf of all three Samsung entities whose financial results are at issue: STA, SEA, and

7

SEC.

8
9

4.

An order precluding Samsung’s expert and any Samsung witnesses from

testifying regarding Samsung’s sales or profitability based on any document other than

10

. Samsung insisted that

fully complied with the Court’s Order and

11

gave Apple all the information it had requested. (Olson Decl. Ex. 18.) Samsung should be held

12

to its word and should defend Apple’s damages case based on

13

5.

.

An order precluding Samsung from seeking to extend or delay case deadlines

14

or obligations based on orders issued in connection with this Motion. Samsung should not be

15

rewarded for its violations of the Court’s Order by claiming that any further orders from the Court

16

to remedy the violation are a basis to delay the trial or any other deadlines.

17

6.

An order finding that Samsung materially violated the Court’s January 27,

18

2012, Order. A finding that Samsung materially violated the January 27, 2012, Order may be

19

important at the end of the case if Apple seeks to prove that Samsung’s litigation conduct

20

amounts to willful misconduct or special circumstances.

21

V.

22

CONCLUSION
For the foregoing reasons, Apple requests that the Court grant Apple’s Motion and issue

23

the orders identified in Paragraphs 1–6 above.

24

Dated: February 28, 2012

MORRISON & FOERSTER LLP

25
By:
26
27
28

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

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APPENDIX A

Case5:11-cv-01846-LHK Document616 Filed01/11/12 Page1 of 11

1
2
3
4
5
6
7
8
9

HAROLD J. MCELHINNY (CA SBN 66781)
[e-mail]
MICHAEL A. JACOBS (CA SBN 111664)
[e-mail]
JENNIFER LEE TAYLOR (CA SBN 161368)
[e-mail]
ALISON M. TUCHER (CA SBN 171363)
[e-mail]
RICHARD S.J. HUNG (CA SBN 197425)
[e-mail]
JASON R. BARTLETT (CA SBN 214530)
[e-mail]
MORRISON & FOERSTER LLP
425 Market Street
San Francisco, California 94105-2482
Telephone: [phone]
Facsimile: [phone]

10

WILLIAM F. LEE
[e-mail]
WILMER CUTLER PICKERING
HALE AND DORR LLP
60 State Street
Boston, MA 02109
Telephone: [phone]
Facsimile: [phone]
MARK D. SELWYN (SBN 244180)
[e-mail]
WILMER CUTLER PICKERING
HALE AND DORR LLP
950 Page Mill Road
Palo Alto, California 94304
Telephone: [phone]
Facsimile: [phone]

11
12

Attorneys for Plaintiff and
Counterclaim-Defendant APPLE INC.

13
14

UNITED STATES DISTRICT COURT

15

NORTHERN DISTRICT OF CALIFORNIA

16

SAN JOSE DIVISION

17
18

APPLE INC., a California corporation,
Plaintiff,

19
20
21
22
23
24

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.

25
26
27
28
PROPOSED ORDER ON APPLE’S MOTION TO COMPEL
CASE NO. 11-CV-01846-LHK
sf-3089365

Case No. 11-cv-01846-LHK
[PROPOSED] ORDER GRANTING
APPLE’S MOTION TO COMPEL
PRODUCTION OF DOCUMENTS
AND THINGS

Case5:11-cv-01846-LHK Document616 Filed01/11/12 Page2 of 11

1

Plaintiff Apple Inc. (“Apple”) has moved pursuant to Federal Rule of Civil Procedure 37

2

and Patent Local Rule 3-4(a) for an order compelling Defendants Samsung Electronics Co., Ltd,

3

Samsung Electronics America, Inc., and Samsung Telecommunications America, LLC

4

(collectively, “Samsung”) to complete, by the dates specified below, its production of certain

5

identified documents and things. Having considered the arguments of the parties and the papers

6

submitted, and GOOD CAUSE HAVING BEEN SHOWN, the Court hereby GRANTS Apple’s

7

Motion to Compel Production of Documents and Things as follows:

8

I. Technical Documents Relevant to Utility Patent Infringement.

9
10

IT IS ORDERED that by no later than January 23, 2012, Samsung shall complete its
production of the technical documents identified in subsections A through R below.

11

A. Documents sufficient to show, for each Product at Issue, which versions of the

12

operating system (including but not limited to the Android operating system or TouchWiz

13

overlay) included the accused functionality, and the dates during which each version of the

14

operating system was used.1

15

B. Documents sufficient to show, for each Product at Issue, which updates to the

16

operating system (including but not limited to the Android operating system or TouchWiz

17

overlay) included the accused functionality, and the dates when such updates were made

18

available.

19

C. Documents sufficient to show, for each Product at Issue, which features, operations,

20

characteristics of, or changes made to each version of the operating system (including, but not

21

limited to, the Android operating system or TouchWiz overlay) included the accused

22

functionality, including technical specifications as well as instructions relating to deployment,

23

installation, maintenance, and upgrade procedures.

24
25
26
27

D. Documents sufficient to show, for each Product at Issue, which versions of any
software, firmware, program(s) library(ies) or other system used to control the touchscreens
1

For purposes of this Order, Samsung “Products at Issue” includes all Galaxy phone and
tablet products and all products identified in Apple’s Amended Complaint. Apple “Products at
Issue” includes all iPhone, iPod Touch, and iPad products.

28
PROPOSED ORDER ON APPLE’S MOTION TO COMPEL
CASE NO. 11-CV-01846-LHK
sf-3089365

Case5:11-cv-01846-LHK Document616 Filed01/11/12 Page3 of 11

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(including at least the touch sensor panels) included the accused functionality, and the dates

2

during which each such version was in use.

3

E. Documents sufficient to show, for each Product at Issue, which updates to any

4

software, firmware, program(s), library(ies) or other system used to control the touch screens

5

(including at least the touch sensor panels) included the accused functionality, and the dates when

6

such updates were made available.

7

F. Documents sufficient to show, for each Product at Issue, which features, operations,

8

characteristics of, or changes made to each version of the any software, firmware, program(s),

9

library(ies) or other system used to control the touch screens (including the display and touch

10

sensor panels) included the accused functionality, including technical specifications as well as

11

instructions relating to deployment, installation, maintenance, and upgrade procedures.

12

G. Documents sufficient to show, for each Product at Issue, which versions of each

13

Samsung application installed in the Products at Issue included the accused functionality, and the

14

dates during which each such version was in use.

15

H. Documents sufficient to show, for each Product at Issue, which updates to each

16

Samsung application included the accused functionality, and the dates when such updates were

17

made available.

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I. Documents sufficient to show, for each Product at Issue, which features, operations,

19

characteristics of, or changes made to each version of any Samsung application of the Products at

20

Issue included the accused functionality, including, but not limited to, those relating to

21

deployment, installation, maintenance, and upgrade procedures.

22

J. Documents sufficient to show arrangement and specification of traces, conductive

23

lines, conductive layers, glass, dielectrics, substrates, adhesives, and other elements used to

24

construct the touch screens (including the display and touch sensor panels) of the Products at

25

Issue.

26

K. Documents sufficient to show the design, manufacture, specification and operation of

27

any monitoring circuitry, integrated circuit, chip, controller or module used to operate the touch

28

screens (including the display and touch sensor panels) of the Products at Issue.
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L. All data sheets concerning the touch screens (including the display and touch sensor

2

panels) on the Products at Issue or any monitoring circuitry, integrated circuit, chip, controller or

3

module used to operate said touch screens.

4

M. Documents sufficient to show and to understand design, specifications, and

5

manufacturing tolerances for the touch screens, touch sensor controllers, and touch screen

6

components in the Samsung Products at Issue, including but not limited to specifications,

7

schematics, flow charts, formulas, or other documentation showing the design and operation of

8

the touch screens, touch sensor controllers, and touch screen components or of other accused

9

features.

10
11
12

N. All requests for quotations relating to the touchscreens, touchscreen controllers, and
touch screen components in each Samsung Product at Issue.
O. All qualification documentation for the touchscreens, touchscreen controllers, and

13

touch screen components in each Samsung Product at Issue, including internal qualification

14

documentation and vendor qualification documentation, specifications used to qualify both first-

15

and third-party supplied parts and components, and quality control criteria used for

16

manufacturing.

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18
19

P. All Bills of Materials and design drawings relating to the Samsung Products at Issue
provided to or received from vendors or suppliers.
Q. All functional testing results and testing criteria relating to the touch screens, touch

20

sensor controllers, and touch screen components in the Samsung Products at Issue, including

21

documents pertaining to prototypes and pre-production touch screens, touch sensor controllers,

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and touch screen components.

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24
25

R. All testing data related to the shielding of traces of conductive material in the Samsung
Products at Issue.
*** *** ***

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II. Documents Related to Design-Around Efforts
IT IS FURTHER ORDERED that by no later than January 23, 2012, Samsung shall

3

complete its production to Apple of the documents relating to design-around efforts identified in

4

subsections A through E below.

5

A. Documents sufficient to identify and show in detail each design around, allegedly non-

6

infringing alternative manufacturing process, and/or alternative technology or method that can be

7

used as an alternative to the patented technology of each of the Utility Patents at Issue.

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B. All Documents concerning each design around, and/or allegedly non-infringing
alternative design that can be used as an alternative to the Design Patents at Issue.
C. All Documents relating to each change Samsung made, is now making, or will make to
the Products at Issue in response to Apple's allegations in this lawsuit.
D. All Documents relating to Samsung’s analyses, actions, plans or attempts to exercise
due care to avoid infringing the Patents at Issue.
E. All Communications with Google or any other third party regarding design arounds for
the Patents at Issue.
*** *** ***

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III. Documents Relevant to Design Patent, Trademark, and Trade Dress Infringement.

18

IT IS FURTHER ORDERED that by no later than January 23, 2012, Samsung shall

19

complete its production to Apple of the documents relating to infringement of Apple’s design

20

patents, trademark, and trade dress identified in subsections A through O below.

21

A. E-mails and documents from designers, developers, or anyone else responsible for or

22

involved in the design, development or marketing of Samsung’s Products at Issue (including but

23

not limited to individuals responsible for or involved in consumer surveys, R&D, management,

24

and product planning), and counsel (if not privileged) discussing actual consumer confusion or

25

the possibility of consumer confusion between the parties’ Products at Issue or the source,

26

sponsorship, or affiliation of the parties’ Products at Issue.

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B. Trademark, trade dress, and design patent search reports relating to any element of
Apple’s asserted trade dress or asserted trademarks, including prior art searches.
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C. Documents discussing or assessing the design of Apple’s Products at Issue, including

2

the distinctiveness or lack of distinctiveness thereof or the similarity of design between any of the

3

parties’ products, from the files of designers, developers, anyone else responsible for or involved

4

in the design, development or marketing of Samsung’s Products at Issue (including but not

5

limited individuals responsible for or involved in consumer surveys, R&D, management, and

6

product planning), and counsel (if not privileged).

7

D. For inspection, all physical samples of Apple’s Products at Issue in Samsung’s

8

possession (excluding products purchased for litigation or products personally owned by its

9

employees).

10

E. Documents sufficient to show the identity and title of individuals who developed the

11

external hardware design and the GUI design for each of Samsung’s Products at Issue (including

12

the design of the icons used in the GUI).

13

F. E-mails and documents from designers, developers, engineers, and others (including

14

but not limited to CAD drawings, sketchbooks/notebooks, models/mockups, and Adobe

15

Illustrator or other computer files) relating to the design and development of all GUI designs for

16

each of Samsung’s Products at Issue, including but not limited to the design and development of

17

TouchWiz, the icons and icon arrangement(s) used in each Samsung Product at Issue, and all

18

alternative GUI designs considered or used by Samsung.

19

G. E-mails and documents from designers, developers, engineers, and others relating to

20

the feasibility of all GUI designs considered (including ease of manufacturing, cost savings,

21

enhanced usability and technological challenges).

22

H. E-mails and documents from designers, developers, engineers and others relating to

23

the design and development of all external hardware designs—including design alternatives and

24

redesigns and the feasibility (including ease of manufacturing, cost savings, enhanced usability

25

and technological challenges) of the designs considered—for all smartphone and tablet computer

26

products offered for sale by Samsung.

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28

I. E-mails and documents from designers, developers, engineers and others relating to the
design and development of the earphone or speaker slot design for all mobile phone products
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offered for sale by Samsung—including design alternatives and redesigns and the feasibility

2

(including ease of manufacturing, cost savings, enhanced usability and technological challenges)

3

of the designs considered.

4

J. Designer meeting minutes, notes of design meetings, specifications or requirements

5

communicated to the designers, project management reports, and reports to executives relating to

6

the external hardware design or the GUI for all smartphones or tablet computers offered for sale

7

by Samsung.

8
9
10
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12
13

K. Three samples of each Samsung Product at Issue, including user and service manuals
and all other end user documentation relating to the intended use or operation of the products at
issue.
L. Documents sufficient to show all model numbers, code names, or other internal
designations used to refer to each of Samsung’s Products at Issue.
M. To the extent not already produced under the Court’s December 22, 2011, Order (Dkt.

14

537), all Samsung sketchbooks (or similar hand drawings, however created, stored, or archived)

15

created on or after January 1, 2000, that depict designs for any Samsung mobile phone product,

16

tablet product, or touchscreen digital media player, regardless of where sold, whether for a final

17

design or an alternative design that was not commercially released.

18

N. To the extent not already produced under the Court’s December 22, 2011, Order, all

19

CAD drawings (or other schematics that Samsung uses to design its products) created on or after

20

January 1, 2000, that depict designs for any Samsung mobile phone product, tablet product, or

21

touchscreen digital media player, regardless of where sold, whether for a final design or an

22

alternative design that was not commercially released.

23

O. To the extent not already produced under the Court’s December 22, 2011, Order, All

24

physical models created on or after January 1, 2000, that depict designs for any Samsung mobile

25

phone product, tablet product, or touchscreen digital media player, regardless of where sold,

26

whether for a final design or an alternative design that was not commercially released.

27

*** *** ***

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IV. Marketing, Market Research, and Advertising Documents.
IT IS FURTHER ORDERED that by no later than January 23, 2012, Samsung shall

3

complete its production to Apple of the marketing, market research, and advertising documents

4

identified in subsections A through K below.

5

A. All U.S. and global marketing and advertising strategy documents, marketing

6

requirements documents, market analyses (including actual or projected market demand), market

7

share analyses, competitor analyses, consumer surveys, and focus group studies relating to the

8

Apple or Samsung Products at Issue, including but not limited to those that mention Apple, iPod,

9

iPhone, iPad or any other nicknames or designations used by Samsung to indicate Apple or any of

10
11
12
13

its products.
B. Documents evidencing or referencing U.S. or global media plans for any of Samsung’s
Products at Issue.
C. A copy of each U.S. advertisement and any drafts of each U.S. advertisement for any

14

of Samsung’s Products at Issue, including but not limited to print, television, billboard, radio, on-

15

line, and airline advertisements, and documents sufficient to determine where and when each such

16

advertisement appeared.

17

D. Copies of any advertisements, wherever run, that mention or target Apple or any of its

18

products, including but not limited to advertisements that are meant to evoke Apple or any of its

19

products and/or to compete with Apple or any of its products.

20
21
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23
24

E. Documents referencing or relating to the number of times an online advertisement for
any of Samsung’s Products at Issue has been “clicked on” by a user.
F. Documents sufficient to identify all markets and retail outlets where Samsung’s
Products at Issue are or will be sold.
G. Documents describing how Samsung’s Products at Issue are to be marketed or

25

presented in retail outlets or by carriers, including but not limited to scripts or sales points to be

26

used by salespeople.

27
28

H. Documents referencing or relating to any incentives that Samsung offers to any retail
outlet or carrier in connection with the sale of any of Samsung’s Products at Issue.
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I. Documents sufficient to identify all markets and media outlets where Samsung’s
Products at Issue are or will be advertised.
J. Documents sufficient to show per-month advertising and marketing spending in the
U.S. regarding the Products at Issue.
K. Documents sufficient to identify the demographics of likely or targeted customers for

6

each of Samsung’s Products at Issue.

7

V. Financial Information Relevant to Damages.

8
9

IT IS FURTHER ORDERED that by no later than January 23, 2012, Samsung shall
complete its production to Apple of the sales and other financial documents identified in

10

subsections A through H below. All figures provided should tie to Samsung’s general ledger,

11

should include any carrier subsidies, rebates or payments, and should be provided in U.S. dollars

12

(including any currency conversions used). To the extent that Samsung contends that any form of

13

damages will include less than a full quarter for any product, Samsung must provide these figures

14

on a monthly basis for that product and the specific quarter (or monthly for all products and

15

periods). All figures should be provided from the date the product was first available in the U.S.

16

or worldwide.

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A. Documents evidencing Samsung’s U.S. and worldwide revenue, unit sales and selling
price for the accused products (smartphones and tablets), including:
1. Samsung’s U.S. and worldwide revenues for the accused products (1) per
smartphone or tablet (2) per carrier (3) per quarter.
2. Samsung’s U.S. and worldwide unit sales for the accused products (1) per
smartphone or tablet (2) per carrier (3) per quarter.
3. Samsung’s U.S. and worldwide average selling price for the accused products
(1) per smartphone or tablet (2) per carrier (3) per quarter.
B. Documents sufficient to show the date when each accused product was introduced into
the U.S. market.
C. Reports showing gross profit and Samsung’s cost of goods sold:

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1. For each accused product, costed bills of materials and financial reports

2

provided to U.S. or corporate management reflecting Samsung’s calculation of its gross margin

3

for the accused products from June 2009 to the present.

4

2. To the extent the reports are not prepared on a product-by-product basis, reports

5

reflecting gross margins or gross profit consolidated for the accused products, for tablets and for

6

smartphones or for Galaxy S and Galaxy SII line of phones as reflected on a quarterly or monthly

7

basis.

8
9

3. Based on standard accounting and financial conventions, these reports should
show both standard costs for the components that make up the phones and allocations of other

10

expenses (such as freight, variances, and manufacturing overhead) to calculate a consolidated cost

11

of goods sold.

12
13

D. Reports reflecting operating costs and profitability with respect to smartphones:
1. Consolidated reports provided to U.S. and corporate management reflecting any

14

expenses not included in costs of goods sold that Samsung incurs or allocates to U.S. smartphone

15

or tablet products, including any research and development expenses, sales and marketing

16

expenses, and general and administrative expenses.

17
18
19
20
21

2. Consolidated reports that reflect how such expenses for the accused products
compare to U.S. expenses for mobile phones more generally and/or to worldwide expenses.
3. Consolidated reports on operating profit for any of the accused phones, for
smartphones, and for mobile phones more broadly reflecting the foregoing expenses.
E. Audited or unaudited financial reports for each entity named as a defendant in this case

22

and for each Samsung entity that sells any of the accused products, audited (or, if audited are

23

unavailable, unaudited) financial reports (including at a minimum an income statement, balance

24

sheet, cash flow statement and all associated notes) for each quarter or fiscal year ending on or

25

after March 31, 2009.

26
27

F. Documents relating to any financial valuation of the intellectual property in suit. The
foregoing should include any reports on in-process research and development calculations that

28
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include technology related to any accused products, any valuation used for balance sheet

2

valuations, amortization, or a write-off of intangible assets.

3
4

G. Documents sufficient to show relevant expense for research and development and to
design around any patent, including:

5
6

1. Any consolidated reports on the expense Samsung incurred to develop any of
the accused products.

7
8

2. Any reports or financial information that reflect the actual or projected expense
to design around any patent.

9
10

H. Any quarterly, annual or multi-year business plans prepared for the accused products
or the divisions of Samsung that sell the accused products.

11
12

IT IS SO ORDERED.
Dated:

By:
Honorable Paul S. Grewal, U.S.M.J.

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