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

Filing 922

Administrative Motion to File Under Seal Samsung's Motion for Clarification Regarding the COurt's May 4, 2012 Order filed by Samsung Electronics America, Inc.(a New York corporation), Samsung Electronics Co. Ltd., Samsung Telecommunications America, LLC(a Delaware limited liability company). (Attachments: #1 Declaration of Joby Martin In Support of Samsung's Motion to File Documents Under Seal, #2 Exhibit Samsung's Motion For Clarification Regarding the Court's May 4, 2012 Order (Redacted), #3 Declaration of Mark TUng In Support of Samsung's Motion for Clarification (Redacted), #4 Exhibit 1 to the Tung Declaration, #5 Exhibit 2 to the Tung Declaration, #6 Exhibit 3 to the Tung Declaration, #7 Exhibit 4 to the Tung Declaration, #8 Exhibit 5 to the Tung Declaration, #9 Exhibit 6 to the Tung Declaration, #10 Exhibit 7 to the Tung Declaration, #11 Exhibit 8 to the Tung Declaration, #12 Exhibit 9 to the Tung Declaration, #13 Exhibit 10 to the Tung Declaration, #14 Exhibit 11 to the Tung Declaration, #15 Exhibit 12 to the Tung Declaration, #16 Exhibit 13 to the Tung Declaration, #17 Exhibit 14 to the Tung Declaration, #18 Exhibit 15 to the Tung Declaration, #19 Exhibit 16 to the Tung Declaration, #20 Exhibit 17 to the Tung Declaration, #21 Exhibit 18 to the Tung Declaration, #22 Proposed Order Granting Samsung's Administrative Motion to FIle Documents Under Seal)(Maroulis, Victoria) (Filed on 5/15/2012)

1 QUINN EMANUEL URQUHART & SULLIVAN, LLP
Charles K. Verhoeven (Cal. Bar No. 170151)
 [e-mail]
50 California Street, 22nd Floor
 San Francisco, California 94111
Telephone: [phone]
 Facsimile: [phone]
 Kevin P.B. Johnson (Cal. Bar No. 177129)
[e-mail]
 Victoria F. Maroulis (Cal. Bar No. 202603)
[e-mail]
th
 555 Twin Dolphin Drive 5 Floor
Redwood Shores, California 94065
 Telephone: [phone]
Facsimile: [phone]

Michael T. Zeller (Cal. Bar No. 196417)
 [e-mail]
865 S. Figueroa St., 10th Floor
 Los Angeles, California 90017
Telephone: [phone]
 Facsimile: [phone]
 Attorneys for SAMSUNG ELECTRONICS
CO., LTD., SAMSUNG ELECTRONICS
 AMERICA, INC. and SAMSUNG
TELECOMMUNICATIONS AMERICA, LLC



UNITED STATES DISTRICT COURT



NORTHERN DISTRICT OF CALIFORNIA, SAN JOSE DIVISION

 APPLE INC., a California corporation,



CASE NO. 11-cv-01846-LHK

Plaintiff,
vs.

 SAMSUNG ELECTRONICS CO., LTD., a
Korean business entity; SAMSUNG
 ELECTRONICS AMERICA, INC., a New
York corporation; SAMSUNG
 TELECOMMUNICATIONS AMERICA,
LLC, a Delaware limited liability company,

Defendants.


SAMSUNG’S MOTION FOR
CLARIFICATION REGARDING THE
COURT’S MAY 4, 2012 ORDER (DKT
NO. 898)
Date:
Time:
Place:
Judge:

June 19, 2012
10:00 a.m.
Courtroom 5, 4th Floor
Hon. Paul S. Grewal




02198.51855/4750272.6

PUBLIC REDACTED VERSION

Case No. 11-cv-01846-LHK
SAMSUNG’S MOTION FOR CLARIFICATION REGARDING THE COURT'S MAY 4, 2012 ORDER

1

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 June 19, 2012, at 10:00 a.m., or as soon as the matter

4 may be heard by the Honorable Paul S. Grewal in Courtroom 5, United States District Court for
5 the Northern District of California, Robert F. Peckham Federal Building, 280 South 1st Street, San
6 Jose, CA 95113, Samsung Electronics Co., Ltd., Samsung Electronics America, Inc., and Samsung
7 Telecommunications America, LLC (collectively “Samsung”) shall and hereby do move the Court
8 for an order clarifying its order of May 4, 2012 (Dkt No. 898) concerning introduction of evidence
9 of source code at trial.
10

In particular, Samsung seeks an Order clarifying that the May 4, 2012 Order permits

11 Samsung to introduce at trial:
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1. Versions of source code produced on or before December 31, 2011 as evidence of
Samsung’s design-around efforts; and
2. Evidence of design-arounds and non-infringing alternatives to the ‘381 and ‘163
patents other than source code produced after December 31, 2011.

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1 I.

INTRODUCTION

2

On May 4, 2012, the Court entered an Order granting Apple’s motion for sanctions relating

3 to Samsung’s production of source code after December 31, 2011, the deadline set by the Court
4 for the production of the source code for the Samsung accused products. (Dkt. No. 898.)

The

5 Court—understanding that Samsung had not produced any source code by December 31, 2011
6 relating to its design-around efforts—precluded Samsung from “offering any evidence of its
7 design-around efforts” for the ‘381, ‘163 and ‘891 patents. (Id. at 9.) However, the Order
8 permits Samsung to rely “on the versions of code that were produced on or before December 31,
9 2011.”
10

(Id.)
Samsung brings this motion to clarify two aspects of the Order.

First, as Apple admitted

11 during the hearing on its motion for sanctions, Samsung produced source code prior to the Court’s
12 deadline that included the “blue glow” design-around to the ‘381 patent. Following the hearing,
13 Samsung discovered that its timely production of source code on December 30, 2011 included the
14 blue glow source code. Apple’s experts inspected and printed this blue glow design-around
15 source code within days of the Court’s deadline, and relied on it in their expert reports.

Thus,

16 Samsung had in fact produced evidence of its design-around efforts in compliance with the
17 Court’s Order.

Such timely-produced evidence was never the subject of Apple’s motion, and

18 Apple has no argument of prejudice based on this evidence. Samsung therefore seeks
19 clarification that the Order permits Samsung to use at trial evidence of the blue glow source
20 produced prior to December 31, 2011.
21

Second, Samsung seeks clarification that the Order is limited to source code produced after

22 the December 31 deadline, as opposed to any evidence of design-arounds or non-infringing
23 alternatives generally. For instance, Samsung provided timely interrogatory responses and other
24 non-source code discovery identifying additional design-arounds and non-infringing alternatives
25 that were not implemented into commercially released products prior to December 31.

Because

26 Apple has no legitimate claim that this discovery violated the Court’s Order, Samsung should be
27 entitled to introduce non-source code evidence—including physical evidence, publicly available
28 products, discovery responses, documentary evidence, expert testimony, and admissions of
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1 Apple’s technical experts that alternatives do not infringe Apple’s patents—relating to these
2 alternative technologies.

Apple’s Motion never sought sanctions on such non-source code

3 evidence, and as a result it was not the subject of the briefing and hearing.
4

Samsung will fully comply with the Court’s preclusive sanctions order, but respectfully

5 seeks clarification of the Court’s Order to confirm that Samsung may offer timely-produced
6 source code or non-source code evidence produced during the course of discovery as evidence of
7 actual or potential ways to design around the ‘381, ‘163 and ‘891 patents.1
8 II.

BACKGROUND

9

On March 9, 2012, Apple filed a Rule 37(b) motion seeking an order precluding Samsung

10 from presenting, using or relying on any source code that was not produced by the December 31,
11 2011 deadline set by the December 22 Order.

(Dkt. No. 795.)

Apple’s motion was based on its

12 asserted inability to prove infringement in later versions of the accused products, due to
13 Samsung’s implementation of design-arounds to the ‘381, ‘163 and ‘891 patents.

(Id. at 5-6; see

14 also Declaration of Mark Tung In Support of Samsung’s Motion for Clarification (“Tung Decl.”)
15 Ex. 1 at 3:10-21.)

The Court granted Apple’s Motion on May 4, 2012, concluding that

16 preclusive sanctions were warranted because Samsung’s late production of design-around-related
17 source code “left [Apple’s experts] with no meaningful opportunity to comprehend” Samsung’s
18 design-arounds for the ‘381, ‘163 and ‘891 patents. (Dkt. 898 at 8.)

The Court specifically

19 relied on Samsung’s mistaken statement that it “did not produce any ‘blue glow’ [design-around]
20 source code until January 23, 2012.”
21

(Id. at 5.)

At the April 24, 2012 hearing, Apple revealed that Samsung’s December 30, 2011

22 production of source code for the Galaxy S II did in fact include source code for the blue glow
23 function.

(Tung Decl., Ex. 1 at 9: 1-9.)

Following the hearing, Samsung conducted a detailed

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1

Apple has recently indicated that it is no longer asserting the ‘891 patent at trial currently
scheduled to begin on July 30, 2012. (See Dkt. No 902 at 3.) Judge Koh has directed the
26 parties to enter a stipulation dismissing this and other claims without prejudice. (Dkt. No. 912 at
2.) Should Apple later re-assert the ‘891 patent, Samsung reserves the right to clarify the effect
27 of the Order on its March 10, 2012 production of source code for its ‘891 design-around.
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Case No. 11-cv-01846-LHK
SAMSUNG’S MOTION FOR CLARIFICATION REGARDING THE COURT'S MAY 4, 2012 ORDER

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1

of its December 30 production of source code,
(Id. ¶ 3.) Samsung
confirmed that its December 30 source code production for at least four accused products, running
four different versions of the Android operating system, contained the blue glow function—not
just the Galaxy S II, as Apple claimed.2

(Id.) According to Samsung’s source code inspection

logs, Apple’s experts inspected the blue glow source code on January 6, 2012, and received
printouts of the code on January 9, 2012.
III.

(Id., Ex. 2.)

ARGUMENT
A.

Samsung Seeks Clarification That the Court’s Order Permits Samsung to
Introduce at Trial Evidence of Blue Glow Source Code Produced on or Before
December 31, 2011.

The Order states that Samsung is permitted to rely “on the versions of code that were
produced on or before December 31, 2011.”

(Dkt. No. 898 at 9.)

However, the Order also

provides that Samsung is precluded from “offering any evidence of its design-around efforts” for
the ‘381 patent.

(Id.) Read literally, these provisions could result in an inconsistency.

Samsung’s timely production of source code, made available for Apple’s inspection on December
30, included source code for the blue glow function as implemented in multiple accused
products—including at least the Galaxy S II, Exhibit 4G, Epic 4G and Galaxy Tab 10.1.
3.)

(Id. ¶

Apple’s experts inspected this code on January 6, 2012, and Bates-stamped printouts of this

code were in Apple’s actual possession as early as January 9, 2012—two months before the close
of discovery.

(Id. ¶ 4, Ex. 2.)

Apple’s experts have had ample time to review the blue glow

source code, and Apple has had every opportunity to conduct follow-on discovery—which it did
by questioning numerous witnesses about the blue glow function. (See, e.g., Tung Decl, Ex. 3 at
58:23 – 59:22; Ex. 4 at 119:16 – 120:21; Ex. 5 at 116:24 – 118:16; Ex. 6 at 104:13 – 105:18; Ex. 7
2

Samsung’s statement that it did not produce blue glow source code prior to December 31,
2012 referred to

(Tung Decl. ¶ 5.)

1 at 54:9 – 60:22, 69:25 – 70:13, 132:20 – 134:9, 203:25 – 204:12, 252:5 – 22.)

One possible

2 reading of the Order, however, arguably would preclude Samsung from relying on this source
3 code despite the fact that Samsung produced it to Apple in compliance with the Court Order.
4

Indeed, Apple has indicated that it interprets the Order broadly.

In deposing Dr. Michael

5 Wagner, Samsung’s damages expert, Apple apparently took the position that “Samsung would not
6 be allowed to produce evidence regarding any actual implementation of blue glow at trial,” even if
7 that evidence was produced prior to the Court’s December 31 deadline. (Tung Decl., Ex. 8 at
8 293:3 – 295:18.)

Samsung therefore requests that the Court clarify its Order to make clear that

9 Samsung is permitted to introduce evidence of its blue glow source code that was produced before
10 December 31 as evidence of its efforts to design around the ‘381 patent.
11
12
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B.

Samsung Seeks Clarification That the Court’s Order Permits Samsung to
Introduce at Trial Evidence of Design-Arounds Other Than Source Code
Produced After December 31, 2011.

The Court’s Order should be construed as only precluding evidence of source code that

14 Samsung produced after December 31, 2011—the conduct at issue in Apple’s Motion and deemed
15 prejudicial by the Order. Source code is not the only means of showing actual or potential
16 alternatives to the technology claimed by the ‘381 and ‘163 patents.

Samsung’s discovery

17 responses, expert analysis and testimony, as well as the physical devices themselves are all non18 source code evidence of such alternatives.

While Samsung believes that the Court meant to limit

19 its Order to the source code at issue in Apple’s Motion, one potential reading of the Order
20 suggests that Samsung will not be permitted to introduce any evidence of technical alternatives—
21 even non-source code evidence that Samsung timely produced to Apple, discovery that was not
22 subject to any court order, and/or alternatives that were not implemented in released products prior
23 to December 31.

Construing the Order to prelude all evidence of alternatives would far exceed

24 the relief requested by Apple, any plausible claim of prejudice, as well as the scope of the
25 sanctionable conduct

Cf. Navellier v. Sletten, 262 F.3d 923, 947 (9th Cir.2001) (“[s]anctions

26 may be warranted under Federal Rule of Civil Procedure 37(b)(2) for failure to obey a discovery
27 order as long as the established issue bears a reasonable relationship to the subject of discovery
28 that was frustrated by sanctionable conduct.”). Thus, clarification of the Order is necessary.
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i.

1

The ‘381 Patent

With respect to the ‘381 patent, source code is not necessary to determine whether the

2

3 accused products infringe.

Indeed, Apple’s expert, Dr. Ravin Balakrishnan, admitted that source

4 code is not necessary to determine whether the accused products infringe the ‘381 patent.3

(See,

5 e.g., Tung Decl., Ex. 9 at 60:23 – 63:6, 133:16 – 134:18; Ex. 10 at 41:18 – 42:2, 121:1-14; Ex. 11
6 at ¶¶ 191, 197, 198, 210, 218.)

During the preliminary injunction phase, Dr. Balakrishnan

7 analyzed the blue glow function as implemented on physical products—without the benefit of
8 source code—and testified that it did not infringe the ‘381 patent.

(Id., Ex. 9 at 166:12 – 167:21.)

9 Moreover, Apple recently revealed that it never intended to rely on “all versions” of the source
10 code—a fact that Apple withheld from this Court in the briefing and hearing on its Motion for
11 Sanctions. (See Dkt. No. 902 at 3.) (stating Apple’s intention to show infringement of all of its
12 utility patents—not just the ‘381 and ‘163 patents—with “just four versions of Samsung’s
13 operating system software.”)

Rather, Apple contends that infringement “is apparent by observing

14 the accused products in operation.” (Dkt. No. 910 at 2.)

If Apple can show infringement by

15 relying on the physical devices themselves, then Samsung should be permitted to use the physical
16 devices as evidence of the blue glow function.
17

Apple has known since very early in this litigation that the blue glow function has been or

18 can be implemented into each accused product. Apple’s expert analyzed the blue glow function
19 as early as August 2011.

(Id., Ex. 9 at 166:12 – 167:21.) Likewise, Apple’s counsel has known

20 since at least November 29, 2011 that Samsung incorporated the blue glow function in each
21 accused product.

(Tung Decl., Ex. 14.)4

In addition to the blue glow source code produced on

22
3

Although Apple’s expert testified that he based his report on physical samples of the
accused products, Apple has repeatedly refused to make these devices available to Samsung for
24 inspection. (Tung Decl., Exs. 12 – 13.) Without the opportunity to inspect the actual devices,
Samsung cannot know how many of the samples relied on by Dr. Balakrishnan include the blue
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glow function.
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4
After Samsung’s December 30, 2011 production of blue glow source code, Apple
27 expressly relied on this evidence of the blue glow in moving to compel documents relating to
Samsung’s other design-around efforts. (Dkt. No. 613 at 8-9) (“Following the initiation of this
28
(footnote continued)
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Case No. 11-cv-01846-LHK
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SAMSUNG’S MOTION FOR CLARIFICATION REGARDING THE COURT'S MAY 4, 2012 ORDER

1 December 30, Samsung has timely produced ample evidence—physical product samples, change
2 logs, deposition testimony, discovery responses—showing the date which Samsung incorporated
3 the blue glow function into the accused products. Accordingly, the first version of the stipulation
4 that Apple itself drafted—which included an express carve-out for the ‘381 patent—reflects the
5 fact that Apple was perfectly capable of determining that each product incorporates the blue glow
6 function, and that the release version of source code is not representative with respect to the ‘381
7 patent. (Id., Ex. 15.)

Apple cannot claim surprise in response to non-source code evidence that

8 the blue glow has been or can be implemented into each accused product.

Apple therefore

9 suffered no prejudice whatsoever in connection with blue glow, and certainly no prejudice that
10 would justify construing the May 4 Order to preclude any and all evidence of it—including timely
11 produced non-source code evidence.
ii.

12
13

The ‘163 Patent

Samsung has timely disclosed to Apple numerous non-infringing substitutes to the

14 invention claimed by the ‘163 patent.

For example, in response to Apple’s Interrogatory 16,

15 Samsung identified numerous alternatives—either known to Samsung or implemented by
16 Samsung—that do not infringe the ‘163 patent.5

(Id., Ex. 16.)

With the exception of the

17 design-around source code produced on March 12, 2012, none of these alternatives existed in the
18 accused products prior to December 31.

Apple’s expert, Dr. Karan Singh, testified that

19
20 lawsuit, Samsung attempted to design around Apple’s ‘381 patent by incorporating a “blue glow”
functionality into its products as a substitute for the ‘381 patent’s “rubber-banding” feature.”)
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5

These alternatives include

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(Tung Decl., Ex 16.)

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1 alternatives disclosed in Samsung’s response to Interrogatory 16—including “not translating a
2 web page so as to substantially center a second box on the touch screen display while a first box is
3 enlarged”—would not infringe the ‘163 patent. (Id., Ex. 17 at 162:15 – 168:5.)

Additionally,

4 Dr. Singh relies on documents produced to Apple on December 29, 2012 that show
5

(See id., Ex. 18

6 at ¶ 281.) The Court should clarify that the Order does not preclude such timely disclosed
7 evidence of non-infringing alternatives to the ‘163 patent.
8

Technical alternatives that have not been implemented—although irrelevant to Apple’s

9 asserted need to show “continuing infringement”—are relevant to a host of issues. For example,
10 a patentee must prove the absence of non-infringing substitutes in order to recover lost profits.
11 Panduit Corp. v. Stahlin Bros. Fibre Works, Inc., 575 F.2d 1152, 1156 (6th Cir. 1978).

The

12 Federal Circuit has recognized that a non-infringing substitute defeats a claim to lost profits even
13 if the defendant has not actually implemented it—and even if the substitute is not on the market.
14 Grain Processing Corp. v. American Maize-Products Co., 185 F.3d 1341, 1354 (Fed. Cir. 1999).
15 Courts have likewise held that the potential to avoid infringement by developing and
16 implementing non-infringing substitutes is relevant to the determination of a reasonable royalty.
17 See, e.g., Panduit Corp., 575 F.2d at 1160-62; Parker-Hannifin Corp. v. Champion Labs., Inc.,
18 2008 WL 3166318, at *16 (N.D. Ohio, Aug. 4, 2008) (“Also probative is what defendant would
19 have spent to design around the patent and launch its own non-infringing product and how quickly
20 that design could be implemented.”)

Finally, Samsung’s later development of non-infringing

21 alternatives to the ‘163 patent may also be relevant in the context of proceedings to enforce any
22 permanent injunction that is ultimately entered in this case. Semitool, Inc. v. Dynamic Micro Sys.
23 Semiconductor Equip. GMBH, 2005 WL 350954, at *1 (N.D. Cal. Feb. 14, 2005).

The Court

24 should clarify that the Order only precludes Samsung from relying on the design-around source
25 code produced on March 12, 2012, and that Samsung remains free to raise non-source code
26 evidence of other substitutes for purposes other than establishing liability for infringement.
27 IV.

CONCLUSION

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1

For the foregoing reasons, Samsung respectfully requests the Court to clarify that pursuant

2 to its May 4, 2012 order (Dkt No. 898), Samsung’s is permitted introduce at trial:
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1. Versions of source code produced on or before December 31, 2011 as evidence of
Samsung’s design-around efforts; and
2. Evidence of design-arounds and non-infringing alternatives to the ‘381 and ‘163
patents other than source code produced after December 31, 2011.

7
8 DATED: May 15, 2012
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QUINN EMANUEL URQUHART &
SULLIVAN, LLP
By

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

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