Apple Inc. v. Samsung Electronics Co. Ltd. et al
Filing
934
Administrative Motion to File Under Seal 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 Proposed Order Granting Motion to Seal, #2 Declaration in Support of Motion to Seal, #3 Exhibit 1 to Ward Declaration ISO Motion to Seal, #4 Proposed Order Granting Motion to Strike, #5 Declaration of Diane Hutnyan ISO Motion to Strike, #6 Declaration of Jeffrey Johnson ISO Motion to Strike)(Maroulis, Victoria) (Filed on 5/17/2012) Modified on 5/21/2012 attachment #2 sealed pursuant to General Order No. 62 (dhm, COURT STAFF).
1 QUINN EMANUEL URQUHART & SULLIVAN, LLP
Charles K. Verhoeven (Bar No. 170151)
2 charlesverhoeven@quinnemanuel.com
50 California Street, 22nd Floor
3 San Francisco, California 94111
Telephone: (415) 875-6600
4 Facsimile: (415) 875-6700
5 Kevin P.B. Johnson (Bar No. 177129)
kevinjohnson@quinnemanuel.com
6 Victoria F. Maroulis (Bar No. 202603)
victoriamaroulis@quinnemanuel.com
th
7 555 Twin Dolphin Drive, 5 Floor
Redwood Shores, California 94065-2139
(650) 801-5000
8 Telephone:
Facsimile:
(650) 801-5100
9
Michael T. Zeller (Bar No. 196417)
10 michaelzeller@quinnemanuel.com
865 S. Figueroa St., 10th Floor
11 Los Angeles, California 90017
Telephone: (213) 443-3000
12 Facsimile: (213) 443-3100
13 Attorneys for SAMSUNG ELECTRONICS CO.,
LTD., SAMSUNG ELECTRONICS AMERICA,
14 INC. and SAMSUNG
TELECOMMUNICATIONS AMERICA, LLC
15
16
UNITED STATES DISTRICT COURT
17
NORTHERN DISTRICT OF CALIFORNIA, SAN JOSE DIVISION
18
19 APPLE INC., a California corporation,
Plaintiff,
20
21
CASE NO. 11-cv-01846-LHK
vs.
22 SAMSUNG ELECTRONICS CO., LTD., a
Korean business entity; SAMSUNG
23 ELECTRONICS AMERICA, INC., a New
York corporation; SAMSUNG
24 TELECOMMUNICATIONS AMERICA,
LLC, a Delaware limited liability company,
25
Defendants.
26
27
SAMSUNG’S NOTICE OF MOTION AND
MOTION TO STRIKE EXPERT
TESTIMONY BASED ON UNDISCLOSED
FACTS AND THEORIES;
MEMORANDUM OF POINTS AND
AUTHORITIES IN SUPPORT THEREOF
Date:
Time:
Place:
Judge:
June 26, 2012
10:00 a.m.
Courtroom 5, 4th Floor
Hon. Paul S. Grewal
FILED UNDER SEAL
28
Case No. 11-cv-01846-LHK
SAMSUNG’S NOTICE OF MOTION AND MOTION TO STRIKE
1
TABLE OF CONTENTS
2
Page
3 NOTICE OF MOTION AND MOTION .......................................................................................... 1
4 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF ........................ 1
5 I.
PRELIMINARY STATEMENT ........................................................................................... 1
6 II.
STATEMENT OF RELEVANT FACTS ............................................................................. 2
7
A.
Apple’s Initial Disclosures and Infringement Contentions ....................................... 2
8
B.
Apple’s Experts Rely on Facts That Were Withheld in Discovery........................... 4
9
1.
Dr. Michel Maharbiz ..................................................................................... 4
10
2.
Mr. Peter Bressler .......................................................................................... 4
11
3.
Dr. Susan Kare .............................................................................................. 5
12
4.
Dr. Sanjay Sood............................................................................................. 6
13
5.
Dr. Tony Givargis ......................................................................................... 6
14
6.
Dr. Ravin Balakrishnan ................................................................................. 6
15
7.
Terry Musika ................................................................................................. 7
16
8.
Russell Winer ................................................................................................ 8
17
C.
Apple’s Experts Assert Undisclosed Theories on Infringement ............................. 10
18
1.
Dr. Michel Maharbiz ................................................................................... 10
19
2.
Dr. Tony Givargis ....................................................................................... 10
20 III.
ARGUMENT AND CITATION OF AUTHORITY .......................................................... 11
21
A.
Apple’s Nondisclosure of Critical Facts Violates the Federal Rules of Civil
Procedure and the Case Management Order ........................................................... 11
B.
Apple’s Untimely Assertion of New Infringement Contentions Violates the
Patent Local Rules, the Federal Rules of Civil Procedure, and the Court’s
Case Management Order ......................................................................................... 14
C.
Apple’s Failure to Comply with the Federal Rules of Civil Procedure, the
Patent Local Rules, and the Court’s Scheduling Order Is Neither Harmless,
Nor Justified ............................................................................................................ 15
22
23
24
25
26
1.
Samsung Suffered Significant Prejudice from Apple’s Conduct ................ 16
2.
Samsung Is Unable to Cure the Prejudice Caused by Apple’s
Conduct ....................................................................................................... 17
27
28
Case No. 11-cv-01846-LHK
-iSAMSUNG’S NOTICE OF MOTION AND MOTION TO STRIKE
1
3.
Likelihood of Disruption of the Trial .......................................................... 17
2
4.
Apple’s Failure to Disclose Was Willful .................................................... 17
3 IV.
CONCLUSION ................................................................................................................... 18
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Case No. 11-cv-01846-LHK
-iiSAMSUNG’S NOTICE OF MOTION AND MOTION TO STRIKE
1
TABLE OF AUTHORITIES
2
3
Page
Cases
4 Ash v. Ford Motor Co.,
2008 WL 1745545 (N.D. Miss. Apr. 11, 2008) .........................................................................10
5
Avago Techs. Gen. IP Ltd. v. Elan Microelectronics Corp.,
6
2007 WL 2433386 (N.D. Cal. Aug. 22, 2007) .............................................................................7
7 DCG Sys. v. Checkpoint Techs., LLC,
2012 WL 1309161 (N.D. Cal. Apr. 16, 2012) .............................................................................7
8
Dollar v. Long Mfg., N. C., Inc.,
9
561 F.2d 613 (5th Cir. 1977) ......................................................................................................10
10 Dominguez v. Excel Mfg., Inc.,
2010 WL 5300863 (N.D. Cal. Dec. 20, 2010) .........................................................................5, 9
11
Guifu Li v. A Perfect Day Franchise, Inc.,
12
2012 WL 929784 (N.D. Cal. Mar. 19, 2012) ...........................................................................4, 5
13 Informatica Corp. v. Bus. Objects Data Integration, Inc.,
2006 WL 463549 (N.D. Cal. Feb. 23, 2006) ................................................................................8
14
InterTrust Techs. Corp. v. Microsoft Corp.,
15
2003 WL 23120174 (N.D. Cal. Dec. 1, 2003) .............................................................................7
16 Lucent Techs., Inc. v. Gateway, Inc.,
580 F.3d 1301 (Fed. Cir. 2009) ....................................................................................................9
17
MEMC Elec. Materials v. Mitsubishi Materials Silicon Corp.,
18
2004 WL 5363616 (N.D. Cal. Mar. 2, 2004) ...............................................................................7
19 Monolithic Power Sys., Inc. v. O2 Micro Int'l Ltd.,
2009 WL 3353306 (N.D. Cal. Oct. 16, 2009) ..............................................................................8
20
O2 Micro Int'l Ltd. v. Monolithic Power Sys., Inc.,
21
467 F.3d 1355 (Fed. Cir. 2006) ....................................................................................................8
22 ResQNet.com, Inc. v. Lansa, Inc.,
594 F.3d 860 (Fed. Cir. 2010) ......................................................................................................9
23
Uniloc USA, Inc. v. Microsoft Corp.,
24
632 F.3d 1292 (Fed. Cir. 2011) ....................................................................................................9
25 Volterra Semiconductor Corp. v. Primarion, Inc.,
796 F. Supp. 2d 1025 (N.D. Cal. 2011) .......................................................................................8
26
Von Brimer v. Whirlpool Corp.,
27
536 F.2d 838 (9th Cir. 1976) ....................................................................................................4, 5
28
Case No. 11-cv-01846-LHK
-iiiSAMSUNG’S NOTICE OF MOTION AND MOTION TO STRIKE
1 Yeti by Molly, Ltd. v. Deckers Outdoor Corp.,
259 F.3d 1101 (9th Cir. 2001) ..................................................................................................5, 9
2
3
Statutes
4 Fed. R. Civ. P. 26 ...............................................................................................................1, 3, 4, 6, 8
5 Fed. R. Civ. P. 37 ...................................................................................................................3, 4, 5, 9
6
Miscellaneous
7
Patent Local Rule 3–1 ..................................................................................................................3, 22
8
Patent Local Rule 3–6
...............................................................................................................22
Patent Local Rule 3–7
..............................................................................................................22
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Case No. 11-cv-01846-LHK
-ivSAMSUNG’S NOTICE OF MOTION AND MOTION TO STRIKE
1
NOTICE OF MOTION AND MOTION
2
TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD:
3
PLEASE TAKE NOTICE that on Tuesday, June 26, 2012, at 10:00 a.m., or as soon
4 thereafter as the matter may be heard by the Honorable Paul S. Grewal in Courtroom 5, United
5 States District Court for the Northern District of California, Robert F. Peckham Federal Building,
6 280 South 1st Street, San Jose, CA 95113, Samsung Electronics Co., Ltd., Samsung Electronics
7 America, Inc., and Samsung Telecommunications America, LLC (collectively “Samsung”) will,
8 and hereby does, move the Court for an order striking portions of Apple’s expert reports that rely
9 on previously undisclosed facts or that assert new theories of infringement or invalidity.
10
This Motion is made pursuant to Fed. R. Civ. P. 26 and 37, and Patent Local Rules 3-1 and
11 3-3, and is made on the grounds that Apple expert reports rely on facts and theories that Apple
12 improperly failed to disclose during discovery, causing prejudice to Samsung in its ability to
13 prepare for trial.
14
This motion is based on this Notice of Motion, the supporting Memorandum of Points and
15 Authorities, the Declarations of Diane C. Hutnyan, Christopher E. Price, Jeffrey Johnson, and
16 James J. Ward dated May 17, 2012, together with all accompanying exhibits, all pleadings on file
17 in this action, and such other evidence or argument as may be presented at or before the time this
18 Motion is deemed submitted by the Court, and such matters of which this Court may take judicial
19 notice.
20
21
22
23
24
25
26
27
28
Case No. 11-cv-01846-LHK
-1SAMSUNG’S NOTICE OF MOTION AND MOTION TO STRIKE
1 DATED: May 17, 2012
2
QUINN EMANUEL URQUHART &
SULLIVAN, LLP
3
4
5
6
7
8
9
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
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Case No. 11-cv-01846-LHK
-2SAMSUNG’S NOTICE OF MOTION AND MOTION TO STRIKE
1
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF
2 I.
PRELIMINARY STATEMENT
3
Although the Federal Rules of Civil Procedure and the Patent Local Rules establish clear
4 guidelines for the disclosure of contentions and facts supporting expert opinions, Apple has failed
5 to comply with both in this case. Apple’s experts have widely relied on materials that were never
6 produced to Samsung during fact discovery, and cited evidence that Samsung saw for the first
7 time when it reviewed the expert reports.
8
Dr. Maharbiz, Apple’s technical expert on its ‘607 patent, [REDACTED]. But Apple
9 refused to disclose even the very existence of these tests until it was impossible for Samsung to
10 investigate critical facts relating to them and the conclusions reached. Likewise, Dr. Balakrishnan,
11 another one of Apple’s patent infringement experts, examined Samsung devices to reach his
12 infringement opinion on Apple’s ‘381 patent. However, not only could he not name what version
13 of the relevant software he examined, neither he nor Apple ever produced the devices he examined
14 for review by Samsung.
In a similar way, Apple’s failure to disclose licensing agreements that
15 its damages expert, Mr. Musika, relied on in his report deprived Samsung of any ability to test
16 Apple’s conclusory representations about its licensing agreement payments, and has left Samsung
17 with no ability to investigate or properly rebut his conclusions on reasonable royalties, a central
18 plank in any reasonable royalty analysis. Apple has kept this critical information from Samsung
19 despite unambiguous obligations to produce it under the Federal Rules and the Court’s Scheduling
20 Order, all to Samsung’s prejudice.
21
Apple has similarly deviated from the Patent Local Rules’ requirement that infringement
22 contentions be disclosed well in advance of the close of discovery. For example, Dr. Maharbiz
23 offers a theory of infringement that was not disclosed in Apple’s infringement contentions. Apple
24 experts have also disclosed non-infringement and infringement theories that were not disclosed in
25 response to Samsung interrogatories. For example, Apple’s expert on Samsung’s ‘711 patent
26 introduced an entirely new non-infringement theory that was not disclosed in response to a
27 Samsung interrogatory seeking all such theories. Rather than follow the rules, Apple chose to
28 disclose new infringement theories after the close of fact discovery.
But if infringement
Case No. 11-cv-01846-LHK
-1SAMSUNG’S NOTICE OF MOTION AND MOTION TO STRIKE
1 contentions can be changed at will after the close of fact discovery, then parties have every
2 incentive to invert the discovery process, and delay the assertion of true theories until after fact
3 discovery closes for strategic gain. This is the exact path Apple chose to follow.
4
Apple’s conduct is a clear violation of a host of discovery rules that set out unambiguous
5 obligations to make discovery an orderly matter. Adherence to these rules is even more critical in
6 a highly expedited proceeding like this one. Because Apple has violated its discovery obligations
7 under the applicable Federal Rules of Civil Procedure and the Patent Local Rules, and presented
8 novel facts from eight experts and two entirely new contentions that have never before been
9 disclosed to Samsung, all to Samsung’s extreme prejudice, the Court should strike those portions
10 of Apple’s expert reports that rely on the previously undisclosed facts and purport to assert new
11 theories regarding invalidity or infringement.
12 II.
STATEMENT OF RELEVANT FACTS
13
A.
14
Apple was obligated under the Federal Rules, the Patent Local Rules, and the Court’s
Apple’s Initial Disclosures and Infringement Contentions
15 Scheduling Order to disclose all relevant facts and contentions to Samsung pursuant to the
16 following schedule:
17
•
August 26, 2011: Apple serves its infringement contentions
18
•
March 8, 2012: Fact discovery closes
19
•
March 22, 2012 and April 16, 2012: Experts serve their reports and rebuttals,
20
respectively, based on the disclosed facts.
21 Dkt. No. 187 (Aug. 25, 2011 Scheduling Order); see Fed. R. Civ. P. 26(a); Patent Local R. 3-1.
22
These rules exist to ensure that the parties will not be sandbagged with last-minute
23 disclosures or game-changing alterations in theories of the case. See Fed. R. Civ. P. 37(c)(1) (any
24 party “fail[ing] to provide information . . . as required by Rule 26(a) or (e) . . . is not allowed to
25 use that information or witness to supply evidence on a motion, at a hearing, or at a trial”).
26 Similarly, Patent Local Rule 3-1 explicitly requires that parties identify all infringement
27 contentions they intend to assert by no later than 14 days after the Case Management Conference.
28 The parties cannot change their contentions without seeking leave of Court and showing good
Case No. 11-cv-01846-LHK
-2SAMSUNG’S NOTICE OF MOTION AND MOTION TO STRIKE
1 cause. See Patent Local R. 3-1, 3-3, 3-6 (“Amendment of the Infringement Contentions [] may be
2 made only by order of the Court upon a timely showing of good cause.”).
3
Apple served its infringement contentions in August 2011. (See May 17, 2012 Ward
4 Declaration (“Ward Dec.”), Ex. A (Apple’s Disclosure of Asserted Claims & Infringement
5 Contentions, Aug. 26, 2011).) These contentions purported to set forth how Samsung’s devices
6 allegedly infringe Apple’s patents. (See id., Ex. A, at 2 (listing which “Accused Instrumentalities”
7 infringe Apple’s asserted patents).) By August 26 of last year, Apple’s disclosures should have
8 laid out the entirety of its arguments in this case.
9
In addition, Samsung served Apple with detailed requests for production (“RFP”) and
10 interrogatories. For example, Samsung’s RFPs sought:
11 •
12
13
14
For each person You intend to rely on as an expert witness, all DOCUMENTS concerning
. . . (d) each and every DOCUMENT the expert has reviewed or relied upon in
formulating his or her opinion and each and every DOCUMENT the expert will assert
supports each of his or her opinions and each fact; and (e) all reports prepared by the
expert. (RFP No. 47.)
•
All DOCUMENTS concerning the infringement or non-infringement of any of the claims
of any of the APPLE IP by any entity or person. (RFP No. 122.)
16 •
All DOCUMENTS regarding any instrumentalities that APPLE contends or has contended
infringe any of the APPLE IP. (RFP No. 123.)
15
17
18 •
19
20
21
All DOCUMENTS and things relating to APPLE’S analysis, consideration, or evaluation
of whether any SAMSUNG product, device, apparatus, method, process, or system
infringes any of the APPLE IP, including, without limitation, all documents and things
concerning any test, evaluation, or reverse engineering of any SAMSUNG product, device,
apparatus, method, process, or system. (RFP No. 127.)
(Ward Dec., Ex. B (Samsung’s First Set of Requests for Production to Apple, Aug. 3, 2011).)
22
Samsung’s Interrogatories were similarly detailed, requiring that Apple:
23
24
25
26
•
IDENTIFY all facts RELATING TO studies, including formal or informal analysis,
investigation, surveys, focus groups, consumer research, or other information or reports
that relate to, support, or refute YOUR claims in this action, including, for each such study,
when it was commissioned, conducted, and completed, by whom it was conducted, and its
conclusions. (Interrogatory No. 16.)
27 (Ward Dec., Ex. C (Samsung’s First Set of Interrogatories to Apple, Aug. 3, 2011).)
Apple’s responses to these and Samsung’s other discovery requests should have disclosed
28
Case No. 11-cv-01846-LHK
-3SAMSUNG’S NOTICE OF MOTION AND MOTION TO STRIKE
1 all of the facts upon which Apple’s experts base their opinions. Expert opinions were submitted
2 after the close of fact discovery because they depend on facts disclosed during fact discovery.
Apple’s Experts Rely on Facts That Were Withheld in Discovery1
3
B.
4
Apple’s experts rely on a host of facts that were not disclosed during fact discovery,
5 despite being directly responsive to Samsung’s discovery requests. Many of these facts serve as
6 the foundation for their opinions. The first time that Samsung saw these materials was when
7 Apple’s experts used them in their reports or discussed them during their deposition.
8
1.
9
Dr. Michel Maharbiz
On March 22, 2012, Apple served Dr. Maharbiz’s report, which contains his infringement
10 opinions on Apple’s ‘607 patent. [REDACTED]
11
Even though the SEM Reports are responsive to numerous discovery requests (see, e.g.,
12 Ward Dec., Ex. B (RFP Nos. 47(d), 97, 122, 123, 127)), nowhere in any of its disclosures or
13 discovery responses did Apple ever mention [REDACTED]. Apple also failed to disclose the
14 [REDACTED]in its Infringement Contentions. Indeed, even as late as March 9, 2012 – one day
15 after the close of fact discovery and the date that appears on the [REDACTED] – Apple served
16 corrected amended interrogatory responses to Samsung’s Interrogatory Nos. 16 and 18, which still
17 did not disclose the existence of the [REDACTED]. (Ward Dec., Ex. E (Apple’s Corrected
18 Amended Objections and Responses to Samsung’s Interrogatory Nos. 4, 6, 7, 16, 17, 18 (dated
19 March 9, 2012).)
20
2.
21
Mr. Peter Bressler
Mr. Bressler’s March 22 report on infringement opines on the [REDACTED]. The devices
22 that Mr. Bressler and Apple consider to be commercial alternatives are the central thrust of his
23
24
1
Samsung’s motion is filed in reliance on the eventual formal stipulation of dismissal of
certain claims, pursuant to Apple’s Statement Identifying Claims It Will Assert at Trial. (Dkt. No.
25
907 (filed May 7, 2012).) Other Apple experts rely on undisclosed materials and assert novel
26 theories in their reports, but those experts’ opinions are for claims that Apple states that it intends
to “drop.” If, however, Apple does not “drop” those claims, as it has indicated, Samsung reserves
27 the right to revise this motion to seek preclusion of any additional report that improperly asserts an
opinion.
28
Case No. 11-cv-01846-LHK
-4SAMSUNG’S NOTICE OF MOTION AND MOTION TO STRIKE
1 report, and form the basis for any opinion that Apple’s products [REDACTED]. Samsung’s RFP
2 No. 127 sought “[a]ll DOCUMENTS and things relating to APPLE’S analysis, consideration, or
3 evaluation of whether any SAMSUNG product, device, apparatus, method, process, or system
4 infringes any of the APPLE IP, including, without limitation, all documents and things concerning
5 any test, evaluation, or reverse engineering of any SAMSUNG product, device, apparatus, method,
6 process, or system. (Ward Dec., Ex. B.) Yet Apple never disclosed numerous devices during
7 discovery that Mr. Bressler considered to be adequate for comparison, including:
8
•
[REDACTED]
9
Apple never disclosed any of these devices to Samsung, nor did it amend any of its
10 discovery responses in order to provide a proper basis for its expert’s opinion.
11
In addition, Interrogatory No. 72 required Apple to state fully and in detail all facts
12 supporting its contention of design patent infringement. (Ward Dec., Ex. G (Samsung’s Fourth
13 Set of Interrogatories to Apple, Feb. 7, 2012).) [REDACTED].
14
15
3.
Dr. Susan Kare
Apple retained Dr. Kare to opine on possible alternative designs to Apple’s design patents.
16 [REDACTED] Samsung’s interrogatories clearly requested that Apple “fully and in detail [state]
17 all facts that support YOUR contention as to the non-functionality of any claimed feature, element,
18 or combination of features and elements.” (Ward Dec., Ex. G (Interrogatory No. 68).) Yet Apple
19 never produced or disclosed any of the following devices that Dr. Kare relies upon:
20
•
21
(Ward Dec., Ex. I at ¶ 53, 54 and 62.) Dr. Kare also discusses Samsung icons that Apple
[REDACTED]
22 has never before identified as being subject to a trademark or trade dress claim. [REDACTED]
23 Samsung’s Interrogatory Nos. 70-71 requested that Apple, for all Apple trade dress and Apple
24 trademarks “state fully and in detail all facts that support YOUR contention that SAMSUNG is
25 diluting or has diluted such trade dress,” as well as “all facts that support YOUR contention that
26 the SAMSUNG product or product packaging is likely to cause confusion, cause mistake, or
27 deceive consumers as to the affiliation, connection, or association of SAMSUNG with APPLE, or
28 as to origin, sponsorship, or approval by APPLE of SAMSUNG’S goods, services or commercial
Case No. 11-cv-01846-LHK
-5SAMSUNG’S NOTICE OF MOTION AND MOTION TO STRIKE
1 activities.” (Ward Dec., Ex. G.)
Apple never identified any of these icons as being disputed, and
2 indeed never noted them at all until Dr. Kare’s report.
3
4
4.
Dr. Sanjay Sood
Dr. Sood’s report expresses opinions [REDACTED]. To support his opinions, Dr. Sood
5 relies heavily on surveys he conducted concerning consumer purchases of basic household items,
6 such as tape dispensers and wall clocks. [REDACTED] Yet Apple has never produced either the
7 questions in the survey questionnaires or the questionnaires themselves. [REDACTED]. Without
8 the survey questionnaires and responses, Samsung is greatly prejudiced in its ability to challenge
9 Dr. Sood's opinions regarding [REDACTED] and his application of those opinions to the products
10 at issue in this lawsuit.
11
Apple’s disclosures and discovery responses do not identify these materials, nor did Apple
12 ever inform Samsung that its expert would rely on them.
13
14
5.
Dr. Tony Givargis
Dr. Givargis’s March 22 [REDACTED]. Yet, this document was never listed anywhere in
15 Apple’s Invalidity Contentions on the ‘711 patent, despite the fact that the contentions list many
16 other materials [REDACTED].
17
18
6.
Dr. Ravin Balakrishnan
The ’381 patent covers the “bounceback” feature, where the screen appears to “bounce”
19 when a user attempts to scroll past the edge of the viewable area of an electronic document on the
20 display. (Ward Dec., Ex. P (Balakrishnan Report, March 22, 2012, at ¶ 45).) Dr. Balakrishnan
21 examined 27 Samsung products to determine whether they infringed the ‘381 patent.
Dr.
22 Balakrishnan’s product examination was one of the primary bases for his conclusions as to
23 whether Samsung’s products infringed the ‘381 patent, and the only physical inspection of devices
24 that took place.
(Id. at ¶¶ 14-19.)
Apple has refused to make these devices available for
25 inspection. [REDACTED] In response to Samsung’s request for inspection of the examined
26 products, Apple has provided only version numbers of the Android OS [REDACTED] running on
27 the inspected devices, which is an insufficient basis by itself to determine how the accused
28 “bounceback” functionality behaves on the actual devices Dr. Balakrishnan relied upon.
Case No. 11-cv-01846-LHK
-6SAMSUNG’S NOTICE OF MOTION AND MOTION TO STRIKE
1 [REDACTED] However, the Samsung Galaxy S (i9000), running the same version of Android,
2 does not exhibit the same functionality. (See May 17, 2012 Declaration of Jeffrey Johnson, at ¶¶
3 4-7.)
4
7.
5
Terry Musika
(a)
6
Licensing Information
Apple’s damages expert, Terry Musika, relies on Apple’s production of licensing
7 information to opine on Apple’s reasonable royalty damages. Mr. Musika also relies on Apple
8 licensing information in his rebuttal report, to criticize the reasonably royalty rate conclusions of
9 Samsung’s damages expert, Dr. Vincent O’Brien. (Ward Dec., Ex. T (Musika Report, March 22,
10 2012, at ¶¶ 169-80); Ex. U (Musika Rebuttal Report, Apr. 16, 2012, at ¶ 29, 43-45, 69-69).) Yet
11 Apple failed to timely produce the licensing information which underlies Mr. Musika’s opinions;
12 obstructed Samsung’s discovery efforts into Apple’s licensing practices; and cherry picked the
13 licensing information that Mr. Musika relies on.
14
Samsung made extraordinary efforts to obtain all relevant licensing agreements from
15 Apple. Samsung’s RFPs required the production of, among other things:
•
“All DOCUMENTS relating to or evidencing any Licenses, or the negotiation
thereof, relating to the APPLE ACCUSED PRODUCTS or the technology claimed
or disclosed by the SAMSUNG PATENTS-IN-SUIT.”
•
19
“All licenses in which You have received or conveyed rights under a patent relating
to the APPLE ACCUSED PRODUCTS.” (Ward Dec., Ex. B (RFP No. 9); id.
(RFP No. 11).)2
20
[REDACTED] This was the version of the licensing chart available to Samsung when it
16
17
18
21 deposed Apple’s Rule 30(b)(6) witness on certain licensing issues and royalty payments, Mark
22 Buckley, on February 23. [REDACTED]
23
24
2
Samsung also served Interrogatory No. 6, which requires identification of “any and all
persons to whom YOU have ever licensed or offered to license, or persons who have requested to
26 license, or to whom YOU have granted or offered to grant any other rights under the patent, trade
dress, or trademark, including the status of those requests and offers, whether continuing,
27 successful, or terminated, and identify (by Bates number) all DOCUMENTS RELATED to any
such license, offer, request, or other grant of rights.” (Ward Dec., Ex. C (Interrogatory No. 6).)
28
25
Case No. 11-cv-01846-LHK
-7SAMSUNG’S NOTICE OF MOTION AND MOTION TO STRIKE
1
Despite repeated requests, Apple refused to make its Rule 30(b)(6) licensing witness
2 available to address these late produced, inconsistent, and ambiguous charts. (Price Dec., at ¶ 4,
3 Exs. B at 2, E at 3, F at 3.)
4
By its own admission, Apple has also refused to produce [REDACTED] even though Mr.
5 Musika relies on one such license in his reasonable royalty analysis.3
6
[REDACTED] it is also clear that Apple has failed to make a full production of patent
7 licenses related to the Accused Products. [REDACTED]
8
Even with these grossly belated disclosures, however, Apple’s production is still
9 incomplete. According to media accounts, Apple entered into patent license agreements with Cliff
10 Island LLC and/or Digitude Innovations, transferring up to a dozen patents from Apple to
11 Digitude. This includes at least two feature patents related to the Accused Products, U.S. Patent
12 No. 6,208,879 (Mobile Information Terminal Equipment and Portable Electronic Apparatus) and
13 U.S. Patent No. 6,456,841 (Mobile Communication Apparatus Notifying User Of Reproduction
14 Waiting Information Effectively).4 [REDACTED]
15
(b)
16
Manufacturing Capacity
Mr. Musika also relies on [REDACTED] prepared by Mark Buckley, Apple’s Rule
17 30(b)(6) witness on manufacturing capacity. [REDACTED] (Ward Dec., Ex. T, at Exhibit 3, at
18 45 (citing [REDACTED], listed as exhibits 15 and 16 to Mark Buckley Deposition).)
19 [REDACTED] Apple has not produced these materials, nor has their underlying factual basis
20 been disclosed to Samsung.
21
8.
22
Russell Winer
In Sections VII through X of his March 22, 2012 report, Dr. Winer offers numerous
23 opinions on Apple’s trade dress, including fame and distinctiveness (Sections VII and VIII),
24
25
3
[REDACTED] These licenses are attached to the Price Declaration as Exs. FF and GG.
“Apple Made A Deal With The Devil (No, Worse: A Patent Troll)”, accessed on May 10,
26
2012 at http://techcrunch.com/2011/12/09/apple-made-a-deal-with-the-devil-no-worse-a-patent27 troll/; “Apple partners with patent troll Digitude Innovations — and wow, what a deal”, accessed
on May 10, 2012, at http://venturebeat.com/2011/12/10/apples-patents-digitude-innovations/.
28
4
Case No. 11-cv-01846-LHK
-8SAMSUNG’S NOTICE OF MOTION AND MOTION TO STRIKE
1 likelihood of infringement (Section IX) and likelihood of dilution (Section X). But the opinions
2 he offers are based on facts and theories that were not disclosed in response to Samsung’s
3 contention interrogatories on these very same issues.
4
For example, Interrogatory No. 71 sought all “facts that support YOUR contention that the
5 SAMSUNG product or product packaging is likely to cause confusion, cause mistake, or deceive
6 consumers as to the affiliation, connection, or association of SAMSUNG with APPLE, or as to
7 origin, sponsorship, or approval by APPLE of SAMSUNG’S goods, services or commercial
8 activities.” (Ward Dec., Ex. G.) Although Apple’s responses never disclosed that it would do so,
9 Dr. Winer advanced the following theories and alleged facts to support his opinions on trade dress
10 infringement:
11
•
Consumers’ post-sale personal experiences with and public exposure to Apple
products. (Ward Dec., Ex. W (Winer Report at ¶¶ 101, 105, 107, 108, 141 and
143).)
13
•
[REDACTED]
14
•
Competition between Samsung and Apple products for the same market share, in
connection with the second Sleekcraft factor. (Id. at ¶¶ 96, 111, 112, 114-116, 147151.)
•
Alleged instances of consumer confusion, in connection with the third and fourth
Sleekcraft factors (Id. at ¶¶ 154 and 157.)
•
Marketing and sale of Samsung and Apple products in the same channels, including
retail stores where both Samsung and Apple products are sold, and the relative
placement of Apple and Samsung products in stores and on websites, in connection
with the second and fifth Sleekcraft factors. (Id. at ¶¶ 123, 124, 158 and 159.)
•
Product price and the sophistication of and degree of care exercised by consumers,
in connection with the sixth Sleekcraft factor. (Id. at ¶¶ 127-130 and 160.)
•
23
Details regarding the look of Samsung phones and tablets prior to the release of the
Galaxy line of smartphones and tablets, and internal Samsung documents
referencing the iPhone and iPad, in connection with the seventh Sleekcraft factor.
(Id. at ¶¶ 132 -138 and 163-165.)
24
Similarly, although Interrogatory No. 70 required Apple to identify all facts that supported
12
15
16
17
18
19
20
21
22
25 its “contention that SAMSUNG is diluting or has diluted such trade dress,” Dr. Winer puts forth
26 facts and theories that were never disclosed to support his opinions on trade dress dilution:
27
•
Consumers’ post-sale interactions with Apple products, in connection with second
and fourth likelihood of dilution factor. (Id. at ¶¶ 171 and 181.)
28
Case No. 11-cv-01846-LHK
-9SAMSUNG’S NOTICE OF MOTION AND MOTION TO STRIKE
1
•
[REDACTED]
2
•
Alleged instances of consumer confusion, in connection with the sixth likelihood of
dilution factor. (Id. at ¶ 185.)
3
Finally, Dr. Winer offers facts and theories to support his opinions regarding consumer
4
recognition and fame of the trade dress, including [REDACTED]. (Id. at ¶ 92.) Yet Apple never
5
disclosed these facts or theories, despite the clear language of Samsung’s Interrogatory No. 69,
6
which requested “the date on which YOU contend such trade dress and trademark became famous
7
and acquired secondary meaning and state fully and in detail all facts that support YOUR
8
contention that such trade dress and trademark became famous and acquired secondary meaning as
9
of that date.” (Ward Dec., Ex. G.)
10
C.
Apple’s Experts Assert Undisclosed Theories on Infringement
11
In addition to citing undisclosed facts as support for their opinions, Apple’s experts have
12
asserted entirely novel positions on the alleged patent infringement of Samsung’s products and the
13
supposed invalidity of Samsung’s patents, presenting opinions that never appeared in its August
14
26, 2011 Infringement Contentions or its October 10, 2011 Invalidity Contentions.
15
1.
Dr. Michel Maharbiz
16
Apple is asserting claim 8 of the ‘607 patent against Samsung. (See Dkt. No. 907 (Apple’s
17
Statement Identifying Claims It Will Assert at Trial, at 2).) This claim requires a “virtual ground
18
charge amplifier.” In its Infringement Contentions for claim 8, Apple merely asserted that “the
19
specific circuit elements performing this [virtual ground charge amplifier] function will be
20
identified in discovery.” (Ward Dec., Ex. A (Ex. 17).) During the course of discovery and to this
21
day, Apple has never sought leave to amend its Infringement Contentions to identify any circuitry
22
that corresponds to the “virtual ground charge amplifier” limitation in claim 8.
23
[REDACTED] The Atmel documentation and deposition testimony Dr. Maharbiz relies
24
upon were not contained in Apple’s contention disclosures and Apple never sought leave to amend
25
its Infringement Contentions to identify the Atmel documentation or testimony.
26
2.
Dr. Tony Givargis
27
[REDACTED]
28
Case No. 11-cv-01846-LHK
-10SAMSUNG’S NOTICE OF MOTION AND MOTION TO STRIKE
1
In short, Apple’s experts have asserted opinions based on facts that were never disclosed in
2 seven months of discovery.
3 III.
ARGUMENT AND CITATION OF AUTHORITY
4
A.
5
6
Apple’s Nondisclosure of Critical Facts Violates the Federal Rules of Civil
Procedure and the Case Management Order
Apple’s failure to produce or disclose facts upon which its experts rely, and its failure to
7 adhere to its announced theories on infringement and invalidity, violate the Federal Rules of Civil
8 Procedure, the Patent Local Rules, and the Court’s Scheduling Order. See, e.g., Fed. R. Civ. P.
9 26(a)(1)(A)(ii); Fed. R. Civ. P. 26(e).
10
It is axiomatic that any nondisclosure of facts is a violation of the Federal Rules of Civil
11 Procedure. See, e.g., Fed. R. Civ. P. 26(a)(1)(A)(ii); Fed. R. Civ. P. 26(e). A party that “fails to
12 provide information . . . as required by Rule 26(a) or (e) . . . is not allowed to use that information
13 or witness to supply evidence on a motion, at a hearing, or at a trial.” Fed. R. Civ. P. 37(c)(1).
14 Failure to obey a Case Management Order is also improperwhen the Order requires the parties to
15 complete fact discovery and disclosure of all infringement theories by a date certain (i.e., the fact
16 discovery cutoff date) especially in a case like this one where Apple has insisted on an expedited
17 schedule. See Von Brimer v. Whirlpool Corp., 536 F.2d 838, 843 (9th Cir. 1976) (finding that
18 district court properly excluded evidence under Fed. R. Civ. P. 37(b)(2) for failure to comply with
19 pre-trial orders); Guifu Li v. A Perfect Day Franchise, Inc., 2012 WL 929784, at *18-19 (N.D.
20 Cal. Mar. 19, 2012) (precluding parties from introducing at trial documents requested during the
21 course of discovery that were not produced by the discovery cut-off date). Indeed, courts do not
22 hesitate to punish a party that sandbags their opponent with new and undisclosed facts by
23 precluding the offending party from using the challenged portions of a report, or even by striking
24 the an entire report, irrespective of its importance. See, e.g., Yeti by Molly, Ltd. v. Deckers
25 Outdoor Corp., 259 F.3d 1101, 1106 (9th Cir. 2001) (it was not an abuse of discretion to exclude
26 an improperly disclosed expert report, even where “the district court made it much more difficult,
27 perhaps impossible for [the sanctioned party] to rebut [the other party’s] damages calculations”).
28
Unsurprisingly, improper expert disclosures are prejudicial and harmful, turning discovery
Case No. 11-cv-01846-LHK
-11SAMSUNG’S NOTICE OF MOTION AND MOTION TO STRIKE
1 into a game of “blind man’s bluff.” Failure to disclose an expert witness or provide the required
2 information can result in exclusion of the expert witness “unless the failure was substantially
3 justified or is harmless.”
Fed. R. Civ. P. 37(c)(1); Dominguez v. Excel Mfg., Inc., 2010 WL
4 5300863, at *5 (N.D. Cal. Dec. 20, 2010). Rules 37(b) and (d) apply these preclusive sanctions
5 equally where a party has failed to sufficiently answer interrogatories.
Fed. R. Civ. P.
6 37(b)(2)(A), 37(d)(1). In addition, the Court’s Case Management Order required Apple to submit
7 its Initial Disclosures and Infringement Contentions on August 26, 2011, and complete all fact
8 discovery by March 8, 2012. Failure to comply with a Case Management Order may result in
9 Rule 37 sanctions. See Von Brimer, 536 F.2d at 843; Guifu Li, 2012 WL 929784, at *18-19.
10
During the seven months of discovery in this case, Apple has failed to identify, produce, or
11 disclose many materials relied upon by its experts, including facts, witnesses, documents, or
12 things. Instead, Apple waited until the deadline for its expert reports – well after the close of fact
13 discovery – to ambush Samsung with new evidence and studies that it has concealed for strategic
14 gain.
Because of Apple’s gamesmanship, Samsung has had no meaningful opportunity to
15 investigate or respond to these improperly assertions of undisclosed facts, so any opinion that
16 relies on them should be stricken.
17
For example, the portions of Dr. Maharbiz’s report that rely on [REDACTED] are entirely
18 improper and illustrate why opinions based on undisclosed facts should be stricken. Not only did
19 Apple fail to disclose that its expert would rely on such reports, it failed to disclose the very
20 existence of these [REDACTED], the underlying facts, and the results. These Reports were
21 generated by a third-party, [REDACTED]. Samsung and its expert, however, never had an
22 opportunity to inspect the site where the testing took place, the Samsung devices that were
23 allegedly tested, the equipment used during testing, whether such equipment was properly
24 calibrated, etc.
Nor did Samsung have an opportunity to depose the author(s) of the
25 [REDACTED] or the individuals that conducted the tests to determine if they were properly
26 qualified and performed the testing with proper equipment and under proper conditions. The
27 nondisclosure of the [REDACTED] evidences a complete disregard for Rule 26 obligations, and
28 places Samsung at a substantial disadvantage by having no meaningful opportunity to test the
Case No. 11-cv-01846-LHK
-12SAMSUNG’S NOTICE OF MOTION AND MOTION TO STRIKE
1 validity of those Reports.
2
The [REDACTED] and all of the underlying facts and analyses are clearly responsive to at
3 least Samsung RFP No. 127, which seeks “[a]ll DOCUMENTS and things relating to APPLE’S
4 analysis, consideration, or evaluation of whether any SAMSUNG product, device, apparatus,
5 method, process, or system infringes any of the APPLE IP, including, without limitation, all
6 documents and things concerning any test, evaluation, or reverse engineering of any SAMSUNG
7 product, device, apparatus, method, process, or system.” (Ward Dec., Ex. B.) The [REDACTED]
8 and all of the underlying facts and analyses are also responsive to Samsung’s Interrogatory No. 16,
9 which sought information concerning any infringement analysis conducted on Samsung’s
10 products. (See Ward Dec., Ex. C.) The Court’s Case Management Order established March 8,
11 2012 as the deadline for the completion of fact discovery, and the fact that Apple’s consultant
12 conveniently dated the Reports March 9 does not alter Apple’s disclosure obligation. Apple
13 should have disclosed the [REDACTED] as part of fact discovery in accordance with the Federal
14 Rules of Civil Procedure and the Court’s Case Management Order.
15
A complete response to RFP No. 127 or compliance with Rule 26(e) would have mandated
16 disclosure of the undisclosed materials relied upon by Apple’s other experts as well. Mr. Bressler,
17 for example, relies on examples of “alternative devices” to substantiate his opinions. (See Ward
18 Dec., Ex. F, at 16-47 (conducting comparative analysis).) As such, these materials should have
19 been disclosed well before the close of discovery. Apple’s failure to do so was improper, and
20 those portions of the reports that rely on these alternatives should be stricken, as should those
21 similarly offending portions of the expert reports identified in Part II.B. See, e.g., Avago Techs.
22 Gen. IP Ltd. v. Elan Microelectronics Corp., 2007 WL 2433386 (N.D. Cal. Aug. 22, 2007)
23 (striking portions of an expert report that “did not merely use [an] undisclosed reference to explain
24 other invalidating prior art, but also relied on the undisclosed reference itself”).
25
Finally, Apple’s refusal to timely and completely produce its licensing agreements is
26 frankly outrageous, and the haphazard, late, and inconsistent character of Apple’s licensing
27 disclosures violate discovery rules. Apple’s flagrant discovery abuse has deprived Samsung of its
28 ability to properly formulate its position on damages and rebut Mr. Musika’s opinions.
Case No. 11-cv-01846-LHK
-13SAMSUNG’S NOTICE OF MOTION AND MOTION TO STRIKE
1
The rules governing discovery are clear: facts must be disclosed if they are to be relied
2 upon by experts, and failure to disclose facts properly and timely warrants remedial action by the
3 Court. Here, any opinion based on undisclosed facts meets that standard, and the Court should
4 excise the offending portions of Apple’s expert reports or strike them entirely.
5
B.
Apple’s Untimely Assertion of New Infringement Contentions Violates the
6
Patent Local Rules, the Federal Rules of Civil Procedure, and the Court’s
7
Case Management Order
8
The Patent Local Rules provide for a “streamlined mechanism to replace the series of
9 interrogatories that accused infringers would likely have propounded in its absence. These rules
10 require parties to crystallize their theories of the case early in litigation and to adhere to those
11 theories once they have been disclosed. They provide structure to discovery and enable the parties
12 to move efficiently toward claim construction and the eventual resolution of their dispute.” DCG
13 Sys. v. Checkpoint Techs., LLC, 2012 WL 1309161 (N.D. Cal. Apr. 16, 2012) (Grewal, M.J.)
14 (internal quotation omitted); MEMC Elec. Materials v. Mitsubishi Materials Silicon Corp., 2004
15 WL 5363616, at *4 (N.D. Cal. Mar. 2, 2004) (internal quotations omitted). “The overriding
16 principle of the Patent Local Rules is that they are designed to make the parties more efficient, to
17 streamline the litigation process, and to articulate with specificity the claims and theory of a
18 plaintiff’s infringement claims.” InterTrust Techs. Corp. v. Microsoft Corp., 2003 WL 23120174,
19 at *2 (N.D. Cal. Dec. 1, 2003). The Patent Local Rules “requir[e] both the plaintiff and the
20 defendant in patent cases to provide early notice of their infringement and invalidity contentions,
21 and to proceed with diligence in amending those contentions when new information comes to light
22 in the course of discovery.” O2 Micro Int’l Ltd v. Monolithic Power Sys., Inc., 467 F.3d 1355,
23 1365-66 (Fed. Cir. 2006).
Any deviation from the announced infringement and invalidity
24 contentions without an appropriate amendment under Rule 3-7 “deprives [the opposing party] of
25 the notice to which it [is] entitled.” Volterra Semiconductor Corp. v. Primarion, Inc., 796 F.
26 Supp. 2d 1025, 1043 (N.D. Cal. 2011).
27
Here, Dr. Maharbiz sets forth an entirely new and undisclosed infringement theory for
28 claim 8 of the ‘607 patent based on Atmel documentation and testimony that was not disclosed in
Case No. 11-cv-01846-LHK
-14SAMSUNG’S NOTICE OF MOTION AND MOTION TO STRIKE
1 Apple’s Infringement Contentions.
Apple never sought leave to amend its Infringement
2 Contentions pursuant to Patent Local Rule 3-6 to include this theory. Accordingly, all portions of
3 Dr. Maharbiz’s expert report relating to this new theory of infringement should be stricken
4 pursuant to Patent Local Rule 3-1. Likewise, Dr. Maharbiz relies on a new interpretation of a
5 claim element and offers previously undisclosed support for this new interpretation. Additionally,
6 Dr. Givargis spends substantial time discussing “MP3 Modes” and “Springboard” and Dr. Winer
7 provides an entirely new explanation for the secondary meaning of Apple’s products – yet these
8 theories were clearly responsive to Samsung’s interrogatories. See supra Part II.C.
9
This Court has consistently stricken infringement theories and claims asserted for the first
10 time in expert reports. See, e.g., Monolithic Power Sys., Inc. v. O2 Micro Int’l Ltd., 2009 WL
11 3353306, at *3 (N.D. Cal. Oct. 16, 2009) (striking newly asserted claims that were first raised
12 outside the discovery period and without leave of the Court); Informatica Corp. v. Bus. Objects
13 Data Integration, Inc., 2006 WL 463549, at *14 (N.D. Cal. Feb. 23, 2006) (striking new
14 infringement claims because the standard for amendment of contentions was not met). It should
15 do so here as well.
16
C.
Apple’s Failure to Comply with the Federal Rules of Civil Procedure, the
17
Patent Local Rules, and the Court’s Scheduling Order Is Neither Harmless,
18
Nor Justified
19
Failure to provide the disclosures mandated by Fed. R. Civ. P. 26 can result in exclusion of
20 the expert witness “unless the failure was substantially justified or is harmless.” Fed. R. Civ. P.
21 37(c)(1); Dominguez, 2010 U.S. Dist. LEXIS 137582, at *5. Rules 37(b) and (d) apply these
22 preclusive sanctions equally where a party has failed to sufficiently answer interrogatories. Fed.
23 R. Civ. P. 37(b)(2)(A), 37(d)(1). The burden of proving an excuse is on the party facing sanctions.
24 See Yeti, 259 F.3d at 1107. The four factors courts consider in evaluating harmlessness and
25 justification are: “(1) prejudice or surprise to the party against whom the evidence is offered; (2)
26 the ability of that party to cure the prejudice; (3) the likelihood of disruption of the trial; and (4)
27 bad faith or willfulness involved in not timely disclosing the evidence.” Dominguez, 2010 U.S.
28 Dist. LEXIS 137582 at *5. Because all of these factors support Samsung’s motion, the portions of
Case No. 11-cv-01846-LHK
-15SAMSUNG’S NOTICE OF MOTION AND MOTION TO STRIKE
1 Apple’s experts’ reports which rely upon and cite undisclosed facts or which assert novel
2 infringement or invalidity theories should be stricken.
3
4
1.
Samsung Suffered Significant Prejudice from Apple’s Conduct
Apple’s patent licensing agreements are highly relevant to the Georgia-Pacific analysis.
5 Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1326-32 (Fed. Cir. 2009). The Federal
6 Circuit has increasingly emphasized the importance of a full and rigorous evaluation of a party’s
7 licensing agreements and practices to determining a reasonable royalty. In Lucent Technologies,
8 580 F.3d at 1329, the court rejected a damages award based on a reasonable royalty rate analysis
9 because the plaintiff failed to prove that the licenses underlying the analysis were “sufficiently
10 comparable.” In ResQNet.com, Inc. v. Lansa, Inc., 594 F.3d 860 (Fed. Cir. 2010), the Federal
11 Circuit held that evidence of royalty rates from licenses that lacked a relationship to the claimed
12 invention could not form the basis of a reasonable royalty calculation. The following year, the
13 Federal Circuit rejected the “25% rule,” holding that “there must be a basis in fact to associate the
14 royalty rates used in prior licenses to the particular hypothetical negotiations at issue in the case.”
15 Uniloc USA, Inc. v. Microsoft Corp., 632 F.3d 1292, 1317 (Fed. Cir. 2011).
16
Here, Apple’s haphazard, inconsistent, untimely and incomplete production of licensing
17 information – producing eight different versions of its [REDACTED]; failing to produce, timely
18 or at all, all relevant licenses; and refusing to make its Rule 30(b)(6) licensing witness available
19 for further deposition – has impaired Samsung’ ability to undertake a full analysis of Apple’s
20 comparable licenses and licensing practices. It has also allowed Apple to “cherry pick” the data
21 relied on by Mr. Musika, allowing him to rely on patent and non-patent licenses beneficial to
22 Apple, while shielding a fair and full inquiry into Apple's licensing agreements and strategies.
23
Regarding the other experts, had Apple properly amended its contention disclosures,
24 Samsung would not have been deprived of its right to conduct directed discovery and prepare for
25 trial with knowledge of Apple’s theory of the case. Instead, Apple has strategically used new
26 materials and shifted its contentions to gain a competitive edge. “There is a necessary element of
27 gamesmanship which applies in discovery, but parties must act in the spirit of discovery. The
28 parties’ mutual knowledge of all the relevant facts is a prerequisite for proper litigation.” Ash v.
Case No. 11-cv-01846-LHK
-16SAMSUNG’S NOTICE OF MOTION AND MOTION TO STRIKE
1 Ford Motor Co., 2008 WL 1745545 (N.D. Miss. Apr. 11, 2008) (citing Dollar v. Long Mfg., N. C.,
2 Inc., 561 F.2d 613, 616 (5th Cir. 1977)).
3
4
2.
Samsung Is Unable to Cure the Prejudice Caused by Apple’s Conduct
At this point in the case, Samsung can do nothing to cure the prejudice caused by Apple’s
5 concealment of facts and changing positions on infringement and invalidity. Samsung cannot now
6 commission new expert reports to rebut Apple’s alleged findings.
Furthermore, as explained
7 above, Samsung cannot now take discovery to verify the accuracy, reliability, and validity of the
8 new facts and analyses contained within Apple’s expert reports. Nor can Samsung effectively
9 alter its strategy, at this late date, to correspond to Apple’s entirely new infringement and
10 invalidity contentions.
11
12
3.
Likelihood of Disruption of the Trial
At Apple’s request, this case is proceeding under an accelerated schedule, with dispositive
13 motions due on May 17, and trial set to begin on July 30. Discovery is complete and it is simply
14 too late for Samsung to take full discovery on undisclosed facts, conduct any of its own tests or
15 analyses based on these new materials, incorporate information learned into its experts’ opinions
16 and trial strategy, and prepare supplemental expert reports. Apple has known that the trial date
17 could not be disrupted, and failed to disclose its facts and contentions knowing Samsung would
18 not have the opportunity to respond. That the trial date cannot be changed emphasizes why there
19 is no way for Samsung to cure the prejudice caused by Apple’s late disclosures.
20
21
4.
Apple’s Failure to Disclose Was Willful
Apple’s failure to substantively respond to Samsung’s discovery requests can only be
22 construed as purposeful concealment of critical evidence in bad faith. The undisclosed facts upon
23 which Apple relies are not new, and most have been available for some time. For example, Apple
24 concealed the very existence of the SEM Reports – allegedly completed one day after the close of
25 fact discovery – that Dr. Maharbiz relies upon in his report, despite every opportunity and
26 obligation to disclose them even after the cutoff.
Indeed Apple has produced hundreds of
27 thousands of pages after the cutoff. Mr. Musika relied on licensing agreements that Apple has
28 readily available in its licensing database, and on representations that Apple’s production of patent
Case No. 11-cv-01846-LHK
-17SAMSUNG’S NOTICE OF MOTION AND MOTION TO STRIKE
1 licensing information was complete, when in fact it was not. Apple’s failure to disclose much of
2 the basis for its experts’ reports, as well as its decision to make last-minute changes regarding
3 infringement and invalidity theories were clearly “willful.”
4 IV.
CONCLUSION
5
For the forgoing reasons, at least those portions of Apple’s expert reports that rely on
6 undisclosed facts or assert novel theories, which are listed with particularity in Samsung’s
7 accompanying Proposed Order, are improper, prejudicial, and should be stricken.
8
9
10 DATED: May 17, 2012
Respectfully submitted,
11
QUINN EMANUEL URQUHART &
SULLIVAN, LLP
12
13
14
15
16
By/s/ Victoria F. Maroulis
Charles K. Verhoeven
Kevin P.B. Johnson
Victoria F. Maroulis
Michael T. Zeller
17
18
19
Attorneys for SAMSUNG ELECTRONICS CO.,
LTD., SAMSUNG ELECTRONICS AMERICA,
INC. and SAMSUNG
TELECOMMUNICATIONS AMERICA, LLC
20
21
22
23
24
25
26
27
28
Case No. 11-cv-01846-LHK
-18SAMSUNG’S NOTICE OF MOTION AND MOTION TO STRIKE
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?