Monday, August 6, 2012

Apple opposes Samsung's 'me too' motion for adverse inference jury instruction on emails

Two days after Apple won an adverse inference jury instruction concerning Samsung's spoliation of evidence (deleted emails), Samsung brought a motion asking for the same type of sanction against Apple, referring to a statement in Magistrate Judge Grewal's order that Samsung had been free all along to allege that Apple also failed to take the necessary measures to safeguard relevant emails.

The fight over adverse inference jury instructions is very important. Based on the status quo, the jury would be told that Samsung was found to have spoliated evidence, and even though the jury would be free to draw its conclusions, Samsung would face a steep challenge especially in connection with the question of willful infringement. Samsung's first reaction to Judge Grewal's order -- on the day after the order -- was to bring a motion for de novo determination by Judge Koh, arguing that this kind of sanction must be decided by a district judge, not a magistrate judge (and, of course, arguing that the decision was erroneous; Samsung even claims that this decision has to be reversed or it would "undermine the fairness of the trial and ensure that any verdict in Apple's favor must be reversed" by the appeals court because of Samsung having been disadvantaged).

After Samsung brought its own motion for the same kind of sanction against Apple, it has increasingly been relying on an equal treatment kind of argument: the court should either grant adverse inference instructions against both parties, or against neither party.

When I saw Samsung's motion for an adverse inference jury instruction against Apple, I called it, in the headline as well as the body of my blog post, a "me too" motion. In today's filing, Apple's lawyers used the same term (twice). No, they didn't have to be inspired by me to come up with this term: it was the most obvious choice.

Apple's opposition brief raises some of the issues that I also identified in my commentary on Samsung's motion (again, because those issues were obvious to someone watching this dispute and certain related cases). For example, Apple simply doesn't have an email system that periodically deletes emails, and its leadership was on notice to keep emails relevant to litigation because of other ongoing actions. Apple's brief points out that "there is an enormous difference between systems like Samsung's that require individuals to 'opt in,' by taking affirmative actions to preserve [relevant messages], and systems like Apple's that require individuals to 'opt out,' by taking affirmative actions to delete". Furthermore, Apple's brief stresses (as I did in my post) that Samsung's motion doesn't provide any indication that relevant emails (that would have helped Samsung's case) got lost.

Apple's filing also addresses Samsung's claim that the critical point in time at which Apple would have had a duty to preserve (including an obligation to notify employees in the possession of potentially relevant emails) allegedly cannot be a later one than the one at which Samsung's duty arose. Samsung's argument was basically that a plaintiff is in a better position than a defendant to anticipate litigation because he decides if and when to sue. Apple makes a pretty interesting counterargument. It says that it "negotiated with Samsung in good faith after first apprising Samsung of its infringement claims" in the summer of 2010 and sued "only after Samsung announced a new round of infringing products in Spring 2011", a behavior by which "Samsung made clear to Apple that it would not stop copying Apple's products". Apple basically says that Samsung knew it was going to provoke litigation, and it was working on those products for quite some before their launch, while Apple still had a basis for hoping that Samsung would stop infringing. Apple claims that it reasonably "rel[ied] on the parties' business relationship while the parties negotiated", while Samsung "knew it was planning a new round of infringing products, and thus was not entitled to rely on this business relationship".

Apple's argument is interesting and makes some sense, though one can certainly argue that it wasn't realistic to assume that Samsung would refrain from the launch of further iPhone and iPad lookalikes, considering that those products became very popular very quickly and that it's a far greater opportunity for Samsung to be a (if not the) market-leading device maker under its own name than to build low-margin components for Apple. But it's always easy to know with the benefit of 20-20 hindsight what Samsung did. From Apple's perspective at the relevant time, the assumption may very well have been that Samsung would rather preserve its business relationship with Apple and avoid potentially very costly litigation than compete with Apple on the basis of what Apple considers to be widespread infringement of its intellectual property.

The court doesn't have much time left to decide on these jury instruction issues. Samsung's tactics make psychological and political sense. It seeks to capitalize on the fact that the court (as well as the appeals court) will want to avoid any impression of double standards. But the fact patterns are so very different that it would take observers only a few minutes (or seconds) to figure out that there's simply a discrepancy in the merit of the relevant motions that warrants the granting of one and dictates the outright denial of the other. Thus far, Judge Koh has displayed enormous strength and a consistent focus on the facts. She knows that her ruling will be appealed one way or the other (unless the parties settle in the meantime). She can also figure that if Samsung loses, it will claim that the trial was unfair. Samsung's lawyers play this game very well, but Judge Koh appears to be far more interested in facts than in tactical considerations. That approach benefits Apple.

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