Thursday, August 2, 2012

Apple wants ruling in favor of its design patent claims due to Samsung's alleged misconduct

I have been watching the debate over Samsung's release of material (that Judge Koh previously excluded) to the press, and I was going to wait for the judge's decision, but Apple's latest filing in this context is significant enough to warrant a post because it could have major implications for the outcome of the trial.

According to a letter Apple filed on Wednesday, this is the full text of Samsung's statement to the press:

"The Judge's exclusion of evidence on independent creation meant that even though Apple was allowed to inaccurately argue tot he jury that the F700 was an iPhone copy, Samsung was not allowed to tell the jury the full story an show the pre-iPhone design for that and other phones that were in development at Samsung in 2006, before the iPhone. The excluded evidence would have established beyond dobut that Samsung did not copy the iPhone design. Fundamental fairness requires that the jury decide the case based on all the evidence."

Apple argues that monetary sanctions are not enough for such an attempt to influence the jury and apparently didn't deter Samsung's conduct before: the Korean electronics giant has already been sanctioned four times in this litigation, most recently for destroying evidence. Apple proposes a couple of alternative sanctions:

  • Ideally, Apple wants "judgment in [its] favor [...] on its claim that Samsung infringes Apple's phone design patents, and [...] that those patents are not invalid". In that case, Samsung would potentially face a billion-dollar damages bill, most of which would be a disgorgement of infringer's profits. The jury would still have to establish liability with respect to Apple's three software patents-in-suit and its two trade dresses, but liability with respect to the four design patents-in-suit would be determined by the court.

    Apple is well aware of how drastic a sanction this would be, but it believes that it would be justified by the extraordinary circumstances:

    "The proper remedy for Samsung's misconduct is judgment that Apple's asserted phone design patents are valid and infringed. Through its extraordinary actions yesterday, Samsung sought to sway the jury on the design patent issues, and the proper remedy is to enter judgment against Samsung on those same patents. It would be, to be sure, a significant sanction. But serious misconduct can only be cured through a serious sanction—and here, Samsung's continuing and escalating misconduct merits a severe penalty that will establish that Samsung is not above the law."

  • "In the alternative, and at a minimum, the Court should (i) instruct the jury that Samsung engaged in serious misconduct and that, as a result, the Court has made a finding that Samsung copied the asserted designs and features from Apple products; and (ii) preclude Samsung from further mentioning or proffering any evidence regarding the 'Sony design exercise' for any purpose."

    While this alternative set of sanctions would theoretically provide Samsung with an opportunity to still defend itself against Apple's design patent claims, it would put Apple pretty close to victory on its design patent claims. An instruction that "Samsung copied the aserted designs and features from Apple products" would most likely lead the jury to establish liability, to be somewhat skeptical of any invalidity claims, and to believe that Samsung infringed willfully.

Even if the court found that the appropriate sanction is a jury instruction that falls short of Apple's second (softer) proposal, Samsung would still have a major problem. Apple has already won one adverse inference jury instruction. The question is how trusthworthy Samsung is going to appear to the jury if another sanction becomes known to it.

Apple suspects that Samsung's objective is a "mistrial", but Apple now wants this trial to happen, and wants to get decisions. It obviously wants decisions in its favor, and if sanctions provide such decisions without the imponderabilities of jury deliberations, even better.

I believe Samsung and its lawyers are very frustrated with Judge Koh because of the two preliminary injunctions she recently granted. Whatever the reason for Samsung's release of material deemed inadmissible evidence may be, it's very unusual for a party to a litigation to claim at the very outset that it is disadvantaged. I quoted Samsung's statement to the press further above, and what I find shocking is the final sentence: "Fundamental fairness requires that the jury decide the case based on all the evidence." This is nothing short of a claim that Judge Koh's management of this trial is unfairly prejudicial to Samsung, and whether or not it was meant that way, the sentence also can be interpreted as expressing Samsung's hopes that some members of the jury find out about those pictures through the press. Samsung would deny this, and jurors are not allowed to do their own research or talk to anybody about the case, but in the age of the Internet and with the high profile that this case has in Silicon Valley, I don't know if it's realistic to assume that all jurors in all lawsuits will abide 100% by the law in this regard.

Besides asking for sanctions, Apple thinks the court should insist that John Quinn, the founder of world-class litigation firm Quinn Emanuel (Samsung's counsel in its dispute with Apple), should answer who drafted the statement and who released it. This could lead to further issues, including possible sanctions against particular persons.

I don't mean to condemn Samsung's conduct too much, but it simply shouldn't have done this. Judge Koh told Mr. Quinn that he's preserved the record for a possible appeal. Samsung and it lawyers are obviously afraid of an outcome that exposes Samsung as a copycat, even if such a finding may or may not be reversed on appeal more than a year later. And they thought that drawings according to which Samsung was working on iPhone-like designs well ahead of the launch of the iPhone are a silver bullet that can help dissuade the jury from a finding of willful infringement. But Judge Koh had her reasons to exclude that material, and if Samsung doesn't agree with her reasoning, it needs to take this case to the appeals court, which will inevitably happen anyway.

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