Monday, August 13, 2012

Copying and misconduct at heart of Apple's and Samsung's disagreement on jury instructions

On Sunday, Judge Lucy Koh ordered Apple's and Samsung's lead counsel to meet in person that same day (Apple previously complained that Samsung had not been willing to make its lead counsel available for a meeting) and to file their disputed and undisputed proposed jury instructions until 8 AM local time (Monday). They did so at around 2 AM.

Four weeks ago, their disputed instructions covered more than 360 pages. I analyzed that document, and most of the items I highlighted then are still contentious. This morning's filing is about 100 pages shorter than the one in July, but about half of that reduction is simply due to the fact that at this stage they are discussing only the instructions to be given to the jury after the close of evidence, while the preliminary instructions (given after jury selection) are now water under the bridge.

I will analyze Judge Koh's proposed instructions, which I guess we will see later in the week, or possibly during the weekend, and compare them to what the parties proposed. I guess Apple's proposals will, for the most part, be viewed more favorably than Samsung's, manyY of which are just about muddying the water. But some of Apple's proposals are clearly tendentious, and Samsung is entitled to objective instructions.

Rather than compare this set of proposals in each and every detail to the one made four weeks ago, I'd like to highlight the two high-level themes that appear to be the strategically most important ones.

The single most important question is the relevance of Samsung's alleged (and, in my opinion, well-documented) "copying" to certain legal questions, especially infringement. On this question, the parties' proposals are diametrically opposed. Here's what Samsung would like the jury to be told:

"You have heard allegations by Apple that certain of its designs and patents have been copied. Regardless of whether you as the jury accept this testimony, you may not consider it in deciding whether any patents in this case have been infringed. Copying is not an element of patent infringement. I will give you further instructions on the standards to apply in determining utility patent infringement and design patent infringement. In neither case will evidence of copying or lack of copying be relevant to your deliberations. Evidence of copying, if established, is only relevant as one of several considerations you will need to account for in deciding whether a patent is invalid because it was an obvious design."

Samsung stresses that "[its] proposed instruction on the relevance of allegations of copying is particularly important in this trial because Apple chose to make it a central theme in its case, despite its not being an element in its main legal claims of infringement". As a minor concession, Samsung offers to change the last sentence to this:

"In the event that evidence of copying is established and would be relevant to a particular issue other than infringement, I will provide you with an explicit instruction to that effect."

Apple does not want any instruction to this effect and argues that copying is relevant to more questions than just non-obviousness. Apple lists three examples that Samsung cannot reasonable dispute in my view: indirect infringement (which requires an infringer to know that others will infringe), willful infringement, and trade dress secondary meaning. What's less straightforward to determine is the relevance of "copying" to direct infringement. Patent law is a strict liability regime: even with a 100% independent creation, you can be liable for infringement -- and even with 100% intentional copying, you are not liable for anything if there is no valid patent within the scope of which your copied product falls.

I try hard to separate my personal position from the law. Not only would I like independent invention to be a total defense to patent infringement but I also think that evidence of copying will, on balance, lead to more accurate jury verdicts than most of the other evidence, such as technical analysis, that is presented to, but not really understood by, your average jury member. However, Judge Koh is in a far better position to determine what kind of jury instruction, if any, is appropriate here, and we'll know soon.

What Samsung cites the Federal Circuit opinion on Allen Engineering Corp. v. Bartell Industries, Inc. (2002):

"While copying may be relevant to obviousness, it is of no import on the question of whether the claims of an issued patent are infringed."

Maybe Judge Koh will adopt this and decide that "copying" is irrelevant to direct infringement, but Apple would still be right about indirect infringement, willfulness and trade dress secondary meaning.

Apple argues that "the Federal Circuit has considered copying as relevant to infringement" in other cases than Allen v. Bartell, such as L.A. Gear, Inc. v. Thom McAn Shoe Co.. Samsung denies that this 1993 decision held copying to be relevant to (design) patent infringement, but Samsung uses a disingenuous out-of-context quote to make that argument, claiming that the decision "clearly says that copying is 'an issue not relevant to patent infringement'". But this the full quote from which Samsung omitted the parts that support Apple:

"Melville presented no evidence to counteract the evidence of copying of the patented design. Indeed, Melville admitted copying, offering as its only justification the proposition that copying is prevalent in the fashion industry, an issue not relevant to patent infringement."

In the full quote, one can see that the referenced "issue not relevant to patent infringement" is not "copying" in general but "the proposition that copying is prevalent in the fashion industry". I have previously criticized Samsung for an out-of-context citation: it quoted from a "while" subclause, and the related main clause said the opposite of what Samsung was trying to argue.

There's a key sentence in the L.A. Gear decision that Samsung doesn't even address:

"Substantial similarity is not disputed; indeed, copying is admitted."

Again, we'll see what Judge Koh wants to tell the jury about the relevance of copying to the issue of infringement. If Samsung wins a limiting instruction, it can hope that the jury will properly separate the issues, but if Apple wins and no limiting instruction is given, then it's quite possible that the jury verdict on multiple infringement counts will be strongly influenced by all of the evidence of "copying" that was presented.

In connection with secondary factors of non-obviousness of design patents, Samsung proposed an item (as part of a comprehensive instruction) that Apple claims "goes far beyond the law to excuse Samsung's copying and eliminate the relevance of this factor":

"Did others copy the claimed design? Where parties have a practice of marketing very similar products, however, evidence of copying is not a strong indicator of nonobviousness, but rather a measure of the extent to which parties in the market typically follow developments by their competitors, whether patented or not."

I have to grant it to Samsung that "follow[ing]" is a pretty good euphemism for "copying".

The other big issue surrounding the jury instructions relates to the various sanctions that have been ordered by Magistrate Judge Grewal or at least requested by Samsung. Some of the disputed jury instructions relate only to this set of issues. Judge Koh will have to rule on Samsung's pending motions no later than simultaneously with finalizing her jury instructions. Samsung and Apple disagree not only on whether certain instructions should be given at all but also on how they should be phrased. A single word, such as "relevant", can make a significant difference in how the jury perceives an adverse inference instruction, and that's why they're both fighting so hard over what might ultimately be told to the jury.

In the context of proposed jury instructions, Samsung uses the same tactics as always: it argues that for any wrongdoing the court found on Samsung's part, there's an equivalent on Apple's side. But if one looks at the actual issues, it's clear that Samsung's conduct was far more problematic than Apple's. For example, wherever Apple withheld information for a limited amount of time, Samsung still received it at a time when it was able to make full use of it. That's why Magistrate Judge Grewal imposed tougher sanctions on Samsung, and found that some of what Apple did should not even be told to the jury because it would only create confusion without proving anything.

I believe the final jury instructions will also place the emphasis on Samsung's misconduct as opposed to suggesting that both companies engaged in misconduct of the same kind.

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