Tuesday, September 4, 2012

Apple won't demand billion-dollar payment or bond from Samsung for at least a few months

While fighting a high-stakes battle against each other, Apple and Samsung can still agree on efficient procedures on mundane issues that are merely about money and have no bearig on what they are primarily interested in: market share.

On Monday (Labor Day), the parties filed a "stipulation and [proposed] order regarding schedule for enforcing judgment and certain post-verdict filings" in an effort to "avoid burdening the Court with unnecessary or multiple stages of filings while post-trial motions are pending".

If approved by Judge Koh, the first item amicably resolves Samsung's motion to stay the August 24 jury verdict while it may still be overruled in whole or (much more likely) in part by Judge Koh. Apple was fine with a stay but originally disagreed with Samsung's claim that a bond should be waived because a bond over such an amount is costly. The stipulation just says that "[a]ny attempt to execute or enforce the judgment, award, or verdict entered in favor of Apple and against Samsung [...] shall be stayed until 14 days after the Court enters judgment resolving all post-trial motions". Given that the hearing on post-trial motions is scheduled for December 6 and that Judge Koh will need some time after the hearing to write her orders on the multiplicity of issues to be addressed, we're talking about the early part of 2013 then. Since the stipulation doesn't say anything about a bond, Samsung won't have to file one with the court, but the parties have probably reached a private agreement over this that is more cost-efficient and doesn't require any administrative effort by the court. There are different options, such as the following ones:

  • Apple still buys components from Samsung of an annual value on the order of ten times the damages verdict. Parties that do so much business with each other could agree that, for example, Apple can simply withhold some payments for components until the post-trial motions are resolved.

  • Since they are litigating against each other in ten countries, issues over security come up between these parties in different jurisdictions all the time. For example, Apple had to post bonds to seek enforcement of preliminary injunctions, or to proceed with its German lawsuits (in one of which Samsung tried to delay resolution of Apple's claims by complaining about deficiencies of a bond). Maybe they've reached a global agreement on how to handle the need to post bonds in different jurisdictions in the near term. It's really unlikely that Samsung, which currently has tens of billions of dollars in the bank, would be unable to pay the billion-dollar amount if it ultimately had to.

  • They may also have agreed upon enforcement procedures for such payment. For example, Samsung might have agreed to let Apple enforce its damages claim, if necessary, against Samsung's U.S. operations, even the part of the damages claim that Samsung Electronics Co. Ltd., a Korean legal entity, will owe.

The bonding issue will have to be addressed again after Judge Koh's final rulings. In that case, Samsung will probably want enforcement of everything (including the damages payment) stayed for the duration of an appeal to the Federal Circuit.

The stipulation furthermore sets schedules and page limits for motions relating to the recovery of costs (attorney's fees and other trial-related costs) under Rule 54. Any such motions will be filed "14 days after the Court enters judgment resolving all post-trial motions filed pursuant to Rules 50, 52, 59, and 60". As I said further above, that probably means early 2013 (most likely January).

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