On May 1, Apple filed a motion in the Northern District of California alleging that Samsung intentionally destroyed documents it was obligated to hand over as part of the discovery process, an act referred to as "spoliation of evidence" in the legal parlance.
When a Court finds that a party did, in fact, destroy or withhold evidence it had reason to believe would be relevant to a foreseeable or current lawsuit, it may enact a few remedies. The specific remedy Apple is seeking is a "spoliation inference" instruction to the jury.
In effect, Apple wants the Judge to instruct the jury as follows:
1. Samsung had a duty to preserve relevant evidence, failed to do so, and acted in bad faith in failing to meet its legal duty.
2. The jury may infer that documents Samsung failed to produce would have been advantageous to Apple's position.
3. If the jury finds Samsung liable for infringement, they may presume that the infringement was "intentional, willful, without regard to Apple's rights."
Apple's motion doesn't pull any punches, accusing Samsung of spoilating "vast quantities of relevant evidence in blatant disregard of its duty to preserve all such evidence." Consequently, Apple writes that strong adverse inference instructions are required.
The motion is heavily redacted, but as far as I could tell, the basis for Apple's motion lies in what it believes are major discrepancies between the number of documents deposed Samsung witnesses provided and the actual number of documents they were supposed to hand over.
And in an attempt to highlight a company-wide pattern of misconduct, Apple's motion stresses that this isn't new territory for Samsung, pointing out how they were previously sanctioned in another case for similar behavior. Specifically, Apple mentions a lawsuit involving Samsung and Mosaid Tecnologies wherein it was discovered that Samsung had an ongoing policy of automatically deleting emails from custodian computers every two weeks, even when they were required to keep email evidence relevant to an ongoing legal dispute. In other words, even in the midst of litigation, Samsung was actively deleting relevant email evidence.
With Samsung's policy of email deletion still in effect, Apple writes that it has been adversely affected.
Samsung’s ad hoc, unmonitored email “preservation” methods have resulted in the irretrievable loss of unknown volumes of relevant emails. For example, Judge Grewal recently compelled the deposition of Won Pyo Hong, the head of Samsung’s Product Strategy Team, in part due to an email in which Dr.Hong “directly orders side-by-side comparisons of Apple and Samsung products for design presentations."
Apple and the Court cannot possibly know how many more emails Dr. Hong sent or received that would have supported Apple’s claims that Samsung copied Apple products had they not been deleted. The same is true for the many other Samsung witnesses who produced only a handful of emails, or none at all.
Apple also points out that Samsung, while being investigated by Korea's Fair Trade Commission (KFTC), obstructed justice by purposefully destroying a large amount of data during the course of a price fixing investigation.
In a recent KFTC press release on the matter, the agency concluded that numerous Samsung executive employees participated in obstructing an on-site investigation of one of Samsung's facilities.
Specifically, the KFTC found that high level Samsung executives instructed company security personnel to physically block KFTC officials from entering the facility while "Samsung employees from the department subject to the investigation destroyed relevant data and replaced the computers of those employees who were subject to investigation.”
And citing an KFTC press release on the matter, Apple's motion adds:
Further, the head of the department subject to the investigation evaded the investigation according to a contingency plan, and, following the FTC investigators’ withdrawal, returned to the office and deleted relevant data saved on his computer.”
Apple even points out that the KFTC investigation uncovered a 2011 email to a Samsung Executive Vice President describing the deletion of files regarding "Korean roadmap iPhone countermeasures" and other data.
The email in question was not produced in Samsung's legal dispute with Apple, which Apple points out as an example of a destroyed or withheld document that Samsung was obligated to preserve and hand over to Apple.
A hearing on Apple's motion is currently scheduled for June 7, 2012, with Samsung's reply brief due by May 15.
But Samsung is crying foul, and filed a motion on Monday aiming to secure more time to adequately respond to Apple’s serious allegations, which it claims are without merit. Specifically, Samsung wants an extension on its reply date (from May 15 to May 29) and is also seeking to push back the hearing on the matter to July 10, 2012.
As one would expect, Samsung calls the allegations baseless and promises to vigorously defend its document retention policies - which seems like a tall order given that Samsung has a bad track record in this regard.
Interestingly enough, court documents reveal that the US District Court isn't the only venue where Apple has accused Samsung of destroying evidence. Apple lodged a similar complaint with the ITC not too long ago, a fact which comes into play in the current dispute.
While Apple’s counsel suggests that Samsung doesn't need more time to respond since they already filed a similar reply brief with the ITC, Samsung argues that Apple’s allegations in the US Northern District of California case involve different custodians and patents. What’s more, Samsung notes that “their obligation to preserve evidence in this case arose at a different time than in the ITC action."
Samsung also claims that adequately responding to Apple’s motion would require the review of thousands of pages of documents and voluminous pages of deposition testimony. Moreover, Samsung writes that it needs time to potentially retain an expert and closely examine Samsung’s practices as it pertains to the “preservation of information.” And doing so while many of the custodians in question reside in Korea, Samsung writes, would require significant efforts.
Compounding matters is that Samsung's legal team will be particularly busy over the next few weeks.
Over the next two weeks, Samsung’s counsel will take and defend on-going expert depositions, prepare and file pre-trial motions both in this case as well as a related action before the International Trade Commission (“ITC”), participate in a court-ordered mediation session with Apple, and prepare for a hearing in the ITC action. Samsung’s counsel will be in hearing for the ITC action between May 30 and June 16 in Washington, DC.
Without the allotment of additional prep time, Samusng writes that it will suffer substantial prejudice while stressing that an extension would have no impact on the trial schedule since the jury instructions won't be given until the end of trial.
After taking in Samsung's objections, Apple filed a surprisingly terse reply brief, also filed on May 7, articulating why Samsung's motion should be denied.
Apple’s motion for adverse inference jury instructions cannot have come as a surprise to Samsung, and the hearing on it should not be delayed until the last possible moment:
• Samsung has known about Apple’s concern over its automatic deleting of emails for months and has already filed an opposition to a parallel motion that Apple filed in the ITC;
• Samsung’s proposal disrupts the schedule for pre-trial filings that Judge Koh has set out, which requires the parties to file their proposed jury instructions on July 11, 2012, just one day after the hearing Samsung requests and
• Samsung’s proposal is inconsistent with Judge Koh’s direction that the parties “follow the local rules regarding a briefing schedule” on this motion
We'll keep you updated as to when the Court issues a ruling on Samsung's request for additional time.