Samsung defeats Apple bid for sanctions over evidence

Samsung Electronics Co. defeated a bid for judicial sanctions sought by Apple Inc. over a release of evidence in the iPhone patent dispute now on trial in San Jose federal court in California.

U.S. District Judge Lucy Koh today dismissed Apple’s request to punish a Samsung lawyer’s public disclosure of evidence excluded from trial. Koh polled jurors on the matter and concluded they could remain in place, saying she was “satisfied” the jury could remain “fair and impartial.”

Apple Inc. has spent more than $647 million on advertising for the iPhone in the U.S. and $457.2 million for the iPad, according to a slide shown by the company’s lawyers.

Apple, in an Aug. 1 filing with Koh, said a July 31 statement authorized by Samsung’s lawyer was designed to convey to jurors, through the media, arguments contesting Apple’s central allegations that Samsung copied the iPhone and iPad. The move was “bad faith litigation misconduct” meant to prejudice the jury, Apple said.

“Apple requests that the court issue sanctions granting judgment that Apple’s asserted phone-design patent claims are valid and infringed by Samsung,” according to the filing signed by lawyer William Lee.

Koh said today that Samsung and its lawyers at Quinn Emmanuel Uquhart & Sullivan LLP chose to “highlight evidence that they both knew was excluded,” and she reserved the right to investigate the release further. She interviewed each juror separately, asking if they had read or heard anything about the case since testimony ended July 31.

One juror said he saw a “headline” on the Internet about an Apple designer’s testimony that his group works around a kitchen table. Koh, after concluding that testimony could proceed, warned the jurors against reading media reports about the trial and said the court is compiling news articles about the case for their review after trial.

“We can scrapbook it for you, whatever you like,” Koh told the jury. “Don’t feel like you’re missing out.”

Apple had said that if Koh doesn’t decide the case in its favor outright, she should tell the jury that Samsung engaged in “serious misconduct.” Apple proposed that Koh tell jurors Samsung copied the designs and features from Apple products, and preclude Samsung from any further mention of evidence regarding a pre-existing design.

Samsung, in an Aug. 2 filing, said Apple’s request should be rejected because it’s “frivolous at every level,” and because Samsung’s statement was protected free speech.

Apple, based in Cupertino, California, seeks $2.5 billion for its claims that Samsung infringed patents covering designs and technology for mobile devices. Samsung, based in Suwon, South Korea, countersued and will present claims that Apple is infringing two patents covering mobile-technology standards and three utility patents.

Koh today also denied Apple’s request to seal marketing materials and a geographical breakdown of its sales. Apple doesn’t publicize country-by-country sales and rather just releases data by broader regions such as “Asia-Pacific,” “North America” and “Europe.”

When Michael Jacobs, an Apple lawyer, argued that the documents are protected trade secrets, the judge told him to appeal her decision. Jacobs said Apple will determine later how it will challenge Koh’s denial and admit the evidence.

Apple has spent more than $647 million on advertising for the iPhone in the U.S. and $457.2 million for the iPad, according to a slide shown by the company’s lawyers. Phil Schiller, Apple’s senior vice president of worldwide marketing, testified today Samsung is trying to take advantage of the popularity Apple has generated for its products.

“I absolutely believe it’s had an effect on our sales,” Schiller said. Some customers are buying Samsung devices because they look like the iPhone or iPad, he said. Upon seeing Galaxy’s tablet computer, Schiller said his response was, “They are just going to copy our whole product line.”

Schiller also described how the company takes advantage of free press coverage. Apple decided not to pay for any advertising for a period between the iPhone’s introduction in January 2007 by co-founder Steve Jobs and when it went on sale later in the year, Schiller said. Positive news stories about the product did a better job than advertising could for building buzz, he said.

With Apple’s attorneys trying to show that the iPhone and iPad were breakthrough technologies, Schiller read from articles in which reviewers raved about the product’s designs. The company was taking a “big gamble” by introducing the products because nothing like them had been on the market before, he said.

To reinforce Apple’s claim that Samsung copied the designs of the iPhone and the iPad, Schiller read from an internal survey conducted by Apple that shows customers consider design one of the main reasons to buy the company’s products.

Koh on July 31 barred Samsung from presenting images of a smartphone that Samsung claimed it was developing in 2006, the year before Apple introduced the iPhone. Koh rejected Samsung’s request to reconsider her ruling for what she said was at least the third time, standing by her earlier decision that the evidence wasn’t “timely disclosed” in Samsung’s arguments pertaining to patent infringement.

John Quinn, the Samsung attorney who approved the release of the information, said a statement to the court that it was done in response to a request from members of the media and that the information was already in public court filings made by Samsung or Apple and wasn’t intended to prejudice the jury.

In the statement that Quinn approved for the media, Samsung said that Koh’s ruling means the company “was not allowed to tell the jury the full story and show the pre-iPhone design for that and other phones that were in development at Samsung in 2006, before the iPhone.” (Bloomberg)