Apple v. Samsung: Rule 37 Sanctions Ordered Against Samsung for Failure to Timely Produce Documents Despite Two Court Orders

May 7, 2012

Apple sought sanctions against Samsung pursuant to Fed.R.Civ.P. 37(b)(2) in two separate motions pertaining to alleged violations of discovery orders, including an order regarding discovery on damages. The court had initially ordered Samsung to produce two categories of documents: (1) documents from the custodial files of Samsung designers of the Samsung products at issue during the preliminary injunction motion referencing the Apple products alleged by Apple to embody one or more of the ornamental or utility features claimed in the patents; and (2) all survey documents from central or custodial files that reference the Apple products-in-issue. After this order, Apple contended that the Samsung production was still woefully inadequate and the court issued a further order directing Samsung to comply by December 31, 2011 and stating that failure to comply would subject Samsung to sanctions.

The court ultimately agreed that Samsung had failed to comply with the court's orders, even though there was significant burden on Samsung due to the compressed case schedule. "The scale of Samsung's production and the burden placed on it by the compressed case schedule and the numerous claims at issues . . . That burden, however, does not negate Samsung's obligation to comply with no fewer than two court orders specifying the production of documents that reference Apple's products claimed to embody the features and designs at issue. As this court has stated under similar circumstances, '[o]nce the order compelling production issues, the focus of this court's appropriate inquiry necessarily shifts to compliance.' Notwithstanding Samsung's efforts, the court agrees with Apple that Samsung's production as of October 7 and December 31, 2011 failed to comply with the Court's orders."

Nonetheless, the court believed that Apple had overreached in its request for sanctions: "There is little doubt that Apple overreaches in claiming the monetary sanctions it seeks. The court would have to engage in rank speculation to determine the effect, if any, of the belatedly-produced documents on the merits of Apple's preliminary injunction motion. Equally attenuated is Apple's request for fees and expenses for the preliminary injunction motion itself, which Apple chose to bring before promulgating any discovery requests."

The court did agree, however, that Apple should receive some of its fees because some of the documents should have been produced earlier and directly contradicted Samsung's representations. "Moreover, Samsung's belated production of these documents directly contradicts counsel's multiple representations to this court that the type of documents Apple sought did not exist. Even more troubling is Samsung failure to address the inaccuracy of these earlier representations to the court. The court thus GRANTS Apple's motion as to fees and expenses incurred in connection with Apple's motion to compel that resulted in the December 22 Order. "

With respect to the damages ordered discovery, the court also found that the discovery by Samsung had significant shortcomings: "Late-produced and never-produced product data, inconsistent presentations regarding the cost of goods sold and total profits that result in improper witness instructions during deposition, and errors that require additional iterations of what Samsung insists was an accurate and complete spreadsheet, are indicative of a failure to provide damages data that accurately and fully complied with the court's order by the indicated date."

Accordingly, the court found that narrowly tailored sanctions were appropriate: "On balance, in order to mitigate the harm to Apple in a narrowly tailored and timely fashion, the court will require the following:

• No later than April 30, Samsung shall produce any and all remaining, responsive discovery outlined by Apple in its proposed order to the motion to compel that resulted in the court's January 27 Order;
• No later than May 7, Apple may supplement its expert report(s) on damages, limited to explaining any changes to the initial report(s) that are the result of the additional production;
• Samsung shall wait to depose Apple's damages expert(s) shall be limited to half of the time otherwise allow under the federal rules and the discovery order of the presiding judge. The delayed deposition(s) must be completed no later than May 14."


Apple Inc. v. Samsung Electronics Co., LTD, Case No. C 11-1846 LHK (PSG) (N.D. Cal. April 23, 2012)

The authors of www.PatentLawyerBlog.com are patent trial lawyers at Jeffer Mangels Butler & Mitchell LLP. We represent inventors, patent owners and technology companies in patent licensing and litigation. Whether pursuing patent violations or defending infringement claims, we are aggressive and effective advocates for our clients. For more information contact Stan Gibson at 310.201.3548 or SGibson@jmbm.com.