Can you imagine if Apple establishes a ruling that its design patent of a rectangle with four rounded corners is valid and infringed, without a trial, just by judicial fiat -- as a punishment because a lawyer made a statement to the press? Apple would lose its cool factor, that's for sure, not to mention going down in history as the King of Legal Ickdom. Move over, Microsoft. Apple is aiming for the gold in this category, and your record as the worst ever is being challenged.

[ Update Friday Aug. 3: The judge has said no to Apple, as she should, as reported by the LA Times' Andrea Chang. So much for all those Apple headlines.]

Dan Levine of Reuters has more:

Samsung spokesman Adam Yates said the company will be submitting a response. "Apple's filing is baseless," Yates said.

A typical sanction for attorney misbehavior is a monetary fine, but Apple is asking Koh to rule that Apple's phone design patents in the case are valid, and that Samsung has infringed them. Those are issues that the jury has been empanelled to decide.

[Update:Samsung has filed a motion to strike, in response to Apple's request for sanctions against Samsung. Samsung's motion to strike is accompanied by exhibits, one of them, Exhibit 5, is 15 pages of snippets of coverage in the media about Apple v. Samsung, most of it, Samsung points out, evidence excluded from trial. So if the jury is incapable of following instructions, there is plenty for them to read out there already. My question is: how much of it was planted by Apple? Here are the filings:

• Samsung's Motion to Strike
• Declaration of Joby Martin in Support of Motion to Strike
• Exhibit 1
• Exhibit 2
• Exhibit 3
• Exhibit 4
• Exhibit 5
• Exhibit 6

Applying the correct legal standard, it is abundantly clear that no sanctions whatsoever are warranted. Nothing in the statement released by Samsung was false, let alone deceptive. Nor did the statement undermine the integrity of this Court‘s proceedings. As Mr. Quinn‘s declaration explained, the statement was released by Samsung in response to media requests for information and media reports relating to the evidence this Court had addressed and excluded in open court. It was made after countless stories impugning Samsung‘s reputation (many of which cited Apple sources) with false accusations of copying had been published, both before and after the jury was impaneled. Samsung provided information that was already public and the subject of extensive media reports, and responded to these repeated attacks against Samsung which plainly injured Samsung‘s reputation in the market. Samsung‘s actions were not only protected by the First Amendment, but also consistent with every ethical and legal requirement regarding press statements.

Set against this background, Apple‘s request for dismissal is utterly unprecedented. Apple has offered no authority affirming an inherent powers dismissal based on a disclosure to the press – let alone a truthful dissemination of publicly available information.

Much as I hate to give more publicity to this move by Apple, here it is, for your reading pleasure. Here are the exhibits:

• Declaration of Peter J. Kolovos
• Exhibit A
• Exhibit B
• Exhibit C

Amazingly enough, Apple attaches some media articles as their exhibits, one of which quotes an Apple attorney saying something nasty about Samsung. So first you give a helpful quote to a journalist, spinning it your way, and then you show it to the judge? How very SCO-like of Apple.

And in other news, the Judge has had enough of the multiple objections to objections from these litigious litigators, and she has some new rules for them.

It's the Forbes article, Exhibit A, that quotes the Apple attorney accusing Samsung of contempt of court, no less, even though they have had an opportunity to read what Samsung's John Quinn pointed out in his Declaration, that the judge had issued no order saying he couldn't do what he did. It's not contempt of court if there's no order.

Duh.

If talking to the press is a no no, why is Apple doing it? Obviously, they are. The Forbes article also, oddly, supports Samsung's claim that it was not a press release, just a brief statement, attached to the excluded evidence slides:

Apple’s lawyer Harold McElhinny called the move the most blatant example of contempt of court it had ever seen and an intentional effort to “pollute the jury.”...

As for Samsung, it had its PR agency send two PowerPoint presentations, containing a total of nine pages, to reporters with this statement about what it called the “excluded evidence.”

The Judge’s exclusion of evidence on independent creation meant that even though Apple was allowed to inaccurately argue to the jury that the F700 was an iPhone copy, Samsung 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. The excluded evidence would have established beyond doubt that Samsung did not copy the iPhone design. Fundamental fairness requires that the jury decide the case based on all the evidence.

Apple asserts that Samsung's statement to the media was to try to influence the jury, but that's nonsense. They aren't allowed to read media about the trial. Apple's lawyers know that, and anyway Quinn pointed it out in his Declaration to the court. So guess what Apple comes up with next? You will not believe it:

Samsung’s press statement contains a clear message to any friend or family member of any juror: “[f]undamental fairness” requires that the jury have access to information that the Court has supposedly unjustly excluded. (Id.) The statement includes the excluded demonstratives, as well as the conclusion that the jury is supposed to draw from them—that “Samsung was not allowed to tell the jury the full story” and that the excluded evidence “established beyond doubt that Samsung did not copy.” (Id.) This is an invitation to anyone with any connection to the case or to the jury to provide this information—or, at minimum, to tell the members of the jury that they are not getting the “full story” or “all the evidence.” In short, Samsung was inviting and encouraging readers of the press statement to share this properly excluded evidence with the jury.

Samsung is talking to me and you, not the jury. They want people to know that they are not being allowed to present all the evidence that they believe would prove their innocence. You'd be crying from the rooftops too, if it was you, because fair is fair. And if Apple is so sure of its patents, why is it objecting to this evidence coming before the jury? Seriously. Why? Why not have all the facts before them? At this point, unless that happens, the public is unlikely to believe the trial was fair. Then even if Apple prevails, people will just take it that Apple muscled its way to an unjust victory.

It's bad enough there are so many patents approved by the USPTO and the Federal Circuit. That tilts the playing field against all defendants at the starting gate. If Apple has a case, let's hear it. But Samsung wants a chance to put on its best case too. Whether or not it would matter to the jury, I can't say. But it feels icky, the way it is now.

How about turning down the volume and skipping the ad hominems and just fighting fair and square? Patent aggression is bad enough without fighting like this. I mean, John Quinn asked the right question, "what is the point of a trial?" Why would any one want it decided on only some of the evidence?

And may I point out something? We have been blizzarded with articles by FOSSPatents (and many others) for months and months about this very case. If Apple ever had any contact with FOSSPatents, as it did with Forbes, then isn't this the pot calling the kettle black? I mean, which is more likely to influence a jury -- a nonstop torrent of articles that seem to invariably support Apple's point of view published *before* the jury is chosen, or a press statement that the jury will never see or hear about because they've already been given instructions to avoid that?

I mean. Come on. I don't know if Apple is also a client of FOSSPatents, like Oracle and Microsoft, and I don't mean to imply anything about that, although if I was Samsung, I'd want to inquire. But even if not, look at the media pressure on the potential jury pool, if we're going to worry about anything in that area. It's way more toxic to a fair trial.

Here's today's docket listing the filings, and if you see any you crave to read immediately, let me know. I got the ones I thought were the most interesting, the Apple motion and the judge's order regarding the new rules:

1536 - Filed & Entered:   08/01/2012
Statement re [1509] Statement, [1397] Statement, [1436] Stipulation, [1452] Statement, Supplemental Joint Statement re Meet and Confer to Discuss Objections to Exhibit Translation by Samsung Electronics America, Inc.(a New York corporation), Samsung Electronics Co. Ltd., Samsung Telecommunications America, LLC. (Maroulis, Victoria) (Filed on 8/1/2012)

1537 - Filed & Entered:   08/01/2012
RESPONSE to Samsungs Corrected Objections To Cross Examination Materials For Justin Denison by Apple Inc.. (Attachments: # (1) Declaration Of Jason R. Bartlett In Support Of Apples Supplemental Response To Samsungs Objections To Cross Examination Materials For Justin Denison, # (2) Exhibit A)(Jacobs, Michael) (Filed on 8/1/2012)

1538 - Filed & Entered:   08/01/2012
Statement Joint Preliminary Statement Proposing Post-Verdict Proceedings by Apple Inc.. (Jacobs, Michael) (Filed on 8/1/2012)

1539 - Filed & Entered:   08/02/2012
RESPONSE to re [1533] Declaration in Opposition, Apple Inc.'s Response to Declaration of John B. Quinn and Recommendation Regarding Appropriate Sanction by Apple Inc.. (Attachments: # (1) Declaration of Peter J. Kolovos, # (2) Exhibit A, # (3) Exhibit B, # (4) Exhibit C)(Selwyn, Mark) (Filed on 8/2/2012)

1540 - Filed & Entered:   08/02/2012
OBJECTIONS to Apples Responses To Samsungs Objections To Forstall, Bressler, Kare, Denison And Schiller Direct Examination Materials Apples Objections To Samsungs Proposed Direct Examination Materials For Jdenison And Supplemental Objections To Samsungs Proposed Cross Examination Materials For Schiller by Apple Inc.. (Attachments: # (1) Declaration Of Richard Hung In Support Of Apples Objections And Responses Re Samsungs Responses, # (2) Exhibit A, # (3) Exhibit B)(Jacobs, Michael) (Filed on 8/2/2012)

1541 - Filed & Entered:   08/02/2012
OBJECTIONS to Samsung's (1) Objections Regarding Forstall Exhibits, and Amended Exhibit Disclosures for Bresller, Kare, Schiller and Denison, and (2) Responses Regarding Exhibits for Denison Direct Exam and Schiller Cross Exam by Samsung Electronics America, Inc.(a New York corporation), Samsung Electronics Co. Ltd., Samsung Telecommunications America, LLC. (Attachments: # (1) Declaration of Ketan V. Patel, # (2) Exhibit A, # (3) Exhibit B, # (4) Exhibit C, # (5) Exhibit D, # (6) Exhibit E, # (7) Exhibit F, # (8) Exhibit G, # (9) Exhibit H, # (10) Exhibit I)(Maroulis, Victoria) (Filed on 8/2/2012)

1542 - Filed & Entered:   08/02/2012
OBJECTIONS to Samsung's [Corrected] (1) Objections Re: Forstall Exhibits and Amended Exhibit Disclosures for Bressler, Kare, Schiller and Denison, and (2) Responses Re: Exhibits for Denison Direct Exam and Schiller Cross Exam by Samsung Electronics America, Inc., Samsung Electronics Co. Ltd., Samsung Telecommunications America, LLC. (Maroulis, Victoria) (Filed on 8/2/2012)

1543 - Filed & Entered:   08/02/2012
OBJECTIONS to re [1540] Objection,, [Corrected] Apples Responses To Samsungs Objections To Forstall, Bressler, Kare, Denison And Schiller Direct Examination Materials by Apple Inc.. (Jacobs, Michael) (Filed on 8/2/2012)

1544 - Filed & Entered:   08/02/2012
ORDER Regarding Objections. Signed by Judge Lucy H. Koh on 8/2/2012. (lhklc2, COURT STAFF) (Filed on 8/2/2012)

1545 - Filed & Entered:   08/02/2012
ORDER by Judge Lucy H. Koh denying [1216] Motion for Relief; granting in part [1258] Motion for Clarification (lhklc2, COURT STAFF) (Filed on 8/2/2012)

The Parties have filed multiple rounds of objections regarding the testimony of witnesses Bressler, Kare, Denison, and Schiller. See, e.g., ECF Nos. 1462, 1466. The Court has already ruled on several of these objections on July 30, 2012, and July 31, 2012. See, e.g., ECF Nos. 1511 and 1520. The parties filed additional objections to these same witnesses on July 31, 2012. See, e.g., ECF Nos. 1518, 1521, and 1526. The parties then filed yet a third round of objections on August 2, 2012, covering many of the same witnesses, as well as adding a new witness, Mr. Forstall. See ECF Nos. 1540, 1541. The parties then filed a fourth round of corrected objections on August 2, 2012, regarding the same witnesses. See ECF Nos. 1542, 1543.

In light of these multiple rounds of objections on the same four witnesses, the Court will assume that the objections filed on July 31, 2012 have been superceded by the corrected objections filed on August 2, 2012, at ECF Nos. 1542 and 1543, and will only rule on these objections.

In the future, the parties may only file one set of objections and responses to a witness’s exhibits. Additionally, for all objections related to untimely disclosures, or exhibits that have previously been stricken by either this Court or Judge Grewal, the parties shall indicate the docket number and the page number of the controlling order, as well as the docket number and the page number of the controlling motion to strike or exclude. Finally, in the future, should the parties need to file corrected objections, the parties must refile attachments with the corrected objections.

IT IS SO ORDERED.

Dated: August 2, 2012

**********************

APPLE INC.’S RESPONSE TO
DECLARATION OF JOHN B. QUINN
AND RECOMMENDATION
REGARDING APPROPRIATE
SANCTION

Plaintiff Apple Inc. (“Apple”) hereby submits this Response to the Declaration of John B. Quinn and Recommendation Regarding Appropriate Sanction. Pursuant to the Court’s inherent authority and California Professional Rule of Conduct 5- 120, Apple seeks a finding that Samsung and its counsel have engaged in bad faith litigation misconduct by attempting to prejudice the jury by issuing a statement that attaches and discusses excluded evidence, and suggests that it be provided to the jury. Apple requests that the Court issue sanctions granting judgment that Apple’s asserted phone design patent claims are valid and infringed by Samsung.

I. INTRODUCTION

Samsung apparently believes that it is above the law, and that it—not this Court—should decide what evidence the jury should see. Yesterday, the Court once again rejected Samsung’s attempt to introduce evidence related to a defense that was not timely disclosed to Apple. Undaunted, and apparently unwilling to accept the Court’s ruling, Samsung chose self-help to get its excluded evidence before the jury: it issued a “statement” attaching a set of excluded demonstrative slides and proclaiming that “[f]undamental fairness” required the jury to consider them. On its own initiative, Samsung emailed reporters claiming that “Samsung was not allowed to tell the jury the full story,” that “excluded evidence would have established” Samsung’s case, and that “[f]undamental fairness requires that the jury decide the case based on all the evidence,” including the evidence that the Court excluded. (Ex. A (“Samsung, After ‘Begging’ to Get Sony Into Apple Patent Trial, Flouts Judge And Releases ‘Excluded Evidence’ Anyway”).)¹ This press statement wrongly calls into question the very integrity of the Court and the judicial process, and undermines Apple’s fundamental right to a fair trial by impartial jurors uninfluenced by extrajudicial statements. The Court should not condone this behavior; the Court can, and should, severely sanction it.

Remarkably, it was counsel for Samsung—John Quinn—who authorized Samsung’s statement, shortly after an outburst in court in which he demanded that the Court explain itself to

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At 2:48 p.m., after openings were done and a suave Apple industrial designer was testifying, a Samsung press statement hit our inbox (along with those of other reporters) with a link to the excluded slides.

.. .

Quinn said Samsung was merely responding to press inquiries about the issue (though this reporter didn't ask about it) . . .

Regrettably, this is merely the latest and most extraordinary example of Samsung’s willful disregard for the rules of practice and the orders of this Court. Samsung already has been sanctioned four times in this case for discovery abuses. Most recently, Samsung was sanctioned for destroying evidence. Litigation misconduct is apparently a part of Samsung’s litigation strategy—and limited sanctions have not deterred Samsung from such misconduct. Now, with so much at stake, Samsung has taken the calculated risk that any sanctions arising from its attempt to influence the jury with its excluded arguments are a price it is willing to pay. Indeed, Samsung may have determined that its gambit could lead to a mistrial—which it apparently would welcome.

But Apple will not request a mistrial. Apple—like the Court—has invested enormous time and resources in expeditiously preparing the case for trial, a jury has been seated, and the evidence has begun. That case should proceed on the current schedule, to bring closure to Apple’s claims and Samsung’s counterclaims. A mistrial would play directly into Samsung’s strategy of delay, and only reward Samsung’s misconduct.

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II. FACTUAL BACKGROUND

On the morning of July 31, 2012, Samsung’s counsel John Quinn once again sought reconsideration of this Court’s ruling that Samsung was precluded from raising a defense that was not timely discussed to Apple. (Tr. July 31, 2012 at 290-93.) Mr. Quinn’s argument became increasingly heated, and, at one point, he interrupted the Court asking, “What’s the point . . . of having the trial? What’s the point?” (Id. at 291-92.) Despite the Court’s repeated requests that Mr. Quinn end his argument, Mr. Quinn did not relent until the Court threatened to sanction him. (Id. at 292-93.)

Later that day, Samsung issued a statement publishing the excluded evidence and inviting the jury to consider the excluded evidence out of court. According to multiple reports, the full text of Samsung’s statement is as follows:

The Judge’s exclusion of evidence on independent creation meant that even though Apple was allowed to inaccurately argue to the jury that the F700 was an iPhone copy, Samsung 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. The excluded evidence would have established beyond doubt that Samsung did not copy the iPhone design. Fundamental fairness requires that the jury decide the case based on all the evidence.

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Mr. Quinn’s declaration also includes uninvited legal argument, including the claim that he was entitled to publicize Samsung’s excluded defenses (1) because the excluded information was part of the public pretrial record and thus “part of trial,” (2) because an extrajudicial statement was necessary, in light of the Court’s exclusion order, to protect his client from the prejudicial effect of the media’s reporting on Apple’s claims, and (3) because under the First Amendment “truth is an absolute defense.” Mr. Quinn did not provide the Court with a copy of the text of Samsung’s press statement.

III. LEGAL STANDARDS

“Courts of justice are universally acknowledged to be vested, by their very creation, with power to impose silence, respect, and decorum, in their presence, and submission to their lawful mandates.” Chambers v. NASCO, Inc., 501 U.S. 32, 43 (1991). “This power reaches both conduct before the court and that beyond the court’s confines, for ‘[t]he underlying concern that gave rise to the contempt power was not . . . merely the disruption of court proceedings. Rather, it was disobedience to the orders of the Judiciary, regardless of whether such disobedience interfered with the conduct of trial.’” Id. at 44 (quoting Young v. United Sates ex. Rel. Vuitton et

4

Under California Rule of Professional Conduct 5-120, a lawyer “who is participating or has participated in the investigation or litigation of a matter shall not make an extrajudicial statement that a reasonable person would expect to be disseminated by means of public communication if the member knows or reasonably should know that it will have a substantial likelihood of materially prejudicing an adjudicative proceeding in the matter.”

IV. ARGUMENT

A. SAMSUNG’S BAD FAITH ATTEMPT TO INFLUENCE THE JURY
WARRANTS SANCTIONS UNDER THE COURT’S INHERENT
AUTHORITY.

1. Samsung’s statement was a bad faith attempt to influence the jury
with excluded evidence.

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The excluded evidence would have established beyond doubt that Samsung did not copy the iPhone design. Fundamental fairness requires that the jury decide the case based on all the evidence.

Samsung’s press statement contains a clear message to any friend or family member of any juror: “[f]undamental fairness” requires that the jury have access to information that the Court has supposedly unjustly excluded. (Id.) The statement includes the excluded demonstratives, as well as the conclusion that the jury is supposed to draw from them—that “Samsung was not allowed to tell the jury the full story” and that the excluded evidence “established beyond doubt that Samsung did not copy.” (Id.) This is an invitation to anyone with any connection to the case or to the jury to provide this information—or, at minimum, to tell the members of the jury that they are not getting the “full story” or “all the evidence.” In short, Samsung was inviting and encouraging readers of the press statement to share this properly excluded evidence with the jury.

Moreover, it was Samsung that affirmatively chose to go on the offensive with this press statement. In his declaration, Mr. Quinn implies that the release was a response to specific inquiries, calling it a “brief statement” in response to “requests from members of the media seeking further explanation” about the excluded evidence. (Quinn Decl. ¶ 2; see also id. ¶ 4 (claiming that “Samsung did not issue a general press release”).) Even if this were true, it would be no excuse: simply because the press asks for materials does not give an attorney license to provide those materials. Indeed, attorneys routinely decline such requests where it would breach legal or ethical obligations to make a disclosure.

But, in fact, press reports make clear that this was a broader release, made unsolicited to certain press members, affirmatively aimed to disseminate Samsung’s excluded evidence widely among the press:

At 2:48 p.m., after openings were done and a suave Apple industrial designer was testifying, a Samsung press statement hit our inbox (along with those of other reporters) with a link to the excluded slides. (The linked material has since been removed, but All Things D snagged it.) “The excluded evidence would have established beyond doubt that Samsung did not copy the iPhone

6

design,” the statement said. “Fundamental fairness requires that the jury decide the case based on all the evidence.”

It was Samsung that took the initiative to email reporters with its statement, and Samsung that chose to disseminate the excluded evidence with the instruction that the jury should decide the case based on it. “Few, if any, interests under the Constitution are more fundamental than the right to a fair trial by ‘impartial’ jurors, and an outcome affected by extrajudicial statements would violate that fundamental right.” Gentile v. State Bar of Nevada, 501 U.S. 1030, 1075 (1991). Samsung’s attempt to undermine this right by broadcasting the excluded evidence and suggesting that the jury should consider it is precisely the kind of “bad faith” litigation misconduct that warrants sanctions.

2. Samsung’s actions substantially increased the likelihood that the jury
will see the excluded evidence.

7

3. Samsung’s misconduct is particularly egregious, because it impugned
the integrity of the Court.

Specifically, Samsung asserted that “[t]he Judge’s exclusion of evidence” will allow Apple to make “inaccurate[]” arguments, and will prevent Samsung from “tell[ing] the jury the full story” that “would have established beyond doubt that Samsung did not copy.” (Exs. A, C.) The clear implication of Samsung’s press statement is that the Court is somehow biased or unfair, and that the trial will violate “[f]undamental fairness” because the jury’s decision will not be “based on all the evidence.” (Id.) Samsung’s statement is a frontal assault on the integrity of the Court and calls the judicial process into question. It is precisely to protect the “integrity of

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4. Samsung’s press statement is the latest in a string of litigation
misconduct.

• On April 23, 2012, Judge Grewal granted monetary sanctions to Apple as a result of Samsung’s failure to comply with two discovery orders, after Apple twice moved to compel documents reflecting Samsung’s analysis or consideration of Apple’s products. (See Dkt. 880.)

• Judge Grewal’s April 23 Order also granted Apple’s motion for sanctions due to Samsung’s non-compliance with a prior Court order compelling Samsung to produce financial information relevant to establishing Apple’s damages. As a sanction, Judge Grewal allowed Apple to supplement its damages expert report and limited Samsung’s deposition of Apple’s damages expert to half the time otherwise allowed under the Court’s rules. (See id.)

• On May 4, 2012, Judge Grewal issued an Order precluding Samsung from offering any evidence at trial of its design-around efforts for the ’381, ’891, and ’163 patents because Samsung had failed to comply with Judge Grewal’s prior order compelling production of source code for the accused Samsung products. (See Dkt. 898 and Dkt. 1106.)

• On July 25, 2012, based on a finding that Samsung had “consciously disregarded” its obligation to preserve relevant evidence by leaving in place “an adjudicated spoliation tool [] for seven months and tak[ing] almost no steps to avoid spoliation beyond telling employees not to allow what will otherwise certainly happen,” Judge Grewal granted Apple’s motion for an adverse inference and ordered that the jury be instructed that Samsung destroyed relevant evidence that was favorable to Apple. (See Dkt. 1321.)

5. The Court can and should sanction Samsung for its bad faith conduct
in the litigation.

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Sanctions for issuance of a press statement of the type that Samsung issued is well within the Court’s authority. For example, in American Science, the court issued sanctions under its inherent authority for “issu[ance of an] objectionable press release intentionally and in bad faith.” 606 F. Supp. 2d at 625; see also Chambers, 501 U.S. at 44 (listing other examples of appropriate exercise of inherent sanctioning authority).

Here, Samsung’s effort to place excluded evidence before the jury by press statement has threatened to taint the fair outcome of this case, and cannot help but undermine the public trust in the judiciary. In this closely watched case, Samsung’s misconduct cannot and should not be permitted to go unchecked. Samsung’s press statement has “violate[d] [Apple’s] fundamental right” to “a fair trial by ‘impartial’ jurors” and called the Court’s integrity and impartiality into question with its “What’s the point?” message. Gentile, 501 U.S. at 1075. Those actions can and should result in serious sanctions, as discussed in detail below.

B. SAMSUNG’S ATTORNEY’S AUTHORIZATION OF THE PRESS
STATEMENT VIOLATED CALIFORNIA ETHICAL RULE 5-120.

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The Discussion of Rule 5-120 lists four factors to consider in determining whether there has been a violation of the Rule, three of which are directly relevant here:

Whether an extrajudicial statement violates rule 5-120 depends on many factors, including: (1) whether the extrajudicial statement presents information clearly inadmissible as evidence in the matter for the purpose of proving or disproving a material fact in issue; (2) whether the extrajudicial statement presents information the member knows is false, deceptive, or the use of which would violate Business and Professions Code section 6068(d); (3) whether the extrajudicial statement violates a lawful "gag" order, or protective order, statute, rule of court, or special rule of confidentiality (for example, in juvenile, domestic, mental disability, and certain criminal proceedings); and (4) the timing of the statement.”

Likewise, the second factor weighs in favor of a finding of a violation. Specifically, the first sentence in Samsung’s press statement falsely asserted that “Apple was allowed to inaccurately argue to the jury that the F700 was an iPhone Copy” – a charge repeated by Samsung’s counsel after Apple’s opening statement, when Samsung yet again sought to re-argue the Court’s prior rulings on inadmissibility. (Tr. at 346-49.) However, Apple made no such claim during its opening statement (and, as Samsung well knows, Apple has not and does not accuse the F700 in this case). (Dkt. 1178.) Rather, Apple’s opening statement accused Samsung

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The fourth factor – the timing of the statement – also weighs in favor of a finding of violation. Samsung issued the press statement and the excluded slides as a direct response to the Court’s rulings earlier in the day. Moreover, by issuing the release at a time when the jury will be away from Court for two days, Samsung increased the likelihood that a juror might learn of the information before trial resumes, and maximized the time between a juror’s potential exposure and any curative instruction that the Court might provide when Court resumes.

Mr. Quinn’s extrajudicial appeal to the jury flouts the judicial process and the safeguards designed to ensure a fair trial. Such prejudicial statements are not, as Mr. Quinn suggests (Quinn Decl., ¶ 13), protected by the First Amendment. In Gentile, 501 U.S. 1030, the Supreme Court explained that “[f]ew, if any, interests under the Constitution are more fundamental than the right to a fair trial by ‘impartial’ jurors, and an outcome affected by extrajudicial statements would violate that fundamental right.” Id. at 1075. Accordingly, the Supreme Court held that the State has a substantial interest in preventing officers of the court, such as lawyers, from making comments that (1) are “likely to influence the actual outcome of the trial,” or (2) “are likely to prejudice the jury venire, even if an untainted panel can ultimately be found.” Id.

In addition, Mr. Quinn is wrong that his press statement can be justified under California Ethics Rule 5-120(B)(2) on the ground that it contained public information. The slides Mr. Quinn disclosed to the press did not merely recite “information contained in a public record.” Those slides and the accompanying press statement were, in fact, the very argument to the jury that this Court has repeatedly held inadmissible. A direct appeal to the jury to subvert the Court’s exclusion order is not encompassed by Rule 5-120(B)(2).

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C. JUDGMENT IN APPLE’S FAVOR ON ITS PHONE DESIGN PATENT
INFRINGEMENT CLAIMS IS AN APPROPRIATE SANCTION FOR
SAMSUNG’S AND ITS COUNSEL’S MISCONDUCT.

It is fully within the Court’s authority to order judgment in Apple’s favor as a sanction for this misconduct. See, e.g., Halaco Eng’g Co. v. Costle, 843 F.2d 376, 380 (9th Cir. 1988) (“Dismissal under a court’s inherent powers is justified in extreme circumstances, in response to abusive litigation practices, and to insure the orderly administration of justice and the integrity of the court’s orders.” (citations omitted)); see also Chambers 501 U.S. at 45 (“[O]utright dismissal of a lawsuit . . . is a particularly severe sanction, yet is within the court’s discretion”). The misconduct at issue is “extreme”—it is exceptional for a party to issue a press statement encouraging dissemination of excluded evidence to a sitting jury and disparaging the judge who entered the order for denying them a “fair trial.” Likewise, the press statement is an “abusive litigation practice[]” insofar as it sought to increase the chance that the jury considered excluded evidence. “In cases where the drastic sanctions of dismissal or default are ordered, . . . the losing party’s non-compliance must be due to willfulness, fault, or bad faith. A finding of any of these circumstances can justify the sanction of dismissal.” Halaco, 843 F.2d at 380 (citations omitted).

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In assessing whether to exercise its discretion to order judgment in Apple’s favor, the Court should consider whether any sanction other than judgment could remedy the harm caused by the misconduct of Samsung and its counsel. “A primary aspect of that discretion is the ability to fashion an appropriate sanction for conduct which abuses the judicial process.” Chambers, 501 U.S. at 44-45. In other words, the sanction must remedy the harm: “The proper remedy must rectify ‘whatever improper effect the attorney’s misconduct may have had in the case before it.’” United States v. Sierra Pacific Indus., __ F. Supp. 2d. __, 2011 WL 5828017, at *9 (E.D. Cal. Nov. 18, 2011) (quoting McMillan v. Shadow Ridge at Oak Park Homeowner’s Ass’n, 165 Cal. App. 4th 960, 968 (Cal. Ct. App. 2008)).

No remedy other than judgment on Apple’s phone design patent claims could fully rectify the harm that Samsung and Mr. Quinn have caused. No exclusionary sanction would be sufficient—the evidence that the press statement addresses has already been excluded. Nor would a mistrial be appropriate. A mistrial would only further delay resolution of Apple’s claims—which would be to Samsung’s benefit, and Apple’s detriment. Moreover, a mistrial would impose significant additional expense on the parties and the Court. Cf. Gentile, 501 U.S. at 1075 (“The State has a substantial interest in preventing officers of the court, such as lawyers, from imposing such costs on the judicial system and on the litigants.”).

Likewise, monetary sanctions cannot remedy the harm that Samsung’s press statement has caused. Apple is seeking permanent injunctive relief precisely because monetary relief is inadequate to address the harms caused by Samsung’s infringement; Samsung should not be allowed to reduce the risk of injunctive relief by manipulating the jury with extrajudicial statements, then simply pay a fine. Moreover, it is evident that monetary sanctions have been insufficient to deter misconduct by Samsung and its counsel. The Court previously imposed monetary sanctions on Samsung, yet its pattern of misconduct persisted. (See Dkt. 880.) The

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In addition to sanctions in the form of judgment, Samsung and Mr. Quinn should also be ordered to comply with the Court’s order identifying who released the press statement, and who drafted it. (Tr. at 555.) Mr. Quinn’s declaration fails entirely to address these aspects of the Court’s order.

V. CONCLUSION

For the foregoing reasons, Apple respectfully requests that the Court sanction Samsung by granting judgment in favor of Apple on its claim that Samsung infringes Apple’s phone design patents, and granting judgment that those patents are not invalid. In the alternative, and at a minimum, the Court should (i) instruct the jury that Samsung engaged in serious misconduct and that, as a result, the Court has made a finding that Samsung copied the asserted designs and features from Apple products; and (ii) preclude Samsung from further mentioning or proffering any evidence regarding the “Sony design exercise” for any purpose.

Dated: August 1, 2012

WILMER CUTLER PICKERING
HALE AND DORR LLP

By: /s/ William F. Lee
William F. Lee

Attorneys for Plaintiff
APPLE INC.

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¹ All exhibits cited herein are attached to the Declaration of Peter J. Kolovos, filed herewith.

²Professional Rule 1-100 explains “the comments contained in the Discussions of the rules, while they do not add independent basis for imposing discipline, are intended to provide guidance for interpreting the rules and practicing in compliance with them.”

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I, Mark D. Selwyn, am the ECF User whose ID and password are being used to file this Declaration. In compliance with General Order 45, X.B., I hereby attest that William F. Lee has concurred in this filing.

Dated: August 1, 2012

By: /s/ Mark D. Selwyn
Mark D. Selwyn

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I hereby certify that a true and correct copy of the above and foregoing document has been served on August 1, 2012 to all counsel of record who are deemed to have consented to electronic service via the Court’s CM/ECF system per Civil Local Rule 5.4.

/s/ Mark D. Selwyn
Mark D. Selwyn

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