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Apple and Samsung Argue About Apple's "Non-Jury Issues" ~pj
Monday, September 10 2012 @ 07:38 PM EDT

This is strange. Apple is now arguing about matters where the jury ruled *for* them, not against them. Apple, I gather, didn't like it that the jury found for Samsung on Apple's FRAND claims, probably because it could impact other cases in Apple's world tour of the globe's courtrooms in Apple's thermonuclear war against Android. Incidentally, here's who Bloomberg News says is the field marshall doing the coordinating of Apple's new super-aggression, Noreen Krall.

So Apple wants to argue their equitable defenses of waiver, estoppel and unclean hands.... you know, just writing it out is to express its oddness. Why would you need to argue your equitable defenses to claims you just prevailed on? The jury said Apple didn't infringe any of Samsung's patents, after all. The only reason must be to win a bit more than what the jury already gave you or to get from the judge what the jury wouldn't give you.

Samsung points that out, that the equitable defenses are moot, but it asks the judge, if it grants Apple's request for further motion practice, to make it mutual, and then Samsung will raise some indefiniteness issues around design patents, like the D'889 rounded corners one that it intended to put into its 50(b) motion. To which Apple says, Samsung shouldn't be allowed to argue it now, as they tried it earlier and didn't win on summary judgment and in addition it's a fact issue, not a matter of law. So Apple wants the freedom to argue moot equitable defenses, but Samsung gets no such opportunity. How very Apple. The new bully version.

But Samsung quotes what ought to be the winning argument, that the judge ruled last month that she would only entertain one post-verdict motion from each side:

The Court’s August 28, 2012 Order was clear: “The Court will entertain only one post-judgment motion for relief per side, not including Apple’s motion for permanent injunction and willfulness enhancement.”
Is that not clear? It was clear to Samsung so it planned on saying everything in that one motion, but Apple wants what it wants. And what it wants is to talk longer, fill more pages, than Samsung. And it wants money. And it wants to win what the jury failed to award it, by trying to walk through this other door.

What does it all mean? It means both sides realize this peculiar verdict may not be exactly cast in eternal stone, and so they are trying for every little thing that might help their side in case the judge alters the landscape. And Apple makes clear that it's looking for attorneys' fees, and they need this additional motion practice to be able to ask for it. Charming.

Here's an excellent explanation on IPWatchdog by law professor Richard T. Redano on why Apple might be worrying a bit about treble damages in this case after the jury's vague verdict.

I told you the day the verdict was announced that this story was far from over, and here we go with The Rest of the Apple v. Samsung Story. In litigation, it ain't over 'til it's over, and it's definitely not over yet.

The filings:

1959 - Filed & Entered: 09/07/2012
Order on Motion for Miscellaneous Relief
Docket Text: ORDER by Judge Lucy H. Koh granting [1755] Motion Clarification regarding Sealing Order (lhklc2, COURT STAFF) (Filed on 9/7/2012)

1960 - Filed & Entered: 09/07/2012
Notice of Appearance
Docket Text: NOTICE of Appearance by John Mark Pierce (Pierce, John) (Filed on 9/7/2012)

1961 - Filed & Entered: 09/09/2012
Opposition/Response to Motion
Docket Text: OPPOSITION to ( [1956] MOTION Regarding Schedule for Briefing of Non-Jury Claims ) filed bySamsung Electronics America, Inc.(a New York corporation), Samsung Electronics Co. Ltd., Samsung Telecommunications America, LLC. (Maroulis, Victoria) (Filed on 9/9/2012) Modified text on 9/10/2012 (dhmS, COURT STAFF).

1962 - Filed & Entered: 09/10/2012
Reply to Opposition/Response
Docket Text: REPLY (re [1956] MOTION Regarding Schedule for Briefing of Non-Jury Claims ) filed by Apple Inc.. (Selwyn, Mark) (Filed on 9/10/2012)

The order, #1959, is granting Intel's request to keep its trade secrets secret. And there is a new lawyer from Quinn Emanuel assigned to this case, John Mark Pierce, a very handsome dude, I must say. Maybe you have to be if you practice in LA, which is where he does work. His speciality is appellate practice, which explains why he's joining the team now. As his bio puts it, he is charge of the post-trial onward:
Partner coordinating all post-verdict motions and appeals in Apple v. Samsung, a case tried in the U.S. District Court for the Northern District of California in relation to iPhone and iPad utility and design patents.
But appellate practice is not all he does. He's a litigator with a capital L. From his bio:
John Pierce has been described by Benchmark Plaintiff Litigation 2012 as “one of Quinn Emanuel’s most esteemed jury trial lawyers maintaining a 100% success rate in jury trials, arbitration and preliminary injunction proceedings." A former Army officer who was also an editor of the Harvard Law Review, Mr. Pierce is a tireless advocate who has represented individuals and companies in a broad range of practice areas. In his second year at Quinn Emanuel, he won two multi-million dollar jury verdicts within a span of two months, including the 67th highest jury verdict in the United States in 2008 as determined by the Verdict Search Top 100 List.

He has successfully represented clients in complex disputes involving, to name a few, film financing, false advertising, 1st Amendment claims, structured finance, government contracts, copyright, trade secrets, financial fraud and insurance coverage. Renowned by clients for his fighting mentality and ability to connect with juries, judges and witnesses, Mr. Pierce is also an experienced appellate advocate with the analytic and writing skills necessary to maximize the likelihood of protecting a verdict on appeal.

On behalf of large institutional clients suing as plaintiffs, Mr. Pierce has obtained verdicts, pre-trial judgments and settlements amounting to more than $250 million. On behalf of corporate defendants, he has obtained verdicts, pre-trial judgments and settlements successfully defending against over a billion dollars in claims.

Ex-Army. Fighting mentality. Harvard Law. Sounds fierce. But look at that face. How could a jury resist? I gather juries fall under his spell on a regular basis, going down the long list of cases he's won.

On the other side is Ms. Krall and her boss, Bruce Sewall, and their army of lawyers, inside the company and outside, as Bloomberg describes them:

Krall has become a familiar sight in courtrooms around the world as Apple’s chief litigation counsel. Her greatest victory came Aug. 24, when a California jury ordered Samsung Electronics Co., the biggest smartphone maker, to pay Apple more than $1 billion for infringing patents related to the iPhone.

“There is no historical precedent for what Noreen Krall is doing,” said John Thorne, who ran Verizon Communications Inc.’s intellectual-property team before joining Kellogg Huber in Washington this year. “Good generalship produces results like Noreen has gotten. She’s mastering big decisions, like which law firms to hire, how to manage resources, how much of Tim Cook’s time to take.”

Krall, 47, and her boss, General Counsel Bruce Sewell, have amassed a team of lawyers from inside Apple and some of the top U.S. law firms to fight Samsung, HTC Corp. (2498) and Google’s Motorola Mobility unit over Google’s Android mobile operating system and the smartphones and tablets that run on it....

Krall’s job includes understanding the patent rules and court procedures in more than three dozen jurisdictions, making sure arguments are consistent, providing feedback and keeping her team motivated. She observes her lawyers’ arguments from benches or public seating in the back of courtrooms, leaving with them at the end of the day.

There's no precedent, because it's over the top, and therefore a huge risk. And she's never done this before. Mr. Pierce is ex-Army and is seasoned in litigation on exactly this kind of scale.

On the other hand, Krall is a New Yorker originally. I don't for a second underestimate that. But she worked more as a paper pusher for IBM's patent department, and then was at Sun, where there wasn't a lot of litigation happening. Apple has never acted like this before. I'd call it an experiment, then. That doesn't mean it can't work. But surprise tactics, while often effective at first precisely because they are a surprise, don't necessarily prevail in the end.

This jury was, to put it mildly, unusual in the way it approached matters, and that makes the big "win" very much in doubt. And Apple lost in Korea overall, and lost in Tokyo, and so let's see over time if this assertiveness pays off. Even if it does, the company is letting her redefine Apple's brand in a way that without a doubt will cost them customers. It already has. I gather they don't care about that, or they don't believe it or maybe they think they'll gain more by this strategy than they'll lose by it. But one thing is for sure - this is not the Apple that we used to know.

Getting back to the motion practice argument, here's why Samsung thinks it's stupid:

Additional briefing is particularly inappropriate because the equitable issues Apple identifies in its motion here are moot or may well be mooted by the Court’s rulings on the parties’ Rule 50 motions. The jury found no liability on Samsung’s claims against Apple. Thus, unless the Court grants judgment as a matter of law on the relevant Samsung claims (a motion Samsung has not yet even filed), Apple’s equitable defenses of waiver, estoppel and unclean hands are entirely moot. Moreover, these affirmative defenses and Apple’s unfair competition counterclaim are based entirely on the FRAND theories that the jury rejected when it found in favor of Samsung on Apple’s antitrust and breach of contract claims. See Dkt. No. 1189 (Joint Pre-Trial Statement) at 1, 13; see also Apple’s Amended Counterclaims in Reply, Dkt. 381, at 82-83. The jury’s rejection of Apple’s FRAND claims forecloses Apple’s assertion of similar claims that would require the Court to make a contrary finding. See L.A. Police Protective League v. Gates, 995 F.2d 1469, 1473 (9th Cir. 1993) (“[I]n a case where legal claims are tried by a jury and equitable claims are tried by a judge, and the claims are ‘based on the same facts,’ in deciding the equitable claims ‘the Seventh Amendment requires the trial judge to follow the jury's implicit or explicit factual determinations.’”) (quoting Miller v. Fairchild Indus., 885 F.2d 498, 507 (9th Cir. 1989)).

There is no reason to exempt “non-jury claims” from the Court’s August 28, 2012 Order, and let alone devote 50 pages of separate briefing to issues that are potentially moot and irrelevant. At the very least, Apple’s one-sided request for separate briefing on equitable issues is improper. Samsung has its own equitable issues it may raise, and pursuant to its understanding of the Court’s Order, had intended to include them as warranted in its consolidated post-trial motion to be filed on September 21.

However, if the Court is inclined to grant Apple’s request for additional, separate briefing on non-jury claims, then it should be mutual and extend to the Samsung equitable issues that remain to be resolved. These include, among others, the indefiniteness of the “substantially centered” limitation in the ‘163 patent as well as indefiniteness of the asserted design patents.

The Court should deny Apple’s motion. But to the extent the Court grants Apple’s request for separate briefing on non-jury claims, Samsung respectfully requests a mutual schedule so that Samsung’s non-jury issues may be separately briefed as well.

Here's Apple argument on why its equitable defenses are not moot:
Second, Samsung incorrectly contends that Apple’s equitable claims are moot. (Dkt. No. 1961 at 1.) They are not. The jury found that Apple has not infringed any of Samsung’s patents and that Samsung’s rights with respect to the asserted claims of the ’516 and ’941 patents have been exhausted. (Dkt. No. 1931 at 17, 20.) Apple’s affirmative defenses of waiver, estoppel, and unclean hands are equitable claims that relate to the unenforceability of Samsung’s ’516 and ’941 patents in their entirety and that would separately support an “exceptional case” finding and an award of attorney’s fees to Apple. Samsung cites no case law to support its contention that the jury’s verdict renders Apple’s affirmative defenses moot, and in fact, other courts have decided similar equitable claims following a jury’s finding of no liability on claims for patent

infringement. In Qualcomm Inc. v. Broadcom Corp., No. 05-CV-1958B (BLM), 2007 U.S. Dist. LEXIS 28211 (S.D. Cal. Mar. 21, 2007), for example, a jury found that the defendant had not infringed any asserted patents. Id. at *4-5. In post-trial proceedings following that verdict, the district court considered the defendant’s equitable claims and found in favor of the defendant on its affirmative defense of waiver. Id. at *3-5. On appeal, the Federal Circuit affirmed the finding of waiver and specifically noted that the patent owner’s “failure to appeal the non-infringement judgment [did] not moot its appeal of the unenforceability judgment.” Qualcomm Inc. v. Broadcom Corp., 548 F.3d 1004, 1010 n.1 (Fed. Cir. 2008); cf. In re Omeprazole Patent Litigation, 483 F.3d 1364, 1375 (Fed. Cir. 2007) (stating that an “inequitable conduct claim was not technically moot, because it would have rendered the entire ... patent unenforceable, rather than just the claims that were held invalid”). Similarly here, Apple’s affirmative defenses of waiver, estoppel, and unclean hands are not moot, and this Court should hear and decide them in post-trial proceedings.

Moreover, the jury’s verdict with respect to Apple’s FRAND-related claims does not foreclose Apple’s assertion of its affirmative defenses. The jury found in favor of Samsung on Apple’s antitrust and breach of contract claims. (Dkt. No. 1931 at 19.) Apple’s affirmative defenses of waiver, estoppel, and unclean hands do not depend on any factual determinations, either explicit or implicit, made by the jury. The jury only made findings with respect to the ultimate questions of liability for the antitrust and breach of contract claims and did not make any specific findings on subsidiary factual issues. (Id.) For example, the jury verdict does not prevent this Court from concluding, as a separate matter, that Samsung waived its rights to enforce its patents by indicating to others in the industry that it did not intend to enforce its patents (waiver) or that Apple relied on Samsung’s misleading conduct or silence regarding its intent to enforce its patents (estoppel). Thus, there would be no inconsistency between the jury verdict and the Court’s finding that the ’516 and ’941 patents are unenforceable due to waiver, estoppel, or unclean hands.

As you can see, Apple wants more than money. It wants to block Samsung from being able to use its FRAND patents at all, not just here but in any other litigation in the US, by having the judge rule them unenforceable.

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