14-05-19 Apple-Samsung Joint Submission on ADR

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JOINT SUBMISSION IN RESPONSE TO THE COURT’S REQUEST REGARDING ADR

CASE NO. 12-CV-00630 (LHK)

[COUNSEL LISTED ON SIGNATURE PAGE]

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

APPLE INC., a California corporation,

Plaintiff, v.

SAMSUNG ELECTRONICS CO., LTD., a Korean corporation, SAMSUNG ELECTRONICS AMERICA, INC., a New York corporation, and SAMSUNG TELECOMMUNICATIONS AMERICA, LLC, a Delaware limited liability company,

Defendants.

Civil Action No. 12-CV-00630-LHK JOINT SUBMISSION IN RESPONSE TO THE COURT’S REQUEST REGARDING ADR

Case5:12-cv-00630-LHK Document1894 Filed05/19/14 Page1 of 7

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1 JOINT SUBMISSION IN RESPONSE TO THE COURT’S REQUEST REGARDING ADR


Pursuant to the Court’s May 5, 2014 request, Apple and Samsung submit this Joint Statement

Regarding Alternative Dispute Resolution (“ADR”). (See Trial Tr. 3425:1-17.)

Apple’s Statement

Apple has always been committed to a resolution with Samsung, preferably without the need

for litigation, that recognizes and protects Apple’s intellectual property. As the Court knows from

trial, Apple met with Samsung multiple times before being forced to file the present lawsuits. After

litigation began, the most senior officials of Apple have devoted days’ worth of their time to various

ADR processes, as well as having countless discussions with Samsung outside formal mediation.

Accordingly, when the Court inquired on May 5 whether Samsung and Apple were willing to engage

in further ADR, and counsel for Samsung stated they “were always willing to participate if there is

an interest in doing so” (Trial Tr. 3424:14-15), Apple also communicated its willingness to engage

in further discussions. (Id. at 3424:18-25.)

However, immediately after that exchange Samsung’s lead counsel made a number of

statements suggesting that Samsung has no interest in stopping its use of Apple’s patents or

compensating Apple for past infringement. For example, Mr. Quinn was quoted as saying: “I’m

more confident than in any case I’ve ever been in that this [jury verdict in the 630 matter] is

unsupported [by the evidence]. It will go to zero. They’re not going to see any of this money. This

won’t stand.” Samsung Atty Quinn Calls iPhone IP War ‘Apple’s Vietnam’, Law360.com,

http://www.law360.com/articles/534842/samsung-atty-quinn-calls-iphone-ip-war-apple-s-vietnam

(last visited May 19, 2014). Mr. Quinn reportedly dismissed the earlier verdicts against Samsung by

saying: “Apple hasn’t collected a penny—or succeeded in taking any products off the market.” Id.

“This is Apple’s Vietnam, and people are sick of it.” Id. And, in what hardly presages a fruitful

return to mediation, Mr. Quinn remarked: “It’s kind of hard to talk settlement with a jihadist.” Key

Samsung Lawyer Sees Patent War Ending Soon – With Apple Getting Nothing, Cnet.com,

http://www.cnet.com/news/samsung-attorney-quinn-says-patent-war-will-be-over-soon-and-apples-

not-getting-our-money/ (last visited May 19, 2014).

Apple remains concerned that despite protestations to the contrary, Samsung has adopted a

business model that prohibits early or even timely resolution of any dispute involving intellectual


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property infringement. See, e.g., Kurt Eichenwald, Apple’s Victory Over Samsung Isn’t As Big As It

Seems, VanityFair, http://www.vanityfair.com/online/daily/2014/05/apple-samsung-lawsuit-winner

(last visited May 19, 2014). Accordingly, Apple sent the letter attached as Exhibit A, inquiring

whether Samsung was genuinely interested in pursuing ADR. Apple further requested assurances

that Samsung would not, as it had done in the past, argue in the context of a request by Apple for an

injunction or the establishment of a future royalty, that Apple’s willingness to pursue ADR reflected

a willingness to license Samsung to Apple’s patents. Samsung responded in the letter attached as

Exhibit B. Samsung’s refusal even to agree that it will not argue that Apple’s participation in the

ADR process can be used in future injunction or royalty proceedings makes clear that Samsung has

no interest in entering into a meaningful ADR procedure or ceasing use of Apple’s intellectual

property. Absent such assurance, it would be impossible for Apple to participate in ADR. However,

upon the receipt of assurances that Samsung will not use in any of the worldwide litigations Apple’s

participation in ADR to resist an injunction or reduce a royalty, and that Samsung is genuinely

interested in reaching a resolution of these issues, Apple will engage in further ADR proceedings to

resolve the present lawsuits and avoid future litigation

Samsung’s Statement

On May 5, the Court requested that the parties jointly report on the status of ADR by May

19. Having heard nothing from Apple, Samsung’s counsel reached out to Apple on May 7 to inquire

about further ADR. Apple responded with its May 13th letter, posturing about Apple’s purported

trial victories and demanding that Samsung agree to various conditions precedent to further ADR.

Despite its rhetoric, Apple has not been the only party engaged in efforts to settle this case.

Rather, for each of the prior ADR meetings cited by Apple, Samsung’s most senior executives also

attended – traveling from Korea to San Francisco or Los Angeles to do so – and Samsung dedicated

at least as much, if not more, time and effort to those prior ADR meetings than that noted by Apple

in its May 13th letter. See, e.g., Joint Submission dated February 21, 2014 (Dkt. No. 1310).

Apple seeks to condition further ADR on Samsung’s agreement that “Samsung will not use

Apple’s participation in ADR to resist an injunction or reduce a royalty.” Importantly, if Apple

were truly interested in global resolution of all cases between the parties, this condition precedent to


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ADR would be a non-issue. Regardless, Apple’s condition is improper. The case law and Federal

Rules of Evidence define the boundaries of what Samsung may and may not argue – not Apple.

Apple’s willingness to license its patents is relevant to multiple Georgia Pacific factors and, to the

extent relevant, Samsung should be permitted to make such arguments without Apple attempting to

extort an improper concession from Samsung, as it now is. By contrast, Samsung does not condition

its willingness to participate in ADR on anything even though Apple has repeatedly used its pre-

litigation meetings with Samsung during trial to support its arguments (See, e.g., PX-132; 630 Trial

Tr. at 340:1-9; 2472:11-2473:1; 1846 Trial Tr. at 1290:7-16; 1951:1-1964:10; 1846 Retrial Tr. at

613:1-9; PX3038).

Finally, Apple cites to a series of statements attributable to Samsung’s lead trial counsel as

“suggesting that Samsung has no interest in stopping its use of Apple’s patents or compensating

Apple for past infringement.” Yet the statements quoted by Apple relate to the fact that Samsung

does not believe portions of the juries’ verdicts will withstand appeal. Such statements have little, if

anything, to do with Samsung’s willingness to discuss settlement. Simply put, though both parties

contend that they are committed to resolution, only Apple seeks to impose an obstacle to this

resolution through a unilateral condition precedent to further ADR. Samsung remains amenable to

discussing settlement of these cases without seeking to impose any comparable conditions upon

Apple.


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Dated: May 19, 2014

By: /s/ Mark D. Selwyn By: /s/ Michael L. Fazio

Attorney for Plaintiff and Counterclaim-Defendant

APPLE INC.

Attorney for Defendants and Counterclaim-Plaintiffs

SAMSUNG ELECTRONICS CO., LTD., SAMSUNG ELECTRONICS AMERICA, INC., AND SAMSUNG TELECOMMUNICATIONS AMERICA, LLC

HAROLD J. McELHINNY (CA SBN 66781)

[email protected]

JACK W. LONDEN (CA SBN 85776)

[email protected]

RACHEL KREVANS (CA SBN 116421)

[email protected]

RUTH N. BORENSTEIN (CA SBN 133797)

[email protected]

ERIK J. OLSON (CA SBN 175815)

[email protected]

MORRISON & FOERSTER LLP

425 Market Street

San Francisco, California 94105-2482

Telephone: (415) 268-7000

Facsimile: (415) 268-7522

JOSH A. KREVITT (CA SBN 208552)

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H. MARK LYON (CA SBN 162061)

[email protected]

GIBSON, DUNN & CRUTCHER LLP

1881 Page Mill Road

Palo Alto, CA 94304-1211

Telephone: (650) 849-5300

Facsimile: (650) 849-5333

WILLIAM F. LEE (pro hac vice)

[email protected]

WILMER CUTLER PICKERING

HALE AND DORR LLP

60 State Street

Boston, Massachusetts 02109

Telephone: (617) 526-6000

Facsimile: (617) 526-5000

CHARLES K. VERHOEVEN

(Bar No. 170151)

[email protected]

KEVIN A. SMITH (Bar No. 250814)

[email protected]

QUINN EMANUEL URQUHART &

SULLIVAN LLP

50 California Street, 22nd Floor

San Francisco, California 94111

Telephone: (415) 875-6600

Facsimile: (415) 875-6700

KEVIN P.B. JOHNSON (Bar No. 177129

(CA); 2542082 (NY))

[email protected]

VICTORIA F. MAROULIS (Bar No. 202603)

[email protected]


SULLIVAN LLP

555 Twin Dolphin Drive, 5th Floor

Redwood Shores, California 94065

Telephone: (650) 801-5000

Facsimile: (650) 801-5100

WILLIAM C. PRICE (Bar No. 108542)

[email protected]


SULLIVAN LLP

865 South Figueroa Street, 10th Floor

Los Angeles, California 90017-2543

Telephone: (213) 443-3000

Facsimile: (213) 443-3100


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MARK D. SELWYN (CA SBN 244180)

[email protected]

WILMER CUTLER PICKERING

HALE AND DORR LLP

950 Page Mill Road

Palo Alto, CA 94304

Telephone: (650) 858-6000

Facsimile: (650) 858-6100


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ATTESTATION

I, Michael L. Fazio, am the ECF User whose ID and password are being used to file this Joint

Submission. In compliance with Local Rule 5-1(i)(3), I hereby attest that Mark D. Selwyn has

concurred in this filing.

Dated: May 19, 2014

/s/ Michael L. Fazio Michael L. Fazio


EXHIBIT A

Case5:12-cv-00630-LHK Document1894-1 Filed05/19/14 Page1 of 3



EXHIBIT B


quinn emanuel trial lawyers | los angeles

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May 15, 2014

VIA E-MAIL

William F. LeeWilmerHale60 State StreetBoston, Massachusetts 02109

Re: Apple v. Samsung Elecs. Co., Ltd., Case No. 12-cv-00630-LHK (N.D. Cal.)

Dear Bill:

I write to respond to Apple’s letter dated May 13, 2014. Samsung is, and always has been, agreeable to engage in ADR to successfully resolve these cases. Apple’s letter seems to imply that Apple has been the only party meaningfully participating in ADR in these cases, to include the various sessions before Judge Spero prior to the first trial and subsequent efforts with Mr. Piazza. Yet these ADR efforts are a two-sided process and Samsung participated in those prior efforts with the prospect of a successful conclusion. Like Apple, Samsung’s most senior executives also attended these prior ADR meetings and Samsung dedicated at least as much, if not more, time and effort to those prior ADR meetings than that noted by Apple in its May 13th letter. See, e.g., Joint Submission dated February 21, 2014 (Dkt. No. 1310). Indeed, Samsung’s executives traveled from Korea to Los Angeles and San Francisco (a 10 plus hour flight) on numerous occasions to participate in the prior ADR meetings.

Apple’s letter contradicts itself – on the one hand, Apple contends that “it has always been willing to participate in any ADR” while, on the other, Apple creates various obstacles to the parties engaging in further ADR. For example, Apple asserts that its purported “willingness” to engage in prior ADR “was used by Samsung to advance the counterfactual proposition that Apple was willing to license the asserted patents to clone Apple products.” (emphasis added). Yet Samsung never represented to the Court that Apple was willing to license the asserted patents to “clone” Apple products. Rather, Samsung stated throughout the parties’ negotiations that Apple was willing to license the asserted patents for a sum of money. Further, Apple’s willingness to license its patents is relevant to multiple Georgia Pacific factors, and Apple’s attempt to condition further ADR on a prohibition against Samsung making future arguments of this type is improper.


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Apple further contends that “a resolution must include compensation to Apple for Samsung’s use of Apple’s IP.” However, and as Apple knows well, Apple has been found to have infringed Samsung’s patents throughout the world, including twice in the U.S. – once in the ITC and again most recently in the 630 case. Nor have Apple’s positions faired nearly as well before the Federal Circuit as Samsung’s. In any event, Apple’s insistence that a condition precedent to further ADR be that it is the only party to be compensated runs contrary to its purported “commit[ment] to a resolution of this matter.”

Apple also seeks to condition additional ADR upon Samsung providing “assurance … that Samsung is prepared to engage in a realistic attempt to resolve this matter.” Samsung has filed numerous papers with the Court undertaking the duties and obligations of ADR, and it has represented in open court that Samsung is committed to resolving these matters. It is thus unclear to Samsung what further assurances Apple seeks.

Notably, Samsung’s May 7th email to Apple regarding ADR was prompted by the Court’s request that the parties jointly report on the status of settlement by May 19. That was the purpose of our communication – not to posture or attempt to impose improper conditions upon further ADR, as Apple now seeks to do. Indeed, most of the statements in Apple’s May 13th letter – including the various quotes attributable to Samsung’s counsel – relate to the fact that Samsung does not believe portions of the juries’ verdicts will withstand appeal. Such statements have little, if anything, to do with Samsung’s willingness to discuss settlement.

Further, though Apple asserts that “Samsung has now lost three jury trials and an ITC proceeding,” Apple’s letter ignores several salient facts, to include: (1) the jury’s finding of Apple’s own infringement of Samsung’s counterclaim patent and award of 100% of the amount Samsung sought for Apple’s infringement; (2) that each verdict was far less than the amounts sought by Apple; and (3) that many commentators agree with Samsung that Apple, in fact, resoundingly lost the latest trial. See, e.g., Kevin Lee, Quinn’s Play Pays Off for Samsung, DAILY JOURNAL, May 6, 2014 at 1 (“There is no other way to characterize this [than] as a stunning defeat for Apple”); Chris O’Brien, Samsung, in Symbolic Win, Ordered to Pay $119.6 Million, L.A. TIMES, May 2, 2014 (“By ordering Samsung to pay only a small fraction of damages that Apple had requested in the company’s latest patent trial, a jury awarded a symbolic victory to the South Korean smartphone maker”). Nor has Apple collected any amount from the prior verdicts and, as Samsung has repeatedly stated, we do not anticipate that Apple will. Simply put, Apple has nothing to show for its years of litigation and hundreds of millions of dollars spent on attorneys’ fees.

Accordingly, Samsung reiterates its request that brought the parties to this latest letter exchange which is, as I requested in my May 7th email, that Apple please advise Samsung as to its position regarding the joint submission requested by the Court. Samsung believes that what the Court envisions for the May 19th submission is a short joint statement indicating whether either or both parties are willing to discuss ADR and details, if any, that the parties are able to provide as to their plans to engage in ADR. We look forward to your response.


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Very truly yours,

/s/ Victoria F. Maroulis

Victoria F. Maroulis


Documents

14-05-19 Apple-Samsung Joint Submission on ADR