[Update 2: The L.A. Times reports the judge has said no to Apple. Color me not surprised.]

Here are the exhibits:

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

4. In a bad faith effort to interfere with SCO's exercise of its rights with respect to UNIX and UnixWare technologies, Novell has, in disregard of its obligations under the Asset Purchase Agreement, and subsequent to the Asset Purchase Agreement, filed for copyright protection in the same UNIX technology covered by SCO's copyrights.

5. Recently, Novell repeatedly claimed publicly in press releases and otherwise that it, and not SCO, owns the UNIX and UnixWare copyrights.

6. Novell has made such statements with the intent to cause customers and potential customers of SCO to not do business with SCO and to slander and impugn the ownership rights of SCO in UNIX and UnixWare, and to attempt, in bad faith, to block SCO's ability to enforce its copyrights therein.

7. Novell's false and misleading representations that it owns the UNIX and UnixWare copyrights has caused and is continuing to cause SCO to incur significant irreparable harm to its valuable UNIX and UnixWare copyrights, to its business, and its reputation.

8. Through this action for slander of title against Defendant Novell, SCO seeks the following:

a) a preliminary and permanent injunction: (i) requiring Novell to assign to SCO all subsequently registered copyrights Novell has registered in UNIX and UnixWare; (ii) preventing Novell from representing in any forum that it has any ownership interest whatsoever in the Unix and UnixWare copyrights; and (iii) requiring Novell to retract or withdraw all representations it has made regarding its purported ownership of the UNIX and UnixWare copyrights; and

b) actual, special, and punitive damages in an amount to be proven at trial based on Novell's slander of SCO's title and interest in the Unix and UnixWare copyrights.

Novell has a privilege to assert a rival claim to the UNIX copyrights. Novell also has a privilege to inform interested parties of its claim of ownership, especially in light of the considerable public controversy SCO has generated surrounding its claim to these copyrights. To state a claim for slander of title, SCO must plead and prove that Novell's statements were "knowingly false." To overcome Novell's privileges, SCO must plead and prove that Novell's statements were "made from spite, ill will or hatred."

Ironically, it was SCO that invoked [PDF] the First Amendment in Red Hat v. SCO, arguing that SCO's legal rights were so important, and such a matter of public interest, that it had the right to speak out about its legal position. I mention it because some of the cases it cites might be of interest, although the case ended up going nowhere, due to SCO filing for bankruptcy and then melting away like the Wicked Witch in the Wizard of Oz when water was thrown on her.

Flash forward to now. This time, it's Apple, not with a claim of slander of title, but similarly claiming it can accuse Samsung of slavish copying to the media and its lawyer of contempt of court, no less, in open court and to the media, but Samsung has no right to defend itself to the media in response, and that when it did it should be punished severely by granting Apple a total win on its design patent claims.

There is no end to litigation nonsense, I've concluded, in the US legal system. It is so depressing to watch.

[ Update: This morning, Friday, the judge told them, CNET's Josh Lowensohn reports, no more theatrics:

Koh also warned both sides that any additional "theatrics or sideshows" would not be allowed.

"I will not let any theatrics or sideshows distract us from what we're here to do, which is to fairly and timely decide this case," she said. Koh also ruled before court got underway that Apple cannot withhold results from a consumer research survey that Samsung planned to use in its cross-examination. Apple had sought to keep the survey private, saying it was proprietary information that competitors could see and use to shape their own products.

Judge Koh also told the jurors that she will collect the articles about the case and save them for them, so they won't miss a thing. I hope she does it on a rolling basis, so she sees what's going on in the media, and how biased a lot of the coverage has been. It will open her eyes, which may just be why Samsung presented her with that long list of articles, to catch her up to what Samsung believes is a coordinated campaign that is damaging Samsung's reputation. - End Update.]

Here is the Samsung motion to strike, as text, and note the distinction the motion makes between Samsung and its attorney, John Quinn, as to which one issued the press statement. That's because lawyers' speech can be limited, but Samsung enjoys full First Amendment rights. Also note that it is Samsung's position that there can be no sanctions such as Apple is "recommending" without a hearing to protect Samsung's due process rights:

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

QUINN EMANUEL URQUHART & SULLIVAN, LLP
Charles K. Verhoeven (Bar No. 170151)
[email, address, phone, fax]

Kevin P.B. Johnson (Bar No. 177129)
[email]
Victoria F. Maroulis (Bar No. 202603)
[email]
[address, phone, fax]

Michael T. Zeller (Bar No. 196417)
[email, address, phone, fax]

Attorneys for SAMSUNG ELECTRONICS CO.,
LTD., SAMSUNG ELECTRONICS AMERICA,
INC. and SAMSUNG
TELECOMMUNICATIONS AMERICA, LLC

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA, SAN JOSE DIVISION

Plaintiff,

vs.

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

Defendants.

______________

CASE NO. 11-cv-01846-LHK (PSG)

SAMSUNG’S MOTION TO STRIKE
APPLE INC.’S RESPONSE TO
DECLARATION OF JOHN B. QUINN
AND PURPORTED
RECOMMENDATION REGARDING
SANCTION

TABLE OF CONTENTS

Page

II. FACTUAL BACKGROUND .......................................3

A. Samsung‘s Statement ............................................3

B. The Information at Issue Was Publicly Disclosed Before Samsung‘s
Disclosure To The Media .....................................4

C. The Media Has Previously Published Extensive Information About This
Case, Much of Which Is Not Admissible..............................5

D. The Court Has Endorsed Public Disclosures of Pretrial and Trial
Proceedings. .............................................7

E. Relevant Procedural Background....................................8

IV. APPLE‘S "RECOMMENDATION" IS IMPROPER UNDER THE FIRST
AMENDMENT AND FAILS TO MEET THE REQUIREMENTS FOR
AN INHERENT POWER DISMISSAL....................................12

A. Apple‘s Attempts To Interfere With Samsung‘s First Amendment Rights
Should Be Rejected Out of Hand .........................12

B. Apple Ignores The Stringent Standards Governing Requests For Dismissal
Under The Court‘s Inherent Powers............................14

C. There Is No Basis for Inherent Power Sanctions.............................15

1. Apple Has Not Shown That Samsung Engaged Deliberately In
Deceptive Practices .....................................15

2. Apple Has Not Shown That Samsung‘s Conduct Undermines The
Integrity Of This Court‘s Proceedings ...........................17

3. Apple Has Not Shown That Samsung Acted In Bad Faith ................18

4. The Release Of Samsung‘s Statement Does Not Threaten To
Interfere With The Rightful Decision Of The Case .......................19

5. None Of The Leon Factors Supports The Harsh Dismissal Sanction
Apple Seeks..............................19

i

TABLE OF AUTHORITIES

Page

Cases

Anheuser-Busch, Inc. v. Natural Beverage Distributors,
69 F.3d 337 (9th Cir. 1995)....................................................14, 19

Avago Technologies General IP Pte Ltd. v. Elan Microelectornics Corp.,
2007 WL. 1449758 (N.D. Cal. May 15, 2007) ............................20

Berndt v. Cal. Dep’t of Corrections,
2004 WL. 1774227 (N.D. Cal. Aug. 9, 2004)...................................20

Chambers v. Nasco, Inc.,
501 U.S. 32, 111 S. Ct. 2123 (1991) ..............................................14, 15

Christensen v. Stevedoring Services of America, Inc.,
430 F.3d 1032 (9th Cir. 2005).................................................18

Ciampi v. City of Palo Alto,
2011 WL. 4915785 (N.D. Cal. 2011)...............................................12

Coleman-Hill v. Governor Mifflin Sch. Dist.,
2010 WL. 5014352 (E.D. Pa. Dec. 2, 2010) .................................20

Constand v. Cosby,
229 F.R.D. 472 (E.D. Pa. 2005) ...................................13, 14

Craig v. Harney,
331 U.S. 367 (1947) ..............................................13

Doe v. Hawaii,
2011 WL. 4954606 (D. Haw. Oct. 14, 2011)...............................20

Evon v. Law Offices of Sidney Mickell et al.,
__ F.3d __, 2012 U.S. App. LEXIS 15861 (9th Cir. Aug. 1, 2012)...........................................14

Gentile v. State Bar of Nevada,
501 U.S. 1030 (1991) ...............................................13, 14, 19

Halaco Engineering Co. v. Costle,
843 F.3d 376 (9th Cir. 1988)...........................................2, 14, 15

Landmark Communications, Inc. v. Virginia,
435 U.S. 829 (1978) .............................................................12

Leon v. IDX Systems Corp.,
464 F.3d 951 (9th Cir. 2006)..............................14, 16, 19, 21

ii

Miller v. City of Los Angeles,
661 F.3d 1024 (9th Cir. 2011)...............................................17

Mills v. Alabama,
384 U.S. 214 (1966) ......................................................12

Pennekamp v. State of Fla.,
328 U.S. 331 (1946) ..................................................13

People v. Crayton,
28 Cal. 4th 346 (2002)....................................................18

People v. McKenzie,
34 Cal. 3d 616 (1983)..............................................18

Richardson v. Marsh,
481 U.S. 200 (1987) .......................................................17

Roadway Express, Inc. v. Piper,
447 U.S. 752, 100 S. Ct. 2455 (1980) ........................................10

In re Sawyer,
360 U.S. 622 (1959) ........................................................13

Sheppard v. Maxwell,
384 U.S. 333 (1966) .............................................................12

Standing Committee on Discipline of U.S. Dist. Court for Cent. Dist. of California v. Yagman,
55 F.3d 1430 (9th Cir. 1995)............................................13

U.S. v. Wunsch,
84 F.3d 1110 (9th Cir. 1996)................................................13

iii

In the event Apple is permitted to re-file as a proper motion, or the Court decides to consider Apple‘s "recommendation," Samsung respectfully submits this response. However, given the nature of the relief sought, and the limited time Samsung has had to prepare a response, Samsung respectfully requests an opportunity to file a further response should the Court determine to consider this matter further.

I. PRELIMINARY STATEMENT

Apple seeks an unprecedented sanction of outright dismissal of Samsung‘s defenses to its design patent claims, in the guise of an alleged "recommendation" about Samsung‘s release of information that was already publicly available. Apple cites no authority supporting such an extreme sanction for conduct protected by the First Amendment. There is no such authority. Apple‘s "recommendation" is frivolous at every level, and can only be viewed as another plea that it be relieved from its obligation to prove its claims to a jury.

Apple‘s request is an affront to the integrity of the jury. Apple proceeds on the groundless assumption that the jury, already instructed by the Court not to read media accounts, will violate the Court‘s instructions and do precisely that. As explained in the Quinn declaration, Apple‘s premise is factually unfounded and contrary to settled law. Nowhere does Apple even address, let alone refute, these points. Apple does not even ask that the Court confirm with the members of the jury that they are continuing to follow this Court‘s instruction. Nor does it address the implications of its unfounded assumption that this jury, because it cannot be trusted to obey the strict orders of the Court, cannot be trusted to decide this case fairly. Indeed, if in fact the jury has been monitoring the press in contravention of the Court‘s instructions, it would be exposed to virtually unlimited coverage of inadmissible aspects of this case.

1

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. In fact, the only dismissal case Apple has cited reversed a dismissal based on alleged discovery abuse for failure to satisfy the stringent requirements to impose such a remedy. Halaco Engineering Co. v. Costle, 843 F.3d 376 (9th Cir. 1988). In the only case Apple cites that even involved a statement to the press, American Science and Engineering, Inc. v. Autoclear, 606 F. Supp. 2d 617 (E.D. Va. 2008), the court did no more than order the party to retract an offending statement, issue corrective language and pay a modest amount of attorney‘s fees – and that was where the statement was false and misleading, unlike here. Nor is there any basis to infer bad motive from the prior sanctions rulings cited by Apple, particularly where those rulings either did not involve a question of bad faith at all

2

In addition to lacking any merit, Apple‘s request is fatally flawed procedurally. Apple has not complied with any of the rules for a motion before this Court, or the due process requirements for obtaining what amounts to dismissal of Samsung‘s defenses. Apple‘s ―recommendation‖ should be stricken for that reason alone, and its attempt to escape having to present its case to the jury should be summarily rejected.

II. FACTUAL BACKGROUND

A. Samsung’s Statement

On July 31, 2012, representatives of Samsung emailed a statement to certain selected media members and transmitted to them several of Samsung‘s proposed trial demonstrative exhibits. Samsung‘s statement read:

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.¹

3

B. The Information at Issue Was Publicly Disclosed Before Samsung’s Disclosure
To The Media

The same information that Samsung shared with select members of the media on July 30, 2012, had already been disclosed to the public before July 30, 2012. In fact, the materials Samsung transmitted to the media previously had been the subject of several publicly filed briefs and public Court hearings. For example:

• On July 10, 2012, Samsung filed public briefs (without any objection by Apple), which included descriptions and images of the F700 designs, and argued that the "2006 Samsung smart phone and GUI designs . . . are found in the internal documents Apple improperly seeks to exclude, and the jury should see all of them." See Dkt. No. 1208-3 at 11.

• At Apple‘s request to file the trial briefs publicly and consistent with the Court‘s guidance regarding openness, Samsung publicly filed its evidence of independent creation as Exhibits 5, 6 and 8 to the Declaration of Joby Martin in Support of Samsung‘s Trial Brief; Apple‘s "Sony-style" CAD drawings and models were attached as Exhibits 1 and 2 to the Martin Declaration. See Dkt. No 1322.

• Apple itself publicly filed Shin Nishibori‘s testimony that the direction of the iPhone‘s design was completely changed by the "Sony-style" designs that Jonathan Ive directed him to make. See Dkt. No. 1428-1.

• Samsung also publicly filed this information in its Motion for Reconsideration of the Court‘s decision to exclude this information from Samsung‘s opening statement (Dkt. No. 1463) and Samsung‘s Offers of Proof (Dkt. Nos. 1473 and 1474).

• Other public filings, including filings by Apple, that disclosed the information at issue and/or attached the exhibits at issue include Docket Numbers 1438-2 (attaching Shin Nishibori testimony regarding "Sony-like design" to Tucher Declaration in Support of Apple‘s Motion to Enforce), 1429 (explaining that "Apple has listed images of the model . . . us[ed] as a comparison point for the

4

Sony-style design . . . as evidence of alternative designs for the iPhone Apple claims it was considering before the 'Sony-style' exercise," and attaching images as Exhibit 12, Dkt. 1429-13), and 1451-2 (attaching Shin Nishibori‘s testimony that the direction of the iPhone‘s design was completely changed by the "Sony-style" to Cashman Declaration in Support of Motion for Leave).

Apple urges that the media‘s publication of inadmissible information transmitted by Samsung is likely to cause prejudice. As the Court has recognized, there is indeed intense public and media scrutiny of this case. And because of that scrutiny, virtually all the information and images in the excluded slides not only appeared in publicly filed documents, but also had already appeared in media reports, including by the New York Times, Los Angeles Times, Huffington Post, and CNET:

• The New York Times, in "Apple—Samsung Trial Highlights Tricky Patent Wars," dated July 30, 2012,⁴ reported that Samsung‘s trial brief "cites internal Apple documents and deposition testimony to conclude that Apple borrowed its ideas from others, especially Sony . . . Samsung, quoting its own documents, said it had touch-screen phones in development before the iPhone was introduced in January 2007, pointing to the Samsung F700 model." The article then included this photo of the F700 which was among the material included with Samsung‘s statement at issue here:

5

• In an article entitled, "iPhone inspired by Sony designs, Samsung argues in court filing," dated July 27, 2012,⁵ the Los Angeles Times likewise provided images that were among the material disclosed wish Samsung‘s July 31, 2012 statement.

• In an article entitled, "iPhone Prototypes That Never Left Apple‘s Lab (PHOTOS)", the Huffington Post on July 28, 2012,⁶ reported the following: "photos from court documents [linked in the article] showing an array of iOS Apple products in multiple stages of production – and one of those designs has a Sony label on it." The article then included eight different photos of products which were also the subject of Samsung‘s subsequent statement to the press at issue here.

• On July 30, 2012 in an article entitled, "Apple says 'Purple‘ iPhone concept predates Sony‘s art,"⁷ CNET news linked to a full PDF of Apple‘s Reply in Support of its Motion to Enforce (Dkt. No. 1437) which included numerous photos of designs that were among the images released by Samsung on July 31, 2012. The article wrote that ―"[b]oth companies‘ court filings have been a treasure trove of goodies for reporters..."

6

D. The Court Has Endorsed Public Disclosures of Pretrial and Trial Proceedings.

Samsung made its statement to the press in the context of this Court‘s recent rulings that this would be an "open trial" to which the public and the media would receive the maximum possible access. In the days and weeks leading up to jury selection and Samsung‘s subsequent statement regarding public court proceedings, the Court stressed the importance of making these proceedings public and denied both parties‘ motions to seal. (See Dkt. Nos. 1256; 1269; 1321 at 2 n.4). Samsung‘s sharing of information already disclosed in pretrial filings with the press and the public is entirely consistent with this Court‘s statements in its orders that "[t]he United States district court is a public institution, and the workings of litigation must be open to public view. Pretrial submissions are a part of trial." See Dkt. No. 1256 at 2. Indeed, the Court told the parties that "the whole trial is going to be open," id. at 3, and again noted on July 20, 2012 "the plethora of media and general public scrutiny" of these proceedings and that "[t]he public has a significant interest in these court filings." See Dkt. No. 1269; see also id. at 2 ("The mere fact that the production of records may lead to a litigant‘s embarrassment, incrimination, or exposure to further litigation will not, without more, compel the court to seal its records. Unlike private materials unearthed during discovery, judicial records are public documents almost by definition, and the public is entitled to access by default.") (internal quotations omitted).

7

On July 30, 2012, the Court Impaneled and Instructed the Jurors. Jury selection was completed on July 30, 2012, and the Court instructed the jury at that time. In the course of this process, the Court repeatedly instructed the jury not to view press or Internet articles about this case:

THE COURT: Because you will receive all the evidence and the legal instruction you properly may consider to return a verdict, do not read, watch, or listen to any news or media accounts or commentary about the case or anything to do with it; do not do any research, such as consulting dictionaries, searching the internet, or using other reference materials; and do not make any investigation or in any other way try to learn about the case on your own.

So no one is to do their own CSI investigation. It‘s limited to what you can consider from the courtroom in this trial. The law requires these restrictions to ensure the parties have a fair trial based on the same evidence that each party has had an opportunity to address.

A juror who violates these restrictions jeopardizes the fairness of these proceedings and a mistrial could result that that would rquire us to do the entire trial process all over from the beginning.

So if any juror is exposed to any outside information, please notify the Court immediately.

After the Jury Was Impaneled and Instructed, Samsung Petitioned the Court to Allow Admission of the Evidence at Issue, and Prejudicial Negative Publicity Ensued. Prior to commencement of opening statements on July 31, counsel for Samsung sought an explanation for the Court‘s Order precluding Samsung from introducing evidence of its smartphone designs that predated the iPhone as evidence of independent creation for purposes of rebutting Apple‘s allegations of copying and willfulness. 7/31/12 Hearing Tr. at 290:13-293:10. The Court declined

8

During Opening Statements, Apple‘s Counsel Falsely Accuses Samsung‘s F700 Phone of Copying iPhone: During his opening statement, Apple‘s counsel displayed a chart of a number of Samsung phones he claimed pre-dated the iPhone. This was Slide 23:

9

This evidence of independent creation is undisputed, irrefutable, and has been asserted by Samsung since at least the preliminary injunction proceedings. Dkt. 181a at 4. Additional images of the F700 and Samsung‘s related internal models for that design were timely produced to Apple on February 3, 2012, and Apple deposed the F700‘s principal designer, Hyoung Shin Park, on

10

In Response to Samsung‘s Transmission of Public Information, Apple Publicly Makes False "Contempt of Court" Accusations. No Court Order prohibited Samsung‘s statement and transmission of public information after opening statements and after the arguments held in open Court. Indeed, Apple now concedes this—its "recommendation" is not based in any way on supposed violation of any prior Court Order. Yet in open court with media present, Apple‘s lawyers falsely accused Samsung‘s counsel of "contempt of court" and "intentional attempt[s] to pollute this jury."¹¹ In fact, Samsung was merely responding to repeated media inquiries requesting additional information about evidence that had been discussed and ultimately excluded

11

III. THE COURT SHOULD STRIKE APPLE’S “RECOMMENDATION” FOR
FAILURE TO COMPLY WITH THE RULES GOVERNING MOTIONS FOR SANCTIONS

Apple‘s "recommendation" is a request for dismissal sanctions. Yet it does not even begin to comply with the requirements of Local Rule 7-8 governing such motions. It was not noticed for hearing in accordance with Rule 7-2; it was not separately filed; it and it does not comply with the form requirements of the local rules. Accordingly, the Court should strike or deny the motion without the need to consider its substantive request. Martinez v. City of Pittsburg, 2012 WL 699462, at *4 n.5 (N.D. Cal. March 1, 2012); Ciampi v. City of Palo Alto, 2011 WL 4915785, at *5 (N.D. Cal. Oct. 17, 2011).

IV. APPLE’S “RECOMMENDATION” IS IMPROPER UNDER THE FIRST
AMENDMENT AND FAILS TO MEET THE REQUIREMENTS FOR AN
INHERENT POWER DISMISSAL

A. Apple’s Attempts To Interfere With Samsung’s First Amendment Rights
Should Be Rejected Out of Hand

As Apple ignores, Samsung‘s First Amendment rights bar its requested sanction. Public scrutiny of the judicial process is to be promoted, not feared, for "[w]hatever differences may exist about interpretations of the First Amendment, there is practically universal agreement that a major purpose of that Amendment was to protect the free discussion of governmental affairs." Mills v.

12

This Court itself has recognized that "[t]he United States district court is a public institution, and the workings of litigation must be open to public view." Dkt. No. 1256 at 2. To pay heed to these principles, the traditional rule has been that "[s]tatements may be punished only if they 'constitute an imminent, not merely a likely, threat to the administration of justice. The danger must not be remote or even probable; it must immediately imperil.‘" Standing Committee on Discipline of U.S. Dist. Court for Cent. Dist. of California v. Yagman, 55 F.3d 1430, 1442 (9th Cir. 1995) (quoting Craig v. Harney, 331 U.S. 367, 376 (1947)). While this "'clear and present danger‘ standard does not apply to statements made by lawyers participating in pending cases," which can be proscribed if they pose a "'substantial likelihood‘ of materially prejudicing the fairness of the proceeding," id., Apple ignores that the extra-judicial statement it impugns here was made by Samsung, not counsel, and offers no authority that Samsung’s First Amendment rights are limited by the Rules of Professional Conduct or other lawyer-specific guidelines. To the contrary it has long been the law, as the Supreme Court explained in Gentile in adopting the "substantial likelihood of material prejudice" standard specific to attorney statements, that "lawyers in pending cases [a]re subject to ethical restrictions on speech to which an ordinary citizen would not be." Gentile v. State Bar of Nevada, 501 U.S. 1030, 1071 (1991) (citing In re Sawyer, 360 U.S. 622 (1959)); see Constand v. Cosby, 229 F.R.D. 472, 475 (E.D. Pa. 2005) ("limiting parties and witnesses from making extrajudicial statements during a pending civil proceeding raises constitutional questions where similar limitations upon lawyers do not.").

13

Samsung's statement here was and is fully protected by the First Amendment, and complied with Rule 5-120 to the extent that Rule applies at all. Apple makes no showing otherwise, and indeed simply ignores the First Amendment protection that Samsung enjoys.

B. Apple Ignores The Stringent Standards Governing Requests For Dismissal
Under The Court’s Inherent Powers

Even apart from Apple‘s failure to meet the heightened requirements involved here because of Samsung‘s First Amendment rights, Apple fails to meet the standards imposed for any

14

A court may not dismiss a party‘s claims or defenses absent, among other things, a finding of "willfulness, fault, or bad faith." Leon v. IDX Systems Corp., 464 F.3d 951, 958 (9th Cir. 2006); see also Evon v. Law Offices of Sidney Mickell et al., __ F.3d. __, 2012 U.S. App. LEXIS 15861, at *11 (9th Cir. Aug. 1, 2012). "Due process concerns further require that there exist a relationship between the sanctioned party‘s misconduct and the matters in controversy such that the transgression 'threaten[s] to interfere with the rightful decision of the case." Anheuser-Busch, Inc. v. Natural Beverage Distributors, 69 F.3d 337, 348 (9th Cir. 1995).

"Before imposing the 'harsh sanction‘ of dismissal, however, the district court should consider the following factors: '(1) the public‘s interest in expeditious resolution of litigation; (2) the court‘s need to manage its dockets; (3) the risk of prejudice to the party seeking sanctions; (4) the public policy favoring disposition of cases on their merits; and (5) the availability of less drastic sanctions.‘" Id. "A court must, of course, exercise caution in invoking its inherent power, and it must comply with the mandates of due process, both in determining that the requisite bad faith exists, and in its [determination of the sanction]." Chambers, 501 U.S. at 50. This includes "fair notice and an opportunity for a hearing on the record." Roadway Express, Inc. v. Piper, 447 U.S. 752, 767 (1980).

C. There Is No Basis for Inherent Power Sanctions

1. Apple Has Not Shown That Samsung Engaged Deliberately In
Deceptive Practices

15

First, Samsung‘s statement was factual and not misleading. In response to media inquiries, the statement accurately stated that the Court had excluded certain evidence, and how, in Samsung‘s opinion, that ruling would affect the presentation of evidence at the trial. It concluded with Samsung‘s belief that "[f]undamental fairness requires that the jury decide the case based on all the evidence." Nothing in this statement was deceptive at all, let alone deliberately so.

The only portion of the statement Apple claims was false is the first sentence, which Apple claims inaccurately reported that "Apple was allowed to inaccurately argue to the jury that the F700 was an iPhone Copy." Dkt 1539 at 11. This statement was entirely accurate. As discussed above, Apple included an image of the F700 in Slide 24, and claimed to the jury that it was one of the phones that Samsung produced after Apple introduced the iPhone, in contrast to the phones shown in Slide 23, which counsel argued pre-dated the iPhone. Contrary to Apple‘s argument in its "recommendation," counsel did not merely describe the F700 as a slider phone – it did so in the context of discussing phones it claimed were copies of the iPhone. Samsung counsel objected and argued that this copying allegation opened the door to Samsung‘s previously excluded evidence regarding the independent creation of the F700, but the Court overruled the objection. Thus, it was entirely accurate for Samsung to state that Apple was allowed to make an inaccurate copying allegation to the jury with regard to the F700 – that is precisely what Apple‘s counsel did.

Because there was nothing false or misleading in the Samsung statement, there is no basis for inherent power sanctions at all. Apple cites no case sanctioning a party or counsel for an accurate statement. The only remotely relevant authority in Apple‘s "recommendation" is American Science and Engineering, Inc. v. Autoclear, 606 F. Supp. 2d 617 (E.D. Va. 2008), but the press release there that formed the basis of the Court‘s sanction was expressly found to contain "false, misleading, and damaging statements." 606 F. Supp. 2d at 625. Even in the face of such misconduct, the Court simply ordered defendants to remove the offending statement, issue a

16

2. Apple Has Not Shown That Samsung’s Conduct Undermines
The Integrity Of This Court’s Proceedings

There is no basis for Apple‘s accusation that the statement or the information was a bad faith attempt to influence the jury with excluded evidence. All of the information was, as demonstrated above, already in the public record and had been the subject of numerous media reports. Samsung‘s statement and further sharing of this already public information also was made after the jury had been impaneled, and after the jury had been instructed, repeatedly, not to read the papers or go on the Internet. Far from an effort to influence the jury, the statement was a reaction to counter the substantial negative and prejudicial publicity that became prevalent after Samsung petitioned the Court to reconsider admission of the evidence at issue – a type of disclosure that is categorically exempted even from the prohibitions in California‘s Professional Conduct Rule 5-120(C).

Nor did Samsung‘s statement increase the risk that the jury will see this evidence. Whatever risk there was that a of a juror might learn about this evidence already existed based on prior public court filings and prior media reports about those filing. Indeed the timing of Samsung‘s reactive press statement – after the jury already had been impaneled and instructed not to research the case – made it even less likely that the jury would learn of the evidence. Apple‘s assumption that the jurors will ignore their instructions is not only factually baseless (and insulting to the jury), but flatly contrary to law. Richardson v. Marsh, 481 U.S. 200, 206 (1987) (applying "the almost invariable assumption of the law that jurors follow their instructions"); Miller v. City of Los Angeles, 661 F.3d 1024, 1030 (9th Cir. 2011) ("We have a strong presumption that jurors

17

Also baseless is Apple‘s alternative argument that Samsung‘s statement impugned this Court‘s integrity, because it was released after Samsung‘s counsel made a vigorous argument challenging this Court‘s exclusion of the evidence in question. Lawyers are obligated to zealously advocate on their client‘s behalf, Christensen v. Stevedoring Services of America, Inc., 430 F.3d 1032, 1036 (9th Cir. 2005),¹⁶ and it would be absurd to suggest that a lawyer‘s in-court comments concerning a critical issue could somehow give rise to a sanction of dismissal.

3. Apple Has Not Shown That Samsung Acted In Bad Faith

18

4. The Release Of Samsung’s Statement Does Not Threaten To Interfere
With The Rightful Decision Of The Case

5. None Of The Leon Factors Supports The Harsh Dismissal Sanction
Apple Seeks

19

First, nothing in Samsung‘s statement has affected the expeditious resolution of this litigation. The trial will proceed on the schedule set by the Court, without any interruption. Similarly, with regard to the second factor – the need to manage the court‘s dockets – there is no impact here on the Court‘s docket. The third factor considers the risk of prejudice to the party seeking sanctions. As discussed above, nothing in the publication of public-record material that had already been widely reported can possibly prejudice Apple, particularly where the publication occurred after the jury already had been impaneled and instructed. See, e.g., Gentile, 501 U.S. at 1046 ("Much of the information provided by petitioner had been published in one form or another, obviating any potential for prejudice.") (opinion of Kennedy, Marshall, Blackmun & Stevens, JJ.); Berndt v. Cal. Dep’t of Corrections, 2004 WL 1774227, at *4 (N.D. Cal. Aug. 9, 2004) (attorney‘s extra-judicial statements regarding pending case did not create a "substantial likelihood of material prejudice" in part because the information "is contained in the public record, and Ms. Price may freely state any information in the public record").

Apple‘s assumptions of material prejudice overlook the high standards that apply to any such finding. In Mu’Min v. Virginia, for example, the Supreme Court ruled no new trial was required, and that it was not even necessary for the trial court to ask jurors about their individual exposure to out-of-court publicity in a criminal case, even though 8 of the 12 jurors admitted exposure to such publicity and the publicity had detailed the defendant‘s inadmissible murder confession. 500 U.S. 415, 422, 431 (1991). The risk of juror influence here does not even approach this level of taint, which itself does not constitute sufficient prejudice to warrant a new trial as a matter of Supreme Court precedent. See also, e.g., Doe v. Hawaii, 2011 WL 4954606, at *4 (D. Haw. Oct. 14, 2011) (holding that "the Court cannot conclude that the statements were so inflammatory that this Court should impose a restraint on [an attorney‘s] freedom of speech by Court order" because "the substance of the grand majority of [the attorney‘s] statements to the media are already part of the public record"); Coleman-Hill v. Governor Mifflin Sch. Dist., 2010

20

The fourth factor – the public policy favoring disposition of cases on their merits – plainly weighs against dismissal of Samsung‘s defenses. This is particularly true in a patent case, where the public interest favors having patent invalidity issues determined on their merits. Avago Technologies General IP Pte Ltd. v. Elan Microelecs. Corp., 2007 WL 1449758, at *2 (N.D. Cal. May 15, 2007).

The final factor – the availability of less drastic sanctions – also weighs against dismissal. In reviewing this factor, the Ninth Circuit considers: "(1) whether the district court explicitly discussed the feasibility of less drastic sanctions and explained why such alternate sanctions would be inappropriate; (2) whether the district court implemented alternative sanctions before ordering dismissal; and (3) whether the district court warned the party of dismissal before ordering dismissal." Leon, 464 F.3d at 960.

In this case, because Samsung‘s statement did not violate any Court Order and did not satisfy the requirements for inherent power sanctions, no sanctions at all are appropriate. But even if the requirements for inherent power sanctions were satisfied (which they are not), there is no question but that sanctions less drastic than outright dismissal would be feasible. These would include ordering Samsung to retract the statement, issue a corrective statement, and/or pay some form of monetary sanction. As discussed above, that was the relief ordered by the Court in the American Science case Apple cites, where the conduct involved issuance of a false and misleading release. Here, as there was nothing false or misleading in the statement Samsung issued, there is no basis for any sanctions whatsoever, let alone sanctions as draconian as a dismissal.

Apple cites no case imposing a dismissal remedy for the issuance of a press statement, let alone for one that is neither false nor misleading. Because each of the five factors favors dismissal, and in view of the availability of lesser sanctions, it would be reversible error to grant the relief Apple has "recommended."

V. CONCLUSION

21

DATED: August 2, 2012

QUINN EMANUEL URQUHART &
SULLIVAN, LLP

By /s/ Victoria F. Maroulis
Victoria F. Maroulis
Attorneys for SAMSUNG ELECTRONICS CO.,
LTD., SAMSUNG ELECTRONICS AMERICA,
INC. and SAMSUNG
TELECOMMUNICATIONS AMERICA, LLC

____________
¹ The documents accompanying the statement are attached as Exhibit A to the Declaration of Joby Martin, filed concurrently ("Martin Decl.").

² Apple claims that one reporter who did not make a formal press inquiry nonetheless received Samsung‘s statement. But that reporter had closely followed the case and in fact had previously characterized a ruling by Judge Grewal as one that "took Samsung to task for trying to keep as a secret information that is otherwise publicly available." Alison Frankel, Anti-sealing guidelines take hold in Apple-Samsung IP case, Thomson Reuters News & Insight (June 25, 2012), http://newsandinsight.thomsonreuters.com/ Legal/News/2012/06_-_June/Anti-sealing_guidelines_take_hold_in_Apple-Samsung_IP_case/. Samsung‘s efforts in rebutting the negative press it had received is protected both by the First Amendment and the California Rules of Professional Conduct, as discussed infra.

³ See Dkt. No. 1533-1 (Exhibit A to the Declaration of John B. Quinn, attaching emails from press).

⁴ Available at http://www.nytimes.com/2012/07/30/ technology/apple-samsung-trial-highlights-patent-wars.html ?_r=3&pagewanted=all.

⁵ Available at http://www.latimes.com/business/technology/ la-fi-tn-apple-iphone-samsung-sony-20120727,0,3791879.story.

⁶ Available at http:// www.huffingtonpost.com/2012/07/28/ iphone-prototypes-that-never-left-apples-lab-photos_n_1710443.html?utm_hp_ref=technology. ⁷ Available at http:// news.cnet.com/8301-13579_3-57482028-37/ apple-says-purple-iphone-concept-predates-sonys-art/. ⁸ See, e.g., Cory Gunther, "Who was really first? Apple vs Samsung F700 Story Truly Debunked," dated April 20, 2011 (available at http://androidcommunity.com/ who-was-really-first-apple-vs-samsung-story-truly-debunked-20110420/).

⁹ See, e.g., Ina Fried, "Apple Files Lawsuit Against Samsung Over Galaxy Line of Phones and Tablets," AllThingsD, Apr. 18, 2011, http://allthingsd.com/20110418/apple-files-patent-suit-against-samsung-over-galaxy-line-of-phones-and-tablets/ (quoting Apple representative accusing Samsung of "blatant copying" and "stealing our ideas"); Kelly Olson, "Samsung to Step Up Apple Patent War," Business Week, Sept. 23, 2011, http://www.businessweek.com/ap/financialnews/ D9PU7AJ80.htm/ (same); Paul Barrett, "Apple‘s Patent War Seen Leading to Retaliatory Strikes," Business Week, Mar. 29, 2011, http://www.businessweek.com/news/2012-03-29/apple#p3 (same); Andrea Chang, "Samsung unhappy with court‘s ban on U.S. sales of Galaxy Tab 10.1", LA Times, June 27, 2012, available at http://www.latimes.com/business/ technology/la-fi-tn-samsung-galaxy-tab-20120627,0,5661410.story/ (same); ―"'Not as Cool‘ Galaxy Wins Round Against iPad," Chicago Tribune, Jul. 9, 2012, available at http://articles.chicagotribune.com/2012/jul/09 (same); Ashby Jones, "In Silicon Valley, Patents Go on Trial," Wall Street Journal, Jul. 24, 2012, at B1, available at http://online.wsj.com/article/SB10000872396390443295404577543221814648592.html (same).

¹⁰ See also, e.g., http://allthingsd.com/20120731/ live-apple-and-samsung-get-their-first-chance-to-address-the-jury/?mod=googlenews.

¹¹ 7/31/12 Hearing Tr., Vol. 2, at 554:4-7 and 554:14-16.

¹² See supra, at 4-5.

¹³ See, e.g., http://www.latimes.com/business/technology/ la-fi-tn-apple-letter-20120801,0,6845741.story (last checked Aug. 2, 2012); http://news.cnet.com/8301-13579_3-57484757-37/ apple-seeks-emergency-sanctions-against-samsung/ (last checked Aug. 2, 2012); http://www.zdnet.com/apple-seeks-sanctions-against-samsung-7000002013/ (last checked Aug. 2, 2012); see also Andrea Chang, Apple to file emergency motion for sanctions against Samsung, LA Times (Aug. 1, 2012), available at http://www.latimes.com/business/technology/ la-fi-tn-apple-letter-20120801,0,6845741.story; Josh Lowensohn, Apple seeks 'emergency‘ sanctions against Samsung, CNET.com (Aug. 1, 2012), available at http://news.cnet.com/8301-13579_3-57484757-37/ apple-seeks-emergency-sanctions-against-samsung/; San Jose Mercury News, Document: Apple‘s letter of intent to seek sanctions against Samsung attorney (Aug. 1, 2012), http://www.mercurynews.com/business/ ci_21211383/document-apple-letter-intent-seek-sanctions- samsung-attorney-quinn.

¹⁴ Even Apple‘s alternative recommendation for a severe adverse inference instruction is likewise without merit. Keithley v. Homestore.com, Inc., 2008 WL 4830752, at *10 (N.D. Cal. Nov. 6, 2008) ("[A]n adverse inference instruction is a harsh remedy").

¹⁵ For these same reasons, Samsung‘s statement cannot be found to violate California Professional Responsibility Rule 5-120(A)‘s prohibition on statements that "have a substantial likelihood of materially prejudicing an adjudicative proceeding." Of course, that prohibition applies only to members of the bar, and Apple offers no authority that non-lawyer statements fall within its purview. In any event, the Rule expressly authorizes counsel in any circumstances to "state . . . the information contained in a public record." Moreover, a recent commentary notes that "[t]here is not a single reported decision imposing discipline on a California lawyer for violation of the rule, and The State Bar Court Reporter fails to indicate if a violation has ever been charged. . . . A former chief trial counsel in a private conversation said they would not enforce the rule. It is that controversial." Diane Karpman, There’s a TV news crew in the lobby asking for a partner . . .", CA Bar Journal (March 2012). ¹⁶ See also People v. McKenzie, 34 Cal. 3d 616, 631 (1983) ("The duty of a lawyer both to his client and to the legal system, is to represent his client zealously within the bounds of the law." (emphasis omitted)), abrogated on other grounds by People v. Crayton, 28 Cal. 4th 346 (2002).

¹⁷ See Dkt. No. 1213. This was not the first time Judge Grewal took exception with Apple‘s conduct. In his April 12, 2012 order granting Samsung‘s motion to enforce his order to produce materials from "related proceedings," he noted that Apple‘s conduct had been prejudicial. (Dkt. No. 867, at 9:18-19, 10:6-8.) Later, in his July 11, 2012 Order granting Samsung‘s motion for sanctions for its refusal to produce those materials, he pointed out that there "is really no question that Apple violated the [Court‘s] December 22 Order" by imposing "unreasonable," "self-serving," and "tortured" limitations on the Court‘s order. (Dkt. No. 1213, at 9:4-10:5.) He also explained that he was forced to order Apple to comply with his ruling "not once, but twice," despite the fact that it is "fundamental that, when a court orders you to produce it, you produce it." (June 21, 2012 Hearing Tr., at 87:24-88:12.) This consistent refusal to comply with orders is an Apple tactic in other cases, including the parallel ITC action where Judge Pender referred to it as "nonsense." (ITC-796 Teleconference, April 4, 2012, at 12:18-21).

26