Apple, Samsung Lawyers Gear Up for Retrial of the Century
SAN FRANCISCO — If U.S. District Judge Lucy Koh has her way, Apple, Samsung and their teams of elite lawyers will spend next week reliving the patent trial of the century.
The parties are reuniting in a San Jose courtroom to make their cases to a jury once more, this time dueling over how much Samsung should have to pay Apple for copying several of its patented features. Koh ordered the retrial in March, finding the original jury's landmark $1.05 billion award to Apple was tainted by an improper notice date. She has insisted that the new trial must be a virtual replay of the first and barred the parties from introducing new evidence or legal theories.
But some changes cannot be helped. Chicago accountant Julie Davis will be stepping in for Apple's original damages expert, Terry Musika, who died in December. And though they are sticking with the same firms, both tech giants have adjusted their legal lineups.
Morrison & Foerster partner Harold McElhinny is leading the retrial team for Apple, joined by William Lee of Wilmer Cutler Pickering Hale and Dorr, another fixture of the first trial. But Michael Jacobs, who led the charge for Apple with McElhinny last fall, will be on the other side of the country in Wilmington, where he is scheduled to argue a motion for summary judgment for another client.
Meanwhile, Quinn Emanuel Urquhart & Sullivan partner William Price is moving into the driver's seat for Samsung. Quinn partner Charles Verhoeven, who gave openings and closings for the Korean company in its first round with Apple, has been absent from pretrial conferences. Firm founder John Quinn wrote in an email that he does not expect to return for the retrial either.
And although infringement and validity have already been decided, lawyers on both sides are fighting to revise Samsung's bill in their favor.
"The judge cut back on the number of Samsung sales that are at issue, which argues for less money," Durie Tangri partner Mark Lemley, a Stanford law professor, wrote in an email. "But there is some reason to think that, believe it or not, the jury actually undercalculated the damages Apple was owed for infringement of its design patents. So the amount awarded could actually increase on remand."
In her March 1 order, Koh subtracted $450.5 million from Apple's billion-dollar award, ruling that the jury had improperly calculated infringement damages for certain Samsung phones using sales that occurred before Samsung was given notice. (She later reversed her order as to one product, handing $40.5 million back to Apple.) Jurors will now decide how much Samsung owes Apple for those 13 devices on the basis of new notice dates.
Koh's order was seen as a win for Samsung. And yet Apple could walk away with a fatter award if the new jury assesses damages at a steeper rate, IP litigators say. The first jury awarded just a fraction of the $2.75 billion that the Silicon Valley stalwart asked for.
Still, Koh's determination to restage the first trial means that the parties will be bound by their prior strategic decisions, both large and small. At a pretrial conference on Nov. 5, she shot down McElhinny's request to bring in a witness that Samsung wanted to call for the first trial.
"You successfully excluded her last year," Koh told McElhinny. "You don't get to turn around now and reverse yourself."
To decide how much to award in damages, jurors will have to turn back the clock and contemplate what would have happened if Samsung had never infringed Apple's patents. Apple will strive to prove that it would have captured sales that went to Samsung. Meanwhile, lawyers for Samsung will try to show that Apple still would have faced competition from noninfringing devices. They are also expected to question whether demand for Apple's products was driven by the patented features.
Lawyers have fought fiercely over the guidance they can give jurors in the exercise. In an order issued Thursday, Koh sided with Samsung, ruling that the jury should assume the company could have started designing around Apple's patents from the date of first infringement. That ruling could knock tens of millions off a damages calculation.
Although the question at stake in a damages retrial is mathematical, narrative remains important, said McDermott Will & Emery partner Fabio Marino, who was preparing to represent Brocade in such a trial before the company settled with A10 Networks.
But given how warmly the first jury received Apple's story of innovation, Samsung would likely prefer a retrial that is akin to an accounting exercise, said Brian Love, an assistant professor at Santa Clara University School of Law.
That tension played out at the pretrial conference. McElhinny argued that his team should be able to explain the power of Apple's brand, which he described as the strongest in the world.
"Every marketing person will tell you that brand strength drives sales," McElhinny said. "That's what we have to prove."
Samsung moved to exclude testimony about its rival's marketing prowess.
"If Apple is allowed to talk about its brand incessantly, we're going to have a whole trial about how Apple is great," Samsung lawyer Victoria Maroulis said. "That's not related at all to what we have to establish here."
Koh denied Samsung's motion, but McElhinny could not rest. "I don't want to argue, but," McElhinny said while racing to the podium.
"It was granted in your favor," Maroulis said dryly.
Damages experts will be the trial's star witnesses. Apple's new expert, Davis, has been qualified to testify in more than 50 cases, according to court papers. But when she takes the stand next week, she will be limited to what her predecessor, Musika, concluded ahead of the first trial. For example, Koh ruled Thursday that Davis cannot weigh in on whether Samsung copied Apple because Musika did not feel qualified to give such an opinion at the first trial. Koh allowed Davis to reference what other experts say at trial about the matter, but she barred her from using of the word "copying" or any of its synonyms.
Marino said the limitations placed on Davis could present an opening for Samsung to question her credibility.
"She didn't do the analysis herself, and she probably would have done it differently," he said. "If I were on the defense, I would try to exploit that in cross."
Meanwhile, Koh has permitted Samsung's damages expert, Michael Wagner, to make use of one fact that the first jury did not have the benefit of: the verdict. Koh ruled Thursday that Wagner may point to the Samsung products that the original jury found did not infringe Apple's patents to try to prove that Samsung had acceptable non-infringing alternatives on the market.
The damages retrial will be something of a rerun for IP litigators in the Valley. But they are riveted nonetheless.
There is little precedent for damages retrials in IP litigation, Marino said. The Eastern District of Texas has seen a few, he noted, but they commenced shortly after the jury reached its original verdict.
Few patent battles are worth enough to merit the expense of one trial, let alone two, Love noted. Ahead of Apple and Samsung's first match in San Jose, some predicted that a decisive verdict might bring an end to their worldwide patent battle. Few expect that to happen this time around, Love said.
"Given all the things that have happened already that haven't brought the parties to the negotiating table, it doesn't seem like this trial will do it," he said.
But that didn't stop Koh from pleading for peace one last time. As the pretrial conference came to a close, she trailed off while detailing her plans for voir dire.
"Are you sure you want to do this?" she asked McElhinny.
"This is the second trial of the century," he replied.