The failure to preserve electronically stored information, particularly emails, is increasingly a pivotal issue in litigation. Thus, it should surprise no one to learn that this issue also arose in the recent patent infringement trial pitting mobile device titans Apple, Inc. (“Apple”) and Samsung Electronics Co., Ltd. (“Samsung”) against each other. While Apple did not file suit against Samsung until April 15, 2011, the maker of the iPhone formally notified Samsung of its alleged “copying of Apple’s design” on August 4, 2010. Upon receiving this notice, Samsung took limited steps to preserve evidence, including emails, pertaining to Apple’s claims. Unfortunately, these initial steps did not extend to all of its employees with information potentially responsive to Apple’s charges of infringement. Indeed, it was not until after Apple filed suit that Samsung issued a strongly worded set of preservation instructions to all its employees with potentially relevant information. Samsung also did not suspend the automatic deletion of emails every two weeks on the mail system at its South Korean headquarters. This system of auto-deletion had previously resulted in a spoliation charge against Samsung in Mosaid v. Samsung, 348 F. Supp. 2d 332, 333 and 339 (D.N.J. 2004), yet the company made no change to its procedures for email preservation. In addition, the Court found that Samsung took no steps to verify whether employees who had been instructed to preserve emails were actually complying with such instructions.
The Court held that Samsung’s actions, or lack thereof, constituted spoliation of evidence. In doing so, the Court noted that the duty to preserve evidence also “includes an obligation to identify, locate, and maintain information that is relevant to specific, predictable, and identifiable litigation.” In response to Samsung’s argument that its duty did not arise until after Apple filed suit, the Court held that the duty to preserve evidence, including emails, arises at the point in time when the litigation is reasonably anticipated, whether or not a lawsuit has actually been filed. The Court went on to conclude that Samsung had acted with “conscious disregard” for whether its system of automatic deletion would result in the destruction of relevant evidence. As a result, the Court charged the jury as follows:
Samsung has failed to prevent the destruction of relevant evidence for Apple’s use in this litigation. This is known as the “spoliation of evidence.”
I instruct you, as a matter of law, that Samsung failed to preserve evidence after its duty to preserve arose. This failure resulted from its failure to perform its discovery obligations.
You also may presume that Apple has met its burden of proving the following two elements by a preponderance of the evidence: first, that relevant evidence was destroyed after the duty to preserve arose. Evidence is relevant if it would have clarified a fact at issue in the trial and otherwise would naturally have been introduced into evidence; and second, the lost evidence was favorable to Apple.
Whether this finding is important to you in reaching a verdict in this case is for you to decide. You may choose to find it determinative, somewhat determinative, or not at all determinative in reaching your verdict.
No party in litigation would ever want to be on the receiving end of such a potentially detrimental jury instruction, and Samsung’s conduct after its receipt of Apple’s notice of alleged infringement is a perfect example of what not to do. In that vein, the key points to take away from this decision are as follows:
• Email and other potentially relevant evidence should be preserved as soon your organization receives notice of potential litigation;
• Simply issuing instructions to employees to preserve email or other electronically stored information is not enough. Management must monitor employee compliance to ensure instructions are being followed; and
• If your organization has any systems that automatically delete data, know how to suspend those deletions immediately in order to avoid being labeled as acting with “conscious disregard.”