Apple v. Samsung: One Angry Man?

by Lee Gesmer on December 20, 2012

Apple v. Samsung: One Angry Man?

Juror #8: It’s always difficult to keep personal prejudice out of a thing like this. And wherever you run into it, prejudice always obscures the truth. 12 Angry Men

In this business you got fifty ways you’re gonna screw up. If you think of twenty-five of them, then you’re a genius… and you ain’t no genius. Body Heat (“G”-rated version of quote from the movie)

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If you’ve noticed a lawyer with a paranoid, haunted look, and you’re wondering why, the answer may be that the lawyer is thinking, “what I have forgotten? Having a waived something I shouldn’t have?” The last time I wrote about the lawyer’s nightmare of waiver the waiver may have ended up costing Microsoft $300 million. In that case, i4i’s patent suit against Microsoft, Microsoft’s appeal of damages was made more difficult  by its failure to move for judgment as a matter of law on the issue. As I said in my post on that case, “trials are a virtual waiver landmine.”

Now, a waiver in Apple v. Samsung may outdo the cost of the waiver in the Microsoft case by $700 million.

In Apple v. Samsung a California federal jury awarded Apple over $1 billion for infringing patent and trade dress rights associated with the Apple iPhone.

Following trial the jury foreperson, Velvin Hogan (pictured above), became a media star, granting generous interviews to the press. Some of what he had to say motivated Samsung to investigate his background, and it didn’t like what it learned. During jury selection the judge asked the prospective jurors “have you or a family member or someone very close to you ever been involved in a lawsuit, either as a plaintiff, a defendant, or as a witness?” Hogan described a 2008 lawsuit in which he had been a defendant, but failed to disclose the fact that he had been sued by Seagate in 1993, and had filed for bankruptcy at least in part as a consequence of that lawsuit.

Since 2011 Samsung has been Seagate’s largest shareholder, owning almost 10% of Seagate’s stock. It follows, Samsung has argued, that Hogan may have been biased against Samsung based on this financial relationship. At the very least, he should have disclosed this lawsuit in response to the judge’s question. Samsung filed a motion for a new trial or an evidentiary hearing to examine Hogan’s conduct during jury deliberations.

No way, the judge ruled this week. Hogan disclosed the fact of his bankruptcy during voir dire (questioning during jury selection). Samsung was able to dig up his bankruptcy case file after trial, and they could have done it during trial. If they had, the bankruptcy filing would have led them to the Seagate case and they could then have moved to disqualify Hogan during trial. Samsung was obligated to act with “reasonable diligence based on information about juror misconduct” in its possession, and it failed to do so. Consequently, Samsung waived its right to seek a new trial, or even an evidentiary hearing into juror misconduct.

What is one to make of all of this?

If given a choice between retrying this case and torture with a medieval thumbscrew Judge Koh might be hard-pressed to chose. This trial consumed enormous resources—of the parties and the court system—and the idea of being forced to retry it based on one errant juror’s failure to disclose a fact that could have been totally irrelevant to the jury’s decision would be anathema to her.

As a legal matter, whether to grant a new trial or an evidentiary hearing is at the discretion of the court, and Judge Koh is unlikely to be reversed on appeal. Not every judge would necessarily rule as she did, but Samsung is almost certainly stuck with her ruling. The fact that the Seagate case against Hogan is almost 20 years old, and that Samsung’s financial relationship with Seagate is so tenuous, makes it extremely unlikely that the Federal Circuit will reverse Judge Koh on this issue.

If Hogan had brought evidence into the juryroom—or if there was reason to believe he was doing independent research into the patents at issue and sharing that with the jury—it might be a whole other story. For example, the Federal Circuit reversed a federal judge in the district where I practice (Massachusetts) for failing to question the jury after learning that a juror had brought a physical object into the jury room during in order to help clarify the evidence. (Atlantic Research Marketing Systems, Inc. v. Troy). However, that case involved conduct brought to the attention of the court during deliberations, not afterwards, as was the case here. And, Hogan didn’t bring any objects (other smart phones?) or information to the deliberations, so this case doesn’t go as far as the Federal Circuit’s ruling in Atlantic Research.

Samsung does seem to have dropped the ball by not investigating Hogan’s bankruptcy filing during trial. Each side of this case was almost certainly heavily staffed, and one attorney or paralegal should have been assigned to investigate each juror. To the extent this wasn’t standard procedure before this case, it is a lesson to trial lawyers that an in-depth background check on each juror is mandatory. Failing to do so is arguably malpractice, unless the case is too small (or client funds too constrained) for a check to be affordable.

In 12 Angry Men one juror, played by Henry Fonda, persuaded 11 jurors to change their view of the evidence. Did Velvin Hogan connect the relationship between Samsung and Seagate and decide to use his place on this jury to retaliate against Seagate for the suit it brought against him 19 years ago? Likely, we will never know. Big money cases and s0-called “trials of the century” like Apple v. Samsung are common, and are quickly forgotten. The lesson this case is most likely to be remembered for years from now is this: research your jurors at the outset of trial as soon as possible. If a juror has a hidden bias or there is some other basis for disqualification and you could have learned it during trial, you risk a post-trial challenge to the verdict based on waiver.

Apple v. Samsung Order re Juror Misconduct (courtesy Groklaw.com)

 

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