In one of the rulings from the recent patent mega-trial between tech giants Apple and Samsung regarding smartphones and tablet computers, the Court (Judge Grewal) granted a request from Apple for an adverse inference instruction that Samsung had “failed to preserve evidence” and that the evidence destroyed could be presumed to be favorable to Apple. Obviously, this type of instruction tilted the playing field in the case in favor of Apple.
The destroyed evidence in question related to Samsung’s design of its products. The documents that were “destroyed” by Samsung were emails subject to Samsung’s written 14-day document retention policy. That policy directed deletion of all emails that were two weeks old and an “auto-delete” function automatically erased the emails.
Samsung did turn off the “auto-delete” for witnesses with relevant information when the lawsuit commenced in April 2011. Eight months earlier, however, Apple’s attorneys had informed Samsung in detail of the basis for Apple’s infringement claims. Following that notice, Samsung distributed a detailed litigation hold letter in August 2010 to some of its employees, but not to all having information relevant to the Apple claims. Although the letter told employees to save relevant documents, Samsung did not take the additional step of turning off the auto-delete function at that point. In addition, Samsung did not follow up after sending the letter to see if its employees were preserving relevant documents.
Judge Grewal found that the relevant emails from and after the date that litigation was reasonably foreseeable had to be preserved. In this case, he said, Samsung, at a minimum, foresaw litigation in August 2010 when it sent the litigation hold letter. From the date of that letter forward, Judge Grewal ruled that Samsung should have turned off the auto-delete function and followed up to ensure that relevant documents were being preserved.
Comment: The Court was not penalizing Samsung for having a document retention policy that included auto-deletion of email. Such policies have been upheld by the courts. What the District Court did penalize was Samsung’s failure to adjust that policy once litigation with Apple was “reasonably foreseeable,” and its failure to police the litigation hold letter to ensure it was being followed. At a minimum, the takeaways here are twofold: (a) when a potential court battle is brewing, any auto-delete programs affecting the electronic documents of key witnesses should be disabled; and (b) once a litigation hold letter has been issued by a company, the company and its lawyers should follow up to ensure it is being followed. Unfortunately, there is no bright line rule for determining when litigation is reasonably foreseeable, but the line is clearly crossed when detailed threats of litigation have been made by one side or the other.