Apple v Samsung – if litigation is possible, then you have a duty to retain all records (and to remove any automated deletion systems).
Apple filed suit against Samsung in several jurisdictions around the world, including Australia, last year claiming the South Korea-based company had ripped off some of the technology and designs that went into the iPad and iPhone. Samsung countersued, alleging Apple violated some of its patents.
As reported in the media, the majorly of the world wide cases rested on the major case in the United States. In the United States Apple had originally sought $2.75 billion in damages. Samsung counter claimed for $421 million. Though the jury denied some of Apple’s claims, the verdict was a major victory for Apple, ordering that Samsung pay more than $1 billion in damages for breaching Apple’s patents. Furthermore, Samsung must cease to produce mobile devices with qualities that infringe upon Apple’s design patents.
The case in the United States revealed that Samsung was utilising an email retention system that automatically deleted any emails older than two weeks. As noted by the case this email retention system continued to operated even as the parties where engaged in litigation. Although it was automatically deleting emails it appeared that Samsung was in the process of destroying evidence, paramount to the case.
Following similar decisions in Australia like the Clayton Utz case with British American Tobacco, it has been established that this sort of automated email deletion process, especially after litigation has started, is a cardinal sin of litigation hold. Not only does it result in the erasing of pertinent evidence, but it also, in and of itself, is incriminating. Claiming “this was always the policy” isn’t defensible in a court of law. Once litigation begins, things change.
We should note that one of Samsung’s lawyers proceeded to issue a counter-motion against Apple, citing the fact that although Apple’s email server was not set up to automatically trash emails, there was no finite procedure in place to ensure that evidence was not erased.
What does this mean for you?
Although the case isn’t due to be heard in the Federal Court of Australia till early next year, the commentary from the Apple v Samsung case has meant that every company that has the remote possibility of potential partaking in litigation should have ready an effective Litigation Hold Policy that also includes, among other things an Email Retention policy.
Litigation Hold Policy
Evidence spoliation will get you in enough trouble. It’s harmful to the integrity of the case and self-incriminating. The fix is relatively straightforward. When you even suspect that litigation is going to take place, it is your responsibility to implement a litigation hold policy that bars all data that could be related to the case from being deleted. It’s your company’s way of saying, “We’re cooperating with the court, preserving the integrity of the evidence, and taking extra precautions to make sure that case-relevant files, email, and data aren’t deleted.” This sort of cooperation will bode well with the judge, and you’ll be able to begin the case free of self incrimination.
Had Samsung done so, they might’ve been shown some degree of leniency – potentially saving them millions of dollars. Instead, their failure to immediately implement a litigation hold policy resulted in the deletion of possibly case-pertinent emails and a jury’s charge of evidence spoliation. This is not the way to begin litigation.
Given the commentary on the Apple v Samsung case, we can gather that at least some Samsung emails were not deleted, and made it into the evidence pool. While we can’t be sure, we can guess that these emails were exchanged long before the actual litigation began (due to the nature of their content).
If Samsung had a company-wide email retention policy in place (that applied even to executives), these emails might have been sent and received outside of the retention period, and thus would have been procedurally deleted. This would be perfectly fine, of course, if Samsung had not yet been aware of the legal battle to come. It’s possible that Samsung could have been well within their rights to delete these emails. However – much to Apple’s liking – this wasn’t the case.
Instead, these emails sat dormant in the inboxes or archives of executives, waiting for the day when they’ would be used as evidence against the very men and/or women who composed them. While it’s entirely possible that an email retention policy wouldn’t have resulted in the legal exclusion of these emails, the opposite is possible, as well. Again, the absence of these emails mightn’t have changed the overall outcome of the case, but it could have very well changed the final order for damages.
It’s never too early to prepare for litigation. Failure to have a consistent email retention policy already in place (and the ability to implement a legal hold) can prove costly should litigation occur. Unfortunately, Samsung had to learn this lesson the hard way.
If you would like to discuss further, the legal implications of this case to your individual circumstances; or talk to our team of experienced lawyers, in regards to establishing your company’s own Litigation Hold Policy, please contact us by phone 07 3891 3333 or email email@example.com