Apple v. Samsung: Email Retention & Litigation Hold Policy Shortcomings

In one of the most lopsided litigations of our time, Samsung was smacked with $1 billion in damages owed to Apple for its infringement upon multiple Apple-held patents. While the jury did not find Samsung guilty of all charges, they dealt the tech company another significant blow in the form of dismissing all countersuits filed against Apple. Furthermore, Samsung must cease to produce mobile devices with qualities that infringe upon Apple’s design patents. In a CNET article by Greg Sandoval, one of the jurors, Manuel Ilagan, spoke on some of the evidence that doomed Samsung.

“The e-mails that went back and forth from Samsung execs about the Apple features that they should incorporate into their devices was pretty damning to me.”

Earlier in the trial, it was decided that both Samsung and Apple could be called out for failing to uphold document retention obligations.  Only last minute deal-making prevented adverse instruction for evidence spoliation against both companies from going to the jury.

In the case of Samsung, the email system was set to automatically delete two-week-old emails from the server, unless they were proactively saved by the end user.  Samsung made a few steps to halt this deletion, but their efforts did not hold up in court.  Although a meager litigation hold was issued in August 2010 (when Apple wrote a letter indicating they though infringement was taking place), but Samsung was cited for lack of adequate notice, insufficient depth and deficient monitoring.

If you’ve followed our blog in the past, you’ll know that continuing with an automated email deletion process, especially after litigation has started, is a cardinal sin of retention. Not only could it result in the erasing of pertinent evidence, but it also, in and of itself, subject to adverse judgment. Claiming “this was always the policy” isn’t defensible in a court of law. There is a clearly stated ‘duty to preserve’ electronically stored information once litigation begins, or even when it is anticipated.

An Infective Litigation Hold Policy

Evidence spoliation will get you in enough trouble. It’s harmful to the integrity of the case and can be self-incriminating. The fix is relatively straightforward. When you even suspect that litigation is going to take place, it is your organization’s responsibility to implement a litigation hold policy that bars the deletion or modification of all data that could be related to the case.  This should cover all custodians relevant to the case, and it should be audited to make sure that data is being stored, and users are not bypassing the system.   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.”

Had Samsung done so, they may have been in a better position to obtain adverse judgment against Apple’s own missing emails.   Instead, their failure to successfully implement a comprehensive litigation hold resulted in the deletion of possibly case-pertinent emails and loss of key negotiation point.

An Ineffective Email Retention Policy

Even though Samsung had that strict two week deletion policy in place, it apparently wasn’t very effective.  Given the comments of Mr. Ilagan, we can gather that some relevant Samsung emails 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 more inclusive company-wide email retention policy in place (that applied even to executives and addressed explicitly saved content), these might have been procedurally deleted. This normal course of business deletion would be perfectly fine pre-August 2010 as Samsung had not yet been aware of the legal battle to come. Samsung may have well within their rights to delete these emails.

Instead, these emails sat dormant in the inboxes or archives of executives, waiting for the day when they’d be used as evidence against the people who composed them. While the absence of these emails mightn’t have changed the overall outcome of the case, but it could have very well changed the price tag.

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.

Preparing for litigation? Try Mail Attender or Discovery Attender from Sherpa Software.

One comment on “Apple v. Samsung: Email Retention & Litigation Hold Policy Shortcomings

  1. Pingback: Why You Need Retention Policies

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