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Case 3:16-cv-02787-WHO Document 434 Filed 01/07/19 Page 1 of 16

1 Michael J. Bettinger (SBN 122196) David T. Pritikin (pro hac vice)


mbettinger@sidley.com dpritikin@sidley.com
2 Irene Yang (SBN 245464) David C. Giardina (pro hac vice)
irene.yang@sidley.com dgiardina@sidley.com
3 SIDLEY AUSTIN LLP Douglas I. Lewis (pro hac vice)
555 California Street, Ste. 2000 dilewis@sidley.com
4 San Francisco, California 94104 John W. McBride (pro hac vice)
415-772-1200 – Telephone jwmcbride@sidley.com
5 415-772-7400 – Facsimile SIDLEY AUSTIN LLP
One South Dearborn
6 Chicago, Illinois 60603
312-853-7000 – Telephone
7 Attorneys for Plaintiffs 312-853-7036 – Facsimile
HUAWEI TECHNOLOGIES CO., LTD.
8 HUAWEI DEVICE USA, INC.,
HUAWEI TECHNOLOGIES USA, INC., and
9 HISILICON TECHNOLOGIES CO., LTD.

10

11 UNITED STATES DISTRICT COURT

12 NORTHERN DISTRICT OF CALIFORNIA

13 HUAWEI TECHNOLOGIES CO., LTD., Case No. 3:16-cv-02787-WHO


HUAWEI DEVICE USA, INC., and
14 HUAWEI TECHNOLOGIES USA, INC.,
HUAWEI’S MOTION TO STRIKE THE
15 Plaintiffs / Counterclaim- JURY DEMAND FOR SAMSUNG’S
Defendants, BREACH OF CONTRACT
16 v. COUNTERCLAIM

17 SAMSUNG ELECTRONICS CO., LTD.,


SAMSUNG ELECTRONICS AMERICA, Hearing Date: Feb. 13, 2019
18 INC., Time: 2:00 p.m.
Location: Courtroom 2, 17th Floor
19 Defendants / Counterclaim- Judge: Hon. William H. Orrick
Plaintiffs,
20
and
21
SAMSUNG RESEARCH AMERICA,
22
Defendant,
23 v.

24 HISILICON TECHNOLOGIES CO., LTD.,

25 Counterclaim-Defendant.

26

27

28

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1 TABLE OF CONTENTS

2 I. INTRODUCTION ...............................................................................................................1
II. FACTS .................................................................................................................................2
3
III. LEGAL STANDARDS .......................................................................................................4
4 IV. ARGUMENT .......................................................................................................................6
5 A. Samsung Cannot Produce Evidence Supporting Its Claim to Monetary Damages ...6

6 1. Samsung Produced No Evidence in Discovery of


Monetary Damages for Its Breach of Contract
7 Counterclaim ................................................................................................6

8 2. Rule 37(c)(1) Precludes Samsung from Introducing


New Evidence of Monetary Damages at Trial .............................................7
9
B. Samsung Has No Triable Issue of Damages under French Law ...............................9
10
C. A Bench Trial Will Be More Efficient ....................................................................10
11
V. CONCLUSION ..................................................................................................................12
12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

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1 TABLE OF AUTHORITIES
2 Page(s)
3 Cases
4
Abdallah v. International Lease Finance Corp.,
5 No. CV 14-06769, 2015 WL 1263141 (C.D. Cal. Mar. 9, 2015) ............................................10

6 ABT Systems, LLC v. Emerson Elec. Co.,


2013 WL 425399 (E.D. Mo. 2013) ..........................................................................................11
7
Alaska Rent-A-Car, Inc. v. Avis Budget Group, Inc.,
8 738 F.3d 960 (9th Cir. 2013) ...................................................................................................10
9 Animal Science Prods., Inc. v. Hebei Welcome Pharm. Co., Ltd.,
10 128 S. Ct. 1865 (2018) ...............................................................................................................9

11 Apple Inc. v. Motorola Mobility, Inc.,


886 F.Supp.2d 1061 (W.D. Wis. 2012) ...................................................................................10
12
Apple Inc. v. Samsung Electronics Co., Ltd.,
13 No. 11-CV-01846-LHK, 2012 WL 2571719 (N.D. Cal. June 30, 2012) ........................7, 8, 10
14 CCR/AG Showcase Phase I Owner, L.L.C. v. United Artists Theatre Circuit, Inc.,
No. 208-CV-00984-RCJ-GWF, 2010 WL 1947016 (D. Nev. May 13, 2010) ......................5, 7
15

16 CQ Inc. v. TXU Mining Company,


565 F.3d 268 (5th Cir. 2009) .................................................................................................5, 7
17
Dannenberg v. Valadez,
18 338 F.3d 1070 (9th Cir. 2003) .................................................................................................10
19 de Fontbrune v. Wofsy,
838 F.3d 992 (9th Cir. 2016) .....................................................................................................9
20

21 Ductmate Industries, Inc. v. Famous Distribution, Inc.,


2014 WL 4104810 (W.D. Pa. 2014) ........................................................................................11
22
eTool Development, Inc v. National Semiconductor Corporation,
23 2011 WL 12677158 (E.D. Tex. 2011) (Bryson, J., sitting by designation) .............................11

24 Georgia Power Co. v. Westinghouse Elec. Co. LLC,


No. CV 112-167, 2013 WL 12204328 (S.D. Ga. Sept. 30, 2013) ...........................................11
25
Granfinanciera, S.A. v. Nordberg,
26
492 U.S. 33 (1989) .....................................................................................................................4
27
Hoffman v. Constr. Protective Servs., Inc.,
28 541 F.3d 1175 (9th Cir. 2008) ...............................................................................................6, 7

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1 Hynix Semiconductor Inc. v. Rambus, Inc.,


527 F. Supp. 2d 1084 (N.D. Cal. 2007) (Whyte, J.) ........................................................ passim
2
Hynix Semiconductor Inc. v. Rambus, Inc.,
3
No. CV-00-20905 RMW (N.D. Cal. Aug. 2, 2006)...................................................................7
4
MicroStrategy Inc. v. Bus. Objects, S.A.,
5 429 F.3d 1344 (Fed. Cir. 2005)..............................................................................................5, 7

6 Nationwide Life Ins. Co. v. Penn-Mont Benefits Servs., Inc.,


No. 2:05-CV-1066, 2006 WL 8424005 (S.D. Ohio June 21, 2006) ........................................12
7
Smith v. Reinke,
8 No. 1:12-CV-00030-BLW, 2014 WL 2203896 (D. Idaho May 27, 2014) ..............................11
9
In re Tech. Licensing Corp.,
10 423 F.3d 1286 (Fed. Cir. 2005)..................................................................................................4

11 Thissel v. Murphy,
No. 15-CV-05937-RS, 2017 WL 2462316 (N.D. Cal. June 7, 2017)....................................5, 7
12
United Servs. Auto. Ass’n v. Mitek Sys., Inc.,
13 No. SA-12-CA-282, 2014 WL 8186642 (W.D. Tex. July 29, 2014).......................................11
14 Yeti by Molly Ltd. v. Deckers Outdoor Corp.,
15 259 F.3d 1101 (9th Cir. 2001) ...............................................................................................5, 7

16 Other Authorities

17 Fed. R. Civ. P. 1 .............................................................................................................................11

18 Fed. R. Civ. P. 26(a) ................................................................................................................3, 5, 7


19 Fed. R. Civ. P. 26(e) ........................................................................................................................7
20 Fed. R. Civ. P. 37(c) .............................................................................................................. passim
21
Fed. R. Civ. P. 44.1 ....................................................................................................................9, 10
22
M. Jaeger, “Reimbursement for Attorney’s Fees” ...........................................................................9
23
B. Thomley, Nothing Is Sacred, 12 Chap. L. Rev. 127, 140 .........................................................11
24
U.S. Const., amend. VII ...................................................................................................................4
25

26

27

28

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1 INTRODUCTION

2 Plaintiffs Huawei Technologies Co., Ltd., Huawei Device USA, Inc., Huawei Technologies

3 USA, Inc., and HiSilicon Technologies Co. Ltd. (collectively, “Huawei”) hereby moves, on

4 February 13, 2019 at 2:00 p.m., or as soon thereafter as it may be heard, to strike the jury demand of

5 Defendants Samsung Electronics Co., Ltd., Samsung Electronics America, Inc., and Samsung

6 Research America (collectively, “Samsung”) for Samsung’s breach of contract counterclaim.

7 With discovery closed, expert reports completed and rulings issued on the parties’ summary

8 judgment and Daubert motions, the contours of this case have come into clearer focus. The patent

9 case has been reduced to one claim each from four Huawei patents, and one claim each from five

10 Samsung patents. To further streamline the patent case, Huawei has offered, without admitting any

11 liability, to pay in full the immaterial amount of damages Samsung is seeking for infringement of its

12 five claims. 1 If Samsung accepts the offer, the patent jury trial will be further reduced to only four

13 Huawei patent claims. Regardless of the scope of the patent case, because each party has made a

14 jury demand and has assembled a record supporting its claim for monetary damages for infringement

15 of its asserted patent claims, those claims will be tried to a jury. The parties’ breach of contract

16 claims have taken a different course. While those claims are admittedly complex, it is now clear that

17 the relief at issue is fundamentally equitable. Indeed, as the record now stands, it is evident that

18 Samsung has no right to a jury trial for its breach of contract counterclaim and that a bench trial,

19 conducted in accordance with the Court’s procedures for such proceedings, would be the most

20 efficient way to resolve that claim, together with Huawei’s parallel breach claim. This conclusion

21 flows from two reasons.

22 First, if, after the close of discovery, the party requesting a jury cannot produce evidence

23 supporting its claim to monetary damages, then the party no longer has a right to a jury. Here,

24 Samsung requested a jury for its breach of contract counterclaim, but Samsung has not and cannot

25 produce evidence supporting its claim to monetary damages. Despite multiple opportunities to do so

26

27
1
Given that the cost of trying Samsung’s patent infringement claims will substantially exceed the
total damages that Samsung seeks, in an effort to streamline the case but without admitting any
28 liability, Huawei offered to pay in full the amount Samsung has sought in damages for infringement
of the patents it is presently asserting. Discussions of Huawei’s proposal are ongoing.
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1 over the course of a discovery period that lasted a year and a half, Samsung failed to produce

2 admissible evidence of its damages. In its interrogatory responses and a passing reference in one its

3 expert’s report, Samsung has suggested that its damages consist of litigation expenses and attorney

4 fees. Samsung, however, did not provide a computation of damages in its initial disclosures,

5 declined to answer relevant interrogatories, chose not to produce responsive documents, and opted

6 not to provide an expert opinion to support its claim for monetary damages. Accordingly, to date

7 Samsung has not identified any cognizable evidence of damages for its breach of contract

8 counterclaim, and—given its failure to address the issue during discovery—the Federal Rules bar

9 Samsung from introducing any new evidence it might seek to adduce at trial.

10 Second, regardless of whether Samsung were permitted belatedly to come forward with

11 evidence of litigation expense damages, Samsung has no legal basis to recover litigation expenses or

12 attorney fees as damages for Huawei’s alleged breach of contract. In an analogous case, Judge

13 Whyte held that a party had no right to a jury trial for a breach of contract claim based on California

14 law because California law does not permit recovery of litigation expenses or attorney fees as

15 damages for breach of contract. The same is true under French law, which both parties agree

16 governs Samsung’s breach of contract counterclaim. As a result, Samsung has no legal basis to

17 present its damages claim to a jury.

18 The Court should therefore strike Samsung’s jury demand, and conduct a bench trial on the

19 parties’ competing breach of contract claims.

20 FACTS

21 Huawei filed its complaint in this case on May 24, 2016. Samsung filed its operative answer

22 and counterclaims on October 14, 2016. Dkt. 90-2. Samsung’s counterclaims consist of nine claims

23 of patent infringement, an antitrust claim, 2 a FRAND breach of contract claim, and two claims

24 seeking declarations of non-infringement and invalidity of Huawei’s patents. See id. ¶¶ 28-558.

25 Samsung sought damages, injunctive relief, and declaratory relief in its prayer for relief. Id. at 114-

26 15.

27
2
28 On September 25, 2018, the Court granted Huawei’s motion for summary judgment as to
Samsung’s antitrust counterclaim. See Dkt. 418 at 23.
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1 Samsung, however, failed to produce evidence in discovery to support its request for

2 damages on its breach of contract claim, despite having obligations to do so in initial disclosures,

3 interrogatory responses, responses to document requests, and expert disclosures. For instance,

4 Samsung did not provide a computation of damages in its initial disclosures, pursuant to Federal

5 Rule of Civil Procedure 26(a)(1)(A)(iii). In Samsung’s Fourth Amended Initial Disclosures, served

6 well after the close of discovery on August 23, 2018, Samsung continued to state that “[t]he amount

7 of damages arising from Huawei’s conduct is not yet ascertainable as some if not all of the conduct

8 is ongoing, requires additional discovery, and may require expert testimony.” Ex. 1 at 10-11.

9 Samsung likewise did not produce evidence or a computation of damages in its interrogatory

10 responses. Huawei served an interrogatory asking Samsung to “[i]dentify and state the basis for any

11 and all damages that You are claiming in this Action, including the dollar amount of any such

12 damages, and the detailed methodology and calculations used to determine such amount.” Ex. 2 at

13 17. Samsung never identified any amount, methodology, or calculation of damages for Samsung’s

14 FRAND breach of contract or antitrust claims. See id. at 22-23. Instead, Samsung lumped its

15 alleged antitrust and breach of contract damages together in a single sentence, and vaguely stated

16 that the damages included “litigation costs and other business costs,” without providing any

17 methodology, calculation, or even a claimed amount. Id. (“Because of Huawei’s monopolization of

18 the relevant technology markets and breach of contractual commitments, Samsung has suffered

19 injury including but not limited to substantial litigation costs and other business costs in the United

20 States and around the globe.”). Samsung has never identified the nature or amount of any claimed

21 “business costs.” Nor has Samsung identified the proceedings as to which it believes it should be

22 entitled to recover its “litigation costs,” much less the nature or amount of such costs.

23 Samsung also failed to produce documents to support its request for damages. At the outset

24 of fact discovery, Huawei served a document request calling for “[a]ll Documents related to any

25 antitrust injury or harm Samsung has allegedly suffered as a result of Huawei’s alleged antitrust

26 violations and/or breach of contract.” Ex. 3 at 112. In response, Samsung agreed to produce

27 “responsive documents,” but never produced any. Id. Huawei served another document request

28 calling for “[a]ll Documents related to Samsung’s allegation that Huawei’s actions have imposed on

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1 it ‘antitrust damages in the form of substantial costs of litigation’ 3 including, but not limited to, all

2 invoices received by Samsung from its external legal advisors and others that Samsung contends

3 reflect costs constituting such antitrust damages.” Id. at 114. In response, Samsung agreed to

4 produce “responsive documents,” but ultimately again never produced any. See id. at 115.

5 Samsung’s experts did not calculate any damages for Samsung’s breach of contract claim.

6 Samsung’s expert Gregory Leonard opined that Huawei allegedly breached its FRAND obligations,

7 but Dr. Leonard did not tabulate any damages that Samsung allegedly suffered due to the breach

8 although he did calculate damages with respect to Samsung’s patent infringement claims. Although

9 Samsung’s antitrust expert Jerry Hausman opined that “Huawei has violated its FRAND

10 commitment,” Ex. 4 at 10, he did not offer any opinion concerning an amount of breach of contract

11 damages that Samsung allegedly suffered. Dr. Hausman’s opinions concerning harm instead

12 focused on the antitrust claim (on which this Court has granted summary judgment in favor of

13 Huawei), but even there he merely stated that “Samsung’s injury . . . is comprised of the cost of

14 multiple litigations, attorneys’ fees, and the experts’ fees paid to me and my team, and associated

15 costs.” Id. at 26. Dr. Hausman then stated in a footnote that “I understand that the specific harm

16 will be quantified by Samsung’s damages expert at a later date when these costs have been

17 tabulated.” Id. at 26, n. 51. Even if Dr. Hausman had tied this alleged antitrust harm to Samsung’s

18 breach of contract claim (which he did not), no Samsung expert ever quantified the alleged damages

19 and the time to do so has long since passed.

20 LEGAL STANDARDS

21 The Seventh Amendment provides that “in Suits at common law, where the value in

22 controversy shall exceed $20.00, the right of trial by jury shall be preserved.” U.S. Const., amend.

23 VII. The Seventh Amendment, however, provides no right to a jury trial “[w]here the only requested

24 relief is equitable.” Hynix Semiconductor Inc. v. Rambus, Inc., 527 F. Supp. 2d 1084, 1101 (N.D.

25 Cal. 2007) (Whyte, J.); see also Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, 42 (1989); In re

26 Tech. Licensing Corp., 423 F.3d 1286, 1289-90 (Fed. Cir. 2005); see 9 Charles A. Wright & Arthur

27
3
28 Huawei’s document request quoted from paragraph 533 of Samsung’s Answer and Amended
Counterclaims, Dkt. 90-2.
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1 R. Miller, Fed. Practice & Proc.: Civil 2d § 2308 (1995) (“[T]here is no constitutional right to a jury

2 trial on a claim for an injunction.”).

3 A party’s right to a jury trial should be assessed not only at the outset of the case, but also

4 before trial. “[I]f, after the close of discovery, the party requesting a jury cannot produce evidence

5 supporting its claim to monetary damages, then the party no longer has a right to a jury.” Hynix, 527

6 F. Supp. 2d at 1106. When a party neglects its obligations to produce damages evidence in

7 discovery, Federal Rule of Civil Procedure 37(c) forbids use of such evidence at trial, erasing any

8 jury trial right the party might otherwise have. Yeti by Molly Ltd. v. Deckers Outdoor Corp., 259

9 F.3d 1101, 1106 (9th Cir. 2001) (deeming Rule 37(c) a “self-executing,” “automatic sanction,” and

10 finding that “exclusion is an appropriate remedy for failing to fulfill the required disclosure

11 requirements of Rule 26(a)”). A party’s failure to comply with its discovery obligations will be

12 excused only if its failure was substantially justified or harmless. Fed. R. Civ. P. 37(c)(1). The

13 burden “is on the party facing sanctions to prove harmlessness.” Yeti, 259 F.3d at 1107.

14 Courts in the Ninth Circuit regularly exclude damages evidence “when a party first discloses

15 its computation of damages shortly before trial and substantially after discovery has closed.” See

16 CCR/AG Showcase Phase I Owner, L.L.C. v. United Artists Theatre Circuit, Inc., No. 208-CV-

17 00984-RCJ-GWF, 2010 WL 1947016, at *8 (D. Nev. May 13, 2010) (collecting Ninth Circuit cases

18 on excluding damages evidence). While a damages computation provided at the outset of a case

19 may be imprecise, “[a]s discovery proceeds, however, the plaintiff is required to supplement its

20 initial damages computation to reflect the information obtained through discovery. The party

21 seeking damages must also timely disclose its theory of damages as well as the computation of those

22 damages.” Id. at *5; Thissel v. Murphy, No. 15-CV-05937-RS, 2017 WL 2462316, at *2 (N.D. Cal.

23 June 7, 2017) (excluding damages evidence due to failure to disclose damages computation). For

24 similar reasons, courts exclude damages evidence when a party fails to answer or supplement

25 interrogatories. See MicroStrategy Inc. v. Bus. Objects, S.A., 429 F.3d 1344, 1356 (Fed. Cir. 2005)

26 (affirming exclusion of “non-expert damages evidence for failure to supplement discovery

27 interrogatories” under Rule 37(c)(1), applying Fourth Circuit law); CQ Inc. v. TXU Mining

28 Company, 565 F.3d 268, 279-80 (5th Cir. 2009) (upholding the exclusion of evidence in support of

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1 various damage calculations or theories that were not disclosed until shortly before trial); Hoffman v.

2 Constr. Protective Servs., Inc., 541 F.3d 1175, 1180 (9th Cir. 2008), as amended (Sept. 16, 2008)

3 (affirming finding that failure to timely disclose damages calculations was not justified).

4 Moreover, if a party cannot prove that it has a cognizable theory of damages under applicable

5 law, the party has no right to have its claim heard by a jury. Hynix, 527 F. Supp. 2d at 1102. Thus a

6 party does not have a right to a jury trial on a breach of contract claim if the party claims only

7 attorney fees as damages, and the applicable law does not permit recovery of attorney fees for breach

8 of contract. See id. “Absent a cognizable theory of damages, [the party demanding a jury] has no

9 right to have its contract claim heard by a jury.” Id.

10 ARGUMENT

11 Samsung has no right to a jury on its breach of contract claim because Samsung has not and

12 cannot at this late date produce evidence supporting its claim to monetary damages. Samsung did

13 not identify any such evidence in discovery, and Rule 37(c) bars Samsung from introducing new,

14 previously undisclosed evidence at trial. In addition, even if Samsung could introduce evidence of

15 its litigation expenses at trial, French law does not allow recovery of attorney fees as damages for

16 breach of contract, leaving Samsung with no right to have its breach of contract claim heard by the

17 jury.

18 A. Samsung Cannot Produce Evidence Supporting Its Claim to Monetary Damages


19 1. Samsung Produced No Evidence in Discovery of Monetary Damages for
Its Breach of Contract Counterclaim
20

21 As set forth in Section II above, Samsung had at least four opportunities to produce evidence
22 concerning the nature and amount of any damages flowing from Huawei’s alleged breach of its
23 FRAND obligations—i.e., its initial disclosures, its interrogatory responses, its responses to
24 Huawei’s document requests, and its expert reports—but it failed to do so in each case.
25 Accordingly, Samsung has to date identified no evidence that it can introduce at trial supporting its
26 claim to monetary damages. Because Samsung lacks such evidence, it has no right to a jury with
27 respect to its breach of contract claim. See Hynix, 527 F. Supp. 2d at 1106.
28

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1 2. Rule 37(c)(1) Precludes Samsung from Introducing New Evidence of


Monetary Damages at Trial
2

3 Any effort by Samsung to introduce at trial previously undisclosed evidence of its claimed
4 damages would be barred by the Federal Rules. Federal Rule of Civil Procedure 37(c) states that
5 “[i]f a party fails to provide information or identify a witness as required by Rule 26(a) or (e), the
6 party is not allowed to use that information or witness to supply evidence on a motion, at a hearing,
7 or at a trial, unless the failure was substantially justified or is harmless.” Fed. R. Civ. P. 37(c); see
8 also Yeti, 259 F.3d at 1106. 4 Samsung cannot possibly show that its failure to produce discovery
9 concerning its breach of contract damages in this case was “substantially justified or is harmless,” as
10 would be its burden. See Yeti, 259 F.3d at 1107. Having neglected multiple opportunities to provide
11 the requested information over the course of a discovery period that lasted a year and a half,
12 Samsung cannot plausibly establish that its failure to produce such discovery was substantially
13 justified. Nor would allowing Samsung to introduce new evidence of its claimed breach of contract
14 damages at trial be harmless because Huawei would be deprived at this late date of addressing
15 Samsung’s damages claim in fact and expert discovery and dispositive motion practice.
16 Consequently, this case falls squarely within the ambit of cases in which courts have
17 enforced Rule 37(c)’s automatic sanction. See CCR/AG, WL 1947016, at *8 (D. Nev. May 13,
18 2010) (courts in the Ninth Circuit regularly exclude damages evidence “when a party first discloses
19 its computation of damages shortly before trial and substantially after discovery has closed.”);
20 Thissel v. Murphy, 2017 WL 2462316, at *2 (excluding damages evidence due to failure to disclose
21 damages computation); MicroStrategy, 429 F.3d at 1356 (affirming exclusion of “non-expert
22 damages evidence for failure to supplement discovery interrogatories” under Rule 37(c)(1), applying
23 Fourth Circuit law); CQ Inc., 565 F.3d at 279-80 (upholding the exclusion of evidence in support of
24 various damage calculations or theories that were not disclosed until shortly before trial, applying
25 5th Cir. law); Hoffman, 541 F.3d at 1180.
26 Samsung can find no refuge in the decisions in Hynix Semiconductor Inc. v. Rambus, Inc.,
27

28
4
Rule 26(a) requires providing initial disclosures and expert reports, while Rule 26(e) requires
supplementing initial disclosures, expert reports, interrogatory responses, and document productions.
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1 No. CV-00-20905 RMW (N.D. Cal. Aug. 2, 2006), and Apple Inc. v. Samsung Electronics Co., Ltd.,

2 No. 11-CV-01846-LHK, 2012 WL 2571719 at *27-28 (N.D. Cal. June 30, 2012). In Hynix, Judge

3 Whyte declined to strike a jury demand for the plaintiff’s antitrust and fraud claims based on the

4 plaintiff’s claim for damages in the form of litigation expenses, but the situation in that case was

5 quite different. First, unlike Samsung, the plaintiff in Hynix produced “boxes of [legal] bills” before

6 the close of discovery to support its claim to litigation costs and expenses as damages. Id. at 3.

7 Samsung made no similar production in this case. Second, despite the production of those boxes of

8 bills, Judge Whyte struck the plaintiff’s jury demand with respect to its breach of contract claim.

9 See Hynix, 527 F. Supp. 2d at 1102. Judge Whyte found that the American Rule did not permit

10 recovery of attorney fees for breach of contract. Id. Accordingly, the facts and outcome in Hynix

11 support a finding that Samsung has no right to a jury trial for its breach of contract claim.

12 Judge Koh’s decision denying Samsung’s motion for summary judgment on Apple’s

13 FRAND-related antitrust claim, in which Samsung had argued that Apple had failed establish

14 damages, is also distinguishable for several reasons. See Apple Inc. v. Samsung Electronics Co.,

15 Ltd., No. 11-CV-01846-LHK, 2012 WL 2571719 at *27-28 (N.D. Cal. June 30, 2012). First, unlike

16 Samsung in this case, Apple seems to have complied with its discovery obligations, as Judge Koh

17 noted that Apple provided evidence in discovery of “specific litigation expenses that it has incurred

18 in defending itself as a result of Samsung’s allegedly anticompetitive conduct.” Id. Second, while

19 Judge Koh noted that nominal damages might suffice to establish entitlement to some damages for

20 purposes of defeating summary judgment, “[n]ominal damages, being limited to $1.00, would not

21 alone satisfy the Seventh Amendment’s amount in controversy limitation [of $20.00].” Hynix, 527

22 F.Supp.2d at 1102 (citing Wiggins v. Rushen, 760 F.2d 1009, 1012 (9th Cir. 1985)). In any event,

23 Samsung has not sought nominal damages in this case. See Ex. 2 at 17, 22-23. Third, Judge Koh’s

24 decision related to an antitrust claim, and Samsung conceded that attorneys’ fees were cognizable

25 damages in that context. Apple, 2012 WL 2571719 at *27. Judge Koh therefore did not consider

26 whether attorneys’ fees were available as damages for a breach of contract claim, the only remaining

27 FRAND claim that Samsung still has. Accordingly, Apple does not help Samsung here.

28 In sum, Rule 37(c) bars Samsung from introducing new evidence, undisclosed in discovery,

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1 to support Samsung’s request for damages on its breach of contract counterclaim. Samsung

2 squandered multiple opportunities to produce such evidence in discovery, making Rule 37(c)’s

3 “automatic” sanction of exclusion entirely appropriate.

4 B. Samsung Has No Triable Issue of Damages under French Law

5 Leaving aside the evidentiary problems, the Court should also strike Samsung’s jury demand

6 because attorney fees are not recoverable as damages under the substantive provisions of the

7 applicable contract law. In Hynix, Judge Whyte struck a jury demand with respect to a breach of

8 contract claim, because (i) the breach of contract claim was based on California law, (ii) the only

9 damages sought for the alleged breach were attorney fees, and (iii) attorney fees are not recoverable

10 as damages for breach of contract under California law. See Hynix, 527 F.Supp.2d at 1102

11 (“Accordingly, the court grants Rambus’ motion to strike the jury demand with respect to Micron’s

12 breach of contract claim.”). The same result applies here.

13 The parties agree that French law governs Samsung’s breach of contract counterclaim. 5

14 Under French law, “a party is not allowed to claim its attorney’s fees based on substantive

15 provisions of the [French] Civil Code.” See Ex. 5 (Markus Jaeger, “Reimbursement for Attorney’s

16 Fees,” International Commerce and Arbitration Vol. 4, Eleven International Publishing, The Hague

17 2010) (hereinafter “Jaeger”) at 151-52; Declaration of Prof. Jacques Raynard (“Raynard Decl.”) ¶¶

18 3-6; see also Fed. R. Civ. P. 44.1 (“In determining foreign law, the court may consider any relevant

19 material or source…The court’s determination must be treated as a ruling on a question of law.”);

20 Animal Science Prods., Inc. v. Hebei Welcome Pharm. Co., Ltd., 128 S. Ct. 1865 (2018) (in

21 determining foreign law, the court can rely on materials outside the pleadings); de Fontbrune v.

22 Wofsy, 838 F.3d 992, 999 (9th Cir. 2016) (endorsing reliance on treatises to determine foreign law).

23 As Professor Jacques Raynard of Montpellier University, College of Law in Montpellier, France

24 explains, the French Cour de cassation ruled in 2004 that attorney fees are not recoverable for

25 breach of contract. See Raynard Decl. ¶ 5. French scholars continue to cite the 2004 case as a

26 5
See, e.g., Dkt. 90-2 ¶ 28 (“Samsung admits that declarations made to ETSI pursuant to its IPR
Policy are governed a[t] least in part, by the laws of France.”);
27
https://www.etsi.org/images/files/IPR/etsi-ipr-policy.pdf (“The POLICY shall be governed by the
28 laws of France.”).

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1 fundamental decision on the issue. See id. ¶ 6 (citing 2016 French law treatise by Professor M.

2 Defossez). 6

3 Instead, a party in France can only recover attorney fees under procedural rules that allow the

4 court to award attorneys’ fees to a prevailing party in certain circumstances as a matter of equity.

5 See generally Ex. 5 at 2-5, 29-37; Raynard Decl. ¶ 4. 7 As a result, there is no triable issue of

6 damages pursuant to French contract law. See Hynix, 527 F. Supp. 2d at 1102; Fed. R. Civ. P. 44.1

7 (determination of foreign law is a question of law). 8 In other words, Samsung has identified no

8 evidence of damages for its breach of contract claim, and even if it did, the evidence would be

9 irrelevant to the jury trial. As in Hynix, Samsung has no cognizable claim of damages under the

10 governing contract law, and therefore “has no right to have its contract claim heard by a jury.”

11 Hynix, 527 F. Supp. 2d at 1102.

12 C. A Bench Trial Will Be More Efficient

13 If the Court grants this motion, Huawei is willing to withdraw its jury demand (and any

14 request for legal relief) for its breach of contract claim against Samsung. In that case, the jury would

15 6
Cf. Apple Inc. v. Motorola Mobility, Inc., 886 F.Supp.2d 1061, 1082 (W.D. Wis. 2012) (denying
motion for summary judgment of no damages, where movant’s “legal analysis [of Wisconsin and
16
French law] is incomplete” and off-point). In the Apple case, the movant submitted a book excerpt
17 dealing the French Law of Contract, but the general principles of contract law did not answer the
specific question of whether French contract law permits recovery of attorney fees.
7
18 Jaeger explains that France has a different conception of attorney fees than the United States, and
analysis of the post-trial claim of the prevailing party for attorney fees can be complex. What would
19 be classified as attorney fees in the United States are divided in France into “legal costs” and
“expenses.” Different standards apply to awards of legal costs and expenses to a prevailing party.
20
“In practice,” the amount awarded to the prevailing party “will only compensate for a, often little,
21 fraction of the total expenses not included in legal costs.” Id. at 2-3, 35.
8
At most, Samsung could argue that if it were to prevail at the bench trial on its breach claim, in a
22 post-trial procedure the Court could theoretically award some portion of Samsung’s attorneys’ fees
in this case, based on French procedural rules. See Alaska Rent-A-Car, Inc. v. Avis Budget Group,
23 Inc., 738 F.3d 960, 973 (9th Cir. 2013) (upholding award of attorney fees, post-trial, to prevailing
party based on Alaskan fee-shifting rule); see, e.g., Dannenberg v. Valadez, 338 F.3d 1070, 1071
24
(9th Cir. 2003) (example of attorney fee award to prevailing party considered on post-trial motion,
25 separate from jury trial). Samsung has not made this argument or shown an entitlement to such a
procedure. See Abdallah v. International Lease Finance Corp., No. CV 14-06769, 2015 WL
26 1263141 at *11 (C.D. Cal. Mar. 9, 2015) (“where plaintiffs merely assert that foreign law applies,
but fail to detail that law, courts regularly presume that the substantive law of the foreign law is the
27 same as that of the forum.”); Alaska Rent-A-Car, 738 F.3d at 973 (stating that “Alaska is the only
28 state that follows the English Rule”). Regardless, a potential post-trial motion requesting an award
of attorney fees to the prevailing party cannot entitle Samsung to a jury trial.
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1 hear the parties’ patent infringement claims, while the Court would hear the parties’ competing

2 breach of contract claims under whatever procedure the Court directs. Given the complexity of the

3 economic and related issues associated with the parties’ breach of contract claims, trying those

4 claims to the Court will minimize the burden on the jury and allow the Court to address most

5 efficiently the contested issues of breach and appropriate equitable remedies. As courts have

6 recognized, where appropriate, bench trials can be more efficient than jury trials. See Georgia

7 Power Co. v. Westinghouse Elec. Co. LLC, No. CV 112-167, 2013 WL 12204328, at *5 (S.D. Ga.

8 Sept. 30, 2013) (“Federal courts also have an interest in securing the ‘just, speedy, and inexpensive

9 determination of every action.’ Fed. R. Civ. P. 1. This interest can be promoted through a bench

10 trial.”); Smith v. Reinke, No. 1:12-CV-00030-BLW, 2014 WL 2203896, at *1 (D. Idaho May 27,

11 2014) (“Here, empanelling an advisory jury would not promote judicial economy because Smith

12 does not have a jury trial right on any of his claims. So the normal course would be a bench trial.

13 Jury trials are slower and more expensive than bench trials.”); B. Thomley, Nothing Is Sacred, 12

14 Chap. L. Rev. 127, 140 (“Jury trials cost much more for courts and litigants than bench trials.

15 Eliminating the jury has been shown to reduce trial time by fifty percent.”).

16 Moreover, holding a bench trial on the parties’ FRAND claims will avoid the risk that the

17 jury will be confused, distracted or overwhelmed by being asked to decide, in a two-week trial, the

18 parties’ FRAND claims together with infringement and invalidity claims for up to nine patents. See,

19 e.g., eTool Development, Inc v. National Semiconductor Corporation, 2011 WL 12677158, *1 (E.D.

20 Tex. 2011) (Bryson, J., sitting by designation) (“allowing the presentation of evidence bearing on

21 non-jury issues during the jury trial would result in the jury’s consideration of evidence not relevant

22 to the jury’s task. That, in turn, could result in confusion of the jury … Second, allowing the

23 evidence of non-jury issues to be presented while the jury is sitting would likely extend the jury trial

24 portion of the proceedings, imposing an unnecessary additional burden on the jurors.”); Ductmate

25 Industries, Inc. v. Famous Distribution, Inc., 2014 WL 4104810, *5-*8 (W.D. Pa. 2014)

26 (“Extraneous evidence increases the risk that the jury will become confused or unfocused.”); United

27 Servs. Auto. Ass'n v. Mitek Sys., Inc., No. SA-12-CA-282, 2014 WL 8186642, at *2 (W.D. Tex. July

28 29, 2014) (“The risk of confusion is particularly high in this case because the issues

11
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1 for jury determination are already complex.”); ABT Systems, LLC v. Emerson Elec. Co., 2013 WL

2 425399 (E.D. Mo. 2013) (“There is no need to burden and possibly prejudice the jury with evidence

3 of issues that are to be decided by the Court.”); Nationwide Life Ins. Co. v. Penn-Mont Benefits

4 Servs., Inc., No. 2:05-CV-1066, 2006 WL 8424005, at *3 (S.D. Ohio June 21, 2006) (“in light of the

5 complexity of the issues involved, a bench trial will be more efficient than a jury trial.”).

6 CONCLUSION

7 For the reasons stated above, Huawei respectfully requests that this Court strike the jury

8 demand for Samsung’s FRAND breach of contract counterclaim.

9
Respectfully submitted,
10 Dated: January 7, 2019
SIDLEY AUSTIN LLP
11

12 /s/ Michael J. Bettinger


David T. Pritikin (Pro Hac Vice) Michael J. Bettinger (SBN 122196)
13 dpritikin@sidley.com mbettinger@sidley.com
14 David C. Giardina (Pro Hac Vice) Irene Yang (SBN 245464)
dgiardina@sidley.com irene.yang@sidley.com
15 Douglas I. Lewis (Pro Hac Vice) SIDLEY AUSTIN LLP
dilewis@sidley.com 555 California Street, Suite 2000
16 John W. McBride (Pro Hac Vice) San Francisco, California 94104
jwmcbride@sidley.com (415) 772-1200 – Telephone
17 SIDLEY AUSTIN LLP (415) 772-7400 – Facsimile
18 One South Dearborn
Chicago, Illinois 60603 Attorneys for Huawei Technologies Co., Ltd.,
19 (312) 853-7000 – Telephone Huawei Device USA, Inc., Huawei Technologies
(312) 853-7036 – Facsimile USA, Inc., and HiSilicon Technologies Co., Ltd.
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HUAWEI’S MOTION TO STRIKE SAMSUNG’S JURY DEMAND; CASE NO. 3:16-CV-02787-WHO