Monday, August 13, 2012

Discovery Sanctions Order in Apple Patent Litigation

U.S. District Judge Leonard Davis of the Eastern District of Texas imposed sanctions last week on Apple for halting a deposition of one of its employees, Mr. Allié, in a patent dispute. Might be of use for civil procedure professors looking for a current example for teaching purposes. Below is the portion of the order setting forth the sanctions:

(1) Apple must pay VirnetX’s reasonable attorneys’ fees and costs associated with responding to Apple’s motion for a protective order and the filing of VirnetX’s motion for sanctions;

(2) Apple must produce Mr. Allié for completion of his deposition at a time and location selected by VirnetX, all costs of such deposition to be paid by Apple. Apple shall not, through counsel or otherwise, further communicate in any way with Mr. Allié regarding the patents about which the witness was testifying prior to termination of his deposition. To the extent Apple has communicated with Mr. Allié about the patents since his deposition was terminated, Apple and Mr. Allié are deemed to have waived any privilege they might otherwise assert as to these conversations, and the witness will truthfully answer any and all questions regarding any such communications between Mr. Allié and Apple or any of its counsel, employees or representatives. Apple is precluded from asking any questions of the witness with regard to the comparison of the two patents.

(3) However, in lieu of Sanction #2 above, Apple may elect the following sanction and no further deposition of Mr. Allié will be taken:

a. Apple is precluded from calling Mr. Allié at trial, or providing any rebuttal or counter-designations from Mr. Allié’s deposition testimony regarding the comparison of ‘225 application and ‘135 patent; and

b. The Court will give the following adverse inference instruction to the jury at an appropriate time during the trial:

“During the deposition of Mr. Allié, counsel for VirnetX asked questions related to comparison of VirnetX’s ‘135 patent and Apple’s ‘225 patent application. Counsel for Apple improperly terminated the deposition and did not permit Mr. Allié to answer these questions. You may, although you are not required to, infer that had Apple’s counsel not terminated Mr. Allié’s deposition, the testimony provided would have been unfavorable to Apple, and that Apple’s counsel’s reason for terminating the deposition was to prevent such unfavorable testimony from being presented to you in this case.”

This choice of sanctions allows Apple to complete the deposition and avoid the adverse inference instruction, but prohibits it from potentially profiting from having stopped the deposition.


(Hat Tip: Beth Thornburg, via twitter at @btSMU)

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