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Samsung Sanctioned for Failing to Stop Email Deletion

SAN FRANCISCO--A federal judge sanctioned Samsung Electronics Co. (SSNHY, 005930.SE) for failing to prevent the automatic deletion of email evidence in its closely watched patent case with Apple Inc. (AAPL), presenting another setback in the South Korean company's defense. Paul Grewal, a magistrate judge in California, granted Apple's request for an "adverse jury instruction" in the case, informing jurors that Samsung failed to live up to its obligation to preserve evidence. Judge Grewal found that Samsung had improperly handled emails, deleting them even after the court case had been filed. His order cites a proprietary company system that by default deletes emails automatically after two weeks unless saved by employees, in part to avoid accidental leaks of confidential information. Though other systems existed to allow Samsung employees to save relevant documents, Judge Grewal said Samsung had never attempted to verify whether Samsung's employees were complying with instructions to protect messages that could be used for evidence. He noted that Samsung may not have acted in bad faith, but he argued that Samsung should have switched the automatic deletion system off altogether. "In effect, Samsung kept the shredder on long after it should have known about this litigation," he wrote. Though the jurors will be told that Samsung failed to preserve evidence, the judge's proposed instructions leave it up to the jury to decide whether the finding is important in reaching a verdict. Judge Grewal noted this is not the first time Samsung's use of an automatic email deletion system has come under fire. During a case in 2004 in New Jersey, the presiding judge also informed the jury that Samsung had destroyed evidence. An Apple spokeswoman declined to comment. A Samsung spokesman did not respond to requests for comment. The move is the latest in the winding legal battle between the technology titans that began in April last year, when Apple sued Samsung claiming its smartphones and tablets had infringed its patents. Since then, the two companies have duked it out in courtrooms across the globe. The original court case is now heading to trial, with jury selection planned for July 30. Apple has said that Samsung should pay $2.525 billion, with the bulk of that figure, $2 billion, representing the profits Apple calculates Samsung made with the products it says infringed Apple's intellectual property. For its part, Samsung has said the iPhone would not exist if not for the technology it developed, and is at the center of its infringement claims against Apple. Write to Ian Sherr at ian.sherr@dowjones.com Subscribe to WSJ: http://online.wsj.com?mod=djnwires

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