Appeals Court Revives Apple's Bid to Block Samsung Sales
The Federal Circuit and U.S. District Judge Lucy Koh in San Jose are still not seeing eye-to-eye on injunctions.
On Monday, the appellate court in Washington, D.C., reversed Koh for the third time on enjoining Samsung from infringing Apple's smartphone patents. The court ruled that Koh applied its new "causal nexus" standard for evaluating irreparable harm too strictly. The upshot is that Apple will get one more bite at stopping Samsung from selling certain phones and tablets found to infringe Apple's touch screen patents.
How that will play out on remand is unclear, in part because Samsung has withdrawn most of the infringing products from the market. But at the very least, said Santa Clara University law professor Brian Love, "Apple can be more specific with the kinds of evidence it presents in the next case" if Samsung or any other manufacturers introduce new infringing devices.
But the ruling contained good news for Samsung too. The Federal Circuit adopted the causal nexus test for permanent injunctions, which will require companies like Apple to show that when a small number of features infringe patents, those features "drive consumer demand."
"Since eBay [v. MercExchange], no Federal Circuit decision or Supreme Court decision has required a causal nexus in the permanent injunction context," Apple's attorney, William Lee of Wilmer, Cutler, Pickering, Hale and Dorr, had argued to the Federal Circuit in August.
Apple and Samsung have been duking it out in Judge Koh's San Jose courtroom for more than three years. A jury awarded Apple $1.05 billion last year, though Koh is currently presiding over a new trial on damages.
At issue in this branch of litigation is whether Samsung's infringement of patented iPhone touchscreen features known as "pinch-to-zoom" and "bounce-back" caused irreparable harm to Apple, supporting a permanent injunction.
Injunctions have been a sticky wicket throughout the litigation. Before trial Judge Koh denied Apple preliminary injunctions based on four of its design patents, but granted one in a separate suit involving newer products based on its search technology patent. The Federal Circuit reversed on one of the four design patents, though that decision was mooted at trial when jurors found the patent did not infringe. The Federal Circuit also vacated the preliminary injunction on search technology, saying Apple had not met the causal nexus test by showing that the search technology drove consumer demand.
With those rulings in mind after the jury trial, Koh adopted the causal nexus standard when Apple moved for a permanent injunction. Apple argued it met the standard with a survey showing that consumers were willing to pay substantially higher prices for products with the pinch-to-zoom and bounce-back features. But, Koh ruled, "even if the survey is taken at face value," paying more isn't the same as buying a phone "because" of the feature. Therefore, Apple had not met the causal nexus test.
On Monday, Judge Sharon Prost wrote for a three-judge panel that Koh was right to apply the causal nexus test, but that she had taken it too far. "Rather than show that a patented feature is the exclusive reason for consumer demand, Apple must show some connection between the patented feature and demand for Samsung's products," Prost wrote. "There might be a variety of ways to make this required showing," she added, such as showing the patented feature made the product "significantly more desirable."
Judges William Bryson and Kathleen O'Malley concurred.
That language appears very favorable for Apple when the case returns to Koh, Santa Clara's Love said. "That said, the Federal Circuit did not impose an injunction [itself], and did not tell Judge Koh to enter an injunction," Love added, so more briefing and argument will likely be necessary.
The bulk of Koh's ruling actually was affirmed. She was correct that neither Apple's design patents nor dilution of its trade dress supported an injunction. On two other prongs of the injunction test, she correctly ruled that the balance of hardships were neutral and that the public interest weighed against an injunction.
But Koh erred not only by applying the causal nexus standard too strictly, but also by weighing each patent individually, rather than deciding whether the infringement taken as a whole meets the test.
Love pointed out that Koh was facing the challenge of applying a new Federal Circuit test in an extremely complex case. "I wouldn't put any of the fault on Judge Koh," he said. "It's not like there were cases and cases and cases out there and she didn't follow a line of precedent."