An appellate court decision has opened the way for Apple (AAPL) to again pursue a ban on some Samsung Electronics (005930:KS) mobile devices found to infringe Apple patents. But the ruling is a mixed bag for Apple, experts say, and will place a bigger burden on parties seeking injunctive relief in patent disputes in the future.
A three-judge federal appellate panel issued the unanimous decision (PDF) on Monday. The court said U.S. District Judge Lucy Koh erred last fall in rejecting Apple’s attempt to ban Samsung products found to infringe three utility patents covering certain iPhone and iPad features. Koh ruled that Apple failed to prove it suffered irreparable harm from Samsung’s infringement, a requirement for injunctive relief. The panel upheld a portion of the earlier ruling, however, denying an injunction against Samsung devices found to infringe design patents.
Apple sought the ban after a jury handed the Cupertino (Calif.)-based company a patent victory over Samsung in August 2012. The iPhone maker was initially awarded $1 billion in damages. Koh reduced that judgment by $450 million, saying the jury’s calculations were flawed. Apple is seeking to recoup the full amount in a retrial on damages that opened on Nov. 12 before Judge Koh; the case is expected to close Tuesday.
According to the appellate decision, Koh’s mistake was in requiring Apple to demonstrate that the unique features tied to the infringed utility patents were the sole reason consumers opted to buy Samsung devices. “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,” the panel ruled.
Through a spokesperson, Samsung said it is pleased with the panel’s decision, affirming the denial of an injunction over the design patents. “While the Federal Circuit also ordered the district court to reconsider a portion of its rationale concerning only Apple’s utility patents, the remand concerns a very narrow scope of evidence presented by Apple. Therefore, we are confident that an injunction will be avoided,” the spokesperson said. Apple did not immediately respond to a message seeking comment.
Now it’s back to the district court on this matter. “Apple will attempt to remedy the holes in the evidence that the court pointed out,” says Amy Landers, a law professor at University of the Pacific’s McGeorge School of Law and a former intellectual property litigator with Orrick, Herrington & Sutcliffe. “I think they’ll take the opinion, evaluate it, and go back to the trial court with a renewed record to try and argue that the injunction should be issued,” she says. “The thing they’ll have difficulty with is the public interest.”
Apple will have to establish, as the ruling says, “that the inclusion of a patented feature makes a product significantly more desirable,” or that “the absence of a patented feature would make a product significantly less desirable.”
That’s a difficult test, say Landers and Stanford University law professor and IP expert Mark Lemley. “It’s not obvious the reconsideration will lead to a different result,” Lemley says. And with the latest decision having established that the test requires a nexus between a patent and the sale of products, the ruling makes it harder for any patent holders to win injunctive relief. “It’s not going to cause people not to ask for [an injunction], but it’s going to make it less likely that they’ll actually get it,” Lemley says.
The outcome is more likely to play a part in Apple’s strategy for future products than it will on the devices at issue in the current dispute—devices now two product generations beyond what the trial covered and mostly off the market. A separate case against Samsung is scheduled to go to trial in March concerning newer models, including Samsung’s Galaxy S3. As Bloomberg News reports, a ban on older Samsung models would support an argument by Apple that the newer phones are the same products but with different names.
Given the timing, Lemley says, Monday’s appellate ruling says more about the interrelationship between the law and a fast-moving business such as smartphones. “[The case] is moving at the pace you’d expect it to move, and technology is just leaping past it, and so is the market,” he says. “Even if you can imagine a court applying an injunction on remand, it isn’t going to change the fundamentals of the market.”