Apple Can Seek to Block Samsung Smartphones, Court Says

Apple Inc. (AAPL) can pursue a ban on sales of some Samsung Electronics Co. products found to infringe its patents on smartphone features, after winning a U.S. appeals court ruling.

The patents cover features that Apple says make its iPhone unique, such as multitouch technology. The Cupertino, California-based company can’t block Samsung products for infringing patented designs, the U.S. Court of Appeals for the Federal Circuit said in an opinion posted today on its website. The ruling gives Apple another chance to curb sales of its top competitor in the $279.9 billion market for smartphones.

Apple must prove the features were a factor customers used in selecting which smartphone to buy, though it doesn’t have to show that it was the single driving factor, the court ruled. The trial judge, in rejecting Apple’s request for a sales block on Samsung phones, said Apple would have to prove that each feature drove sales of smartphones.

“To the extent these statements reflect the view that Apple was necessarily required to show that a patented feature is the sole reason for consumers’ purchases, the court erred,” the three-judge panel in Washington ruled. “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.”

Photographer: SeongJoon Cho/Bloomberg

A Samsung Electronics Co. Galaxy S III smartphone, top, and a Galaxy Nexus smartphone, bottom, are arranged for a photograph next to the Apple Inc. logo in Seoul. Close

A Samsung Electronics Co. Galaxy S III smartphone, top, and a Galaxy Nexus smartphone,... Read More

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Photographer: SeongJoon Cho/Bloomberg

A Samsung Electronics Co. Galaxy S III smartphone, top, and a Galaxy Nexus smartphone, bottom, are arranged for a photograph next to the Apple Inc. logo in Seoul.

Other Case

While many of the phones in this case are no longer sold, Apple has another case against Samsung going to trial in March over newer models, including Samsung’s Galaxy S III. Should the U.S. District Judge Lucy Koh, who is presiding over the case, impose a ban on the older models, Apple could argue that newer phones are the same products gussied up with new names.

The question sent back to the judge “concerns a very narrow scope of evidence presented by Apple,” Adam Yates, a Samsung spokesman, said in a statement. The company is confident it can avoid any sales ban, he said.

Kristin Huguet, an Apple spokeswoman, didn’t immediately return messages seeking comment.

Patents give their owners the power to block use of an invention, though that right can be overcome if it’s in the public’s interest or if the patent owner can be made whole with money and won’t suffer any lasting harm. The ruling lays out how patent owners can successfully stop competitors from using patented features in complex products.

“If consumers wouldn’t be willing to pay significantly more for it, it’s unlikely the infringement is what’s causing harm to the patent owner,” said Steve Auvil, a patent lawyer with Squire Sanders in Cleveland, Ohio, who’s not involved in the case.

‘Crown Jewels’

The Federal Circuit said Koh should have considered a survey showing Samsung consumers were willing to pay extra if the smartphones had some of the features patented by Apple.

The ones Apple can seek a sales ban on cover functions to make the phone easier to use, such as a pinching motion to expand images, a double tap to zoom and a screen that bounces back at a document’s end so the user knows the image isn’t stuck. These patents, Apple said in a court filing, are the “crown jewels of Apple’s ‘unique user experience.’”

Those features were an integral part of Apple’s marketing campaign and form the basis of its argument that others began copying the iPhone once it took off with the public. That could help Apple in its arguments, Auvil said.

“If they’re not advertising the feature, I don’t see how you can argue that the feature is the basis of consumer demand,” he said. “You have to be promoting the feature.”

$1 Billion Verdict

A federal jury last year awarded Apple $1 billion in compensation from Samsung, although part of the damage award is being retried in federal court in San Jose, California.

Apple is trying to force Suwon, South Korea-based Samsung to change or stop selling some smartphones and tablet computers. The $1 billion verdict it won at trial last year equals less than two weeks’ worth of iPhone sales.

Apple filed the lawsuit in April 2011, saying the Korean company “has chosen to slavishly copy Apple’s innovative technology.” Samsung responded a week later with its own patent claims, and the fight has escalated into a legal battle that has spanned four continents.

The design patents included one covering the front face of the iPhone. In that part of the case, the Federal Circuit said the judge was correct to say “isolated, anecdotal statements about single design elements do not establish that Apple’s broader patented designs are drivers of consumer demand.”

The case is Apple Inc. v. Samsung Electronics Co. (005930), 13-1129, U.S. Court of Appeals for the Federal Circuit (Washington). The lower court case is Apple Inc. v. Samsung Electronics Co. Ltd., 11-cv-01846, U.S. District Court, Northern District of California (San Jose).

To contact the reporter on this story: Susan Decker in Washington at sdecker1@bloomberg.net

To contact the editor responsible for this story: Bernard Kohn at bkohn2@bloomberg.net

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