Apple Fails Again in Bid for Samsung Smartphone Sales Ban

Apple Inc. (AAPL) failed again to win a sales ban on Samsung Electronics Co. (005930) products found to infringe its smartphone patents, even after requesting what it described as a more limited prohibition.

U.S. District Judge Lucy H. Koh in San Jose, California, today denied Apple’s bid for what the company had pitched as a “narrowly tailored” ban on some older Samsung smartphone models after a jury in May found infringement by both companies.

The rebuke to Apple’s U.S. litigation efforts was softened by its July 22 announcement that it sold 35.2 million iPhones in the quarter, a 13 percent jump that contributed to a profit increase of 12 percent for the period. The performance shows Apple is withstanding competition from smartphone manufacturers led by Samsung, as consumers await new devices promised by Chief Executive Officer Tim Cook.

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Today’s decision comes as the companies started to wind down their global patent battle. This month they agreed to drop all suits against each other in countries outside the U.S., meaning claims are being abandoned in Australia, Japan, South Korea, Germany, Netherlands, the U.K., France and Italy.

Koh twice rejected the iPhone-maker’s request for a U.S. sales ban in an earlier case filed in 2011. Apple dropped its appeal on July 28.

Patent Fight

The order today may push the two sides to finally conclude what has been a drawn-out and occasionally nasty worldwide patent fight, which has sprouted alongside a market for touch-screen smartphones valued by IDC last year at $338.3 billion. Neither side has won an overarching decision harming its rival’s sales, and judges, including Koh, have repeatedly urged the companies to settle rather than play out their dispute in courts.

The companies are close business partners, with the Galaxy maker providing critical components like semiconductors and memory chips for the iPhone maker’s mobile devices.

Apple tried to make its latest sales ban request more viable by targeting specific infringing features in nine Samsung devices, and by offering what it called a “sunset period” to give its Suwon, South Korea-based competitor a chance to design around the features before any ban was enforced, according to a court filing.

Kristin Huguet, a spokeswoman for Cupertino, California-based Apple, declined to comment on the ruling.

Adam Yates, a spokesman for Samsung, didn’t immediately respond to an e-mail seeking comment.

Four Continents

The trials in San Jose between the world’s top two smartphone makers in 2012 and this year followed patent battles across four continents.

In the second trial, Apple won $120 million of the $2.2 billion in damages it sought. One of three patents Samsung was found to infringe in the second case allows a user to make a call by clicking on a phone number within a Web page or e-mail instead of having to dial it separately. Another enables a user to unlock the device through gestures, and a third covers a function for automatic spelling corrections.

Samsung Patent

The jury found that Apple infringed one Samsung patent covering functions related to retrieving, classifying and organizing digital images, awarding $158,000 in damages.

Samsung didn’t seek a sales ban against Apple.

“Rather than barring entire product lines from the marketplace, Apple merely proposes to stop Samsung from further use of the specific features that the jury found to infringe Apple’s three patents,” Apple argued in a court filing. “Having represented that it can design-around Apple’s patents completely and quickly, Samsung cannot complain that Apple’s narrowly tailored injunction will deprive the public of a single Samsung product.”

Appeals Court

In the first case, Koh was directed by an appeals court to reconsider her December 2012 decision rejecting Apple’s request for a sales ban. She concluded in March that Apple still hadn’t marshaled enough evidence to support its request covering more than 20 devices that were no longer on the market.

In Apple’s latest request, the devices targeted for a sales ban include the Admire, Galaxy Nexus, Galaxy Note, Galaxy Note 2, Galaxy S2, Galaxy S2 Epic 4G Touch, Galaxy S2 Skyrocket, Galaxy S3 and Stratosphere.

Samsung argued in the current case that there’s no evidence Apple suffered “irreparable harm” from any infringement, one of the requirements the iPhone maker must meet to win a sales ban. At a July hearing, Samsung lawyer Bill Price said it was a “Hail Mary” for Apple to contend that Samsung’s infringement has caused damage to the iPhone maker’s reputation for innovation that can’t be fixed with monetary compensation alone.

Samsung said, as it has in the past, that Apple failed to draw a close enough connection, or “causal nexus,” between infringement of patented features and the sales the iPhone maker claims it lost.

“‘Apple has provided no persuasive justification for depriving the public of product choices created by a thriving level of competition other than its claim that an injunction serves the public’s interest in protecting innovation and patent rights,” according to Samsung’s court filing. Apple argued to Koh, as it has in its previous requests, that if a sales ban is approved, it should be extended to any other Samsung products that are “not more than colorably different” than the older devices. That would expand the scope of a ban to include newer devices that use the features found to have infringed Apple’s patents.

The case is Apple Inc. v. Samsung Electronics Co., 12-cv-00630, U.S. District Court, Northern District of California Bookmark Story (San Jose).

To contact the reporter on this story: Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net Peter Blumberg, Charles Carter

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