Wednesday, July 13, 2011

Judge doesn't share Apple's sense of urgency about Samsung case

Judge Lucy Koh of the U.S. District Court for the Northern District of California has put a damper on Apple's hopes of speeding up its federal lawsuit against Samsung.

While an order she issued yesterday relates to only a very limited subset of the entire litigation, the rationale for her decision to deny a motion to shorten time (for the said subset) suggests that she has serious doubt about Apple's entitlement to a faster process in general as well as about the consistency of Apple's positions and actions in that regard.

This does not bode well for Apple's efforts to compress the timeline for the case as a whole and for Apple's desire to obtain a preliminary injunction with respect to certain patents and products.

Formal scope of yesterday's order

Let me show where the scope of that order fits into the greater scheme of things.

Apple filed its original complaint against Samsung in mid April, and amended it two months later. In the meantime, Apple succeeded in getting early access to several Samsung products in the form of an expedited discovery, while Samsung was later denied access to early samples of the iPhone 5 and iPad 3.

On July 1, Apple filed a motion for a preliminary injunction and, simultaneously, two other motions:

  1. Apple filed a motion for an expedited trial, with a proposed schedule that envisions a jury trial to begin on February 1, 2012. In that motion, Apple outlined various reasons for which the court could order a compressed schedule. Some of those reasons -- such as the harm Apple believes to suffer from Samsung's "deliberate and ongoing infringement" -- mirror those provided in Apple's motion for a preliminary injunction concerning the alleged infringement of a subset of the asserted rights by a subset of the accused products.

  2. Furthermore, Apple filed a motion to shorten time for the briefing process with respect to the motion for an expedited trial. The purpose of that one was to compress the timeline for the exchange of pleadings concerning Apple's desire to compress the timeline for the overall lawsuit. Apple wanted a schedule based on which the court would schedule a hearing for July 21 (next week's Thursday), at or after which the decision on the motion for an expedited (overall) trial would be taken.

The motion to shorten time (#2 above) is exactly what I mean by a very limited scope -- and that's the one that the judge denied yesterday. A hearing on that scheduling question will take place on August 24, not on July 21 (which was Apple's preference).

The judge's reasoning and its wider implications

I'll quote and comment on some passages from yesterday's order:

"The Court agrees [with Samsung] that Apple has not established substantial harm or prejudice justifying a shortened briefing and hearing schedule for its Motion to Expedite."

In other words, the judge is unconvinced that Apple is suffering so badly that the five weeks between July 21 and August 24 make a major difference. Instead, the judge believes Samsung should be given a sufficient amount of time to develop its opposition to Apple's motion for an expedited trial.

A decision that five weeks don't make much of a difference doesn't mean that the denial of Apple's motion for an expedited trial and for a preliminary injunction is a foregone conclusion. The timelines and issues are different ones. However, if the judge had agreed at this stage that there's a high degree of urgency even for the relevant subset of the process, that would have made it more likely that the judge also believes in the need for a preliminary injunction and an expedited trial.

The other cornerstone of yesterday's decision is a much bigger problem for Apple in connection with the other two motions:

"Moreover, Apple indicated at the May 12, 2011 hearing that it had been aware of its infringement claims for at least a year and engaged in negotiations with Samsung during that time. See Transcript of May 12, 2011 [...] ('there have been extended efforts . . . to resolve this problem short of litigation. . . . they've been going on for at least a year'). The Court agrees with Samsung that the length of time Apple has been aware of its claims and the long history of infringement alleged in the complaint undermine Apple's claims of urgency to some extent."

Note the word "undermine": this indicates Apple has a serious credibility problem with all of its claims that it needs an extraordinarily swift resolution of this lawsuit.

The logic here is that if a company (like Apple in its own representation) truly sees a fundamental threat in an infringement, it won't negotiate for about a year but will take action sooner than that.

In this case, Apple certainly had its reasons to wait. In my opinion, the delay was due to two factors:

  • Apple buys certain components (chips and screens) from Samsung. That's why Apple certainly didn't want to antagonize Samsung as the first major Android vendor. It's possible that Apple has already decided to replace Samsung as a supplier with respect to all or at least the most critical components. But the search for alternatives, combined with considerations related to the terms of certain agreements, might have delayed Apple's legal action against Samsung.

  • I guess Apple always had Samsung on its "hit list" but wanted to make some headway in its other Android-related cases, especially the first one (its first ITC complaint against HTC). If the ITC had found HTC to infringe certain Apple patents, and if those infringements equally applied to Samsung's products, Apple would have been in a stronger position. However, that first ITC investigation against HTC didn't go too well for Apple (which is why it just brought a second ITC complaint against HTC).

The two reasons outlined above are basically Apple's problem and wouldn't really help to convince the court that Apple needs a superswift resolution of this lawsuit. The first one is a business consideration that's legally unrelated to the infringement at issue. The second one is a tactical plan that Apple might have had but which didn't work out.

Unpersuaded of Apple's claims of extreme urgency, the judge determined that the previously-scheduled case management conference on August 24 is soon enough to discuss the motion for an expedited trial. To me this looks like the judge is sending a clear signal to Apple that the U.S. District Court for the Northern District of California doesn't like to be rushed unless there are really compelling reasons for it.

While the judge didn't mention this, she probably was aware of the fact that Apple filed its ITC complaint against Samsung only on July 5 -- even after Samsung's own ITC complaint against Apple. The ITC is a forum that litigants in this industry frequently choose to get a quick decision. Apple waited with its ITC complaint for more than two-and-a-half months after its original federal lawsuit. In many cases, ITC complaints are filed simultaneously with federal lawsuits. The fact that Apple took so much more time does nothing to enhance the credibility of Apple's claims of urgency.

I can understand that Apple wants Samsung to change its product design as soon as possible, given that the Galaxy range of products is indeed amazingly similar to Apple's iPhone and iPad. But in that case I wonder why Apple didn't go to the ITC in the first place, and why Apple didn't choose one of the so-called "rocket dockets" -- courts that are known for particularly short timelines.

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