Friday, December 9, 2011

Apple keeps fighting for US preliminary injunction with appeal to Federal Circuit but definitively loses one in Australia

In the ongoing mobile patent wars, there is so much at stake that litigants don't just accept unfavorable rulings: they appeal them to the next higher court.

  • For Samsung this just worked out very well in Australia. An appeals court (technically it was just an enlarged bench of the same court) lifted a ban of the Samsung Galaxy Tab 10.1 based on two touchscreen-related patents. Apple appealed the lifting of the ban to the next higher court. As a result, the old ban still stayed in effect for about another week until the High Court decided today not to hear Apple's appeal. Vodafone and Optus, two of Australia's leading carriers, are still going to offer the product before Christmas according to Samsung.

  • Samsung also appealed the German Galaxy Tab 10.1 ban. There will be a hearing on December 20, 2011, at the Düsseldorf Higher Regional Court, but the Galaxy Tab 10.1N, a design-around for the German market, is currently on sale in Germany (Apple is suing Samsung over that one, too, with a hearing scheduled for December 22).

  • Samsung also announced its intent to appeal a Dutch court's denial of a preliminary injunction against several Apple products. The Dutch court attached considerable weight to Apple's FRAND defense.

  • Yesterday, a French court denied Samsung's request for a preliminary injunction against the iPhone 4S, and the English version of a major Korean newspaper quotes a Samsung spokesman who mentioned an appeal as a possibility (though they may also continue with the main proceeding). In my view, Samsung's case in France is so weak that an appeal is extremely unlikely to help there.

  • A week ago, the United States District Court for the Northern District of California denied Apple a US-wide preliminary injunction against four Samsung products. While the outcome is not the one Apple hoped to achieve, that ruling -- unlike the French one against Samsung, which strongly doubted the merits of the case as well as the reasonableness of an injunction -- does acknowledge that the case is likely to have merit (at least large parts of it) but held that an injunction wasn't equitable.

    It became known a few hours ago that Apple has appealed this decision to the Court of Appeals for the Federal Circuit (click to enlarge):

    The appeal and the notice to the court in California were filed on Wednesday, December 7, and entered the court's electronic document system a day later.

    Apple is doing the absolutely right thing. While I believe that Judge Lucy Koh performed a very good analysis of the valid scope of Apple's asserted design patents, her analysis of the equitable factors appears fundamentally flawed to me. Her finding that Apple didn't show, on balance, an entitlement to injunctive relief is somewhat conclusory. I think she misassessed and possibly even misdefined the relevant market and competitive dynamics.

    Apple has a pretty good chance here that the Federal Circuit will find some serious flaws in Judge Koh's reasoning on the equitable factors. A critical reader of her ruling can't help but conclude that her denial of injunctive relief is not well-reasoned to say the least.

    But it's not just that Judge Koh didn't understand the specifics of the commercial issues at hand. The Court of Appeals for the Federal Circuit -- and Apple -- must be particularly concerned about the incredibly high bar she set for injunctions (not only for preliminary but also permanent injunctions). The Federal Circuit sometimes overturns denials of preliminary injunctions, such as in the recent, high-profile, Bosch v. Pylon case), and it may do so here. But even if Apple didn't win a preliminary injunction through its appeal, I think at least some of Judge Koh's reasoning will very likely be overturned. Maybe the CAFC will just correct the worst flaws of that ruling and remand it to Judge Koh for reconsideration. Any such improvement could help Apple in outcome-determinative ways not only in the short term but, more importantly, with a view to the outcome of the main proceeding, which is scheduled to go to trial on July 30 and will involve the decision on a permanent injunction and some of the very same weighing and balancing of different factors.

    If the CAFC accepts to hear Apple's appeal (which I guess it will), the process will take a number of months, but the decision should still come down in time before Judge Koh rules on a permanent injunction.

    It's a good thing that infringement of valid patents doesn't automatically trigger an injunction in the United States the way it does, unfortunately, in Germany. But if the Federal Circuit upheld Judge Koh's ruling, the bar would be unrealistically high at least in the market for wireless devices. As a result, infringers would effectively have a "license of right" (or a "compulsory license" from the point of view of patent holders). Once the CAFC briefing process gets going, I guess Apple will get quite some support from other patent holders in the form of amicus curiae briefs.

  • Another smartphone patent case is also before the CAFC right now: Google filed what is effectively an appeal (though in a strictly legal sense a petition for a writ of mandamus is not an appeal) against the same district court's decision to admit as evidence a "damning" email that strongly suggests Google intentionally infringes on Oracle's Java-related intellectual property rights.

    I don't expect much to come out of Google's petition.

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