Wednesday, March 7, 2012

Apple wins claim construction battle against Samsung at the ITC

On May 31, the ITC will commence its evidentiary hearing on Apple's ITC complaint against Samsung. In that investigation, five technical patents and two design patents are at issue.

Yesterday, Administrative Law Judge (ALJ) Thomas Pender entered his claim construction order. Claim construction is a key step in U.S. patent litigation prior to the analysis of whether the asserted rights are valid and infringed.

If a party prevails on claim construction with respect to a given patent, it's much more likely than otherwise to win, but it's not a given -- especially at the ITC, where only about one out of 20 smartphone-related patents-in-suit is ultimately deemed violated. But to the extent that one can tell at this stage, Apple appears to be on the winning track against Samsung with respect to this ITC investigation. Here's a summary of the claim construction decision:

  • For two of the patents (U.S. Patent No, 7,789,697 on "plug detection mechanisms" and U.S. Patent No. 7,912,501 on an "audio I/O headset plug and plug detection circuitry", the ALJ didn't have to rule on any disputed terms. While Samsung may very well be confident of its ability to defend itself against those patents based on the consensus interpretation, it would likely have tried to have key terms interpreted in its favor but probably didn't see how it could realistically influence the outcome concerning those two patents by picking a claim construction fight over them.

  • Samsung won a favorable claim construction with respect to only one patent, U.S. Patent No. 7,863,533 on a "cantilevered push button having multiple contacts and fulcrums". For the concept of "simultaneous actuation" (and, accordingly, the phrase "actuated simultaneously"), Apple proposed a very narrow definition ("causing the first and second distal ends to move so that more than one contact may be actuated at the same time") but the ALJ agreed with Samsung and the ITC staff that it should be understood as "caused to move or depressed at the same time". That broader interpretation presumably suits Samsung's related invalidity contentions.

  • Apple's proposed interpretations were adopted against Samsung's opposition with respect to two patents:

    • U.S. Patent No. 7,479,949 on a "touch screen device, method, and graphical user interface for determining commands by applying heuristics" is a patent that lists Steve Jobs as one of many inventors. It's a strategic one, and Apple's successful claim construction argument relied in part on Circuit Judge Richard Posner's claim construction in a federal lawsuit in Chicago against Motorola. Just like Motorola did in the Northen District of Illinois, Samsung argued before the ITC that the term "heuristics" and, consequently, the phrase "one or more heuristics" are indefinite, which would mean that the patent is invalid. Motorola and Samsung both work with the Quinn Emanuel law firm, which presumably developed this argument.

      I personally don't like patents that refer to entire categories of problem-solving strategies, and the adopted interpretation of "one or more rules to be applied to data to assist in drawing inferences from that data" is way too broad for my taste. But ALJ Pender notes that "[a] broad term [...] is not impermissible [...], so long as the term has meaning to one of ordinary skill in the art at the time of the invention (i.e., a person of ordinary skill would know an algorithm or rule that could accomplish the claimed subject matter)". If a mere reference to a rule, or set of rules, is enough for a patent to be specific and valid since an implementer "would know an algorithm or rule that could accomplish" the task, then the vast majority of all patents would actually have to be deemed invalid on the grounds of obviousness. But Apple has convinced (in chronological order) Judge Posner, the ITC staff and ALJ Pender that a disclosure of specific algorithms or rules isn't necessary here, and that fact matters a lot more than my personal opinion.

    • The controversial term in U.S. Patent No. RE41,922 on a "method and apparatus for providing translucent images on a computer display" is "image operation". The ALJ agreed with Apple and the ITC staff that this should mean "any kind of operation conducted on an image or window", as opposed to Samsung's narrower definition of "creating or modifying an image". Samsung presented several arguments for its proposal, all of which were deemed unpersuasive by the ALJ, including a reference to what Apple told a patent examiner to overcome rejection.

From a strategic point of view, I believe the two patents concerning which Apple defeated Samsung's claim construction arguments are the two most important ones at issue in this ITC investigation. The only patent on which Apple lost is a hardware patent, which means that the cost to Samsung would be quite high if it had to modify its products, but I believe Samsung could handle this. The remaining two patents (the ones without any disputed terms) relate to plug detection. I believe those are powerful, but the '949 and RE'922 patents appear to be more key to Apple's patent enforcement against Android in general. The '949 patent alone could be powerful enough to create a situation in which Google and its hardware partners would really be forced to negotiate a license agreement with Apple.

For Apple, this claim construction win is significant progress. But Samsung will give it a run for the money in the months to come.

In a parallel ITC investigation, Samsung is asserting five patents against Apple. I saw that Apple brought a motion to have two of those patents thrown out on FRAND grounds. It will be interesting to see how the ITC rules on that motion. In my view, the ITC is not an appropriate venue for standard-essential patents since the ITC is all about import bans (a form of injunctive relief). Also, the ITC appears to be very receptive to all sorts of public interest arguments in connection with remedies, so it would actually be inconsistent to attach much weight to such (partly far-fetched) theories as the availability of HTC's Android-based smartphones affecting the adoption of 4G in the United States while allowing companies to abuse standard-essential patents through the pursuit of import bans. What those patent holders should do is sue in federal court and demand to get paid at a FRAND rate.

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