Monday, May 14, 2012

Federal Circuit grants only a small, Galaxy-Tab-specific part of Apple's appeal of denial of preliminary injunction

In early December, Judge Lucy Koh of the United States District Court for the Northern District of California denied, in its entirety, an Apple motion for a preliminary injunction against four Samsung products over four intellectual property rights (three design patents and one software patent). Apple immediately appealed that denial to the Court of Appeals for the Federal Circuit.

Today the CAFC issued its opinion. Apple's appeal succeeded in part, but only to a rather limited extent. A preliminary injunction against the Galaxy Tab 10.1 in the United States based on a design patent (U.S. Patent No. D504,889) is now reasonably likely. That question is remanded to the appeals court, which now has to assume, contrary to its previous assessment, that this design patent is valid, which doesn't necessarily mean that it will issue a preliminary injunction, but makes it fairly likely. However, Samsung will likely be able to work around any such ruling by modifying its design, like it did in Germany, where it launched a modified version named Galaxy Tab 10.1N. That doesn't mean that enforcement is useless: anything that Apple can force Samsung to do to make its products more distinguishable from Apple's products is a good thing for Cupertino. But it's important to understand that this here won't give Apple the leverage it needs to get Samsung to settle the wider dispute on Apple's preferred terms.

The appeals court affirmed Judge Koh's analysis with respect to two iPhone-related design patents and a software patent.

Apple's appeal raised a fundamental issue that would have been far more meaningful than the questio nof whether or not the tablet design patent must be presumed valid. The far more important issue was that Judge Koh said Apple failed to show a "nexus" between the alleged infringements and the irreparable harm it claims to suffer from the presence of those products on the market. I thought Judge Koh was exceedingly demanding on Apple in that respect. If the CAFC had lowered the bar for Apple in this regard, it would now be in a good position to win a preliminary injunction over more than just one intellectual property right -- and, quite importantly, that would also help Apple with a view to its second U.S. preliminary injunction motion against Samsung (filed in February and scheduled to be discussed at a hearing next month). In that motion, Apple already made a lot of effort to show the required nexus -- and based on today's CAFC ruling, that's what Apple will have to do. Also, Apple tries to get mileage out of the fact that Samsung has become the worldwide number one smartphone maker.

The companies' CEOs and chief lawyers will meet next week in San Francisco for court-moderated settlement talks. Today's CAFC opinion provides both of them with additional information ahead of those talks, but I don't think it puts them closer to a settlement. This is only about a design patent, and it's doubtful whether they will ever really settle design-related claims: companies typically exclude those even from otherwise rather comprehensive cross-license agreements (just like they wouldn't include trademarks in patent cross-license agreements). While Apple's appeal has succeeded in part, this is a victory of rather limited scope and doesn't create any urgency on Samsung's part to settle. I still believe next week's talks will fail to yield a breakthrough.

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