The United States District Court for the Northern District of California just became the third court to order a preliminary injunction against the Samsung Galaxy Tab 10.1, and the second, after the Düsseldorf Regional Court, to do so over an iPad design patent (an Australian injunction, which was subsequently lifted, was based on two technical patents).
Judge Lucy Koh entered the injunction at close of business on Tuesday. Only a day earlier she had scheduled a hearing for Friday. Her order explains that "further briefing and argument from the parties on the issue of the preliminary injunction is unnecessary". Given the Federal Circuit's appellate ruling and her original decision to deny an injunction (which was based on the assumption, overturned on appeal, that the design patent was likely invalid, but nevertheless stated that there was an infringement and irreparable harm), she felt that "any further delay of the injunction is not justified". The injunction will enter into effect as soon as Apple posts a $2.6 million bond.
[Update] In record time, only about five hours after the order, Samsung just filed its notice of appeal:
NOTICE IS HEREBY GIVEN that Defendants Samsung Electronics Co. Ltd., Samsung Electronics America, Inc., and Samsung Telecommunications America, LLC appeal to the United States Court of Appeals for the Federal Circuit from the June 26, 2012 Order Granting Preliminary Injunction entered in the above-captioned action, Docket No. 1135, and each and every part thereof.
Given that the majority of the Court of Appeals for the Federal Circuit -- all but one judge -- did not want to tell the district court to enter a preliminary injunction right away, it's not entirely impossible that Samsung can raise issues concerning Judge Koh's equitable analysis. As you can read further below, Samsung asked for the admission of additional evidence, and Judge Koh's denial of that motion will be part of Samsung's appellate argument. Even if Samsung's appeal failed, Samsung simply cannot let this preliminary injunction stand without an appeal since it will want to argue some of the same issues at the upcoming trial. [/Update]
The decision strengthens Apple's "copycat" allegations against Samsung. The ruling notes that Judge Koh's court "previously found the Galaxy Tab 10.1 to be substantially similar 'in the eyes of the ordinary observer' to the D'889" and that "the Galaxy Tab 10.1 is 'virtually indistinguishable' from Apple's iPad and iPad 2". In fact, Samsung's counsel couldn't distinguish those products when Judge Koh showed them in the courtroom at a limited distance.
If Apple also prevails on this infringement issue at the upcoming trial (which is scheduled to begin on July 30), Samsung may be liable for a substantial amount of damages. Design patent infringement can be very costly.
Samsung is still going to be able to sell 10.1-inch tablet computers in the United States. The scope of a design patent is relatively narrow (which makes it all the more embarrassing for Samsung that it infringed one at all), so Samsung can design around it, as it did in Germany, where a motion for a preliminary injunction against the Galaxy Tab 10.1N (the redesigned version) was denied. At this stage of the lifecycle of the Galaxy Tab 10.1, it's possible that Samsung decides to just take it from the market and focus on new product launches. But if it wanted to continue to sell it in the United States for some more time, it would simply redesign. A redesign might lead to another push by Apple for an injunction, but that's the best way for both parties to get clarity on the scope of Apple's design patent.
Disputes over design patents are usually not settled by way of a long-term license agreement. Patent cross-license agreements typically exclude design patents, just like companies wouldn't cross-license all of their trademarks. Design patent disputes can just be settled case by case (for example, with the alleged infringer agreeing to make certain modifications).
Apple's enforcement of U.S. design patents and equivalent design rights in other jurisdictions already appears to have resulted in different design decisions on Samsung's parts. Its newer products, such as the Galaxy S III smartphone, are clearly more distinguishable from Apple's offerings. Samsung saw that it was just going to suffer all sorts of disruptions of its business, and negative publicity, by continuing to copy Apple's designs. And the commercial impact of injunctions is much greater if they come down shortly after the launch of a product.
Judge Koh will soon adjudicate another motion for a preliminary injunction against Samsung: the one targeting the Galaxy Nexus smartphone with four technical patents. A hearing on that motion was held earlier this month. That decision will be much more important since the software patents at issue in that case are potentially much broader than the iPad design patent and allegedly cover techniques that are found in many other products (other Samsung products as well as third-party products).
Samsung failed to stall
A few hours prior to the Galaxy Tab 10.1 decision, Samsung's hard-working and imaginative lawyers made a last-ditch attempt to cause a delay. They brought a motion (already the second one in as many months) to introduce new evidence. They argued that the factual record on which Judge Koh originally denied a preliminary injunction in December 2011 was outdated by now, and tried to inject new prior art and arguments related to an iPad 2 prototype Apple presented to the patent office. Judge Koh denied this 11th-hour motion in a footnote.
Interestingly, the ruling also says this:
"This Court is persuaded by Judge O'Malley's concurrence that the public interest favors an injunction here 'because the record at this stage shows that the D'889 Patent is likely valid and infringed, and there are no other relevant concerns, the public interest is best served by granting a preliminary injunction.'"
Circuit Judge O'Malley concurred with her colleagues in all respects but wanted the Federal Circuit to go one step further and order an immediate entry of a preliminary injunction. Her colleagues, however, believed that the first-line court, the district court, should perform the equitable analysis and said that this could happen quickly. Samsung's multiple efforts to delay the district court's decision on remand show that Judge O'Malley's concern about potential delay was not unfounded.
Getting a denial of a preliminary injunction overturned, even if only to a limited degree, was a significant achievement for Apple's lawyers at the Federal Circuit. It's easier to succeed with appeals of final rulings. More and more smartphone patent cases are appealed to the Federal Circuit, and if statistics are any indication, we will see more cases in which district court and ITC decisions clearing Android devices of certain infringements will be modified. This was just the first case in which it produced a result that impacts the market, but it won't be the last.
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