Friday, August 31, 2012

Apple asks Judge Koh to reconsider schedule for post-trial decisions on injunctive relief

At close of business on Thursday, Apple filed a request for permission to bring a motion for reconsideration of Judge Koh's scheduling decisions relating to certain post-trial proceedings. Apple complains that the court currently has "asymmetrical" schedules for its decision on Samsung's request to dissolve the Galaxy Tab 10.1 injunction (hearing in September) and for its decision on Apple's request for injunctive relief over the patents the jury found infringed (hearing in December).

This is not just a minor scheduling issue. This has the potential to affect the probability of Samsung being allowed again to sell tablets in the United States that look very much like the iPad, not just this Christmas Selling Season but also beyond, at least until the appeals court decides. And looking beyond this matter, it highlights the equal-treatment dilemma that has been plaguing this California lawsuit for some time, especially recently.

Just like Samsung previously (and successfully) argued that there should be an adverse inference jury instruction against both parties, or against neither one, Apple now demands equal treatment as well. Apple argues that "[its] motion for injunctive relief is more urgent than Samsung's request to dissolve the [Galaxy Tab 10.1] injunction", but in any event, "Samsung's motion certainly should not be addressed before Apple's motion for injunctive relief". In other words, if Apple doesn't get a new injunction in time for the Christmas Selling Season, it at least wants the existing one to stay in place.

At first sight, this may look like Apple doesn't want Samsung to enjoy an injunction-free Christmas Selling Season (the Galaxy Nexus injunction is a separate story and related to a different lawsuit). But there's much more to it. It's not just about whether the Galaxy Tab 10.1 is available in the United States in October or November. The injunction is not limited to the Galaxy Tab 10.1. It also covers any future products that are "no more than colorably different". The most important question is whether Samsung can launch future, commercially more important tablets in the U.S. that bear the same kind of resemblance with the iPad.

Just like I disagreed with Samsung's demand for equal treatment in the adverse inference context, I now think that the potential dissolution of the Galaxy Tab 10.1 injunction is objectively more urgent than the grant of a whole new injunction. That said, Apple's motion flags an inconsistency in Judge Koh's reasoning for denying Apple the opportunity to win a preliminary injunction because of overlaps between the parties' upcoming Rule 50 motions (motions to overrule the jury) and their requests relating to injunctive relief. If the right order in which to decide these issues is to adjudicate the Rule 50's first (or at least simultaneously), then a decision to dissolve the Galaxy Tab 10.1 injunction prior to Apple's Rule 50 motion would put the cart before the horse.

Apple could end up being disadvantaged by the alleged asymmetry not in terms of what is more urgent but in terms of how the schedule might affect the outcome. There's certainly a risk for Apple that Judge Koh will now rush to a dissolution of the Galaxy Tab 10.1 injunction prior to consideration of Apple's Rule 50 motion. Theoretically, she could dissolve the injunction in September and still grant Apple's Rule 50 motion later, overruling the jury's finding that the relevant design patent was not infringed. In that event, Apple could still win a permanent injunction. But there's a risk to Apple that the court might be uncomfortable (even if only subconsciously) with the absurd appearance of an on-again-off-again injunction. This injunction already has a complicated procedural history: it was originally denied, then granted after Apple's appeal, and then the jury cleared Samsung of infringement of the design patent this injunction is based upon. If it is now dissolved, Apple's Rule 50 motion will, not legally but practically, face an even higher hurdle than such motions generally do.

My position is in between Judge Koh's scheduling orders and Apple's request. I believe it is justifiable to revisit the Galaxy Tab 10.1 injunction a couple of months before a new injunction might issue. But if that is so, Apple's related Rule 50 motion should be fully briefed, heard and adjudged on a schedule consistent with the one for the potential dissolution of the existing injunction. Subsequently, all other Rule 50 and relief issues than the Galaxy Tab 10.1's alleged infringement of Apple's iPad design patent could be briefed.

It's easy for the court to say that there are so many issues on the table that consolidation of the parites' motions is needed for efficiency reasons. And it's also easy to say that the court doesn't have the resources to hold a hearing on a preliminary injunction before the December hearing on a permanent one, so there's no window of opportunity for a preliminary one (which would always just be meant to be in place until a decision on a permanent one). But Apple's motion for reconsideration accurately highlights an inconsistency in the reasoning the court has presented so far. There must be a better reason, or a different schedule.

Many people would intuitively say that dissolving an improperly-granted injunction (which this one is if the jury was right) is more urgent than granting a new one. I guess most judges would also feel worse, all other things being equal, about delaying the dissolution of an improperly-granted injunction than about delaying the grant of a new injunction. And while this is not a legal criterion at all, this may feel particularly bad if a foreign company suffers such an injunction at the request of a local-hero competitor. If a country's courts did this all the time, there would appear to be a protectionist agenda in place. That's simply a political reality.

Judge Koh may have had similar feelings and concerns. But she didn't express them. She just attributed it all to case management considerations, and if one applies her own logic, as Apple does in its motion, then Apple is entitled to equal treatment and (at least) identical schedules.

Apple's motion may not result in perfectly symmetrical schedules, but in that case, Judge Koh will have to explain why Samsung's entitlement to a swift resolution of its request for dissolution of an existing injunction trumps Apple's entitlement to a swift adjudication of its push for the grant of a new injunction.

The problem is that it's not easy to develop a legal theory for everything that common sense suggests. The four factors for preliminary injunction decisions (likelihood of success on the merits, irreparable harm, balance of equities, public interest) can favor a plaintiff or a defendant. On average, it's harder to win a preliminary injunction than to prevent one from issuing, but there are still many cases in which the balance of the equities and the public interest tip in favor of right holders, and even some outrageous cases in which they tip sharply in their favor.

One fact that Apple is certainly going to be be pointed to (by Judge Koh or Samsung, or both) is that Samsung itself won't be able to ask for injunctive relief until its Rule 50 motions succeeds at least in part with respect to Samsung's own offensive claims against Apple. Judge Koh said that if and when this happens, she will set a briefing and hearing schedule for an injunction motion. This is an additional asymmetry to the one Apple complains about. It's due to the fact that Samsung didn't prevail on any of its offensive claims at trial. But Samsung can argue that Apple actually gets to pursue injunctive relief at the December 6 hearing, while Samsung would only be able to do so afterwards, and Apple wasn't more successful at trial with its tablet design patent than Samsung was with its five technical patents.

Apple would obviously argue that its Rule 50 motion is much more likely to succeed than Samsung's corresponding motion. Apple rightfully points to the fact that this preliminary injunction matter had previously been before the Federal Circuit. But the unanimous part of the Federal Circuit's decision does not say enough about the infringement issue to be of much use to Apple in arguing that the related part of the jury verdict was unreasonable. Circuit Judge O'Malley's dissenting opinion takes a crystal clear position that there is an infringement, and having at least one circuit judge's dissenting opinion on its side is more than Samsung can say. With Judge Koh's pre-trial grant of a preliminary injunction and Circuit Judge O'Malley being totally on Apple's side, its Rule 50 motion will face a lower hurdle than Samsung's motion, but still a considerable one.

We'll see soon whether Judge Koh modifies the schedule (at least with respect to Apple's Rule 50 motion) or upholds and justifies the proposed asymmetry, either by taking an early position on the merits of the parties' entitlement to injunctive relief (including the related Rule 50 motions), or by arguing (even in the event that there is no precedent she can cite to) that it's good policy to address the potential dissolution of an injunction after a jury verdict of non-infringement (which in any event casts at least significant doubt on the merits of the underlying claims) at the earliest opportunity, even if this occurs before a decision on new injunctions. No matter what she is going to do, the asymmetrical schedules Apple complained about are a good example of Apple not having a home court advantage with this judge. Samsung and its supporters don't like the verdict but can't complain about Judge Koh.

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German court postpones ruling on Apple-Motorola lawsuit targeting 'core Android operating system'

In early July, the Mannheim Regional Court held two trials on Apple lawsuits against Motorola Mobility and Samsung over EP2098948, a multi-touch event model patent, and scheduled decisions for today in the Motorola case and for September 21 in the Samsung case.

I went to the court, but there has been a rescheduling. The decision concerning Motorola will now come down on the same day as the one on the Samsung case, i.e., in three weeks.

There can be situations in which the same patent targeting the same technology -- in this case, we're talking about the Android operating system itself -- is adjudged differently by the same court in parallel lawsuits involving different defendants. For example, one party may fail to bring certain infringement or invalidity contentions in time. But based on how those two trials went, there is no obvious reason why the two cases might have different outcomes. And the consistent outcome is more likely than not to be a finding of non-infringement.

A three-week delay is no big deal in the greater picture. By comparison, Apple obtained a highly favorable jury verdict against Samsung in California a week ago, but the court is unwilling to consider Apple's request for injunctive relief before December, with a decision possibly not even coming down before the end of the year. I'll talk about that in my next post.

I mentioned the "core Android operating system" -- in quotes -- in the headline because Google used this term in its official reaction to last week's Apple v. Samsung verdict, and I thought this touch event model patent is a good example of what a reasonable decision of the "core Android operating sstem" should include. I think Google's use of that term has confused a lot of people out there, and that confusion was anything but unintended.

Google's statement made one very good point. Several of the patents the jury deemed valid and infringed are undergoing reexamination by the USPTO. I, too, believe that this is likely to change the situation, to some degree, in Samsung's favor further down the road.

Also, Google actually admitted that some of the trial patents do affect the "core Android operating system". Google said this:

"Most of these [patent claims] don't relate to the core Android operating system [...]"

"Most" means "not all, but some". It's not Google's fault that some people later said that none reads on core Android.

Obviously, design patents covering the shape of a tablet or smartphone are not an Android issue. Note that I usually refer to patents that Android-based devices have been found to infringe, which is not the same as saying that Android itself has been found to infringe -- but there are also some people who ignore that distinction.

While Google is not responsible for the shape of Samsung's tablets or smartphones, it is indirectly affected by Samsung's infringement. Apple's coherent story of "copying" ranging from packaging design to operating system functionality was clearly a key factor that helped Apple obtain last week's verdict.

It's unclear what Google considers to be the "core Android operating system". The narrowest definition of the core of Android would be... Linux. Android is a Linux derivative. But none of Apple's trial patents reads on Linux itself, so it's clear that Google defines "core Android operating system" more broadly than that.

The touch event model patent that was scheduled to be adjudged today would undoubtedly have to be considered a patent that reads on the "core Android operating system". It covers the way Android informs applications of touch events. All applications receive touch events. Not all applications rely on the specifics of the patented technique (such as selective sending of events if more than one touch is identified at the same time), but this is an operating system patent, not just an application patent that would be relevant only to a particular app, such as the photo gallery or the YouTube client.

The fact that Google CEO Larry Page is talking to Apple CEO Tim Cook about intellectual property matters including Android-related patent litigation shows that Google has problems in this area. How many of those problems relate to the "core Android operating system" depends on how one defines that term.

Whether or not a particular patent reads on what Google includes in its definition of the "core Android operating system" is not the most important thing. What really matters is what technical changes are necessary in the event of an injunction. Will the workaround result in degradations of the user experience, or a loss of functionality, performance, security, or stability? Google has not commented on this yet, but at some point it will have to. After now-Google-owned Motorola won a German injunction over a push notification patent, Apple was very clear about the implications. It explained on its website how this affected some of its customers accessing the iCloud or MobileMe email service from Germany, and how users were able to mitigate the impact. If Apple wins a post-trial injunction against Samsung, I hope Samsung and Google will also be very specific about their workaround strategy -- and not just refer us to an arbitrary distinction between the "core Android operating system" and Android as a whole.

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Japanese patent ruling is a non-win for Apple and a non-defeat for Samsung -- that's all

If you just read that Samsung defeated Apple in Japan, it's because most of the headlines out there are correct only in an utterly formalistic sense but nonsensical from a strategic and commercial point of view. Some reports, however, do get this right. For example, this AP story has a title that is not only correct but also appropriate:

"Tokyo court: Samsung didn't infringe Apple patent"

That's all that happened. In one of more than 50 lawsuits these two companies filed against each other in ten countries on four continents, a ruling came down (an appealable one at any rate) according to which Samsung does not infringe on an Apple patent on a "synchronizing technology that allows media players to share data with personal computers".

Without a doubt, Apple would have loved to score its next win over Samsung just a week after that billion-dollar verdict in California. Everyone loves winning streaks, and if two consecutive wins occur on two different continents, even better. Microsoft actually achieved this against Motorola this year, winning a U.S. import ban on a Friday and a German injunction six days later. But this is more of a psychological matter than anything else.

Let's put today's Tokyo ruling into perspective. If you count each country separately, Apple holds tens of thousands of patents worldwide. It has, by that count, already asserted well over 100 patents against Android. It hasn't even asserted all of the ones it could assert -- for example, most of the patents it listed in a presentation to Samsung in 2010 haven't shown up in court yet. And Apple gets new patents every day, somewhere on this planet, that it could assert in the future.

The drop-out rate in this game is very high. IF a company files a lawsuit over X number of patents, it doesn't realistically expect to prevail on every single one of them. Even that California jury decided against Apple on one of its seven patents. Some of the other six will likely be invalidated over time, at least in part, but at any rate, Apple had temporarily withdrawn a number of more ambitious claims in favor of focusing on those that it thought were easiest to prevail on. In the coming weeks or months we'll see Apple's reassertion of some or all of the temporarily-withdrawn ones. If there had been a trial over all claims, the more and the less ambitious ones, the hit rate would also have been lower, even with the same jury, I'm sure.

I said before that it's exceedingly formalistic to declare Samsung a "winner" based on today's Japanese decision. Apparently, Japan is a "loser pays" kind of country, so it can recover legal expenses, but between these two behemoths, and even if just compared to the billion-dollar California verdict, it would be an overstatement to describe the economic relevance of that as chicken feed.

Things didn't get better for Apple. They didn't get worse for Samsung. But Apple has far too many patents that avoiding liability for one of them (provided that the appeals court affirms) helps Samsung.

There's a lot of spin-doctoring going on by some of the companies involved with these disputes -- I'll address this in my next post in another context, on the occasion of a postponement of a German ruling. The Android camp is clearly losing this patent war (not as quickly as Apple would like to win it, but still, Android is losing without a doubt, with Android-based devices having been found to infringe 15 valid Apple and Microsoft patents, all of them non-standard-essential). That's why some of the companies on the losing end, and those who for whatever reason seek to support them, try to make people believe that there have been wins and losses on both sides, while no reasonable impact assessment can arrive at the conclusion that this is a balanced battle. Currently, not a single standard-essential patent is being enforced against Apple or Microsoft anywhere in the world. Apple will have to pay something to Motorola in Germany and a small amount to Samsung in the Netherlands, but that won't change the equation for a cash-rich player like Apple,

If Android companies in general and Samsung in particular want to score real wins, they have to enforce reasonably powerful non-standard-essential patents. If today's Japanese ruling had awarded Samsung an (enforceable) injunction against Apple, it would have been a win for Samsung and a loss for Apple, and Samsung's chances for a settlement on favorable terms would have increased significantly. But that did not happen today.

I sometimes compare this to soccer, a low-scoring game. Even if there's a very lopsided game -- say, a pre-season match between one of the world's top ten teams against an amateur team from a small town --, the stronger team won't score a goal every time it launches an attack. But at the end of the match, all that matters is how many goals were actually scored. Nobody who wins decisively will care about how many opportunities he missed.

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Thursday, August 30, 2012

Apple and Samsung have to decide how to proceed with their 14 back-burner patents in California

While the United States District Court for the Northern District of California still has some very important post-trial decisions to make, especially on remedies, Apple and Samsung must plan ahead and think about their next claims against each other in that same federal district. Not only did they start a separate lawsuit (over eight patents from each party) earlier this year but they also have the right to reassert 14 patents that they temporarily withdrew in order to narrow the first case, at the court's request, for trial. Samsung would have preferred for all withdrawn rights to be dropped forever (with prejudice), but the court granted Apple's request to dismiss those claims only without prejudice.

A few months ago, Apple suggested a separate bench trial (a trial before Judge Koh, without a jury) to decide only on injunctive relief over those patents. At the time, Apple was not interested in pursuing further damages, and with the $1 billion verdict it just won, it really wouldn't be easy for Apple to collect a substantial amount of additional royalties on the same products. The per-unit damages amount is already fairly high. Apple proposed to focus entirely on injunctive relief with respect to any reasserted patents. For an injunction-only decision without a damages award, a jury is not needed.

In that context, Apple noted that those back-burner patents had already been almost fully litigated. Discovery and claim construction have already taken place. But this didn't persuade Judge Koh to schedule a near-term bench trial over these patents. Still, all of her orders dismissing claims (three in total) allowed reassertion, and even if Apple has to file a new lawsuit now in formal terms, the court can build on all of the effort that has already been made by the judge as well as the parties.

Given that there is only a limited amount of work left to do in order to adjudicate the withdrawn patents, I think there's a pretty good chance that these patents will go to trial, be it a bench trial or a jury trial, in 2013. By comparison, the new 16-patent Apple-Samsung lawsuit filed in 2012 currently has a trial date in March 2014, which Apple will probably try to get moved up at some point, arguing that Samsung's infringement must come to an end. If Apple now reasserts those back-burner patents from the first Samsung lawsuit, there's a risk that the court might consolidate those reasserted claims into the February 2012 lawsuit, resulting in a lawsuit that could involve up to 30 patents. In that event, these claims might not be adjudged next year, and here would also be much more pressure on Apple to drop claims (again) than if it could somehow request a decision on the withdrawn patents separately from the second California lawsuit.

I have no idea how quickly Apple is going to raise this issue. Judge Koh explained her denial of a preliminary injunction hearing on the patents that a jury just found infringe with the court's limited resources relative to the complexity of the dispute. If Apple reasserts some or all of the back-burner patents very soon, it can get them back into the court's queue but may annoy Judge Koh. At the latest, I believe we'll see a reassertion shortly after a ruling on Apple's motion for a permanent injunction and triple damages.

Samsung could also be proactive and reassert its own withdrawn claims anytime now without waiting for Apple. After all, Samsung really needs to win something against Apple at some point if it wants to get a settlement on palatable terms. But Samsung's strategy in this dispute has been to stall. Forging ahead with a reassertion would be out of character for Samsung in this case, but it may decide to change its strategy after the crushing defeat it suffered this month.

Some of Apple's back-burner patents are much more impactful (assuming that an injunction over them is granted) than the multi-touch gesture-related patents and design patents that went to trial. For the trial, Apple clearly focused on the maximum probability of winning, and it prevailed on almost all of its claims. With the back-burner patents, Apple would be unlikely to achieve a similar hit rate, but the enforcement of some of these patents, particularly the '607 multitouch hardware patent, would give Apple much more leverage over Samsung than an injunction over the patents that just went to trial. The trial victory lends Apple's enforcement efforts a lot of additional momentum, while Samsung has to defend itself from the difficult position of a convicted willful infringer.

These are the parties' withdrawn-but-reassertable patents:

The list above does not include Apple's trade dresses and trademarked icons; it's just a patent list. Also, one of Samsung's patents is not listed because it was thrown out by Judge Koh on summary judgment and can't be reasserted against Apple unless the facts change in Samsung's favor (hard to imagine) or the appeals court decides in Samsung's favor.

Furthermore, the parties also dropped various claims from patents from which some other claims (one per patent) still went to trial. They could reassert such claims if they think they might prevail on a different claim than one that may have failed at trial. This would be useful only to Samsung (unless certain parts of the verdict are overruled, in which case it might also be an interesting thing for Apple to do).

In the near term, Samsung is looking at workarounds and, according to a Korea Times article citing Samsung officials, "closely partnering with Microsoft [...] to cut its dependency on Google Android".

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Wednesday, August 29, 2012

The biggest issue with the Apple-Samsung jury verdict: are all those patents really valid as granted?

Since the Apple v. Samsung jury verdict came down on Friday, it's been criticized very harshly by a number of people. In particular, a lot people including me were puzzled that they managed to fill out well over 700 boxes in only three days. And when I read about some of the interviews the foreman and other members of the jury gave, I thought that Apple would have preferred them to remain silent because some of what what they said about their methodology, such as ignoring the judge's instructions and most of the prior art contentions, does not reflect favorably on the process.

But we must separate the question of what has happened from the one of what will happen next. None of those interviews changes the fact that juries enjoy a whole lot of discretion in terms of how they arrive at their decisions. There are some rules they must respect, but not as many rules as some people may think.

I've already said that in connection with damages, we may still see some adjustments in either party's favor. What we are very unlikely to see is that this verdict gets thrown out as a whole. The legal standard for overruling the jury is not that a verdict reached in three days has less weight than one reached after three weeks. It's not that a jury chaired by a markedly pro-intellectual-property software patent holder is presumed to have been biased (though there's no question that Apple hit the lottery jackpot with this foreman). The standard is very high. It's that Judge Koh or the appeals court can only overrule the jury with respect to those parts of the verdict that no reasonable jury could have found.

"No reasonable jury could have found this" is like saying: this jury did something blatantly unreasonable. And again, this relates to what the jury found, not to what instructions it chose to ignore or how quickly it rendered a verdict. If a reasonable jury that read the instructions and took a reasonable amount of time (whether or not three days can be considered reasonable doesn't matter) could have arrived at the same findings, then this verdict will stand forever.

To be clear: I'm describing, not defending, the system. I live in a country in which these cases are put only before professional judges. For a proposal to do away with jury verdicts on patent infringement issues in the U.S., let me refer you to Judge Posner.

Samsung's first bite at the apple is to ask Judge Koh to overrule the jury. Apple will certainly do the same with respect to the findings that didn't work out in its favor (especially the tablet design patent). So far, Judge Koh did not appear to be particularly willing to substitute her opinion for a jury verdict. Samsung brought a dozen summary judgment requests before the trial, all of which were denied. Apple focused on three and prevailed on one of them. There are differences between summary judgment decisions and post-trial Rule 50 decisions. The standard for summary judgment is that one party has a winning legal theory over which there is no genuine factual dispute, i.e., no need to even put the issue before a jury because even if the facts are seen in the light most favorable to the non-moving party, there can be only one decision. For judgment as a matter of law, the standard is, as I explained, that no reasonable jury could find otherwise based on the evidence on the table. One important difference is that a summary judgment ruling is made before, and a Rule 50 decision is made after, all of the testimony given at trial. But even with more evidence on the table, a judge who has previously shown a preference for deferring to the jury may still have that tendency now. I don't think Judge Koh will run roughshod over the jury verdict. But again, adjustments are quite possible.

The one regard in which the jury verdict represents almost a statistical anomaly is that none of the 12 patents -- 4 Apple design patents, 3 Apple software patents, 3 Samsung software patents, 2 Samsung wireless standard-essential patents -- was deemed invalid. This is irreconcilable with overall patent litigation statistics and my observations in these smartphone patent disputes. The jury apparently thought that it should not declare a patent invalid after the patent office, a government agency, had granted it. The "clear and convincing evidence" standard for invalidation is high -- far too high in my opinion -- but it's not insurmountably high. With a dozen patents-in-suit, even though the parties focused on only one claim per patent, there must be some validity issues somewhere.

Even this statistical approach is not a basis for tossing the jury verdict. The question is not whether it's statistically realistic that all 12 patents are valid. The question that must be asked is specific to each patent: could a reasonable jury have found that the "clear and convincing evidence" standard was not met? If yes, the jury verdict stands. This is quite a hurdle for modifying the verdict...

I wouldn't be surprised if Judge Koh declared one or more patents invalid. If she doesn't do it, so might the appeals court. But even if it doesn't happen there, Samsung accurately noted in its post-verdict reaction that at least some of these patents are being reexamined by the patent office, and I think we are definitely going to see some invalidations there. But if you hear of any "rejections", it's not clear whether they relate to the claims that were put before the jury, and even if so, most of those patent office decisions are just preliminary. Should a patent claim get invalidated on a final basis, then Apple will not be able to enforce an injunction over that patent claim.

With all the noise out there about the verdict, I advocate realism. It's not realistic to think that a jury verdict on 700+ issues gets thrown out in its entirety. Nor is it realistic that neither Judge Koh nor the appeals court will decide on at least some modifications. And it's particularly not realistic that all 12 patent-claims-in-suit will survive reexamination.

When there are any new developments, let's analyze their impact as the process unfolds. Most likely, there won't be dramatic changes. But it won't be all bad news for Samsung 100% of the time.

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Court schedules December 6 hearing on Apple's push for triple damages from Samsung

[Update] On Wednesday Judge Koh issued a clarifying order that there won't be a separate preliminary injunction hearing, which the original order did not say explicitly. [/Update]

Judge Koh has set the briefing and hearing schedule of the parties' post-trial motions in Apple v. Samsung. There are two categories of post-trial motions to decide on: motions seeking to overturn parts of the jury verdict (arguing that the judge should overrule the jury or order a new trial on a given set of issues), and motions relating to relief. The latter category has two subissues: damages enhancements and injunctions (permanent and preliminary ones).

The order notes that there is "substantial overlap between the analysis required for Apple's preliminary injunction motion and the parties' various other post-trial motions", so there will be some consolidation. Otherwise the parties could bring multiple partly-duplicative motions.

The court granted Samsung's request for an expedited schedule on the question of whether the preliminary injunction against the Galaxy Tab 10.1 should be dissolved because the jury did not find Apple's related design patent infringed. Apple opposed Samsung's request and argued that Samsung itself denied any irreparable harm from the ban (in public statements that contradict its court filings). But Samsung noted that there is no case law that says an injunction can stay in place without a sufficient likelihood of the underlying infringement claim's success on the merits just because there is supposedly no irreparable harm. Apple now has to respond to Samsung's motion for dissolution on September 7, Samsung can reply six days later, and Judge Koh will then decide, possibly without even holding a hearing on this question -- all of which looks good for Samsung. If there is going to be a hearing on this at all, it will take place on September 20. There might not be a hearing if Judge Koh determines that she doesn't have jurisdiction over this motion. That's because the preliminary injunction is on appeal and, currently, before the United States Court of Appeals for the Federal Circuit. It could be that Judge Koh only provides an indicative ruling but that Samsung will need help from the Federal Circuit to get rid of the Galaxy Tab 10.1 injunction.

September 20 is also the date on which there may be a hearing for Apple's upcoming preliminary injunction motion. Judge Koh's latest order does not set a briefing and hearing schedule for that one, but the fact that she has scheduled another potential hearing for September 20 shows that after seeing the scope of Apple's upcoming motion, a hearing on that day is still a possibility. Judge Koh previously indicated that a delay might occur if Apple asks for too much at once.

On this occasion I'd lke to reiterate that the Galaxy S III will also be affected by a preliminary injunction if it infringes any of the relevant patents in a way that is no more than colorably different from the exemplary infringing devices listed by Apple. Judge Koh's previous two preliminary injunctions against Samsung used a wording that undoubtedly includes other products than the ones named as examples of past infringement, even products that will be launched only after an injunction issues. You can find many quotes by financial analysts in the media who say such injunction will only affect older products. Those analysts presumably never read Judge Koh's other injunctions.

Some others have interpreted Judge Koh's order as indicating that December 6 is the earliest date for a decision on a sales ban. I don't know what the judge discussed with Apple's lawyers. The order itsel does not state that Apple is not allowed to move for a preliminary injunction. It acknowledges Apple's intent to do so without commenting on it explicitly. The scheduling decisions only relate to other matters, including a permanent injunction, and we won't know the schedule for a preliminary injunction until Judge Koh sets one, which apparently won't happen until Apple brings its motion. The scheduling order doesn't invite Apple to bring one, but acknowledges that it intends to and doesn't explicitly discourage it.

In addition to a preliminary injunction, Apple will also request a permanent injunction. A preliminary injunction is one that issues before the end of the proceedings. A permanent one can issue only at the end of the proceedings, requiring prior (or at least simultaneous) adjudication of the relevant post-trial motions. Since Apple wants to force Samsung to modify its products sooner rather than later, and ideally during the Christmas Selling Season (though Samsung might stuff the channel before any injunction takes effect), it wants both. If this was less time-sensitive, it would go for only a permanent injunction. This is also a timing issue with a view to an appeal. If Apple wins a preliminary injunction in, for example, October, and a permanent one in December, Samsung will appeal both and ask that both be stayed. But there's a possibility of the appeals court looking at this and allowing Apple to enforce the preliminary injunction while that one is being appealed. A preliminary injunction appeal would be decided within about six months, while a permanent injunction would have to be appealed as part of an appeal of the entire final ruling, and the appeals court would likely need more than a year given the complexity of this case.

A footnote says that "[t]he Court will entertain only one post-judgment motion for relief per side, not including Apple's motion for permanent injunction and willfulness enhancement", but even that footnote does not explicitly rule out a preliminary injunction motion. Instead, it provides other examples of post-judgment motions that must be consolidated into a single motion.

I still believe Apple wants a preliminary injunction, and we'll see whether it's going to formally file for one in the coming days. Let's focus on damages now.

Shortly after the verdict came down, Apple already indicated that it would seek triple damages for willful infringement. The jury found most of Samsung's identified infringements to have been willful. Under U.S. patent law, "the court may increase the damages up to three times the amount found or assessed". Theoretically, this could raise the amount of damages in Apple v. Samsung to approximately $3 billion.

In the near term, Samsung wanted to ensure that it wouldn't have to prematurely pay the $1.05 billion awarded by jury. It filed a motion for a stay of the August 24 judgment. Apple can oppose that motion by Friday, and Samsung can reply four days later. Judge Koh will not hold a hearing but decide based on the parties' filings. It looks like Samsung's motion is going to be granted. But the stay will only be in effect until the court has decided on the parties' post-trial motions. And at that point, the amount may increase.

Apple now has until September 21 to file its motion for a permanent injunction and "willfulness enhancements" (requests that certain parts of the overall damages figure be increased, with Apple most likely demanding a tripling wherever possible). Samsung's opposition brief will be due on October 19. Apple will reply on November 9, and the hearing will take place on December 6.

It's unlikely that Judge Koh will make a decision right at that December 6 hearing. She may very well indicate certain inclinations, but a formal ruling will take some time. It's more likely to come down later that month than to slip into next year.

I doubt that we'll see a $3 billion damages award. But the court cannot ignore the jury's finding of willful infringement and do nothing to show (not only to Samsung but to all other infringers) that willful misconduct can result in punitive damages. My guess is that there will be some adjustments of the $1 billion base figure (for example, the judge may very well overrule the jury on particular items, but I can't imagine that the verdict as a whole would be thrown out), and those adjustments are more likely to reduce the number in Samsung's favor, but subsequently we'll probably see willfulness enhancements of some kind -- not necessarily an outright tripling (Judge Koh can determine any factor between 1.0 and 3.0), and I expect any such enhancements to relate to only a subset of the overall damages figure, possibly a somewhat limited subset.

Whether or not the damages figure changes by a few hundred million (I think that's a realistic range for any adjustments and enhancements) is going to be less important to Samsung than the question of injunctive relief. If Samsung has to work around patents like tap-to-zoom and the programming interface patent without which it appears impossible to distinguish two-finger pinching gestures from single-finger tapping gestures), the user experience of its Android-based products will suffer some degradation (while not thermonuclear, the impact will be noticeable to users) and affect the competitiveness of Samsung's Android-based gadgets in the U.S. market.

[Update] On Wednesday Judge Koh issued a clarifying order that there won't be a separate preliminary injunction hearing, which the original order did not say explicitly. [/Update]

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Tuesday, August 28, 2012

Google loses leverage as Motorola Mobility confirms German patent license to Apple

In the aftermath of Apple's resounding U.S. court victory over Samsung, analysts again ask the question whether its acquisition of Motorola Mobility has enabled Google to protect Android against patent assertions -- and the consensus answer to this question is "no". I expressed serious doubts (to say the least) about that deal from the day of its announcement. Many people were impressed by the sheer size of Motorola Mobility's portfolio, but leverage, as opposed to size, is the right measure.

Motorola placed particular hopes on one jurisdiction: Germany, a country in which a finding of infringement automatically results in an injunction, the only exception being standard-essential patents, to which certain German courts apply the Orange-Book-Standard framework. The Orange-Book-Standard line is that an implementer of an industry standard seeking to avoid an injunction over a patent essential to the relevant standard must make an offer to take a license on terms that the patent holder cannot refuse without flagrantly violating antitrust law.

In a filing made late on Monday (August 27, 2012) with the United States District Court for the Southern District of California, the Google subsidiary has now confirmed the recent conclusion of a standard-essential patent license agreement with Apple. Under the agreement, Apple is now licensed to use some if not all of Motorola's standard-essential patents in Germany, though the parties have not yet agreed on a FRAND royalty rate, which will ultimately have to be set by German courts unless they agree on a rate prior to its judicial determination.

This is a very significant development because it means that Motorola Mobility will have to rely on non-standard-essential patents in its efforts to gain leverage over Apple. It is enforcing one such patent (one that covers push email notifications). With standard-essential patents, it appears that the only thing Google (Motorola) can do now against Apple in Germany is to push for as high a royalty rate as possible, but even in a hypothetical worst-case scenario to Apple, the limit will be the 2.25% rate that Motorola has been demanding for a long time.

It is not known when this German license agreement came into being. German courts do not make documents available. In a few cases they publish redacted versions of rulings, but generally, the only way to find out about what's happening is to attend court hearings ( including trials) and the judges' announcements of their decisions. Oddly, while I live in Germany, it's much easier and especially much more efficient for me to follow U.S. lawsuits thanks to electronic access to documents, and sometimes I find out from U.S. documents about developments in Germany (such as in this case), or hear things at German court hearings that I wouldn't otherwise find out about U.S. cases. Transatlantic access to information gives my blog a unique advantage over other reporters and analysts.

Most likely, this Motorola-Apple license agreement at a FRAND rate left to be determined by the courts was concluded during this month of August. Here's what the parties said about Apple's offer and Motorola's acceptance. First, Apple's second amended antisuit complaint against Motorola Mobility of August 3, 2012, said the following about Apple's Orange-Book-style offer:

"48. Apple has made an offer to license Motorola's declared cellular standards-essential patents from Motorola for the purpose of selling products in Germany. In light of Motorola's obligation to license these patents on FRAND terms, the Higher Regional Court of Karlsruhe has determined that Motorola must accept Apple's licensing terms or be in violation of German antitrust law. Accordingly, given the requirements of German law and the ruling of the Higher Regional Court of Karlsruhe, the question of liability is no longer an issue in Germany, although the parties will continue to litigate the amount of damages Apple must pay Motorola for the past infringement Motorola alleges and the amount of a FRAND license."

The appeals court ruling Apple referred to came down in late February and granted Apple a suspension of Motorola's enforcement of an injunction over a standard-essential patent that had temporarily resulted in the removal of certain Apple products from its German online store. At the time, I also wrote that Motorola would have to accept Apple's FRAND licensing offer to avoid a continuing antitrust violation. But Apple's early-August filing didn't state that Motorola had actually accepted Apple's offer. Under German law, an agreement is formed by an offer and an acceptance. The offer had been reviewed and approved by a court, but not accepted by Motorola.

In yesterday's answer to Apple's second amended antisuit complaint, Motorola has now officially confirmed its acceptance of Apple's offer, and, therefore, the conclusion of a license agreement:

"48. Motorola admits that Apple has made offers to license Motorola's declared cellular standards-essential patents. Motorola is without sufficient information to form a belief as to the truth or falsity of the remaining allegations of the first sentence in Paragraph 28 and therefore denies same. The Higher Regional Court of Karlsruhe has not made a final determination regarding whether Apple's FRAND offer is valid, an allegation that has been mooted by Motorola's acceptance of the offer after Apple admitted liability for past damages for infringement [emphasis mine], and on those bases, Motorola denies the allegations of the second sentence of Paragraph 48. Motorola admits that the question of liability is no longer an issue in Germany because Apple has voluntarily acknowledged its liability for past damages even though this issue is pending before the Karlsruhe appellate court regarding [Apple Sales International]'s liability for infringement of the '336 patent. Motorola admits that the parties will continue to litigate in the future the amount of damages Apple must pay Motorola for the past infringement and the amount of a FRAND license. Motorola denies the remaining allegations of Paragraph 48."

The emphasized part above leaves no doubt: they have a deal, albeit a deal without a royalty rate for now.

It appears that Google (Motorola) cracked under pressure. The Karlsruhe Higher Regional Court had only made a summary and non-final determination that Motorola's refusal of Apple's offer was an antitrust violation, but Google (Motorola) didn't want to take its chances. The German courts would have let Google (Motorola) continue to refuse to accept the offer, but at some point, Apple could then have sought damages for an antitrust violation.

One important factor here is that Google's Motorola is being formally investigated by the European Commission over suspected abuse of standard-essential patents against Apple and Microsoft. I don't know whether the EU's top competition enforcer strongly recommended to Google (Motorola) to accept the offer, but there can be no doubt that Brussels was paying close attention to the German situation and that Google (Motorola) took this fact into account.

The scope of this license agreement may be limited to "cellular standards-essential patents" (based on Motorola's answer to Apple's complaint) and not include WiFi and/or H.264 video codec patents. But at any rate, Apple now knows what kind of offer it has to make to get a license to any other standard-essential Motorola patents without having to grant a license to Google (Motorola) to a single non-standard-essential Apple patent. Apple will be happy to pay FRAND royalties as long as it can pursue differentiation. Why did Google just pay $12.5 billion?

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Monday, August 27, 2012

Apple to request preliminary injunction against eight Samsung products in wake of jury verdict

As follow-up to Friday's Apple v. Samsung jury verdict and a subsequent order by Judge Koh, Apple has just specified against which Samsung products it is going to request a preliminary injunction ("preliminary" meaning that it would be in place until the court decides on a permanent injunction).

This is the table of the products chosen by Apple, showing which of the asserted intellectual property rights they infringe (click on the image to enlarge):

Each X reflects a jury finding in Apple's favor, with "Q" followed by a number identifying the related question on the verdict form.

I'll list the devices again:

  1. Galaxy S 4G

  2. Galaxy S2 AT&T

  3. Galaxy S2 Skyrocket

  4. Galaxy S2 T-Mobile

  5. Galaxy S2 Epic 4G

  6. Galaxy S Showcase

  7. Droid Charge

  8. Galaxy Prevail

All in all, the jury found 28 products to infringe some of Apple's intellectual property rights.

The business impact of a sales ban on these products per se would be very limited, and negligible compared to an injunction against Samsung's latest devices, especially the Galaxy S M;III, or upcoming ones like the Galaxy Note 2. But Apple will push for an injunction that will have an open-ended wording and include any product, even products that haven't been released yet, that infringes the same intellectual property in a way that is "no more than colorably different". Judge Koh's preliminary injunctions against the Galaxy Tab 10.1 and the Galaxy Nexus smartphone had such an inclusive wording. On that basis, Apple could force Samsung to make changes to such products as the current flagship, the S III -- provided that Apple wins an injunction and that it can enforce it in the near term (it could also be stayed by the appeals court for the duration of an appeal).

Apple's product list indicates that Apple wants to obtain injunctive relief based on all of the intellectual property rights the jury found to be infringed. The question is now whether Judge Koh thinks this scope is too broad to hold a preliminary injunction hearing on September 20. We will know soon.

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Samsung wants Galaxy Tab 10.1 ban lifted in light of jury verdict

On Sunday evening, Samsung filed a motion to dissolve the preliminary injunction Apple won against the Galaxy Tab 10.1 in late June. And Samsung wants the sales ban to be lifted within a matter of days, proposing that the court order Apple to respond to this motion by Tuesday and then decide without a hearing.

In what was otherwise a sweeping victory for Apple, the jury agreed with Samsung that the Galaxy Tab 10.1 does not infringe Apple's iPad-related design patent, shortly referred to as the D'889 patent. Samsung argues that Apple can no longer show a likelihood of success on the merits with respect to this infringement allegation, and the preliminary injunction now lacks a legal basis.

Given that jury verdicts are treated with some deference, it's generally true that a claim on which a jury rendered a negative verdict is not sufficiently likely to succeed that a preliminary injunction is justified. In this particular case, I'm sure that Apple will bring a Rule 50 motion asking the court to overrule the jury with respect to the infringement of the D'889 patent. Judge Koh had previously deemed this patent likely to be infringed by the Galaxy Tab 10.1 in her original (December 2011) decision denying a preliminary injunction (with respect to the Galaxy Tab 10.1, the denial was based on doubts about the validity of the patent, a holding that the Federal Circuit reversed, paving the way for entry of a preliminary injunction). A finding that there is a likely infringement is not the same as a decision that a jury found something that no reasonable jury could have found. The hurdle is higher for the latter. But the fact that the lower hurdle, which is still a significant one, was overcome last time shows that a Rule 50 motion on this item won't be a long shot.

When Judge Koh finally granted, ater Apple's partly-successful appeal, a preliminary injunction, she also relied in part on the minority opinion expressed by Circuit Judge O'Malley, who disagreed with her Federal Circuit colleagues' decision to remand the matter for a new equitable analysis. In Judge O'Malley's opinion, it was clear that all of the requirements for a preliminary injunction were met, and further proceedings seemed a waste of time to her. While this is only a dissenting opinion, the fact that Judge Koh concurred with it last time also helps Apple.

The issue here is primarily timing. If Samsung didn't make this such an urgent matter, Judge Koh would simply await and adjudicate the parties' Rule 50 motions. If Apple won on the D'889 infringement question, the preliminary injunction would remain in place, and otherwise it would be lifted. But Samsung argues that it is suffering irreparable harm with every day that the ban is in place and wants an immediate decision. If the court agreed with Samsung's proposed schedule, Apple would have to bring its D'889-related Rule 50 motion by tomorrow (or it would at least have to make the same kind of argument as in the Rule 50 motion in its opposition to Samsung's motion for dissolution of the injunction). After celebrating most of the other parts of the jury verdict, Apple's lawyers may already have done a lot of work on this item, but if not, they certainly saw late on Sunday that this is now an urgent issue. Samsung has a lot more Rule 50 work to do.

I'm sure that Judge Koh will want to avoid too much of an on-again-off-again situation concerning this injunction. She denied in December; then granted in June after an appeal; she denied a stay, as did the appeals court; and if the injunction is lifted now, she'll want to be sure that Apple's Rule 50 motion won't succeed because otherwise there would certainly be an immediate request for a new injunction.

At this point I don't think it really matters too much to Apple whether or not the Galaxy Tab 10.1 remains on sale. There's little demand for it, and Samsung has newer products on the market that are more relevant. But Apple has to fight for this for two reasons:

  1. The dissolution of this preliminary injunction might encourage Samsung to launch new tablet computers in the U.S. that will again look quite iPad-like.

  2. If Samsung was ultimately (after all appeals) cleared of infringement of the D'889 patent, Samsung would be entitled to recover damages (resulting from enforcement of an improperly-granted preliminary injunction), and while those damages wouldn't be huge by Apple's standards (just a small part of the billion-dollar amount the jury awarded), it wouldn't look too good if Apple had to pay for damages based on overly aggressive enforcement. Should the preliminary injunction be lifted at this point, there still wouldn't be a basis for a damages claim by Samsung (the final outcome of this case, after all appeals, is the one that matters), but the likelihood of Samsung ultimately obtaining damages would increase.

This is the first post-verdict issue to have been raised in the form of a full-blown motion. There will be many more to come.

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Saturday, August 25, 2012

Court may postpone hearing on Apple motion for preliminary injunction against Samsung

Following the Apple v. Samsung jury verdict I just published and commented on, the key issues for the court to address will be

  • whether the jury must be overruled in some ways (as a matter of law), which is especially what Samsung wants;

  • whether any (and if so, which) parts of the damages figure must be tripled because of Samsung's willful infringement; and

  • whether Apple will be granted a preliminary injunction barring Samsung from the sale of infringing products in the United States (a permanent injunction would issue at the end of the litigation, but including appeals this could take a while, which is why a preliminary injunction is what Apple needs for this verdict to have near-term impact on Samsung's competitiveness).

Injunctive relief can only be granted by a judge, not a jury. After the verdict, the court discussed with the parties the possible time line for post-verdict proceedings. Apple had already announced in a filing a few weeks ago that it was going to seek a preliminary injunction, so this was no surprise -- nor can anyone be surprised that Samsung will exhaust all of its options for an appeal, starting with Rule 50 motions in hopes of Judge Koh overruling the jury in at least some ways. The Rule 50's will have to be adjudicated before a decision on injunctive relief.

While Judge Koh said in court late on Friday that a preliminary injunction hearing could take place on September 20 (she couldn't offer any earlier date), she later issued the following notice:

The Court is reconsidering the briefing and hearing schedules regarding Apple's post-verdict preliminary injunction motion, the parties' Rule 50 motions, and Apple's enhancement motion. By Monday, August 27, 2012, Apple shall file a 1-page chart identifying both the products for which Apple is seeking preliminary injunctive relief and the liability finding(s) on which the request as to each product is based. No argument is permitted. Depending on the scope of Apple's preliminary injunction request, the Court may continue [i.e., postpone] the briefing and hearing schedule on Apple's preliminary injunction motion.

In other words, September 20 may not work out given the number of issues in the case. This order obviously seeks to encourage Apple to limit its requests for preliminary injunctive relief to the most pressing issues, but I think it's quite possible that Apple will seek injunctive relief based on all of the intellectual property rights that the jury deemed valid and infringed, even if this may result in a bit of a delay.

We'll know soon whether or not the September 20 date for the preliminary injunction hearing must be postponed. If it is, we at least won't be surprised.

Apple and Samsung have more than 50 lawsuits going on in ten countries on four continents. It's not always easy to find out when and where the next hearing or trial will take place. Based on the information that is available to me, the next trial will take place in Mannheim, Germany, on September 14, over a 3G/UMTS-essential Samsung patent.

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Friday, August 24, 2012

Apple's billion-dollar win over Samsung is a huge breakthrough -- but it's not thermonuclear

A California jury just handed Apple a near-complete victory on its own claims and awarded it more than $1 billion in damages, and rejected all of Samsung's claims. With most of the infringement having been established to have been willful, the jury essentially concluded that Samsung is a reckless copycat and, since some of the infringement is Google's responsibility, basically agreed with Steve Jobs's claim that Android is a stolen product.

Apple CEO Tim Cook was absolutely right not to settle prior to this verdict. He showed strong leadership, and we will probably see much more of that before all is said and done between Apple and the Android camp.

Here's the (final) jury verdict:

12-08-24 Apple-Samsung Amended Jury Verdict

Samsung will undoubtedly try to convince Judge Koh that the jury should be overruled, and I wouldn't rule out minor adjustments by the judge, but all in all, this liability finding is going to stand and the appeals court will also treat it with significant deference. After Judge Koh's order on Samsung's motion to overrule the jury, I will update my list of valid Apple and Microsoft patents that Android-based devices have been found to infringe. The most recent such finding (which did not appear on the original list) was the Mannheim Regional Court's decision that Motorola's Android-based devices infringe on a Microsoft file system patent. That one was number 12. Prior to today's verdict (again, I will await Judge Koh's post-verdict decision), courts in different jurisdictions had found Android-based devices to infringe seven valid Apple software patents, two valid Apple design patents, and three valid Microsoft patents. That list already included (because of earlier decisions, such as on a preliminary injunction motion) some of the patents the jury found valid and infringed, but the list will grow, probably to 15 patents (if not more).

Even if the court upheld all of the jury's liability findings (not unlikely) and granted Apple injunctive relief against Samsung over all of them (not easy to achieve, but possible; a hearing has been set for September 20), and if such injunction was not stayed by the appeals court (a stay is possible but not a given), Samsung would not be forced out of the U.S. market as a result of this litigation. Samsung can and will design around Apple's design patents, and it can and will have to work with Google to engineer around Apple's software patents. Its products may, as a result, be less appealing, but they are still going to be marketable.

This ruling is not thermonuclear on its own, but in its aftermath, we will not only see a lot of wrangling over a judgment as a matter of law to overrule the jury and over injunctive relief but there will also be, even more importantly, a push by Apple to enforce many more design patents and utility (hardware and software) patents against Samsung. Since Samsung has been found to have infringed intentionally and recklessly (partly on its own, partly in conjunction with its "partner in crime", Google), the United States District Court for the Northern District of California will adjudicate more of Apple's asserted patents in the future. In particular, Apple has the right to reassert all of the patents it dropped ahead of this trial in an effort to narrow the case. Apple's legal team -- in-house lawyers as well as the law firm managing its offensive claims, Morrison & Foerster, with a team led by Harold McElhinny and Michael Jacobs -- made just the right picks to focus on slam dunks for this trial. Some of the patents that were temporarily withdrawn are harder to enforce, but they could do much more damage to Samsung, and we will see them resurface soon. Also, Apple has a second California lawsuit going, which was filed in February over eight more patents, which are on average also more impactful than the ones the jury found Samsung to infringe. And courts around the globe will hear and read about a finding that Samsung knew full well what it was doing -- a fact that was clearly established by Apple's mountain of evidence. I wrote more than two weeks ago that "Samsung can hardly explain away all of Apple's smoking guns for intentional copying".

Today's verdict also shows that the only country in which Samsung can score any serious win with its own patents -- some of which are standard-essential and the rest of which isn't impactful -- against Apple is Korea. Samsung already lost three German lawsuits against Apple (four more will go to trial between mid-September and mid-October, and I'll attend all those trials) and it lost in France and Italy. In the Netherlands, it will only receive a tiny amount of damages -- but not an injunction. Samsung has now lost on all of its offensive claims against Apple in California.

A Wilmer Hale team, led by IP litigation superstar Bill Lee, did a really superb job defending Apple against Samsung's patents. But Samsung cannot blame its own lawyers from Quinn Emanuel. Samsung has to blame itself for building its success on an infringing software platform and for deciding to copy Apple's designs. And Samsung has to realize that its own patent portfolio is next to worthless in its fight against Apple. Yes, next to worthless.

Samsung cannot rely on Google in any way. More than a year ago, Google announced its merger agreement with Motorola Mobility and promised to defend Android. So far, the deal has given Google hardly any leverage against Apple, Microsoft and others. A couple of hours before the California verdict was read, the ITC remanded an investigation of a Motorola complaint against Apple -- with only one (non-standard-essential) patent left -- to a judge. Google cannot stop Apple. It is now on the run and will have to scramble to make software changes to Android.

Samsung has issued a statement that claims this jury verdict is a loss for consumers. But things are more complex than that. There can be no reasonable doubt that Samsung and Google have engaged, and continue to engage, in "copytition" (competing through copying) rather than wholly-independent creation. Somewhere the courts have to draw the line and afford some degree of protection to innovators. I don't always agree with Apple's claims, and I don't like all of Apple's patents, but the kind of disregard for other companies' intellectual property that Samsung and Google effectively propose is certainly not the answer.

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ITC remands investigation of Motorola complaint against Apple to judge: only one patent left

Today the Commission, the six-member decision-making body at the top of the ITC, concluded its review of an initial determination according to which Apple was deemed to infringe a standard-essential wireless patent held by Google subsidiary Motorola Mobility (but was cleared of infringement of some other patents).

Apple was cleared with respect to three of Motorola's patents-in-suit, including the aforementioned standard-essential one. But with respect to U.S. Patent No. 6,246,862 on a "sensor controlled user interface for portable communication device", a non-standard-essential patent, the investigation was remanded to Administrative Law Judge Thomas B. Pender. The judge had found claim 1 of that patent indefinite and, as a result, not violated. The ITC has reversed his indefiniteness finding. As a result, there could (but need not) be a finding of a violation with respect to this patent, and an import ban.

An initial determination made by a judge on remand is again subject to a Commission review. All in all, a remand can easily take a year.

Since the remaining patent-in-suit is not standard-essential, the ITC does not have to take a position in connection with this investigation on the issue of import bans over standard-essential patents.

Last week, Google's Motorola Mobility filed a new (second) ITC complaint against Apple over seven non-standard-essential patents.

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Apple-Samsung ruling suggests South Korea is a FRAND rogue state

A couple of court decisions announced in Seoul, South Korea, this morning indicate that South Korea has decided to become a rogue state in connection with standard-essential patents, essentially telling foreign companies that in order to sell their technology products to the country's 50-million population, they must bow to extortion by Samsung and LG.

This is highly problematic and will have diplomatic repercussions. The victims of such abuse will be companies from the United States, Europe and Japan, and increasingly also Chinese companies. I don't know what Apple is going to do, but it would make sense to talk to both U.S. presidential candidates at the earliest opportunity.

As the media report (1, 2, 3), Apple was found to infringe two Samsung wireless patents (which have previously been identified as standard-essential ones), and Samsung was found to infringe one Apple patent. Both companies were ordered minor amounts of damages (chump change) and sales bans on older products, in Apple's case the iPhone 4 and the iPad 2. What appears at first sight to be a mixed ruling and will be subject to a de novo (from scratch) review by an appeals court is actually a declaration of a trade war. It would mean that foreign companies would either have to bow to Samsung's and LG's demands and, among other things, give up their own non-standard-essential intellectual property or stop selling in Korea. If I were Apple, I would defend myself vigorously and, if necessary, write off the Korean market until this issue is resolved through bilateral U.S.-Korea talks or at the level of the World Trade Organization. Also, Apple's products are very popular among a large part of the Korean population, though I guess the influence of "fanbois" is going to be very limited compared to the clout of the Samsung and LG conglomerates.

Even the 2:1 score in Samsung's favor is noticeably inconsistent with the track record these companies have against each other in litigation in countries in which neither one is headquartered. In such neutral countries, Samsung has won zero -- ZERO -- injunctions so far. It has failed miserably in Germany (three times already), in France, in Italy, and in the Netherlands. Now, all of a sudden, it wins two injunctions in a country in which about 20% of the GDP depends on the Samsung group (compared to that percentage, Apple means nothing to the U.S. economy). The only thing Samsung was able to win against Apple in a neutral country at all was an award of what will ultimately be very minor damages in the Netherlands.

While Samsung is now also formally subjected to an injunction, that one is not over a standard-essential patent. Samsung can modify the affected products and future products and simply work around that patent. But Apple cannot work around the 3G/UMTS standard.

Formally, only the iPhone 4 and iPad 2 are affected, but in practical terms, Apple now knows that (unless the appeals court reverses this ruling) Samsung may be able to quickly seek injunctions against newer Apple products over standard-essential patents.

Samsung and LG both have a history of aggressive enforcement of SEPs. LG has a history of very aggressive demands, and this week it just filed a lawsuit over DVD-related patents against ToshibaSamsung in Delaware. LG wants both: high royalties and a back-license to non-standard-essential patents. But if it can "only" get high royalties, it's fine with that. Samsung is not even interested in high royalties from Apple. All that it's interested in is a basis on which Apple will tolerate Samsung's and Google's infringement of its non-standard-essential patents, either on a royalty-free basis or on a basis on which net payments to Apple would be minuscule and on which Apple would not be able to impose restrictions, such as excluding certain patents from the scope of a deal.

What has to be said in all fairness to Korea is that the United States itself will have a credibility problem on standard-essential patents in the event that the ITC later today orders an import ban against Apple over a Motorola SEP (and if such ban is neither vetoed by the White House nor stayed by the Federal Circuit).

The stakes in this are getting higher and higher, but if Apple gives up its intellectual property only because of temporary issues such as the one it faces in Korea, the cost will be far higher than if it defends its rights. If the price to pay for access to the Korean market is unfettered commoditization, Apple should pull out of the market at some point, and return only after the issues have been resolved.

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