Tuesday, September 4, 2012

Samsung's designarounds may complicate the ITC investigation of Apple's complaint

Companies can change smartphones (especially their operating software) more quickly than federal courts and the ITC can rule on infringement complaints. This is a problem in many cases, but the dispute between Apple and Samsung is the highest-profile one in which this matters. As a result, court rulings will formally relate to yesterday's products, and the question of whether tomorrow's products still infringe must be addressed in subsequent proceedings. If an injunction issues after the December 6 hearing, and if Apple is allowed to enforce it even during the appellate proceedings, there could be a need in 2013 and beyond for one or more contempt hearings, i.e., court hearings on Apple requests to sanction Samsung for contempt of court through (alleged) continued infringement. And should Apple win an ITC import ban against Samsung (over a different set of patents), there could be a subsequent enforcement dispute similar to the one Apple is already having with HTC in that same forum.

Administrative Law Judge Thomas B. Pender, who is investigating Apple's ITC complaint against Samsung (which was filed last year and streamlined six months ago), is well aware of this problem. On August 27, he filed a two-page request for additional briefing. Its subject wasn't immediately clear (the document is sealed), but three months after trial, such a request is very unusual. Meanwhile Apple has filed a six-page brief in response to that request, and Samsung and the Office of Unfair Import Investiations ("ITC staff") filed five-pagers. Each of the briefs has a slightly different title, and they are all sealed, but at least the headlines show that this is all about the procedural question of the ITC's adjudication of Samsung's design-around products.

Just like the federal courts, the ITC also has deadlines for the parties' infringement contentions and for discovery. In fact, the ITC's related deadlines are more rigid than those of the federal courts. If Samsung designed around any of Apple's asserted patents after Apple's last opportunity to bring infringement contentions over those designarounds, and if Apple believes that the intended designarounds still infringe, then there will inevitably be an enforcement dispute.

Under the current schedule of that ITC investigation, Judge Pender's initial determination is due on October 19, and the target date for the final decision is February 19, 2013. If there's an import ban, it will take effect 60 days (that's the presidential review period) after the target date, i.e., in the second half of April 2013. If it's already foreseeable that the parties are headed for another clash at that stage, Judge Pender may be concerned that his upcoming initial determination won't really help to resolve the dispute. I don't know whether he's considering a different schedule, but if Samsung's designarounds are in dispute between the parties, it might even make sense to hold a second evidentiary hearing on those designarounds (if they weren't shown at the hearing in early June) and to do whatever else is neeeded to ensure that the ITC decision on Apple's complaint will provide clarity as to whether or not those designarounds infringe.

The judge might consider it a waste of resources to make a decision on yesterday's products if today's products are the real issue. Tomorrow's products may again be different, but today's products should be adjudicated. We are still more than seven and a half months away from the entry into force of any import ban. It may be the better choice to address the problem now, and to provide a maximum degree of legal certainty to both parties.

From a practical point of view, it's not even in Apple's interest to postpone the whole question of designarounds that exist today to an enforcement proceeding that will start next spring and may take a year. If Samsung's designarounds clearly continue to infringe, then Apple may want to get a ruling at the earliest opportunity and assume that it can get a very quick decision on those designarounds in the form of a temporary emergency measure. But Apple just saw that it couldn't get temporary emergency relief against HTC.

If Samsung is very confident of its designarounds steering clear of infringement, it should be interested in legal certainty. Otherwise it could experience what happened to HTC, some of whose products were temporarily held by customs officers. Also, if I were in Samsung's shoes, I wouldn't want to give Apple the appearance of another win. Instead, I would want the ITC to say that my older products infringed, but to clarify at the same time that my current ones don't. But even if Samsung was wrong and the ITC considered those designarounds to still infringe, any delay in this investigation would be useful to Samsung and it would at least know in advance that it still needs to make further changes to its products.

I hope that some more information on this discussion will become publicly discoverable soon. A rescheduling of the decision would certainly be announced publicly.

By the way, there's a similar issue that Judge Koh will have to address in the post-trial proceedings in her court. If Samsung had complied fully and on a timely basis with a court order, it wouldn't have been sanctioned and the jury would have seen not only the version of the operating software that infringed the "overscroll bounce" ("rubber-banding") patent but also Samsung's "blue glow" workaround. It's incredibly hard to imagine that the jury would have considered the blue glow to constitute an infringement of the '381 patent. Even if it had happened, it would have been a far clearer case of a finding that no reasonable jury could have arrived at (and that the court can and must, therefore, overturn) than anything that is in the August 24 verdict.

What I think the court can't and won't do is order an injunction against the "blue glow", which doesn't infringe any Apple patent I know, only because of Samsung's belated delivery of source code. If there's an injunction over the rubber-banding feature, it will only relate to actual infringements, and the blue glow will be fine. But the other two multitouch patents-in-suit, the tap-to-zoom patent and the pinch-to-zoom-related programming interface patent, could still give rise to one or more contempt hearings if Apple believes Samsung's workarounds still infringe.

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