On December 6, 2012 Judge Lucy Koh will hold a hearing to discuss a wide array of post-trial issues between Apple and Samsung. The August 24, 2012 verdict was a key event in this process, but it can be overruled in whole or in part (or there could be a new trial over some or all of the issues), and even to the extent that the jury verdict stands, what really matters is what remedies Apple is going to win. All of this, and even more, will be discussed on December 6. A ruling may come down before the end of the year, or it may take until early next year.
The parties filed their opening briefs on September 21. I commented on them and provided my assessment of their chances. I subsequently clarified that I won't look into the jury misconduct issues raised by Samsung in more detail and that, at this point, I don't really have a firm position on their merits. On October 19, the parties replied to each other's motions. The most important filing at that juncture was Samsung's opposition to Apple's request for a permanent injunction.
Shortly before midnight local time on Friday, Apple and Samsung filed their reply briefs in support of their original motions. I have reviewed them in detail and will again focus on the number one issue -- injunctive relief -- after making just a couple of comments on the question of damages enhancements.
Samsung managed to reverse-engineer, almost entirely, the mathematical derivation of the different parts of the damages verdict. Apple still argues why much larger parts of the jury verdict are subject to tripling than the ones that remain if one subtracts all those parts that Samsung identified as being disgorgement-related (in connection with one product, the Galaxy Prevail, disgorgement was even contrary to law). But I don't think Apple's argument is compelling enough that we'll see major damages enhancements.
Samsung is now also leveraging the recent patent office communication that tentatively declared Apple's "rubber-banding" patent invalid. In particular, Samsung argues that the examiner's preliminary assessment validates Samsung's own decision to implement the patented feature. In other words, Samsung says it was reasonable to deem the '381 patent invalid, and if Samsung acted reasonably, not recklessly, it can't be held liable for willful infringement with respect to this patent -- which is the only patent that Apple asserted at the summer trial but highlighted to Samsung in a presentation in 2010. What's key here is that Samsung's argument is independent of whether the patent office will ultimately uphold or reject the '381 patent. Even if an examiner believes only temporarily that a patent is invalid, Samsung argues there can't be willful infringement ("the PTO’s recent rejection of all claims of the ’381 patent in reexamination (see Dkt. 2079-1) forecloses a finding of objective willfulness, as a neutral expert has embraced Samsung's view on invalidity").
Now on to Apple's argument in favor of injunctive relief.
A critical issue is the standard that Apple has to meet to win a permanent injunction as opposed to a preliminary one. Apple argues that "[t]he contexts differ and affect the standard", pointing to a ruling that described preliminary injunctions as an "extraordinary remedy" while claiming that "permanent injunctions are imposed after a competitor is found liable for infringement". There's no doubt that preliminary injunctions are harder to win than permanent injunctions are after a finding of liability. But the standard for proving irreparable harm is very high either way, and it arguably was raised by recent Federal Circuit decisions.
The question of a causal nexus between infringement and irreparable harm is going to be a major challenge to Apple. Interestingly, Apple says that "Samsung's experts could not identify any patented feature that would be a primary driver of demand by itself". I haven't seen all of that testimony, but I believe Apple is right: smartphones and tablets are so multifunctional that it's hard to attribute all or most of the demand to just one feature or a small group of features. What U.S. courts must ask themselves now is whether they're going to deny injunctive relief again and again because no one can identify a single killer feature or whether they're going to agree with Apple on "the 'fundamental nature' of patents, which are 'property rights granting the owner the right to exclude'". Apple describes Samsung's position that the court should deny injunctive relief as a "demand for a compulsory license", which is, by the way, also the way I described Samsung's position when I commented on its opposition brief. This here is an issue of fundamental importance, and I'll keep focusing on this.
One of Samsung's arguments against injunctive relief is that Apple allegedly licensed its multi-touch software patents to various competitors, but Apple's reply brief suggests that the company doesn't generally license those patents:
"Apple considers these patents 'unique to its user experience' and unavailable for licensing, particularly to competitors; the few patent agreements cited by Samsung do not justify denying an injunction, as they are consistent with Apple's position. [...] Microsoft's agreement is limited to patents filed before 2002, and covers none of the patents in suit. [...] IBM's agreement is a cross license with a party that does not market smartphones, entered into five years before the iPhone launched. [...] The Nokia settlement includes a provisional license to resolve litigation involving only one of the relevant patents (the '381). [...] And Apple already explained without rebuttal from any Samsung witness that the parties' 2010 discussions did not include any right to copy Apple's products using these patents."
The paragraph I just quoted contains more information about the scope of those license agreements than Apple previously provided to the general public. I don't know whether the relevant licensees agree with Apple's interpretation of the scope of those agreements, but Apple does appear to have a more consistent story of retaining exclusivity (at least in recent years) than it previously appeared. And as long as this is Apple's position, it's going to have to carry on with its international enforcement efforts.
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