The "causal nexus" requirement for injunctive relief -- limiting sales bans to cases in which a patent holder can prove that a particular patented feature drives consumer demand -- was key to the reversal of a preliminary injunction Apple had won against Samsung's Galaxy Nexus smartphone and, which is far more important, resulted in the denial of a permanent injunction against multiple Samsung Android products in December. After the United States Court of Appeals for the Federal Circuit decided last week to deny Apple's motion for a rehearing en banc (full-bench review) of the Nexus ruling, some commentators suggested that this was the end of Apple's push for sales bans against Samsung and, looking beyond that dispute, all makers of Android-based, patent-infringing devices. For the next few months that's probably right, but later this year, or maybe early next year, there could be a reversal of fortunes, and the Federal Circuit outlined one possible avenue this morning in an order on another Apple motion.
In mid-January Apple had asked for an (exceptionally rare) initial hearing en banc, i.e., the full court's as opposed to only a three-judge panel's attention to its appeal of the aforementioned denial of a permanent multi-product injunction. Apple proposed, as one (albeit not the only) procedural option, to hold a combined rehearing on the Nexus preliminary injunction case and initial hearing on the multi-product permanent injunction case. After last week's denial of a full-bench rehearing, today's denial of an (even more unusual) initial full-bench hearing on the multi-product case came as no surprise to me. But I do believe that the following obiter dictum deserves attention and consideration:
"The appeal will be heard by a panel [i.e., a subset of the full bench]; a party may argue to the panel the need to overrule precedent, or other basis for hearing en banc; and the panel, if so convinced, will request a poll on rehearing en banc."
This is a first-class invitation -- sort of an "invitation from the president" -- to Apple to re-raise, at a later stage, the fundamental issues relating to the "causal nexus" requirement. I'd be thoroughly surprised if Apple declined this invitation.
Let me describe the next steps outlined by the Federal Circuit's order:
The court will follow its standard procedures and have the case handled by a (three-judge) panel in the first place. Again, no surprise there in light of last week's denial of a different but related motion. The panel will hold a hearing, but that hearing need not be the final one.
Apple can submit in the build-up to the hearing, and at the hearing, that a full-bench hearing is needed either because of precedent that should be overruled or for other reasons. Apple could even have it both ways and argue on the one hand that it can be granted a multi-product permanent injunction even if preliminary injunction precedent is not overruled (because the issues are distinguishable) and on the other hand that a full-court hearing is needed in case the panel doesn't agree with Apple's theory that at the level of the Federal Circuit the "causal nexus" is an issue only for preliminary but not permanent injunctions.
If the panel resolves the multi-product permanent injunction case in Apple's favor without overruling precedent, Apple's request for a full-bench hearing will be moot to the extent that it is based on a need to overrule precedent (the request would not be moot with respect to other grounds, such as an argument stressing the importance of the matter). Actually, in the scenario that the panel sides with Apple, Samsung would definitely be the party pushing for a rehearing en banc. But if the panel feels that precedent such as the Nexus case limits its wiggle room too much to rule in Apple's favor, it may ask the other judges to join in the effort to adjudge this matter. In that case, a vote would be held on whether to do this, and a second hearing -- then in front of all Federal Circuit judges -- might take place.
This outlined course of action eliminates the need for the full court to decide at this very early stage whether to hear the matter (and to depart from its standard procedures). But the panel that will hold the hearing is going to have all of the information to exercise its discretion as a gatekeeper and, potentially, recommend to the full court to grant a second hearing.
I don't want to suggest here that the appeals court's outline of a possible roadmap to a full-bench hearing was needed in order for Apple to be able to file a petition with the panel to request a full-bench hearing. I guess it wasn't formally necessary. If this mattered, I would do my best to look into it in detail (despite currently being on a train to Mannheim for a couple of Nokia v. HTC patent trials). But the key thing here is that based on this order the door is wide open for Apple to bring such a request and the panel is going to be considerably more likely than otherwise to support Apple.
The "causal nexus" requirement -- especially in the extreme form in which Judge Koh applied in December -- is far from enshrined or sacrosanct. Whether or not you saw anyone claim that Samsung listed several "causal nexus" decisions in its opposition to Apple's petition for a rehearing, let me tell you that not even one of the "causal nexus" cases Samsung cited was a patent case (which Samsung's own motion made clear by summarizing briefly the nature of each cited case). And even Magistrate Judge Paul S. Grewal, who assists Judge Koh in the two Apple v. Samsung cases in the Northern District of California, is unconvinced of the "causal nexus" really being a hard and fast requirement for permanent injunctive relief. As law.com reported, Judge Grewal was presiding over a different case, Brocade v. A10, in which he entered a permanent injunction and "noted a 'curious absence of references to the causal nexus standard' in recent Federal Circuit rulings."
Apple's opportunity to challenge this doctrine is not even limited to the latest Apple v. Samsung appeal. The criteria for the availability of injunctive relief over patents covering smaller parts of multifunctional technology products are also going to be a key issue in the Federal Circuit's review of Judge Posner's ruling. That appeal was filed half a year earlier than the appeal of the denial of a permanent multi-product injunction against Samsung. Judge Posner's ruling had two distinct parts: one relating to FRAND-pledged standard-essential patents (Motorola's patents-in-suit) and one relating to non-SEPs (Apple's patents-in-suit). For SEPs the causal nexus is clear: "it only takes one bullet to kill". There are competition reasons for which injunctive relief must be denied over Motorola's SEPs. But Judge Posner based his denial of injunctive relief to Apple, over its non-SEPs, on various reasons, at least one of which is, without using the same terminology, also a "causal nexus" reasoning.
The "causal nexus" requirement in its current extreme form may be history about a year from now, or it may be here to stay. For now there can be no doubt that it is in flux -- especially not in light of today's Federal Circuit order. That's why further developments in the relevant appeals continue to be worth watching, though there are always going to be some who unconditionally support the patentee-hostile status quo.
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