Tuesday, March 19, 2013

Apple requests new damages trial in Samsung case to be held ASAP, Samsung requests stay

Late on Monday Apple filed a motion requesting an April 3 case management conference in the first U.S. federal lawsuit against Samsung in the Northern District of California. In a recent damages order Judge Koh had vacated damages with respect to 14 products the first jury found infringed last summer. As a result, a new damages trial on those products must be held, and it may very well result in hundreds of millions of dollars of additional damages in Apple's favor. In that order Judge Koh proposed that the new damages trial relating to those 14 products be held only after resolution of the parties' appeals of any rulings she's made so far.

Apple's late-Monday motion now explains why Judge Koh's suggested course of actions is simply not possible under the law, which generally limits appeals to final rulings and a few narrow situations in which interlocutory appeals (appeals during an ongoing proceeding) are available. Appeals of sealing orders (collateral orders) and relating to preliminary and permanent injunctions (Apple is appealing Judge Koh's denial of a permanent injunction) are exceptions, as Apple clarifies in a footnote. Apple says that any appeals it (or its rival Samsung) might bring at this point with respect to the March 1 damages order would be doomed to fail, the result being nothing but further delay:

"Apple takes seriously the Court’s encouragement, but after careful analysis, Apple believes that until the damages retrial is held and supplemental damages are decided, appellate review of the March 1 Order will not be obtainable. No final judgment exists to ground an appeal because the March 1 Order directs further proceedings in this Court. Apple researched avenues for an interlocutory appeal of the March 1 Order, but none proved viable. The likely result of an attempt would be a dismissal of the appeal without a substantive decision. That would only further delay a conclusion to these proceedings. Thus, while interlocutory review may seem inviting, Apple believes attempting it would be futile and would only cause delay."

At the end of the motion Apple "requests that the Court set an April 3 case management conference and the prompt entry of an order scheduling a new trial". Various orders and evidence used at the first trial could be recycled, which is why Apple thinks it wouldn't be difficult to hold that second damages trial soonish.

Apple's motion explains that Samsung is benefitting from further delay: it can keep selling products that have been found to infringe, facing neither an injunction nor having to pay damages (and I guess Apple also means future ongoing royalties, which would be available if injunctive relief was also denied by the appeals court). Apple shows a picture of a recently-released Samsung product, the "Galaxy S II (Net10 and Straight Talk)", which looks substantially similar to earlier S II products that were found to infringe Apple's D'677 patent.

A motion from Samsung was filed shortly after Apple's, and it was already mentioned in Apple's motion. Apple had tried to get Samsung to agree to its proposal, but Samsung seeks to stall. Samung is apparently planning to request a partial final ruling under Federal Rule of Civil Procedure 54(b), which Samsung will then appeal on various grounds. Until that appeal is resolved, Samsung requests a stay of the district court proceedings.

Apple's motion says Samsung won't be able to appeal such a partial final ruling. Even though damages have been finally adjudicated with respect to 14 products, Apple expresses its belief that "attempting appellate review through that vehicle would also likely lead only to dismissal of the appeal with no substantive decision". Both parties cite cases that they believe support their position. Samsung points to examples in which the Federal Circuit heard appeals of Rule 54(b) judgments, while Apple highlights reasons for which such appeals have been denied.

Samsung's request for a stay pending appeal of a partial final judgment is obviously appealing to Judge Koh. Samsung's motion states that its appeal will also attack some of the jury instructions. It will also try to get some of Apple's asserted intellectual property rights declared invalid. To the extent Samsung's appeal succeed with respect to the products with respect to which Judge Koh affirmed the jury's damage award, findings of prejudicial jury instructions or of invalidity of asserted patents IPRs would also affect the 14 products with respect to which the damages have been vacated.

Even if Judge Koh would prefer to have some more guidance from the appeals court before proceeding with this case, I don't think she would want delay to be caused by appeals that are likely going to be dismissed. If she agreed with Apple's assessment that Samsung's Rule 54(b) proposal isn't going to work out, then I believe she would change her position and wouldn't stay the case. In the parties' second California case she also proposed a stay pending resolution of any appeals relating to the first case, but ultimately decided not to stay the case.

Apple and Samsung could at least agree on a schedule for the briefing process relating to Samsung's forthcoming motion for a Rule 54(b) judgment. Apple will file its opposition brief on March 26, and Samsung will reply to that one three days later. The parties didn't agree on a hearing date, but the stipulated briefing schedule makes Apple's requested hearing date a possibility.

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