Saturday, March 9, 2013

Second Apple-Samsung case in California to go ahead but parties must narrow their claims

At close of business on Friday, Judge Lucy Koh, the federal judge presiding over two Apple v. Samsung lawsuits in the Northern District of California entered a case management order relating to the second case, which started in February 2012.

I saw media reports according to which she had said at a recent hearing that she wants the case to be narrowed substantially or would otherwise order a formal stay or just simply delay resolution. Formally this was a warning to both parties, but this is of concern only to Apple, which wants to enforce its intellectual property rights as quickly as possible, while Samsung's counterclaims are little more than an effort to slow down the process and create the appearance of mutual infringement. This situation is familiar. In the build-up to the August 2012 trial Judge Koh also insisted on a substantial narrowing of claims, and Samsung tried to reinforce and capitalize on this pressure on Apple. In light of the enormous effort that last year's huge trial required the court and the parties to make, there is now even more narrowing pressure. For example, "[u]nlike in the [earlier] [c]ase, the Court will not permit the parties to involve over fifty experts in this litigation".

This is the roadmap for narrowing

  • In a first step, "within ten days after the Court issues its Claim Construction Order, the parties will be required to limit their asserted patent claims and accused products to twenty-five per side."

    Claim construction (the court's interpretation of the patents-in-suit) definitely provides the parties with important guidance that helps them pick their strongest patent claims and, accordingly, the products that most likely fall within the scope of the claims as construed by the court.

    I understand why the judge wants to limit the number of accused products, but there's something important that the order doesn't say: how will the rule of law ever be enforced if companies have to drop claims against products they actually consider to have infringed and if they don't have reasonable access to injunctive relief that would give them enough leverage to obtain a favorable settlement? How can a legitimate innovator enforce his rights against an obstinate infringer? With all the talk about the U.S. patent system being "broken", there's hardly any attention to the fact that the U.S. patent enforcement system makes it extremely difficult for right holders to deal with parties that infringe large numbers of patents with large numbers of products.

    It also seems that Judge Koh still adheres to her equal-treatment philosophy from the first case, which is prejudicial to Apple. Samsung has far more products than Apple. It won't be practically impacted by a limit of 25, but Apple will be. Giving each party the right to accuse 25 products (which sounds like a lot, but there will have to be some further narrowing as you can see in the next bullet point) means that Apple is left without a remedy for many of the alleged infringements, while Samsung can attack Apple's whole range of products with its counterclaims.

  • In subsequent steps, "the parties will be required to further narrow their asserted patent claims and accused products as well as limit their prior art references: before the close of expert discovery, before the Court considers any motions for summary judgment, after the Court rules on any motions for summary judgment, and again before the pretrial conference". So there won't be 25 patent claims and 25 accused products per side at the trial as far as Judge Koh is concerned. It's unclear how many patent claims and accused products she is prepared to take to the trial in this case. I guess Apple will ultimately have to focus on a handful of patents and maybe a dozen accused products.

A case management conference scheduled for March 27 has now been postponed to April 24. In preparation of that conference the parties "shall make a proposal as to the narrowing of this case consistent with this Order". They are now going to play a blame game, arguing that each other's proposals to narrow fall short of what the court wants the parties to do. Just like in the previous litigation, Samsung is going to argue that the case isn't trial-ready without further narrowing efforts made by Apple.

The order also clarifies that, at least for now, the court will not order a stay (or even allow Samsung to bring a motion to stay) this case pending resolution of the appeal(s) of the first California case. Samsung had argued that a stay was needed, and Apple obviously opposed the idea. The number one strategic issue on appeal is the availability of injunctive relief against multi-feature products. But injunctive relief isn't going to be on the agenda of the second California case until after a trial: liability must be established before remedies can be discussed. It's possible that Samsung is also going to appeal some of the court's pre-trial decisions, and that some of this could have an impact on the court's decisions in the second California case, but there are also countless other patent and non-patent appeals pending that could result in decisions impacting this second Apple v. Samsung litigation. For example, the appeals court makes decisions all the time that affect claim construction. I don't think Samsung showed any particular issue that really required a stay for efficiency reasons. The most important overlap is injunctive relief, but based on the usual Federal Circuit time lines, a decision on that issue will come down before the trial in this second California case takes place (it's scheduled for early 2014), and injunctive relief is a post-trial issue anyway.

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