Wednesday, April 17, 2013

Apple to Samsung: our U.S. multi-touch patents won't be truly invalidated until mid-2017 or later

Two of Apple's three multi-touch software patents asserted at last year's Samsung trial in California, the '381 rubber-banding patent and the '915 pinch-to-zoom API patent, are under reexamination pressure at the United States Patent and Trademark Office. A few weeks ago the USPTO affirmed only three of 20 rubber-banding claims and issued a "final" (though not truly final) rejection of all others, including the one at issue in the Samsung case. In December the USPTO tentatively rejected the '915 pinch-to-zoom API patent. Samsung would like the California case stayed while these reexaminations are ongoing, but Apple yesterday filed its response and says that a stay would be "unwarranted and prejudicial".

Apple expresses its confidence that "the claims will be confirmed" when all is said and done and argues that "if final adverse decisions were the ultimate result, they likely would not occur until mid-2017 or later". That is four years out. Apple writes that "[t]he '381 and '915 reexaminations are many years from completion, unless they culminate in an earlier finding that the claims are patentable" and points to the complex and long-winded proceedings that lie ahead of Samsung's quest for invalidation of these patents. Apple discusses the procedural path in its filing and additionally provides flowcharts that "show the variety of paths reexaminations can take". The flowcharts are pretty useful. You can find them on pages 5 and 6 of the following declaration accompanying Apple's pleading:

13-04-16 Apple Declaration Regarding Patent Reexaminations

Here's how Apple explains the timeline for the further process (all citations omitted below):

"Apple must respond by May 29, 2013, to a final office action in the '381 reexamination, after which the examiner may reopen prosecution or find the claims patentable. If the examiner maintains the rejection, Apple may file a notice of appeal to the PTAB [Patent Trials and Appeals Board] by June 29, 2013. USPTO statistics show that the average time from notice of appeal to a PTAB decision as of 2012 was 36 months, or in this case June 2016. Apple may further request rehearing of any adverse PTAB decision, which would toll the deadline to appeal to the Federal Circuit, or appeal directly to the Federal Circuit. Federal Circuit statistics show that the median time from docketing to disposition of cases originating from the USPTO as of 2012 was roughly 12 months. Thus, if the '381 reexamination proceeds adversely to Apple, it is unlikely to reach final resolution until, on average, June 2017. The '915 reexamination is at an even earlier stage."

During all of the time it would take until the related patent claims are actually invalidated, Apple would be entitled to damages:

"The Federal Circuit has indicated that, under its precedent, subsequent cancellation of claims in a reexamination does not disturb an earlier final court judgment awarding damages for past infringement of those claims. See In re Baxter Int'l, Inc., 698 F.3d 1349, 1351 (Fed. Cir. 2012)


I don't like the notion of someone (in this case, Samsung) potentially owing damages for infringement of a patent that the USPTO should never have issued in the first place. The rejection of a patent as a truly final outcome of reexamination is different from a nullity declaration of the kind Germany's Federal Patent Court issues. If a patent is declared "null and void", the retroactive effect is clear, and patent holders can be liable for earlier enforcement of a patent that later turns out to have been improperly granted. Not so in the United States.

Apple's response to Samsung's statement on reexaminations was only one of several filings the parties made late on Tuesday. Apple also commented on the question of whether the March 1 damages order could be appealed (Apple and Samsung agree that it is not appealable, contrary to what Judge Koh thought) or whether the court should hand down a partial final judgment under Rule 54(b) in order to provide Samsung with something appealable at this stage. Apple doesn't want the partial final judgment: it wants a prompt new damages trial with respect to 14 products. Samsung continues to argue that any new damages trial would have to involve a reevaluation of the underlying merits (infringement, validity). Samsung invokes Seventh Amendment rights to a jury trial and disagrees with Apple that the new jury could just be told that the first jury's infringement findings are now law of the case, limiting the second trial only to a new damages verdict. Samsung says that the new jury can only set damages if it also takes into consideration the scope and extent of the infringements identified.

Also, Samsung continues to oppose Apple's conditional motion for reconsideration, which seeks to reinstate $85 million in damages relating to the Infuse 4G and Galaxy S II AT&T smartphones. Samsung still doesn't have any compelling argument that would support Judge Koh's decision to vacate those damages. Samsung now describes the conditional nature of Apple's motion as "tactical [...] gamesmanship", but I doubt that this is going to be a basis for denying Apple's motion. Apple obviously wants the best outcome for its purposes and isn't defending accuracy for its own sake. But it's generally in the interest of the courts that motions are not adjuged if they don't have to be. In this case, Apple insists on correction of Judge Koh's alleged mistakes only if Samsung's request for a partial final judgment is granted; otherwise Apple is fine with having a new jury render a new damages verdict on these products, and it would be in the interest of judicial efficiency that the court won't have to deal with Apple's motion for reconsideration in this scenario.

The parties didn't raise any new issues or arguments in connection with these procedural questions. They basically filed more of the same, and in greater detail. Briefing is complete now with a view to the April 29 case management conference except for a Joint Case Management Conference Statement due on April 22. In that one, "the parties shall propose a schedule for discovery, a pretrial conference, and trial in the event the Court schedules a new trial".

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