The post-trial, post-damages-ruling procedures in the first Apple v. Samsung litigation in the Northern District of California are sort of a quagmire. It's clear that a second trial is needed, absent a settlement there could even be a third trial one day, one appeal is already before the Federal Circuit while another is certain to come (it's just not clear when), and in the meantime uncertainty is growing over the validity of the asserted claim 19 of Apple's rubber-banding patent. And on top of that, the parties disagree on pretty much everything. Both parties' proposals are legitimate and have something to offer, unless Apple is right that Samsung's envisioned appeal would be premature and cause nothing but delay, which is the most critical one of the questions the court has to analyze now.
At 11 PM local California time Judge Lucy Koh entered an order on various motions the parties had recently brought. It's basically a scheduling order that doesn't contain any definitive decisions. Instead, there will be some further briefing on various contested issues in the weeks ahead, and a case management conference has been scheduled for April 29. All options are on the table. There could be a new damages trial (relating to 14 of the 28 accused products) in a matter of months; if it does take place, it could even be (as Samsung requests) a full retrial on those products involving a new decision on the merits (whether the asserted intellectual property rights are valid and were infringed); and alternatively, the court might enter a partial final judgment with respect to the other 14 products, let Samsung appeal it to the Federal Circuit and stay the proceedings in district court until that appeal is resolved, or possibly even until reexamination of certain patents-in-suit by the United States Patent and Trademark Office (USPTO), including any related appeals, is resolved.
I've uploaded the order to Scribd. I will now quote the full text and provide explanations below each item.
"Having considered the arguments of the parties and the papers submitted, the Court hereby rules as follows:
(1) The Court DENIES Apple's Administrative Motion Seeking an April 3 Case Management Conference, ECF No. 2283."
Two weeks ago Apple requested a prompt new damages trial (with respect to 14 of the 28 accused products) and in that context asked that a case management conference be held today (April 3). Judge Koh denied that request. The longer it took for her to rule on it, the clearer it was that she wasn't going to grant it. Otherwise she would have given the parties advance notice.
As I said above (and as you'll see below), a case mangement conference will be held on April 29. That was Samsung's preferred timing. Apple obviously wants to press on with its claims, while Samsung seeks to stall. Since Judge Koh saw a need for briefing on multiple issues, April 3 would have been too early.
"(2) The Court GRANTS Apple's Unopposed Motion for Leave to File One-Page Reply Supporting Its Administrative Motion Seeking an April 3 Case Management Conference, ECF No. 2287."
This is just administrative: yes, Apple was allowed to submit another page in support of its request for an April 3 conference, but no, the conference won't take place on that day anyway. In that one-page reply Apple had argued that Samsung's response to its motion and certain other Samsung filings showed that Samsung had already developed a clear position on how it wants to proceed, so Apple felt that there was no reason why the case management conference couldn't be held sooner rather than later. But the key thing here is that Judge Koh wanted some more briefing on several issues (not just Apple's motion for a prompt second trial) in advance of one hearing addressing all of these questions.
"(3) Subject to the briefing schedule set forth below, the Court GRANTS Apple's Motion for Leave to File Motion for Reconsideration of Order Granting New Damages Trial on Galaxy SII AT&T and Infuse 4G, ECF No. 2289."
This is the closest thing to a substantive decision in the Tuesday order. Apple is allowed to seek reconsideration of the March 1 damages order with respect to two products (with combined damages of $85 million that Apple says the court vacated erroneously). Samsung had argued that Apple should not even be allowed to formally bring this request, but Apple is allowed to do now, which still doesn't mean that the damages order will be corrected (it may not even be necessary in the end), yet it's a hurdle at which I've seen other motions for reconsideration fail.
"(4) Regarding the Stipulation Regarding Samsung's Motion for Entry of Partial Judgment Pursuant to Rule 54(b) and For Stay Pending Appeal, ECF No. 2282, the Court adopts the Stipulation's briefing schedule, but denies the parties' request for a hearing. The Court takes Samsung's Motion for Entry of Partial Judgment Pursuant to Rule 54(b) and For Stay Pending Appeal, ECF No. 2281, under submission."
There's little that Apple and Samsung agree on, which is why that stipulation was short and not substantive. They just proposed a briefing schedule relating to Samsung's motion for a partial judgment and a stay. And they adhered to that schedule even ahead of the court's formal approval. Briefing on Samsung's motion was completed on Friday with Samsung's reply brief in support of its motion (original document, blog post). In that reply brief Samsung pointed out that "Apple can seek even more damages on these products in the new trial".
The denial of the parties' request for a hearing doesn't mean that there won't be oral argument. There may or may not be. The court may prefer to address this question along with various related issues at the April 29 case management conference, but by taking the motion under advisement now the court reserves the option to rule on Samsung's motion ahead of that conference.
"The Court sets a Case Management Conference for Monday, April 29, 2013, at 2 p.m. On April 22, 2013, the parties shall file a Joint Case Management Conference Statement, not to exceed 10 pages. In the Joint Case Management Conference Statement, the parties shall propose a schedule for discovery, a pretrial conference, and trial in the event the Court schedules a new trial. Lead trial counsel must meet and confer before the parties file the Joint Case Management Statement."
If Samsung's motion for a partial judgment and a stay is granted before April 29, the case management conference might even be canceled (there would be nothing to talk about if the case is stayed, except maybe some details concerning the scope of the partial final judgment and possibly the option of a stay also relating to patent reexaminations). If Samsung's motion is denied before April 29, the case management conference will be primarily about planning the new damages trial, which is why the paragraph quoted above orders the parties to take a position on the schedule for the new trial one week ahead of the case management conference.
"To assist the Court in resolving the many pending disputes, the Court sets the following briefing schedule:
(1) On April 9, 2013, Apple shall file a response, not to exceed six pages, to Samsung's contention that a new trial on damages alone violates the Seventh Amendment. See Samsung Opposition to Apple's Motion Seeking an April 3 Case Management Conference, ECF No. 2286 at 5-10. On April 16, 2013, Samsung may file a reply, not to exceed five pages."
On March 21 I reported that Samsung believes a retrial for 14 of the 28 accused products must involve another verdict on the underlying liability issues. Apple naturally wants to preserve the liability findings it obtained in August 2012. It now has until next Tuesday to make a legal argument as to why the second jury could focus only on damages, accepting as a fact the first jury's infringement and validity findings.
The court needs to think about this issue in two contexts. If a new trial must also address the merits, Samsung's request for a stay pending an appeal of a partial final judgment makes more sense than otherwise. In this case, considerable effort would go into a second liability trial, but if Samsung succeeded with its appeal in one of various ways (even if "only" to the extent that the Federal Circuit believes a jury instruction was prejudicial to Samsung), then there would ultimately (absent a settlement) have to be three trials over essentially the same set of liability issues. If the court agrees with Apple that a partial final judgment would be premature (with an appeal only resulting in a remand without real guidance), then it must hold a second trial over 14 products prior to Samsung's appeal, and in this case it must determine whether the second trial is a damages-only or liability-plus-damages trial.
"(2) On April 9, 2013, Samsung shall file a response, not to exceed five pages, to Apple's contention that immediate appeal of this Court's Order Re: Damages filed on March 1, 2013 is not viable. See Apple's Motion Seeking an April 3 Case Management Conference, ECF No. 2283, at 2. On April 16, 2013, Apple may file a reply, not to exceed four pages."
I've already had to talk about this question of whether a partial judgment (and an appeal thereof) would be premature. The parties have actually already exchanged some legal arguments about this, but by requesting a five-page response from Samsung to Apple's contention and allowing Apple to reply on another four pages Judge Koh basically starts a separate discussion thread for this critical issue. If Samsung convinces the court that a partial judgment (and appeal thereof) would not be premature, then I believe it's fairly likely to win a stay of the proceedings in California pending the appeal. If, however, Apple convinces the court that there is at least considerable risk of a partial judgment (and appeal thereof) being premature, then Samsung's only chance to get the California proceedings stayed is that the court could also order a stay pending reexamination of certain patents-in-suit, particularly the rubber-banding patent. That's the subject of the next and final item of Judge Koh's order:
"(3) On April 9, 2013, both parties shall file a statement, not to exceed four pages per party, regarding when their US PTO reexaminations of the opposing party's patents will conclude and what effect the concluded reexaminations will have on any new trial or appeal. On April 16, both parties may file a response, not to exceed two pages per party."
This blog was first to report on Samsung's notice to Judge Koh that the USPTO has issued a "final" Office action rejecting 17 claims of the '381 rubber-banding patent, including claim 19, the claim at issue in this litigation. I explained that "final" isn't final-final here. A few hours prior to Judge Koh's order, Apple filed a statement explaining this in detail (this post continues below the document):
As you can see, Apple's explanation confirms a lot of what I wrote in yesterday's post on the "final" Office action. Apple additionally mentions the possibility of challenging a USPTO decision in the District of Columbia, while I only mentioned an appeal to the Federal Circuit. The District of Columbia option involves a civil lawsuit against the Director of the USPTO, and would then be appealable to the Federal Circuit as well. Anyway, Apple accurately notes that "reexamination of the '381 patent is far from conclusion". But Judge Koh is now aware of the fact that claim 19 of the '381 patent is of doubtful validity. Of course, Apple may still be able to defend that claim. But there have already been two USPTO communications holding that claim invalid, and the longer this process takes without good news for Apple, the more likely it is that the claim will ultimately be invalidated -- and this could even happen before all appeals are exhausted with respect to the reexamination proceeding: the Federal Circuit will also have to decide on Samsung's appeal with respect to this patent (as part of the infringement case). If the Federal Circuit, which is above the USPTO but will definitely take note of the USPTO's various reexamination decisions, ruled claim 19 invalid, damages would have to be redetermined for even more products. The first jury found 21 Samsung products to infringe that patent claim, but rendered a damages verdict only on a product-by-product basis, making it impossible for the court to know how much of the damages award relating to a given product was based on the '381 patent.
The court enjoys considerable discretion in this context. It could stay the proceedings pending reexamination. That would be a worst-case scenario for Apple with respect to the damages it's seeking, but it wouldn't affect its ongoing appeal of the denial of a permanent injunction, which is the far more important issue.
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