Tuesday, September 17, 2013

Samsung notifies court and Apple of a new plan to derail the November damages retrial

Less than an hour after I reported on Samsung's efforts to avoid allegations of "copying" by Apple at the damages retrial scheduled for November, Samsung filed a notice that outlines its latest plan to derail (or at least delay) the retrial. In its notice, Samsung declares its intent to "move for an immediate stay should the Examiner issue an Advisory Action maintaining his rejection of the '915 patent" in the ongoing reexamination of the pinch-to-zoom API patent.

This is all about timing, and today's notice is definitely meant to challenge Apple to explain now why the case shouldn't be stayed if things work out according to the particular scenario outlined by Samsung (rejection of the asserted claim maintained), and to give Judge Koh time to think about this now. Samsung may actually be hoping that, if things worked out extremely well for its purposes, Judge Koh will reschedule the trial now in order to avoid a situation in which a motion to stay has to be adjudged on the eve of the trial -- but Samsung isn't suggesting this in any way.

This is the procedural situation:

In late April, Judge Koh denied a Samsung motion to stay the proceedings in the first California case pending reexamination of a couple of the patents-in-suit (rubber-banding and pinch-to-zoom API), but she denied it without prejudice and said that Samsung could renew its motion for a stay if any of these asserted patent claims is found in valid in a final Office action and Apple's response to such action does not persuade the United States Patent and Trademark Office (USPTO) to re-open the prosecution of the relevant reexamination. This doesn't mean that the patent claim would be definitively lost at that stage. Instead, the process could still go on for a few years. But at this juncture, the USPTO's Central Reexamination Division would have spoken, and the next recourse available to Apple would be an appeal within the USPTO, to its Patent Trial and Appeals Board (PTAB), followed by an appeal to the Federal Circuit (and, very theoretically, the Supreme Court).

The fact that Judge Koh allows a motion doesn't mean she'll necessarily grant it. But it does mean that she considers a situation in which her criteria are met sufficiently serious that she would give consideration to a possible stay.

Samsung can't meet those criteria with respect to the rubber-banding '381 patent: the asserted claim was upheld. Samsung then argued that it was upheld only because Apple narrowed the scope of the claim to an extent that would be outcome-determinative in the California case and requested a new trial on the merits. Judge Koh said no.

With respect to the less advanced reexamination of the pinch-to-zoom API '915 patent, Samsung has, at this stage, met only one of the two criteria: a "final" (but not truly final) Office action came down in July and tentatively found the patent invalid. But that's not enough (and a Samsung initiative based on claims that the scope of this patent has been narrowed as well didn't go anywhere). There's still a possibility that the Central Reexamination Division might reopen prosecution. However, even if this were to work out in Samsung's favor, the day on or around which it could happen is October 31. That's 12 days before the limited damages retrial -- and that's because Apple was granted a one-month extension for its response to the "final" Office action.

In today's notice, Samsung just informs the court of the timeline, accuses Apple of stalling tactics in the reexamination proceeding, and makes it known that in the event of a refusal by the reexaminer to reopen the proceedings, Samsung will immediately move for a stay. Time is not on Samsung's side because Judge Koh's case management order in April would give Apple ten days to oppose a motion for a stay. Depending on (i) whether the reexaminer (apart from deciding the way Samsung hopes) is on schedule for October 31, (ii) when Samsung finds out about the decision and (iii) how quickly Samsung files its motion (I guess it would happen within hours, if not minutes, of finding out), Apple's opposition brief could be filed just on the eve of the retrial, or maybe even after the retrial has already begun, in which case it would be too late.

At a minimum Samsung probably hopes that Judge Koh will discuss the possibility of such a stay with the parties well ahead of October 31 and modify the briefing schedule for a motion for a stay. Basically, Samsung wants Apple to tentatively oppose a motion that may or may not be filed in the future, subject to the reexaminer's decision, and it wants Judge Koh to make up her mind sooner rather than later.

I have repeatedly talked about Samsung's stalling tactics, so I also want to give fair coverage to Samsung's allegations that Apple is stalling the process at the USPTO. In all fairness the difference here is that even if Apple's request for an extension of time was (which may very well have been the case) in no small part due to the implications of the reexamination proceedings for a possible stay of the limited damages retrial, any stalling by Apple would merely be "counter-stalling": Apple would stall only to make it harder for Samsung to stall. And a request for a one-month extension is not necessarily unreasonable. So the question is whether the parties' relevant actions are legit.

Samsung alleges that "Apple appears to have misinformed the USPTO in order to successfully delay the reexamination proceedings". Samsung says that Apple based its request for an extension on (possibly among other things) the alleged need for Apple's patent attorneys working on the reexamination to consult with litigation counsel in the California action -- but according to Samsung, such coordination is not necessary because the scope of the damages retrial makes it impossible that new validity determinations would be made or that new prior art would come up at the retrial. On this basis, Samsung, which does not want to be "held liable for infringing a patent that is invalid", tries to portray Apple as hypocritical:

"Apple’s actions undermines its claim that it would be prejudiced by a stay regarding the '915 patent. Although Apple claims it urgently needs to resolve its claims against Samsung, Apple seeks to delay resolution of the validity issues surrounding the very same patent."

I haven't formed an opinion on this so far and I probably won't because we will all see what Apple responds and, most importantly, what Judge Koh decides to do. But it's certainly a surprising turn in this California litigation to suddenly have Samsung accuse Apple of stalling, not the other way round.

One unknown here is whether Judge Koh, with the benefit of 20/20 hindsight, would have worded her criteria for a renewed motion for a stay differently if she had anticipated the current situation. She could have alternatively allowed a renewed motion for a stay if there's a final Office action finding the patent invalid but, by a certain deadline such as X days before the trial date, no decision to re-open proceedings. However, I guess she probably did mean things exactly the way she phrased them: a "final" Office action on its own doesn't impress her, but a refusal to reopen proceedings would be reasonably meaningful.

If you're interested in further detail, here's Samsung's filing:

13-09-17 Samsung Declares Intent to Bring Motion for Stay by Florian Mueller

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