Tuesday, October 29, 2013

Ericsson uses Samsung's designaround tactics from Apple case against Samsung at the ITC

The most interesting legal -- to be more specific, procedural -- question in the ITC investigation of Apple's complaint against Samsung was the adjudication of designaround products that Samsung, but not Apple, wanted to be investigated. Now Ericsson is using Samsung's own tactics against Samsung in its own defense against an ITC complaint filed by Samsung in December 2012. And Ericsson may very well succeed. A motion for summary determination was denied, but only because factual issues remained to be discussed at trial. Other than that it doesn't look too bad for Ericsson.

Samsung knew before that what goes around, comes around. And in litigation, things typically come around when the shoe is on the other foot.

Let's start with a quick recap of the Apple-Samsung ITC designaround story. In September 2012 it became discoverable for the first time that designarounds were a controversial issue in the ITC investigation of Apple's mid-2011 complaint against Samsung. The following month, an initial determination (preliminary ruling) by an ITC judge held Samsung to infringe four Apple patents, but cleared all of its designaround products of infringement. In its petition for a Commission review, Apple argued that the Administrative Law Judge lacked a legal basis for ruling on Samsung's designarounds, given that complainants, not respondents, determine the scope of a complaint. On August 9, 2013, the Commission (the six-member decision-making body at the top of the U.S. trade agency) upheld the preliminary ruling with respect to two of the four patents found infringed and also with respect to the judge's clearance of Samsung's designarounds. This month I found out that Apple has appealed the unfavorable parts of the ITC ruling, and when it files its opening brief we'll see whether or not it raises the designarounds issue on appeal.

Yesterday the public redacted version of a September 19, 2013 order by Administrative Law Judge E. James Gildea was filed on the ITC's electronic document system. This is the decision I mentioned further above: he denied an Ericsson motion to determine ahead of trial that Ericsson's designaround products don't infringe, but only because the legal standard for a summary determination (the ITC equivalent of a summary judgment in district court) is that the moving party must prevail even if all disputes facts are viewed in the light most favorable to the opposing party.

In footnote 1, Judge Gildea "notes that there is evidence that Samsung was made aware of the new designs prior to the close of fact discovery and that those new designs were available for inspection in the United States". The ITC would not adjudicate designarounds based merely on prototypes, let alone technical descriptions. There must be evidence of actual importation into the United States, and it looks like Ericsson does have such evidence, but Samsung still argues that "the new designs are not properly part of this [i]nvestigation because Ericsson has not shown that they wil be incorporated into any product for a United States customer". Samsung also disputes that Ericsson delivered any evidence of importation before the close of fact discovery, which Judge Gildea appears unconvinced of -- he's just not 100% convinced of Ericsson's position at this stage, which is why he denied summary judgment.

When the initial determination is handed down, the ruling on designarounds will be a very interesting part to look at.

Here's the public version of the order:

13-09-19 ITC Order Denying Ericsson Motion Re. New Designs by Florian Mueller

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