Wednesday, November 20, 2013

While jury is deliberating, Samsung brings emergency motion to stay Apple's patent case

[Update] Shortly after the notice this blog post reported on initially, Samsung brought the actual motion, published toward the end of this post. [/Update]

On the second day of jury deliberations in the Apple v. Samsung limited damages retrial, Samsung has just notified the United States District Court for the Northern District of California that it "will file an emergency motion to stay today". This motion to put the entire case on hold will be based on a decision by the Central Reexamination Division of the United States Patent and Trademark Office (USPTO) to reject all claims of U.S. Patent No. 7,844,915 on "application programming interfaces for scrolling operations", which is the pinch-to-zoom API patent Apple is asserting in the first California case against Samsung (to be precise, it's asserting claim 8). This is the only multi-touch patent with respect to which Apple may be awarded lost profits by the retrial jury. It was also the most valuable one of the multi-touch patents-in-suit in the first trial.

The court held the limited damages retrial in order to hand down a final judgment (which the parties could appeal to the Federal Circuit) afterwards. After the verdict, which could come down any moment at the time of writing this post, the parties could bring post-trial motions, but a final judgment could have come down within a couple of months of the retrial. Should the court grant the motion to stay that Samsung said it would file today, there would not be a final judgment and, therefore, no possibility for an appeal.

Samsung yesterday tried to have the retrial declared a mistrial, but Judge Koh, herself of Korean descent, could not find anything racist or otherwise offensive in what Apple's lead counsel in this retrial said in his closing argument. It's obvious that Samsung is trying whatever it can to get the California case delayed and derailed. It tried long before the retrial was held; and now that the retrial is almost finished, it's trying the same thing on a new basis.

In today's notice, Samsung mentions that Judge Koh indicated at an April 29, 2013 hearing that she would "likely stay any proceedings" "if the Examiner does not reopen the prosecution [of the '381 rubber-banding patent] and Apple is forced to file a notice of appeal". The asserted claim of the '381 patent was later reconfirmed. In the case management order she entered on the same day, she said the same about the '915 pinch-to-zoom API patent. But what Judge Koh said in April does not necessarily apply o the current situation. Judge Koh apparently felt that a retrial was not worth holding in that scenario. But the retrial is now basically done, and the district court could enter a final judgment, which the parties could then appeal -- unless the case is stayed. Samsung originally wanted an appeal instead of a retrial; now it wants a stay instead of an appeal. I doubt that Judge Koh will stay the case.

Between the April case management order and the start of this retrial, Samsung repeatedly updated the court on the reexamination proceeding. If the USPTO decision Samsung presented to the court today had come down two weeks earlier, the retrial might have been canceled.

In April, Apple already explained that its multi-touch patents won't be invalidated by the USPTO until mid-2017 at the earliest if Apple exhausts all appeals (as it fully intends to unless the patent is confirmed earlier). Apple also said that even if the final outcome of such reexamination was invalidation, it would still be entitled to damages for the period before. What Samsung would need in order to avoid damages for past infringement is a finding by the appeals court that the appeals court erred in not overruling the jury in favor of Samsung with respect to its invalidity defense concerning the '915 patent. The legal standard for an invalidity defense in federal court is "clear and convincing evidence", while the standard in reexamination is lower ("preponderance of the evidence").

Apple can appeal the Central Reexamination Division's rejection of the '915 patent to the USPTO's Patent Trial and Appeal Board (PTAB; formerly Board of Patent Appeals and Interferences, BPAI). If the PTAB affirms the rejection, Apple can appeal the matter to the Federal Circuit (to which it also appealed, for example, the rejection of its broadest "data tapping" patent claims). Theoretically, the Supreme Court could also become involved, though this is unlikely. In any event, Apple can keep the patent alive for several more years. It would make a lot of sense for the district court to render a final judgment and let the parties appeal it to the Federal Circuit now, rather than in 2017 or later.

The USPTO decision may help Samsung to avoid a permanent injunction over the '915 patent. This week the Federal Circuit decided to reverse parts of Judge Koh's decision to deny Apple a permanent injunction, and to remand for further proceedings. For a permanent injunction, the basis is a final ruling, not a likelihood assessment (which is key in a preliminary injunction decision). But Judge Koh might now be hesitant to order an injunction over the '915 patent. She could, however, order an injunction and stay only the injunction with respect to the '915 patent.

This is Samsung's notice:

13-11-20 Samsung Statement of Recent Decision Re. '915 Patent by Florian Mueller

And this is the USPTO communication (Exhibit A to Samsung's notice):

13-11-20 Samsung Statement of Recent Decision Re. '915 Patent by Florian Mueller

[Update] Samsung's motion:

13-11-20 Samsung Emergency Renewed Motion for Stay by Florian Mueller


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