Friday, December 27, 2013

Impact assessment of Apple's renewed motion for U.S. permanent injunction against Samsung

On November 18, 2013 the United States Court of Appeals for the Federal Circuit revived Apple's bid for a permanent patent injunction against Samsung's Android-based devices with respect to three multitouch software patents (rubber-banding, tap-to-zoom-and-navigate, and pinch-to-zoom API), while affirming Judge Lucy Koh's denial of injunctive relief with respect to the asserted design patents. An appellate opinion is not the end of the appellate proceedings, however. Samsung could have tried to delay the process through a petition for a rehearing (and, theoretically, a petition for writ of certiorari with the Supreme Court). But Samsung didn't do any of that, and as a result, the Federal Circuit yesterday (December 26, 2013) issued the formal mandate to the United States District Court for the Northern District of California (Judge Koh's court).

Still on the same day, Apple brought (as it had announced in a motion following the recent damages retrial) a renewed motion for a permanent injunction, requesting that another injunction hearing be held as early as January 30, 2014 (this post continues below the document):

13-12-26 Renewed Apple Motion for Permanent Injunction Against Samsung by Florian Mueller

The fact that Samsung -- a notorious "staller" of Apple's patent infringement lawsuits -- refrained from exhausting all options to delay the process shows that it's not scared to death by the prospect of Apple obtaining an injunction on remand. On a similar note, the fact that Apple did not keep on fighting for an injunction over its design patents also indicates its strategic priorities.

The underlying issue -- what the proper standard for a "causal nexus" between a proven infringement and an alleged irreparable harm to the prevailing right holder should be -- is and remains extremely important, and Apple made some headway in this regard. This matters, but mostly with a view to a future Apple request for an injunction over whatever patents it may prevail on at the trial in its second California litigation with Samsung (scheduled to begin on March 31, 2014), where some more impactful patents are at issue.

It's important to focus on the asserted patents, not the accused products. Obviously, the products that are named in an April 2011 lawsuit (such as the Galaxy S II) are no longer commercially relevant. But Apple is seeking an injunction that would also cover "any other product not more than colorably different from an Infringing Product as to a feature found to infringe" (which is consistent with the Federal Circuit's TiVo v. EchoStar opinion).

Here's my patent-by-patent take on the parameters and potential impact of the remand proceedings:

  • The '163 tap-to-zoom-and-navigate patent is too narrow to have any practical commercial relevance. As I explained in my October 2012 workaround analysis, it does not cover all tap-to-zoom functionality: it applies only if the user can, after using tap-to-zoom, bring a different section of a document to the center with another tap. The enforcement of an injunction over this particular aspect of Apple's tap-to-zoom gesture wouldn't be noticed by Samsung's customers, at least not to the extent that anyone's purchasing decisions would be affected in the slightest.

  • More than six months ago the United States Patent and Trademark Office (USPTO) affirmed the key claims, including the claim asserted in this action, of Apple's '381 rubber-banding ("overscroll bounce") patent. Samsung stopped providing that functionality to end users roughly two years ago, as a result of Apple's patent enforcement. If Apple was unable in any given major market to enforce this patent, I believe Samsung would re-enable the feature because it really does make a difference, in a subconscious but nevertheless important way (the overscroll effect avoids the situation in which the user instinctively feels that the device is not responding and presses harder) -- and it's a nice visual effect. This is again not the kind of feature that would influence purchasing decisions all by itself, but all other things being equal, I would certainly prefer a touch device that does have rubber-banding, and a multiplicity of such features would have an important effect on the user experience and the perceived quality of products (while even 100 patents of the '163 kind wouldn't really matter).

    With respect to rubber-banding, Apple certainly has a point when it says that "[a]bsent an injunction, Samsung could begin again to sell infringing products" (which is where the "colorably different" issue comes into play).

  • The '915 pinch-to-zoom API patent raises the most interesting issues, and if Apple obtains a permanent injunction over this one, we may actually see a subsequent contempt proceeding in which Samsung would have to defend its purported workaround against claims by Apple that it is not a workaround but still an act of infringement.

    The scope of this patent may be just as narrow as that of the '163 patent if Samsung's workaround is indeed a workaround, a fact that is in dispute for the time being. Last year, Samsung claimed that it had a workaround in place that provided end users with the same functionality but nevertheless steered clear of infringement of the '915 patent. So people would get pinch-to-zoom in the form in which they know it, wouldn't notice anything, but the inner workings would somehow be non-infringing. It didn't really disclose what this workaround would look like, and Apple believed that Samsung was still going to infringe. In yesterday's motion, Apple says it still "believes that Samsung continues to infringe at least the '915 patent with its current products because Samsung has not disclosed a designaround that avoids infringement of that patent".

    Situations like these give rise to contempt proceedings after issuance of an injunction (which can also result in appeals). In that event there would be three types of outcomes. The court might clear Samsung's workarounds, in which case Apple's 915 patent would prove useless. The court might find that Samsung still infringes, in which case Samsung's alleged workaround would turn out to be futile and Samsung would actually have to remove the pinch-to-zoom feature from its products. Or the court might find that there could still be an infringement, but should there be one, it would be so very different from the infringement pattern established in this case that Apple would have to bring a new infringement lawsuit to go after that one.

    But we may never get there anyway because the validity of the '915 patent is so doubtful. An examiner at the USPTO's Central Reexamination Division has rejected all claims of this patent, and (also yesterday) Apple appealed that decision to the USPTO's Patent Trial and Appeal Board (PTAB):

    13-12-26 Apple Notice of Appeal to PTAB ('915 Reexam) by Florian Mueller

    Samsung simply said the opposite of the truth when it claimed last month that this appeal was Apple's only option left (in an attempt to have the limited damages retrial stayed in the midst of jury deliberations). I wrote in my commentary back then that "it's rather likely that an appeal will be necessary in the end", and it did prove necessary. It's just that, contrary to Samsung's representations at the time, Apple theoretically had other options to dissuade the examiner from rejecting the patent.

    By exhausting all appeals, Apple can keep the patent technically alive until at least mid-2017 (probably 2018). But at this stage, the patent is of highly dubious validity. If I were a judge having to decide on an injunction motion involving this patent, I would try hard to find a way to avoid that this probably-invalid patent does any harm to Samsung. And I guess Judge Koh will try, too. But her problem is that this is a motion for a permanent (post-trial) injunction, where there is no assessment of the likelihood of a particular outcome. Maybe she could try to somehow give consideration to the doubtful validity of the patent in the balance-of-hardships context, but again, it's difficult. Samsung does, however, have a pretty good chance of obtaining a stay -- and I am convinced that it is entitled to a stay over this patent.

    Theoretically, the proceedings could be stayed with respect to this patent even before an injunction issues. But then the whole case including the damages part would be stayed, and this would delay forever the appeal (on the merits) that last month's limited damages retrial was meant to pave the way for. So it would actually make more sense to grant Apple an injunction over this patent but to also grant a Samsung motion for a stay of its enforcement. This way there would be a final and appealable ruling on the merits, but unjust harm would be avoided.

    Judge Koh could grant an injunction and subsequently grant a Samsung motion for a stay of enforcement. This would not be illogical at all under the circumstances in this case. If Judge Koh denied a stay, Samsung could ask the Federal Circuit to grant one. Whoever grants Samsung a stay, I repeat that in my opinion it's absolutely entitled to one. An enforceable injuntion over the '915 patent at this stage would be nothing but outright injustice.

If you'd like to be updated on the smartphone patent disputes and other intellectual property matters I cover, please subscribe to my RSS feed (in the right-hand column) and/or follow me on Twitter @FOSSpatents and Google+.

Share with other professionals via LinkedIn: