Monday, January 20, 2014

Apple insists on anti-cloning provision as part of any patent settlement with Samsung

When the CEOs of Apple and Samsung, accompanied by several in-house lawyers, meet for their (court-requested) settlement negotiations on or before February 19, there will probably be flexibility on both sides relating to the billions of dollars in license fees that may change hands, but if Samsung wants a deal, it will have to accept, as HTC did before it, an anti-cloning provision that would allow Apple to still bring lawsuits if Samsung's products resembled Apple's offerings too closely in ways that could actually be avoided by means of designarounds.

Yes, this may very well be a dealbreaker and require these parties to square off at the trial in their second California litigation, which is scheduled to begin on March 31. But no matter how much Samsung may hate the notion of an anti-cloning provision (it's definitely at odds with the strategy that enabled Samsung to become the global market leader in smartphones), it's s safe assumption that a deal will only come into being if Samsung accepts this. In a sworn declaration of January 16, 2014, Apple's BJ Watrous, Vice President and Chief Intellectual Property Counsel, told the United States District Court for the Northern District of California that Apple's "discussions with Samsung have consistently included limits to both the scope of any license and a prohibition against cloning Apple products."

On that basis, Apple's lawyers wrote on the same day: "Samsung incorrectly claims [in its opposition to Apple's motion] that Apple made recent offers to Samsung without anti-cloning provisions. Every offer Apple made to Samsung has included limits to both the scope of any license and a prohibition against cloning Apple products."

This topic could come up again at the January 30 injunction hearing before Judge Lucy Koh. It's relevant because a willingness to license patents can weigh against a patentee's pursuit of injunctive relief. Apple argues that Samsung's infringement of three multi-touch software patents must come to an end. Samsung, obviously, opposes this. It brought a motion (which was denied) to conduct some discovery relating to more recent settlement negotiations.

Apart from clarifying Apple's position on an "anti-cloning provision", Apple's reply brief just reinforces the points it made in its original motion. I'm slightly disappointed that Apple opposes Samsung's request that the court stay any injunction (if one issues, which is what I expect to happen) with respect to the '915 pinch-to-zoom API patent, which the United States Patent and Trademark Office has rejected for the time being (an appeal within the USPTO is underway and, as Apple's brief notes, the examiner could acquire control over the matter again). I think it's legitimate for Apple to pursue an injunction, but I don't think it's appropriate to enforce this patent until the USPTO possibly (if ever) changes its position and views the patent more favorably than it does now. I do, however, agree with Apple that Samsung's request for a stay reveals a lack of confidence in its alleged designarounds: "If Samsung is confident that its design-arounds do not infringe the '915 patent, then enforcement of the injunction poses no threat to Samsung."

Here's Apple's reply brief in support of its renewed motion for a permanent injunction against Samsung, along with all publicly-accessible exhibits:

14-01-16 Apple Reply in Support of Permanent Injunction Against Samsung by Florian Mueller

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