Wednesday, March 12, 2014

Apple files cross-appeal in first Samsung case: presumably keeps trying to obtain an injunction

Last week, Samsung appealed the final judgment in its first California litigation with Apple on the same day on which it was handed down, and about a month after Judge Koh had denied both parties' motions for judgment as a matter of law (JMOL) (at which point the clock for an appeal arguably began to tick for Samsung). It was very likely that Apple would appeal the unfavorable parts of the judgment, particularly last week's (second) denial of a permanent injunction. And late on Tuesday, Apple indeed filed a notice of its cross-appeal.

Apple's appeal relates to the final judgment as well as "all interlocutory decisions and orders subsidiary thereto or subsumed therein, including but not limited to, the August 24, 2012 Judgment (Dkt. No. 1933), the March 1, 2013 Order re: Damages (Dkt. No. 2271), and the November 21, 2013 Judgment (Dkt. No. 2823), as well as the March 6, 2014 Order Denying Apple's Renewed Motion for Permanent Injunction (Dkt. No. 3015), to the United States Court of Appeals for the Federal Circuit".

A notice of appeal always has the broadest scope, but in a complex case like this, appellants typically later focus on a limited number of key issues. I think it's reasonably likely that Apple will try again to obtain an injunction (the last item on the list I just quoted). It will have to raise issues relating to Judge Koh's consideration of the "Hauser conjoint survey", a piece of evidence that the Federal Circuit said in the previous appeal the district court must consider. I had understood the Federal Circuit opinion to suggest between the lines (also in light of what the circuit judges said at the hearing) that Hauser should carry the day for Apple, but the decision didn't say so explicitly, much less direct entry of an injunction. In my commentary on Samsung's opposition to the renewed motion for an injunction, I had stated the following:

"Even though Samsung's lawyers present some of their arguments in a pretty compelling fashion (for example, the fact that the "Hauser" survey, the key piece of evidence here that shows consumers' willingness to pay premium prices for certain patented features, doesn't compare particular features to the best non-infringing alternative), entry of a permanent injunction is still the most likely outcome here. The Federal Circuit didn't want to give a direct instruction to Judge Koh that she enter an injunction on remand. Instead, it basically said that Judge Koh stopped the analysis too early, and deferred to the court of equity. But Judge Koh will look at the forest, not only the trees Samsung addresses. And the overall picture is that the Federal Circuit most likely would have rejected Apple's appeal if it had felt that, all things considered, Apple should once again be denied a permanent injunction."

I acknowledge that Samsung and its lawyers were right on this one. What looked like a long shot worked out for them. But I also wouldn't be surprised if Apple gave it another try, hoping that the appeals court will then provide clarification that results in an injunction.

Apple's reference to the March 1 damages order means that it reserves the right to defend, on appeal, the original (August 2012) jury verdict. After all, juries get a lot of deference, and maybe Apple hopes that the appeals court will reject the reverse engineering of the verdict by Samsung's lawyers. But where it is very clear how a jury arrived at its numbers, reverse engineering is acceptable. With respect to one product, the Galaxy Prevail, the jury verdict is absolutely indefensible (provided that reverse engineering is performed) because the jury awarded a wrong category of damages.

So the Apple v. Samsung cross-appeal has started, and I'll follow it very closely.

With respect to another high-profile cross-appeal involving Apple, I'm wondering when the Federal Circuit will finally hand down its opinion. The appellate hearing in the "Posner" Apple v. Motorola litigation was held six months and one day ago, on September 11. That's an incredibly long time between a hearing and an appellate decision. Admittedly, it's a huge case with offensive claims brought by both parties, and the Federal Circuit has never been busier. Still, this is now taking unusually long. In late January I already thought that the ruling was likely to issue any moment.

At the hearing it appeared that Apple was on the winning track. A remand of Apple's offensive case, involving among other things the "Steve Jobs patent", looked like a given. Before that trial finally happens, Motorola's handset business will belong to Lenovo. A remand of Motorola's standard-essential patent claims is also a possibility, but Chief Judge Rader called Motorola's SEP damages claim "crazy" (twice, in fact). I would like to see the Federal Circuit affirm Judge Posner's denial of injunctive relief over SEPs, but it's not certain that it will reach that issue. Judge Posner dismissed the Apple-Motorola case before him, instead of holding a trial that had already been scheduled, because he concluded that the parties weren't entitled to any remedy whatsoever. Technically, if the Federal Circuit held that Motorola was entitled to some damages (though nowhere near the amount it sought), that could be enough to remand for further proceedings, but both parties definitely wanted -- and many other industry players also want -- clarity on the question of SEP-based injunctions. That issue might very well be appealed to the Supreme Court, and in my opinion it would be "certworthy".

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