Saturday, May 24, 2014

Apple requests retrial of Samsung patent case, demonstrates dissatisfaction with jury verdict

After the original version of the Apple v. Samsung II jury verdict that came down on May 2 (and had to be amended on May 5), Apple's PR department had issued a premature statement that basically described the verdict as a win for Apple, though the result was a rather mixed one. Litigants can engage in spin-doctoring all the want, but what's usually more telling is what procedural steps they take after a decision. Do they want to leave a decision intact, or do they seek to have it overturned at all costs?

After the 2012 trial in the first Apple v. Samsung case, Apple was seeking some gradual improvements but more than anything else sought to defend the verdict, while Samsung wanted the jury to be overruled or, in the alternative, a retrial. A limited damages retrial resulted from Samsung's post-trial motions, but the parameters weren't really favorable to Samsung, so the retrial didn't change nearly as much as Samsung had hoped.

This time around, it's the opposite. Just like Apple in the first case, Samsung is still trying to obtain some improvements (due to sealing it's unclear what exactly it has requested), while Apple can't hide its dissatisfaction with this month's verdict: in addition to seeking additional liability findings in its favor from Judge Koh, a tripling of the largest part of the damages award, and a permanent injunction (in the previous post I just discussed that initiative), Apple has also moved, late on Friday by local time, for a complete damages retrial (this post continues below the document):

14-05-23 Apple Motion for JMOL and Retrial by Florian Mueller

In connection with Apple's pursuit of a higher damages figure, be it by tripling and/or a retrial, it's worth noting that Apple's damages claim relating to the '647 "quick links" patent was more than 20 times what Apple itself demanded from Motorola Mobility in a parallel case for the same patent, on a per-device basis. For reasons I explained in my previous post, the '647 claim construction from the "Posner case" was accepted by Apple last week when it brought a motion for a remand of a reexamination procedure jointly with the United States Patent and Trademark Office. Under that claim construction, the patent isn't nearly as valuable as Apple is claiming in the California Samsung case.

The part that proves Apple's disappointment with the outcome of the recent trial is where it argues that "Samsung's improper and prejudicial statements to the jury warrant a new trial on infringement for the '414 and '959 patents (in the event that the Court does not grant JMOL of infringement), a new trial on willfulness for all patents other than the '721 patent (and also other than the '647 patent if the Court grants JMOL of willfulness for that patent), and a new trial on damages for all five of Apple's asserted patents" (emphasis added).

Samsung could also make an argument that it was prejudiced. There was a controversial propaganda video that Judge Koh showed to the jury, though there would been a non-prejudicial alternative. The $2.2 billion damages claim was absolutely ridiculous, yet Judge Koh allowed Apple to present it to the jury, while not permitting Samsung to discuss with the jury the real-world evidence that the terms of Apple's license agreements with companies like HTC and Nokia (or Apple's 60-cents-per-unit damages claim from Motorola over the '647 patent) are. The jury basically had to arrive at its damages figure in a parallel universe in which everything was painted in a light way too favorable for Apple, not in the harsh light of reality, in which Apple's patents are far less valuable than the company claims. The jury wasn't told about the status of the reexamination of the '172 autocomplete patent and was generally misled about (in)validity issues.

But Apple thinks it could get a better damages award next time, and is pushing hard for a new trial.

As for Apple's argument that it was prejudiced, the points Apple makes aren't all wrong. It's just that they aren't extremely strong (while the hurdle for a new trial is reasonably high) and, on balance, if anyone was prejudiced, it was Samsung, not Apple, for the reasons I outlined before.

  • During the trial I already agreed with Apple that Judge Koh should have allowed it to make certain arguments with respect to its alleged non-practice of the patents-in-suit. However, to some extent this is a problem of "you make your bed and you lie in it": Apple made some procedural concessions relating to case narrowing only to go to trial as quickly as possible. This had a limiting effect: Apple then couldn't point to other claims from the asserted patents than the five claims-in-suit.

  • Apple argues that Samsung's "references to the possibility of a permanent injunction" were prejudicial because "the jury could have decided to reduce the damages it awarded to Apple or, even worse, the jury could have found no liability on certain patents as a way to reduce the impact of any injunction". I thought it was reasonable for Apple to request a curative instruction from the court, and the judge was very strict by not granting one. However, it's not likely that the jury's damages award was influenced by this in any way.

  • Apple furthermore believes Samsung should not have been allowed to tell the jury about the fact that the Federal Circuit had reversed a preliminary injunction over the Galaxy Nexus because this "unfairly suggested to the jury that an appeals court sided with Samsung and against Apple on an issue that was relevant in the current trial, when in fact the Federal Circuit's decision had no relevance to the issues that were before the jury". However, it was part of Apple's trial strategy to argue that Samsung had removed the universal search feature and then put it back because of customers complaining. The parties also had an argument over related user comments on a website. It is, however, an obviously important fact that Samsung put the feature back because the preliminary injunction was lifted.

Judge Koh is hardly going to order a new trial for those reasons. She may make some minor adjustments to the verdict, and then she'll let the parties appeal the unfavorable parts of the ruling to the Federal Circuit. Thereafter, there may be a retrial -- but in the meantime the parties will probably settle because this litigation has become a waste of resources.

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