Wednesday, August 27, 2014

Judge denies Apple bid for sales ban against Samsung in second California patent case

Judge Lucy Koh has just denied Apple's motion for a permanent injunction against Samsung over the three patents underlying the jury verdict at the end of the spring trial. This is a very significant setback for Apple, which less than six months ago had already failed, despite a partly-successful appeal, to obtain a sales ban against Samsung in the first California litigation between the two companies, an outcome that Apple accepted as final about a month ago when it withdrew its related cross-appeal.

The denial of an injunction following the recent trial in the second California case is based on Apple's failure to satisfy the eBay v. MercExchange factors for injunctive relief over patents. In a striking parallel to the other case, Judge Koh stressed that "Apple has not satisfied its burden of demonstrating irreparable harm and linking that harm to Samsungs exploitation of any of Apple's three infringed patents." Furthermore, "Apple has not shown that it suffered any of these alleged harms because Samsung infringed Apple's patents." In other words, Apple failed to demonstrate that Samsung's competition is substantially unlawful.

In order to prevail on this motion, Apple would have had to show that "the patented inventions drive consumer demand for the infringing products," which it couldn't (because, in my opinion, it's simply not the case). The court believes that monetary damages are sufficient compensation for the infringements identified in this case. Apple convinced Judge Koh that there was a strong public-interest case here because Apple's injunction motion was "narrowly tailored," Judge Koh still finds that, at the end of the day, the lack of irreparable harm remains outcome-determinative in Samsung's favor. Citing the Federal Circuit, the decision notes that without a clear causal nexus between infringement and irreparable harm, "a court cannot distinguish 'between irreparable harm caused by patent infringement and irreparable harm caused by otherwise lawful competition.'" In this context, it certainly didn't help Apple that, as the order notes, "Apple does not currently practice all of the patents at issue."

Three weeks ago, Apple and Samsung agreed to withdraw all litigation pending between them outside the United States. Apple's continued inability to convince U.S. courts that its patents entitle it to drastic remedies has probably increased the likelihood of a near-term settlement of the remaining litigation between them (though it could still continue for some time if the parties can't agree on a payment covering past infringement).

After today's decision, it's likely that Judge Koh will very soon (it might even happen today as well) rule on the parties' other post-trial motions. Samsung is pushing for a further adjustment in its favor, especially for the invalidation of certain asserted patent claims such as this one, while Apple would ideally like a retrial because the damages award was disappointing from its point of view: it wanted almost 20 times as much money as the jury awarded.

This decision is great news not only for Samsung but also for Google, the developer of the Android mobile operating system. In this second California case, Apple is essentially suing Samsung as a proxy for Google.

Here's the public redacted version of Judge Koh's order:

14-08-27 Order Denying Apple Motion for Permanent Injunction Against Samsung by Florian Mueller

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