At a hearing in March, Apple faced a skeptical court for its fourth or so attempt to obtain a U.S. patent injunction against Samsung. Today, the United States Court of Appeals for the Federal Circuit issued a ruling that vacates Judge Koh's August 2014 denial of an injunction in the second California litigation between Apple and Samsung and remands for further proceedings. However, Chief Judge Sharon Prost strongly disagrees with her two colleagues on the panel, Circuit Judges Moore and (notoriously Apple-admiring and generally patentee-friendly) Reyna, who outvoted her.
Last year, I absolutely liked and agreed with Judge Prost's dissent (on the reasons, not the outcome) in the "Posner" appeal with respect to injunctions over FRAND-pledged standard-essential patents. Today I am once again more convinced by what she writes than by the majority opinion. Last year, her position was favorable to Apple. Today, what she writes supports Judge Koh and, by extension in this particular context, Samsung.
Presumably Samsung will view the Chief Judge's loud and clear dissent as an invitation to request a full-court review.
Very remarkably, Chief Judge Prost's dissent begins with the following five words:
"This is not a close case."
After reading that first sentence on page 41 of the PDF document, it was clear to me that this was one of the most fundamental disagreements ever of a panel member with the majority opinion. The next two sentences then put the (in)significance of the scope of the asserted patent claims masterfully into perspective:
"One of the Apple patents at issue covers a spelling correction feature not used by Apple. Two other patents relate to minor features (two out of many thousands) in Apple's iPhone—linking a phone number in a document to a dialer, and unlocking the screen."
A feature "not used by Apple" plus two "minor" features. That contrasts completely with the majority opinion's unbelievable attempt to blow the importance of the slide-to-unlock idea--something that 15 (fifteen!) European patent judges in three countries have unanimously found to be less than patentworthy--out of proportion:
"Although seemingly straightforward, Apple considered this feature so core to the Apple iPhone user experience that it opened the first iPhone ad with imagery illustrating the operation of this 'slide to unlock' feature."
It's a very simple, thus intuitive feature. That's why it came in handy when Apple was trying to explain to consumers what the iPhone user interface was about. That still doesn't make it a technological achievement. Chief Judge Prost and 15 European judges, eight of them serving on courts that have more power in their countries than the Federal Circuit has in the U.S. (where it is often overruled by the Supreme Court), got this right, and two circuit judges are either Apple fanboys or patent radicals or both.
In one respect, Apple could not even convince the majority: Apple argued that an injunction request relating to features as opposed to products should face a lower standard. Samsung's counsel on appeal said Samsung makes products, not features. Chief Judge Prost says: "The majority correctly rejects this theory and the case should have ended there." And then she asks: "So why doesn't it?" The answer:
"Because the majority finds legal error by the district court where none exists. Then, under the guise of the purported 'legal error,' the majority reverses without deference the district court’s rejection of Apple's survey evidence, never mentioning that the survey was rejected by the district court because Samsung's serious challenges to its techniques and conclusions were unrebutted by Apple. The majority further relies on 'evidence,' found nowhere in the record, that carriers or users preferred having the patented features on Samsung's phones. It also concludes—contrary to our case law—that Apple's alleged evidence of 'copying' is sufficient to show nexus to Apple’s alleged lost-sales. Because the majority here reaches a result that comports with neither existing law nor the record in this case, I must respectfully dissent."
It's almost an understatement to say that the Federal Circuit majority shows no "deference" to the district court's factual holdings. What's happened here over these past few years is an insanity because whatever Judge Koh did was overruled. Judge Koh tried hard to apply the Federal Circuit's latest ruling when issuing her last one, and time and time again, she was reversed.
Today's ruling looks to me like some judges realized the standard they had set in the past (for good reasons, actually) was an insurmountable hurdle for Apple, so they centered today's opinion around the suggestion that "some connection" between an infringement and irreparable harm was sufficient and the made-up claim that Judge Koh had required Apple to "prove that the infringement was the sole cause of the lost downstream sales." Chief Judge Prost, however, says:
"But the majority quotes nothing from the district court’s opinion to show there is such an error. And for good reason: there is nothing. Hence, there is no error.
The words 'sole' and 'predominant' are not even present in the district court's opinion. There is simply nothing in the district court's opinion that explicitly or implicitly required Apple to show that the patented features were the 'sole,' 'predominant,' or 'exclusive' reasons for purchasing Samsung’s products."
A footnote clarifies that Judge Koh's decision used the words "exclusivity" and "exclusively" only in the context of irreparable reputational harm, an aspect the majority opinion didn't even reach.
In Chief Judge Prost's opinion, Judge Koh correctly applied the Federal Circuit's case law but her colleagues chose to be inconsistent with it:
"In making these factual findings [concerning the "Hauser survey"], the district court followed our case law faithfully. Nothing in the district court's opinion suggests that it deviated from our precedent. Rather, the majority deviates from our precedent by repeating as a mantra the phrase 'some connection' in [...] ('Apple III') detached from the causal nexus standard explained in our prior cases."
The following sentence also vents the chief judge's anger:
"The majority has no legitimate basis to reverse the district court."
As for the aforementioned Hauser survey, Chief Judge Prost is underwhelmed by it:
"Hamstrung by the deficiencies in Apple's direct survey evidence, the majority trumpets instead Apple's 'copying' evidence and even creates new evidence." [...]
"[T]here was no evidence at all of such 'carriers' or users' preference;' there was no 'strong' evidence of 'copying;' and 'copying' alone is not dispositive to establish a causal nexus to Apple's alleged irreparable harm from lost sales."
In the copying context, Chief Judge Prost criticizes her colleagues for quoting as a district court holding what was actually a reference to certain Apple theories Judge Koh disagreed with.
The final paragraph from the dissent:
"Based on this record, I cannot agree with the majority's broad warning that '[i]f an injunction were not to issue in this case, such a decision would virtually foreclose the possibility of injunctive relief in any multifaceted, multifunction technology.' See Majority Op. at 22. Rather, injunctive relief will be appropriate when and if, consistent with our case law, the causal nexus requirement is met. This is not such a case."
The only part of Chief Judge Prost's dissent that I don't agree with is her take on the public interest. On that one I'm closer to the majority position. However, that factor doesn't matter if one follows Chief Judge Prost's reasoning on the causal nexus requirement.
Apple will benefit from this decision in any near-term settlement talks, but this is not over yet. There could be a full-court review, and while the majority opinion strongly suggests that Judge Koh should enter an injunction, Judge Koh denied one in the first case despite an appellate victory for Apple, and Apple then dropped its appeal of that decision on remand. Furthermore, an injunction over something like slide-to-unlock would be merely symbolic because even Apple didn't claim in the second California case that Samsung's more recent devices were infringing that patent. The only patent that would likely give rise to disagreement between the parties is the '647 "quick links" patent.
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