Apple and Samsung have agreed to try to resolve whatever little is left of their patent spat by means of mediation before Magistrate Judge Spero. But for now, they are fighting over whether or not Apple can collect more than $540 million in damages in the near term despite a USPTO decision according to which Apple's most valuable software patent in the 2012 trial (and 2013 retrial) shouldn't have been granted in the first place.
Apple says: "Enough is enough." It wants to finally get something out of almost four-and-a-half years of litigation with Samsung. There are, however, various ways to look at this situation. On the one hand, the fact that it takes Apple so many years to get paid calls into question the efficiency of the overall process. On the other hand, Apple also has itself to blame for a substantial part of the problem. If Apple had gone into those Android lawsuits (not just with Samsung, and not just in the U.S.) with more modest expectations, asserting its most defensible patent claims (even if those are usually not broad) and presenting reasonable damages theories (consistent with Apple's FRAND defenses, for example), then it would have received something a while ago. Apple, however, engaged in moonshot-style litigation.
Most of the time, I also believe that "justice delayed is justice denied," as the saying goes. But the solution to that problem is not an outright denial of justice. Ultimately, delayed enforcement is the lesser evil when compared to premature enforcement, as proposed by Apple, which could lead to irrecoverable payments over non-property. The Apple that demands this is not the Apple that so many people like.
Late on Wednesday, Samsung filed a reply in support of its motion to either hold the '915 (pinch-to-zoom API) patent invalid as a matter of law or stay the first California case so the USPTO can finish its job (this post continues below the document):
It's easy to disagree with Apple philosophically on the wider issue. Invalid patents should not entitle anyone to a payment of any kind. But Apple never addressed the question of what was right or wrong: it argued that the law simply entitled it to this. Samsung's reply brief contains stronger arguments against Apple's demand for immediate (i.e., premature) enforcement than I would have expected.
Apple argued that the Federal Circuit's appellate ruling required the court to enter partial final judgment for Apple "immediately" and that the appeals court had implicitly rejected Samsung's argument that Apple's defeat before a Patent Trial and Appeals Board (PTAB) last year had the effect of collateral estoppel on the parties' first California litigation. Samsung's latest filing now points out that its notice to the appeals court came after briefing and even after the oral hearing, and no briefing took place.
Samsung's reply brief points to case law that says a district court "should not be foreclosed from considering [an] issue on remand" if there is substantial doubt as to whether it had actually been decided by the appellate panel, and then goes on to say the following:
"It is highly unlikely that the Federal Circuit chose to resolve the merits of the collateral estoppel (or stay) issues without briefing, and there is at a minimum substantial doubt as to whether these issues were decided. The issues certainly were not necessarily decided when they were raised only in a Rule 28(j) letter and were not addressed by the appellate court at all. The issues thus fall outside the scope of the mandate rule."
"Rule 28(j)" means "supplemental authority": Samsung showed the PTAB decision to the Federal Circuit in order to increase the likelihood of the appeals court holding the '915 patent invalid (which it didn't). That's different from a collateral estoppel argument or a motion for a stay.
Even this traditionally rather patentee-friendly appeals court has held that "a district court must apply intervening legal developments affecting [an] asserted patent's validity, even if the court of appeals already decided the validity issue the other way." (emphasis added) The Federal Circuit said so in its mid-2013 Fresenius decision and based this holding on "[t]he Supreme Court's decision in Simmons Co. v. Grier Bros. Co. (from 1922).
Even though the case law Samsung cites gives Judge Koh more than enough ammunition to at least stay the case, Samsung's lawyers also present an argument that would enable the district court to reject Apple's demand for premature enforcement even if the court interpreted the Federal Circuit's mandate the way Apple proposes: "Manifest injustice would warrant deviation from a decision rejecting, without briefing, collateral estoppel or a stay"
"Manifest injustice" is an accurate description of what Apple unfortunately wants here.
The second part of Samsung's reply brief argues that case law supports Samsung's theory of collateral estoppel here rather than Apple's argument that the technically non-final nature of the USPTO decision makes estoppel a non-option. That part of Samsung's argument is more about what the decisions cited by Apple did not specifically say than about what they did say. Finally, the third part explains that there should at least be a stay, considering that the Federal Circuit remanded for "any further proceedings necessitated" by its decision, giving (in Samsung's lawyers' opinion) Judge Koh every opportunity to stay those proceedings.
Toward the end of Samsung's brief I found a quote from what Judge Koh said at an April 29, 2013 hearing in this case:
"If the examiner decides not to reopen the case and Apple is forced to file a notice of appeal, then I think that that third factor may then swing into Samsung's favor, because if this an invalid patent, then certainly it would be more prejudicial and more of a tactical disadvantage to Samsung to have to do a second trial and to have to do, you know, further litigation on I.P. that may ultimately not be valid."
Considering where the '915 proceedings stood then, Samsung has made lots of headway. The examiner refused to reopen the case, and a PTAB decision affirmed the rejection.
I have previously said that the problem with some of Apple's arguments in the Samsung litigation (design patent damages, for example) are even against Apple's own interests with respect to other litigation, especially where Apple has to defend itself against patent trolls. Less than two weeks ago, Apple made the following argument in the Eastern District of Texas for a stay of case brought by a company named Smartflash LLC. Apple's argument for a stay of that case was merely based on the fact that the USPTO had initiated reexamination proceedings. Nevertheless, Apple stated all the reasons for which Samsung (on a stronger basis, since the proceedings concerning Apple's '915 patent are more advanced) is now also asking for a stay:
"Apple argues there that '[t]his is a case about money, and money would be an adequate remedy for any compensable injury to Smartflash resulting from delay,' [..] and that 'although a trial date was recently set, numerous discovery tasks remain to be completed, including the exchange of supplemental or amended expert reports for the damages retrial and related depositions, as well as motions practice, jury selection, and trial,' [...]"
I wish Apple could just put the remainder of the Samsung dispute aside and then work with companies like Samsung to defend the interests of operating companies (and I also wish Samsung would then support Apple on FRAND licensing questions such as the availability of injunctive relief and the royalty base).
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