Thursday, February 4, 2016

Apple to Supreme Court: Samsung litigation 'may be high-profile, [but] it is legally unexceptional'

Apple has just responded to Samsung's mid-December petition for writ of certiorari (request for Supreme Court review) regarding two legal questions concerning design patents and, in the same document, to amicus curiae ("friend of the court") briefs from major industry players, many IP law professors and various public interest advocates, all of whom agree with Samsung that the top U.S. court should take a look at this matter. Apple's lawyers from Wilmer Hale and Morrison & Foerster actually filed their opposition brief about two weeks ahead of a February 16 extended deadline, which is consistent with Apple's position at the end of its opposition brief that Samsung's petition should not "prolong" the #appsung dispute that began almost five years ago (this post continues below the document):

16-02 Apple Brief Opposing Cert Re. Design Patents by Florian Mueller

Looking at this from the angle of whether the case is worthy of a Supreme Court review (without getting defocused by arguments about the merits), I'm not overwhelmed by Apple's filing, but anything else would have been a major surprise. Honestly, this must have been one of the most difficult challenges ever for Apple's lawyers: to try to downplay the certworthiness of an issue after pretty much the entire ICT industry has made clear that it is profoundly concerned.

The hurdle for Apple to discourage the Supreme Court from taking the case is (although cert petitions are normally long shots) reasonably high here not only because of all the amici who support Samsung but also because the Supreme Court hasn't heard a design patent case in about 122 years. It's so obvious that a lot of things have changed during that period, and the role design patents play in connection with complex technology products really needs to be adjudicated again.

I'm not going to go into too much detail on that filing, but I'll quickly share a few observations:

  • As expected, Apple doesn't deny that the disgorgement of a company's entire profits over a design patent infringement could have major economic implications (and, by extension, a chilling effect on innovation).

  • Apple does, however, deny that there is a problem with design patent trolls:

    "The lack of concrete instances of 'design patent trolls' is unsurprising. Patent trolls may succeed in anticipating technological features and acquiring corresponding utility patents, but it is much harder to anticipate product designs before they are released—particularly given that innovative design companies typically give their products a unique look to differentiate their brand. Even if a troll anticipated what design patents might prove lucrative, it would be highly unusual for a design innovator to sell, assign, or license design rights to a troll. While a company might monetize unused utility patents through sale or license, it will typically keep its design rights to avoid giving away control of its brand."

    Those arguments would make sense in a world in which only narrow design patents are granted. However, in a world in which even single icons and rough screen layouts can be patented, I just cannot agree with Apple.

    Where Apple has a point is that it's not like design patent trolls are already a rampant problem. So far, design patents indeed appeared to have been of much less interest to trolls. However, if the Supreme Court allowed the Federal Circuit decision to stand, design patent assertions by patent trolls (and also by operating companies who use them for purposes that have nothing to do with protecting and controlling their brand) would become a major problem. It appears that the Apple v. Samsung ruling in question has already encouraged one non-practicing entity to threaten operating companies with the specter of total profit disgorgements. I don't have the slightest doubt that more of this is going to happen unless the Supreme Court restores sanity.

  • Apple's brief talks a whole lot about its success story and the company's undeniably transformative impact on the smartphone market. Between the lines, Apple is basically telling the Supreme Court that Samsung is just an infringer who wants to get away with wrongdoings; Apple also tells the court directly that it should ignore Google because it made Android, the operating system powering the devices in question. I don't think Apple will get too much mileage out of that: the amici supporting Samsung's petition are diverse and (most of them) disinterested enough that the Supreme Court can see one doesn't have to be Samsung or, in whatever way, a Samsung partner to take an interest in this matter.

  • While I can understand everything else Apple's lawyers are saying (because they just have to say it), there is one thing that comes up twice in the brief and which really doesn't make any sense to me: Apple says Samsung "appealed numerous issues, [but] did not challenge the validity of Apple's design patents.

    First, it's obvious that an appellant must set priorities, which is hard enough in such a complex case as this one. So if an appellant doesn't raise an issue, it doesn't mean there would have been no merit. Second, one part of Samsung's Supreme Court petition relates to claim construction, and claim construction informs (in)validity determinations. So Samsung is actually challenging validity, but at a strategically chosen level: I've read more than once in literature on appellate strategies in patent cases that claim construction (a matter of law) is far more easily reversed on appeal than factual determinations by a jury. Third, it's actually counterproductive for Apple to make that validity argument, given that its primary iPhone design patent, the D'677 patent, is indeed being challenged before the USPTO (with Samsung being the presumed anonymous petitioner), and the patent office found that one invalid last year. Apple asked the USPTO to modify its first Office action, but to no avail. Apple filed another petition for reconsideration last month. That reexamination is definitely not going well for Apple.

  • Let's go from the weakest part of Apple's petition to the strongest one: Apple points out very clearly that Samsung's support from amici is not as strong for its claim construction question as it is for the disgorgement issue. Apple notes (as I did in my post on the amicus briefs) that the 37 law professors supporting Samsung are the only group of amici to side with Samsung on design patent claim construction. Apple also notes that Oklahoma Associate Professor of Law Sarah Burstein, who had supported Samsung before the Federal Circuit with respect to design patent damages, decided not to sign her colleagues' Supreme Court brief because she fundamentally disagrees on the question of design patent claim construction (as she made clear in this PatentlyO guest post Apple also points the Supreme Court to).

    Those facts do suggest that design patent claim construction is of much less concern to industry than damages, and that Samsung's legal argument on claim construction may be somewhat more controversial than its position on disgorgement of entire profits. However, the number of law professors supporting Samsung has increased (from 27 to 37), and it's not hard to see why companies would be particularly concerned about outsized damages.

  • On the certworthiness of the damages question, I'd like to point to something interesting in Apple's filing but couldn't find such a thing.

  • Appe's argument is merits-centric as opposed to certworthiness-centric. I don't think Apple had much of a choice in that regard. But merits are not really the name of the game at the cert stage, and if the court accepts to hear the case, Apple will already have used some of its merits-related ammunition.

All in all, I would really be surprised if Samsung's petition didn't at least result in a CVSG (call for views of the Solicitor General so the U.S. government will talk to industry and find out how much of a concern there is). Apple's opposition brief has just added to my belief that at least the damages part of Samsung's petition is really very strong.

While I was looking at Apple's filing, I also saw the latest news of a non-practicing entity having been awarded more than $600 million in damages from Apple. This is an Eastern District of Texas jury verdict and the number will likely change before all is said and done, but every verdict of this kind increases the likelihood of Apple at some point joining the proponents of serious U.S. patent reform.

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