Tuesday, November 29, 2016

Federal Circuit unsurprisingly upholds its most surprising decision ever in Apple v. Samsung

On the first day after a long Thanksgiving weekend, the United States Court of Appeals for the Federal Circuit denied, without stating any particular reasons, a petition filed by Samsung earlier this month for a further rehearing en banc in an Apple v. Samsung matter that relates to the second California litigation between these companies. In a way, that "further" rehearing would actually have been the first "genuine" rehearing since the decision by a majority of the circuit judges in early October to overturn a panel decision in Samsung's favor had come down without any opportunity for further briefing, let alone a literal "hearing."

While the sudden reversal of fortunes in October was unbelievably surprising, it would have been a comparable surprise if the circuit judges had now admitted to not having followed proper procedures. There are petitions, ambitious petitions, long-shot petitions, and there are petitions like this one, which one might call "courtesy petitions": they just show to the next higher court that a party really exhausted each and every opportunity to achieve a different result before a (further) appeal. It's like saying "we really didn't mean to bother you and look how hard we tried to avoid it but... what can we do?"

The term "October surprise" is often heard in election years. The FBI's decision to reopen the Clinton email investigation (even if only for a few days) will probably go down in history as this year's October surprise. But that's just because patent law is a complicated, highly specialized field that only a small number of people keep an eye on. Otherwise this year's #1 October surprise would have been that lightning-out-of-the-blue decision by eight circuit judges (with one of them concurring only as far as the result was concerned, not on the reasoning) to overrule a panel decision on all of Apple's three trial-winning patents and to do so without even hinting at the possibility of another decision. The closest thing to a hint was that no decision had come down many months after Apple filed its petition for rehearing. But what can one conclude from silence? From what might be a mere administrative delay? Obviously parties can't submit briefing just because they see something is taking unusually long (without knowing what the key issues are, they wouldn't even know what to address).

Just before Thanksgiving, the Computer & Communications Industry Association (CCIA) filed an amicus brief in support of Samsung's petition. I've uploaded it to Scribd (PDF) and it's a good read. It appears normal to me that there weren't more filings: petitions for rehearing are long shots and a petition for a rehearing after a "rehearing" (even if not a hearing in a literal sense) is more than that. CCIA's brief discusses the confusion and concern caused by the Federal Circuit's handling of this matter. It talks about how commentators have reacted:

  • Donald Chisum (yes, Mr. "Chisum on Patents") and his Chisum Patent Academy co-founder Janice Mueller wrote in a Patents4Life guest post that the October surprise "may turn out to be the court's most controversial decision ever."

    Imagine that: the author of the leading reference on U.S. patent law writes this may be the most controversial decision in Federal Circuit history. But it gets even better (or worse, depending on one's perspective): after disagreeing with the majority of the circuit judges that there was nothing precedential in the October decision, the authors conclude that the Federal Circuit's "highly unusual posture [in this case] may even cause some to question whether the decision smacks of pro-patentee bias."

    Samsung now faces the hard decision of a second cert petition in the same dispute (though this here is a separate case and a totally different issue from design patent damages). Should Samsung decide to fight the good fight here, Mr. Chisum's Patents4Life guest post will be a silver bullet (actually, "silver" may be an understatement).

  • The 717 Madison Place blog focuses on oral arguments and the Federal Circuit. Its author, Denver-based patent attorney Bill Vobach, also found it "odd that the Federal Circuit didn’t conduct oral argument or further briefing." One possible reason in Mr. Vobach's view--and there's nothing implausible about that theory, though there isn't any hard evidence either--is that multiple circuit judges might have had to recuse themselves in the event of further briefings, in which case an 8-3 decision (or 7-1-3 to be precise, but the "1" concurred with the "7" on the outcome, so I view it as 8-3) would have been impossible and the vote might have been as narrow as 4-3. Mr. Vobach interestingly observes that Circuit Judge Newman would have been the senior active member of the majority (as the Chief Judge dissented) but "[s]he must have not wanted to write the majority opinion — as odd as that sounds — and assigned the role to Judge Moore."

    Is there anything in this case that is normal? If there is, I must have missed it...

Even Apple's outside counsel, Wilmer Hale's legendary Bill Lee, was apparently surprised. The preliminary statement of Samsung's petition referred to Mr. Lee likening the case to a "Disneyland adventure" in an interview, saying it "had more twists and turns than Mr. Toad's Wild Ride" (this post continues below the document):

16-11-07 Samsung Motion for 2nd Hearing by Florian Mueller on Scribd

Samsung's petition raises both substantive and procedural questions. In a footnote, it cites to a National Law Review article (by Lucas I. Silva) that said "the decision to grant en banc review will provide powerful ammunition to parties asking the Court to rehear their cases, and it will no doubt be cited in the many petitions for rehearing that are likely to be filed going forward." That is the kind of impact assessment on the law that might persuade the Supreme Court to take a look at the case.

Another footnote quotes a Law360 article (the one with the "Wild Ride" quote) that quotes Mr. Lee as having told the reporter that "[f]or a time, there was some question as to whether Apple would seek en banc review at all." The rest is history and an unusual story of "who dares wins," but "who dares wins" goes both ways: Samsung may ultimately win by daring to file another petition for writ of certiorari.

According to Samsung's petition, there were three cases in which only limited aspects of a case (not a wholesale reversal like here) were decided by the full Federal Circuit without further briefing and argument, and in one of them there was a dissent that objected to a decision to "bypass[] this court's standard operating procedure", furthermore alleging a violation of the Federal Rules of Appellate Procedure and expressing dismay at having been derprived of input required to make good decisions. That case was Abbott Labs. v. Sandoz, Inc (2009). And the dissent at the time was authored by Circuit Judge Newman. The same Circuit Judge Newman who now, according to fellow blogger Bill Vobach, apparently didn't want to write the majority opinion. That 2009 dissent may be the reason.

Federalcircuitology is the new Kremlinology.

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