Possible Injunction for Apple vs. Samsung For Features, But Not for Design Patents

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By Tony Dutra  

Nov. 18 --Apple Inc. cannot get an injunction against rival Samsung Electronics Co.'s smartphones and tablets based on design patents or trade dress protection, but Samsung may be forced to eliminate or modify certain features covered by utility patents or face an injunction, after a Nov. 18 decision by the U.S. Court of Appeals for the Federal Circuit (Apple Inc. v. Samsung Elecs. Co., Fed. Cir., No. 2013-1129, 11/18/13).

The court remanded for the U.S. District Court for the Northern District of California to reconsider whether Samsung should be enjoined from selling phones with “snap back,” “pinch-to-zoom” and “double-tap-to-zoom” features. Judge Lucy Koh will have to reassess the evidence Apple presented to establish a causal nexus between consumers' smartphone purchasing decisions and each of those features.

An injunction based on the design patents would have been a more powerful weapon for Apple, covering entire products rather than specific features. However, the court affirmed Koh's judgment that Apple failed to show the corresponding importance of smartphone design to consumers' product selections.

Highly Publicized Case

Apple filed the instant complaint in 2011 alleging patent and trade dress infringement by 28 different models of Samsung's Android-based smartphones and tablets.

After decisions by the court in Apple Inc. v. Samsung Electronics Co., No. 5:11-cv-01846-LHK, 2011 BL 304343 (N.D. Cal. Dec. 2, 2011) (242 PTD, 12/16/11), and by a jury (166 PTD, 8/28/12), 26 Samsung models were found to infringe three utility and three design patents.

Apple sought a permanent injunction, though the Federal Circuit had largely countered Apple's arguments for a preliminary injunction before trial. Apple I, 678 F.3d 1314, 2012 BL 119064, 102 U.S.P.Q.2d 1633 (Fed. Cir. 2012) (93 PTD, 5/15/12). Further, Apple asserted different patents against different Samsung products in a second case, and the Federal Circuit's injunction-related ruling favored Samsung there as well. Apple II, 695 F.3d 1370, 2012 BL 266126, 104 U.S.P.Q.2d 1401 (Fed. Cir. 2012) (197 PTD, 10/12/12).

The design patents (U.S. Patent Nos. D593,087; D604,305; and D618,677) cover the entire products Apple is trying to protect--the iPhone and the iPad. Samsung was Apple's primary target as to design, given evidence of Samsung's copying.

The utility patents, conversely, are of more general concern to smartphone manufacturers and to Android developer Google Inc., because the features found to infringe are supported under the Android standard. Apple's utility patents (U.S. Patent Nos. 7,469,381; 7,844,915; and 7,864,163) cover, respectively:

• a “snap back” or “bounce back” feature, whereby when a user scrolls in one direction across the face of the device past the edge of an electronic document, the screen snaps back to the document;

• a “pinch-to-zoom” feature, using two fingers to zoom in or out; and

• “double-tap-to-zoom” capabilities.

 

The injunction request was targeted against not only the infringing products--most of which Samsung no longer sells--but also “any other product not more than colorably different,” which conceivably could encompass new and future Samsung models.

In December, Koh declined to grant Apple the injunctive relief that it sought, rejecting arguments based on the design patents, the utility patents and both registered and unregistered iPhone trade dress. 909 F. Supp. 2d 1147, 2012 BL 330890 (N.D. Cal. 2012) (246 PTD, 12/26/12). Apple appealed.

Causal Nexus Required

Judge Sharon Prost wrote the court's opinion.

The court addressed the four factors to consider for a permanent injunction from eBay Inc. v. MercExchange LLC, 547 U.S. 388, 78 U.S.P.Q.2d 1577 (2006), with a focus on the first--whether Apple would suffer irreparable harm without the injunction.

The court rejected multiple arguments Apple made that the analysis for a permanent injunction should differ from that made in the preliminary injunction context, such that a causal nexus should not be a requirement after infringement had been established.

The court also made no distinction between irreparable harm for infringement of single-feature versus complex products, other than to say that showing a causal nexus “just may be more easily satisfied (indeed, perhaps even conceded) for relative 'simple' products.”

But the court distinguished cases where the harm was to “erosion in reputation and brand distinction”--Douglas Dynamics, LLC v. Buyers Prods. Co., 717 F.3d 1336, 2013 BL 133566, 107 U.S.P.Q.2d 1024 (Fed. Cir. 2013) (102 PTD, 5/28/13)--or the market did not feature individual consumers' choices--Broadcom Corp. v. Qualcomm Inc., 543 F.3d 683, 2008 BL 213411, 88 U.S.P.Q.2d 1641 (Fed. Cir. 2008) (193 PTD, 10/6/08).

Where District Court Went Wrong

Nevertheless, the Federal Circuit faulted the district court's analysis to the extent it “required Apple to show that one of the patented features is the sole reason consumers purchased Samsung's products.”

Rather, the court said, quoting Apple II, Apple must “show that the infringing feature drives consumer demand for the accused product.” According to the court:

There might be a variety of ways to make this required showing, for example, with evidence that a patented feature is one of several features that cause consumers to make their purchasing decisions. It might also be shown with evidence that the inclusion of a patented feature makes a product significantly more desirable. Conversely, it might be shown with evidence that the absence of a patented feature would make a product significantly less desirable.  

 

The court also found error in the district court's unwillingness to aggregate features patented separately. As one example, the appeals court said, “it may make sense to view patents in the aggregate where they all relate to the same technology or where they combine to make a product significantly more valuable.”

No to Design Patents

The appeals court nevertheless affirmed the lower court's conclusions related to Apple's evidence of a causal nexus related to the design patents.

According to the court, the district court was correct in noting that “evidence showing the importance of a general feature of the type covered by a patent is typically insufficient” and that “isolated, anecdotal statements about single design elements do not establish that Apple's broader patented designs are drivers of consumer demand.”

Apple's evidence merely that “design mattered” to consumers fell short, the court concluded.

Maybe to Utility Patents

The court's primary objection to the district court's analysis of the utility patents related to a conjoint survey done by Apple's expert, John Hauser. The survey showed the price premium consumers would pay for the patented features.

The court used that survey to identify another way a patent owner may show that a feature drives demand--“evidence that a feature significantly increases the desirability of a product incorporating that feature.” Of course, the court said, that may be a matter of degree, distinguishing willingness to pay an additional $10 for a cup holder in a $20,000 car from willingness to pay up to $100 for a smartphone based on the three features in the utility patents here.

The court then addressed the other three eBay factors. As to the adequacy of damages as a remedy, the court faulted the district court on two grounds. Samsung's ability to pay a monetary judgment does not indicate the adequacy of damages, the court said, asserting that its precedent only says that a defendant's inability to pay may demonstrate inadequacy. And Apple's past licensing of these patents to others and of other patents to Samsung does not answer the question of whether Apple would be willing to license these particularly patents to Samsung, the court said.

The court agreed with the district court, though, that the balance of hardships did not weigh in either party's favor, and that the public interest weighed in Samsung's favor in light of Apple's request to enjoin entire products, which if granted “would have the effect of depriving the public of access to a large number of non-infringing features.”

With its conclusion that the lower court abused its discretion as to irreparable harm and the adequacy of damages, the court remanded for reconsideration of a permanent injunction against Samsung's infringement of the three utility patents.

Finally, the court said that “the undisputed evidence shows that Samsung has stopped selling the products found to dilute Apple's trade dress,” affirming that portion of the injunction denial as well.

Judges William C. Bryson and Kathleen M. O'Malley joined the opinion.

William F. Lee of Wilmer Cutler Pickering Hale & Dorr LLP, Boston, represented Apple. Kathleen M. Sullivan of Quinn Emanuel Urquhart & Sullivan LLP, New York, represented Samsung.

 


Text is available at http://www.bloomberglaw.com/public/document/Apple_Inc_v_Samsung_Electronics_Co_Ltd_Docket_No_1301129_Fed_Cir_.

 

To contact the reporter on this story: Tony Dutra in Washington at adutra@bna.com

To contact the editor responsible for this story: Naresh Sritharan at nsritharan@bna.com