Showing posts with label CAFC. Show all posts
Showing posts with label CAFC. Show all posts

Saturday, April 15, 2023

At 95 it's high time to retire: Federal Circuit's chief judge deserves respect and trust for her complaint over Judge Newman's alleged inability and misconduct

I know that the position I'm taking here is not going to be popular with a significant part of this blog's audience. On LinkedIn and other websites I can see that many patent law practitioners take 95-year-old Judge Pauline Newman's side, but I respectfully disagree.

As a result of all of that outrage, the Judicial Council of the United States Court of Appeals for the Federal Circuit felt forced to issue a public statement yesterday (Friday)--a rare exception from the normally "strong obligations of confidentiality regarding misconduct and disability proceedings"--confirming "the existence of a proceeding under the Act and Rules naming Judge Newman as the subject judge."

The Federal Circuit also released a public redacted version (PDF) of a March 24 order and an April 13 order (PDF), both handed down by Chief Judge Kimberly A. Moore. The more recent order notes that further to the March 24 order, "a special committee composed of Chied Judge Moore, Judge Prost, and Judge Taranto (the Committee) was appointed to investigate and reports its findings and recommendations with respect to [the Chief Judge's complaint]."

What has rallied a number of IP practicioners behind Judge Newman is that she believes to be the only Federal Circuit judge left to care about the patent system. Please...

There may very well have been times, such as under then-Chief Judge Randall Rader, where the Federal Circuit was patentee-friendlier, but the notion that the Federal Circuit would descend into an infringement-friendly venue if not for Judge Newman's persistent efforts is absurd. As a litigation watcher, I consider the Federal Circuit balanced (and anything but anti-IP).

The question has been raised why Chief Judge Moore initially attempted to persuade Judge Newman to accept senior status, but is now seeking her forcible retirement. I don't see any inconsistency there. The suggestion to go senior was intended to mitigate a problem (such as delayed rulings, of which the public redacted version of the March 24 order provides multiple examples) while avoiding an outright conflict that is not in the interest of the institution. This doesn't mean that Chief Judge Moore wouldn't have urged Judge Newman to retire if a reduction of her workload had proved insufficient to address the problem.

It is unfair to focus on Chief Judge Moore when "half of the active judges of the court hav[e] expressed their concerns to Judge Newman or tr[ied] to express their concerns." Concerns have also been raised by "staff" according to the March 24 order.

Anecdotal evidence such as people saying they had conversation with Judge Newman a few years ago doesn't count. At that age, decline can be rapid.

I tend to agree with Judge Posner, who said in a Slate inteview that "there should be mandatory retirement for all judges at a fixed age, probably 80."

That is a middle ground between systems such as the new Unified Patent Court--where judges need to be reappointed every six years, which definitely compromises their independence--and the life tenure of U.S. federal judges. Also, I think it's regrettable that judges in some jurisdictions are forced to retire too early. For instance, Judge Andreas Voss ("Voß" in German) of the Karlsruhe Higher Regional Court didn't apply for a UPC judgeship because he's 62. German judges have to retire at 65, UPC judges at 67. I don't know whether Judge Voss prefers to retire at 65 anyway, but it's a fact that he had no choice, though he's one of the most brilliant patent judges in Europe. He should have been allowed to serve on the UPC for at least one term.

Even some U.S. state judges have to retire at a certain age. I don't understand why parts of the IP community are now criticizing Chief Judge Moore and various colleagues who share her concerns. To the extent that some believe Judge Newman would have deserved better, it's now clear based on the documents the Fed. Cir. released yesterday that Judge Newman was adamant about neither retiring nor going senior. She had every opportunity to "salir por la puerta grande" as it is called in Spanish. She has no one to blame but herself, and that decision in and of itself is an indication of the Federal Circuit's Judicial Council most likely having a point.

Tuesday, January 19, 2016

Apple finally obtains U.S. sales ban against certain features in Samsung phones, but it's useless

Last month, the United States Court of Appeals for the Federal Circuit denied Samsung's petition for an injunction rehearing relating to the second Apple v. Samsung case in the Northern District of California. But earlier this month the appeals court indicated that the underlying ruling on the merits had serious issues, with two patents being likely invalid and the relatively most important one of them, the '647 "quick links" patent, not being infringed under the appropriate claim construction. That wasn't just my interpretation: Law.com understood the judges' statements the same way.

On remand, Apple wanted an injunction that would enter into force immediately as opposed to after a 30-day "sunset period," especially since the '647 patent is set to expire on February 1. However, Judge Koh has now (in her order entering a permanent injunction) rejected Apple's attempt to modify the language of the injunction on remand. Therefore, the '647 patent is--apart from the claim construction issue I mentioned before--now practically irrelevant from an injunction point of view.

The '721 slide-to-unlock patent, whose European sibling has already been held invalid by 15 judges, is irrelevant not only because it will likely be held invalid but also because it covers only certain graphical variants of the slide-to-unlock mechanism, but not the slide-to-unlock functionality as a whole. In fact, even Apple did not claim that various Samsung devices at issue in the spring 2014 trial had infringed the patent. The injunction only refers to "the slide-to-unlock feature accused at trial as implemented in Samsung's Admire, Galaxy Nexus, and Stratosphere products," but not to the implementation found in other products at issue in the same litigation, such as the Galaxy Note, Note II, S II and S III products. In other words: the products accused in the 2014 trial were pretty old from today's perspective (where the current Galaxy is the S 6), but even the less old ones of those weren't even accused of infringing the slide-to-unlock patent. So Samsung can still provide the functionality by simply avoiding the implementation it used in its oldest products. If the patent is indeed held invalid, then Samsung can also use the older implementations (but it presumably won't even be interested in that).

The third injunction patent, the '172 autocorrect patent, is the one I have paid the least attention to so far because I felt that the parties didn't view that one as important. Samsung has claimed to have workarounds for all three injunction patents. What I don't know is whether Apple agrees with respect to the '172 patent. If it doesn't, then we may soon see an enforcement dispute. However, that patent is also likely invalid (not only in the preliminary opinion the Federal Circuit judges indicated at this month's appellate hearing but also in the opinion of the USPTO's Central Reexamination Division).

Some of the reasons for which a majority of the Federal Circuit panel had determined that Apple was entitled to an injunction initially appeared so outrageous to me that I hoped Samsung would take this matter to the Supreme Court. But in practical terms, I guess it wouldn't make (or have made) sense for Samsung to ask the top U.S. court to take a look at this matter while Samsung is trying to get the Supreme Court interested in a couple of design patent issues. It's not that the issues aren't important; they definitely are. But in the practical context of the Apple-Samsung patent dispute, this injunction doesn't matter. Samsung or anyone else could still try to take such questions to the Supreme Court in some future case in which there are would be actual business implications.

What does this injunction mean for Apple?

  • Cupertino doesn't really get leverage from it with a view to a settlement with Samsung.

  • It is, however, a significant accomplishment for Apple's in-house and outside counsel. They had been fighting for an injunction like this for several years. They had to deal with multiple setbacks. But ultimately they got an injunction (albeit one without business implications) over a set of features allegedly found in highly multifunctional devices. If Apple's lawyers had a Ben Carson approach to their own achievements (which they certainly don't), they could put that injunction on a wall because it really is a major achievement from a "persistent litigation" perspective. Alternatively, one could print a poster for lawyers that shows this injunction and says: "No one is ever beaten unless he gives up the fight."

  • Anyone considering infringing any of Apple's patents in the future now knows that Apple may obtain an injunction even if the patents cover only limited aspects of small features of highly multi-functional products. Whether the Supreme Court would uphold such a decision is another question, but it's hard to even persuade the Supreme Court to hear a case.

So the injunction isn't going to have any direct impact, but at a meta-level it does have some relevance.

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Wednesday, December 16, 2015

Federal Circuit denies injunction rehearing: will Apple v. Samsung become the next eBay v. MercExchange?

By sharply disagreeing with the majority of the panel ("This is not a close case."), Federal Circuit Chief Judge Sharon Prost practically invited Samsung to file a petition for a rehearing on Apple's injunction appeal. Samsung indeed filed the petition and received some impressive support from industry, NGOs, and academia. I actually thought a rehearing en banc (full-court review) was fairly likely to be granted, but no: today the notoriously patentee-friendly Federal Circuit merely modified its opinion slightly and denied a rehearing en banc.

The modification now establishes the following rule:

"Apple did [...] show that 'a patented feature is one of several features that cause consumers to make their purchasing decisions.' [...] We conclude that this factor weighs in favor of granting Apple's injunction."

The Federal Circuit has withdrawn the original decision and replaced it with the modified one (which also includes an amended dissent). Here's how Chief Judge Prost criticizes this modification:

"Perhaps recognizing its error, the majority reissued its opinion in this case to remove the implication that even an insignificant connection might be enough to satisfy the causal nexus requirement. While this change is a more accurate reflection of our law, it does not obviate the central problem with the majority's conclusion in this case. As we stated in Apple III, '[t]he question becomes one of degree, to be evaluated by the district court.' [...] Here, the district court weighed the evidence and found it lacking."

The amazing part here is "even an insignificant connection." This is just so inconsistent (of the panel majority, not of Chief Judge Prost) with the Supreme Court's eBay v. MercExchange ruling. Just like Chief Judge Prost's original dissent invited Samsung to request a rehearing, today's modified opinion--especially with the modified dissent--is almost a cert petition (request for Supreme Court review) in and of itself.

Just the day before yesterday, Samsung filed a petition for writ of certiorari in connection with design patents (on a couple of closely related issues on which Chief Judge Prost agrees with Apple, while she still believes Apple simply has no case for an injunction). Could today's denial of a rehearing lead to the next cert petition? I don't know what Samsung plans to do, but I hope that it will give it a try.

I don't think there's been a similarly splendid opportunity for the Supreme Court to provide some clarifications again on patent injunctions since eBay v. MercExchange. One might even argue that the Supreme Court's great work on eBay would have been in vain if the Federal Circuit's Apple v. Samsung ruling was allowed to stand.

Presumably it's not an easy decision for Samsung to ask the Supreme Court for help twice in a short time frame and in connection with the same dispute (though these are two different cases, one of which was filed about a year before the other).

The organizations and individuals who supported Samsung's petition for a rehearing with amicus curiae briefs would likely be interested in a cert petition, given the enormous importance of the issue. And at that stage, some others might also be prepared to chime in.

The first informal amicus curiae brief in support of a petition for writ of certiorari already exists: Chief Judge Prost's dissent.

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Thursday, November 5, 2015

Broadbased support for Samsung's petition for rehearing en banc in Apple injunction case

With an unusually strong dissent, Federal Circuit Chief Judge Sharon Prost practically invited Samsung to request a rehearing en banc (full-court review) of a 2-1 decision that would, unless overturned, pave the way for a permanent injunction for Apple against Samsung over patents covering limited aspects of some of countless smartphone features. Samsung accepted the de facto invitation and petitioned accordingly. On Monday, five amicus curiae briefs in support of Samsung's petition were filed. These amici include:

Chief Judge Prost must be pleased that her dissent from the majority opinion has support in academia, NGOs, and industry.

Apple, however, has a particular problem with the brief filed by the Google-Facebook group. It has asked the Federal Circuit to reject the brief because the filers allegedly didn't meet and confer with Apple prior to filing and because Google should, in Apple's opinion, be treated as another party to the dispute lest its amicus brief constitute an end-run around page limits. I don't have an opinion on the procedural argument, and it doesn't seem overly important to me whether Google is a legitimate amicus curiae in this case, given that there is no way Apple could prevent all the other members of that group of companies from filing an amicus brief. Also, even if the court formally agreed with Apple, the circuit judges would get to see that brief anyway. By far and way the most important aspect of this brief is that it shows the support Samsung has in industry. That political weight would not be diminished by a potential rejection.

Here's the "Google et al." brief (this post continues below the document):

15-11-02 Google Facebook Et Al. Amicus Curiae Brief ISO en Banc by Florian Mueller

Just like Chief Judge Prost, these companies seek to defend the causal nexus standard the Federal Circuit established in its first three Apple v. Samsung injunction decisions. Part A of the brief explains why there is now an inconsistency that must be settled by means of a rehearing en banc. In the second half of their filing, these companies focus on their concerns as major high-tech companies. They refer to an analogy that came up in a previous Apple v. Samsung injunction-related ruling (and to Justice Kennedy's famous concurrent opinion in eBay v. MercExchange):

"To borrow from this Court's analogy in Apple III, if a laptop computer maker was required to change the design of its battery, cooling fan or screws (and the list goes on and on) every time it was found to infringe one of the thousands of patents covering minor features of its product, and was then forced to litigate whether its design-around complies with the injunction, the laptop maker would face the constant threat of coercive patent litigation."

Instead of injunctions, they propose cross-license agreements such as the one Google and SAP announced last week. They note that Apple has licensed the patents at issue, as the record of this case irrefutably shows.

There is a significant overlap between these amici and the membership of CCIA, but CCIA also has a number of very significant other members, such as the ones I listed further above. Here's CCIA's brief (this post continues below the document):

15-11-02 Apple v. Samsung CCIA Amicus ISO Petition for en Banc by Florian Mueller

I have repeatedly disagreed, but also agreed on more than one occasion, with CCIA. I agree this time around, with one exception:

"There is no dispute that patents are a critical part of protecting innovations."

There are industries in which that is the case, but in this industry, there's a constantly-growing number of companies and individuals who believe the patent system does more harm than good. CCIA notes that its member companies file for patents, and they probably didn't want to appear as an anti-patent group here. So they diplomatically chose to say something about information and communications technology (ICT) patents that is actually rather controversial in this industry. That tactical choice has nothing to do with the strength of CCIA's arguments for a rehearing, of course.

CCIA's brief is very focused. The concern is all about outsized, undue leverage for patent holders over high-tech companies that build highly multifunctional products. It's a concise and convincing brief that has drawn my attention to a brand-new academic paper I wasn't previously aware of:

"The majority's 'new and lower causal nexus appears disconnected from the reality of multicomponent devices. It fails to appreciate that even those most innovative technology products are made up of countless small advances, not a few pioneering ones.' Bernard Chao, Causation and Harm in a Multicomponent World at 9 (U. Denv. Sturm C. of Law Legal Studies Research Paper Series, Working Paper No. 15-56, Oct. 27, 2015), http://ssrn.com/abstract=2681204"

The five amicus briefs nicely complement each other. There are, of course, overlaps (for example, the thrust of the two filings from industry is very similar). But each of these filings raises issues and arguments that increase the likelihood of a rehearing. I'm optimistic about the prospects of this, and we'll likely see even more amicus brief activity if the rehearing is indeed granted.

Apple will likely also get some support for its opposition to Samsung's petition, including, if the not too distant past is any indication, from Ericsson, a company that would not hesitate to leverage a patentee-friendly final decision in Apple v. Samsung against Apple...

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Thursday, September 17, 2015

Chief judge disagrees with appellate ruling that would pave the way for Apple injunction against Samsung

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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Saturday, March 21, 2015

Revival of Oracle patent claims is another reason for Google to consider Java license agreement

If one applies "If you can't beat them, join them" to intellectual property rights (IPRs), the formula reads like this: "If you can't beat them and still need them, license them."

When Google's Android team decided to use Oracle's (at the time, Sun Microsystems') Java technology without a license, it knew pretty well that this could spell trouble. Andy Rubin himself wrote in an internal email that "[doing] Java anyway" would make it necessary to "defend [that] decision, perhaps making enemies along the way." I wouldn't consider parties to every legal dispute enemies, and in my view Oracle and Google could and should be great partners. But adversaries they are. Until they settle, that is.

More than 4 1/2 years ago, Oracle (after acquiring Sun Microsystems) sued Google for alleged patent and copyright infringement. Initially, the public perception (including mine) was that the seven patents in the case were more important than the copyright part. The initial complaint stated a set of specific patents and we were all able to look at them, while the copyright claim was initially unspecified (Oracle even had to amend its complaint for that reason). But as the dispute progressed, Oracle's lawyers placed an ever clearer emphasis on the copyright part of the case. I have no idea whether this had also been the priority from the get-go, but even though it might have been misperceived as a "throw in the kitchen sink" claim, I'm quite sure Oracle knew all along that the copyright claim all by itself had the potential to convince Google of the benefits of a license agreement.

In parallel to the district court case, Google challenged all of Oracle's patents-in-suit through reexamination requests filed with the United States Patent and Trademark Office. Depending on the rules applicable to each patent, Google requested either an inter partes (where the requester remains formally involved throughout the process) or an ex parte (where the requester triggers the proceedings without becoming a party to them) reexamination. Then a variety of first Office actions (which are sometimes just meant to challenge the patentee without necessarily indicating that a patent is doomed) and of "final" (but, in reality, far from final) decisions came down. It looked like Oracle's Java patents were falling apart. The district judge was unwilling to take patent claims to trial as long as the USPTO deemed those claims invalid. Oracle took only two patents to trial (on which it didn't prevail in district court and which it didn't even care to pursue on appeal) and dropped five with prejudice in order to save time.

Even while the trial was ongoing, one of the dropped patents rose like Phoenix from the ashes, but the judge said this reversal came too late for the patent to be reasserted.

As I explained then, this still doesn't mean Google would never have to worry about that patent: even if one assumed for the sake of the argument that Judge Alsup succeeded in getting Oracle to drop certain patents without any exception as far as Google itself is concerned, Android device makers might still be liable for infringing that patent with their devices.

The same holds true for any other patents that Oracle could salvage, and one other patent is now on the road to recovery. Yesterday (Friday), the United States Court of Appeals for the Federal Circuit handed down a ruling (PDF) on Oracle's appeal of the USPTO's rejection (affirmed in November 2013 by a Patent Trial and Appeal Board, basically a USPTO-internal court) of various claims of U.S. Patent No. 6,910,205 on "interpreting functions utilizing a hybrid of virtual and native machine instructions." While claims 1 and 8 remain invalidated, the Federal Circuit has held that the USPTO (to be more precise, the PTAB) had misconstrued a key claim term (which relates to overwriting data) and therefore remands for a new decision with respect to the claims for which the interpretation of that term is outcome-determinative: claims 2–4, 15, 16, and 18–21.

Like the aforementioned "Phoenix" patent, this one has a 1997 priority date, so it won't expire before the year after next. Theoretically there would still be time (after the USPTO reaches a new decision) for Oracle to seek injunctive relief (such as an ITC import ban) over it--but in more practical terms, any assertion would likely be about damages. This is actually still more hypothetical than anything else. I guess the parties will continue to focus their litigation efforts on the copyright part of the case and just sort out the patent-related aspect as one of various items whenever they settle. In settlement negotiations all options of both litigants must obviously be considered.

For Oracle (represented by a Morrison & Foerster team led by Marc Hearron), yesterday's ruling is another appellate victory over Google that demonstrates its determination to defend its Java IP. No matter how many years it may take.

Many patents asserted in the major smartphone patent disputes have faced uphill battles when their validity was challenged by defendants. It happened to those Java patents as well. But the longer it takes, the clearer it is that some "rejections" of claims were wrong.

I plan to write about the copyright part of Oracle v. Google again soon. In January, the Supreme Court asked the Obama Administration for input. After the SCOTUS receives the Administration's brief, it will decide on whether to hear the case (if it doesn't, or if it does grant certiorari but later affirms the Federal Circuit, Oracle will have prevailed definitively on copyrightability and the case will go back to district court for "fair use" proceedings).

Just yesterday, the Wall Street Journal described Google as "one of the White House's closest corporate allies." The Journal went on to note that "Google was the second-largest corporate source of campaign donations to President Barack Obama's re-election effort" and that "Google executives have visited the White House scores of times since Mr. Obama has been in office, according to visitor logs." But Google is pretty much isolated in the U.S. economy (with the greatest respect for the likes of Oracle foe HP and Java free-rider Red Hat). The software industry is overwhelmingly on Oracle's side.

In order to support Google here, the Department of Justice would have to take outlier legal positions. As the Copyright Alliance's TerryHart wrote, "Despite legal gymnastics, Google can't land split in Oracle cert petition." Not only would the DoJ have to subscribe to daring legal theories to do Google a favor (which I'm absolutely not suggesting that it even intends to do) but it would also have to act against broader U.S. interests. By and large, the world's most valuable application programming interfaces (APIs) belong to U.S. high-tech companies or they belong to no one (because they're available on open source terms). Again, I'm going to talk about that soon.

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Thursday, March 5, 2015

U.S. appeals court unlikely to grant Apple an injunction against Samsung over three software patents

The five-year anniversary of Apple's patent enforcement efforts against Google's Android mobile operating system (on March 2, 2010, Apple sued HTC) went unnoticed because there was nothing to celebrate in Cupertino. Half a decade after Steve Jobs told his biographer he considered Android a "stolen product" and wanted to "right this wrong" by means of thermonuclear patent war, it's clear that this industry's greatest product visionary simply overestimated the impact that his company's patents would have. Other companies than Apple haven't been much more successful in recent years, to be fair. This is an industry-wide issue.

Yesterday, the United States Court of Appeals for the Federal Circuit held a hearing on Apple's appeal of Judge Koh's August 2014 denial of a permanent injunction against Samsung based on the spring 2014 trial in the second California litigation between these parties. It's the sole remaining case in which Apple is still trying to obtain injunctive relief against Android-based products anywhere in the world. In July, Apple dropped a cross-appeal that could have led (in theory) to an injunction against Samsung based on the first case (which had initially gone to trial in the summer of 2012).

After seeing various reports (such as this one on AppleInsider) that already suggested Apple faced a skeptical court, I've just listened to the official recording (MP3) and agree that affirmance of the denial is the most likely outcome.

On Apple's behalf, WilmerHale's Bill Lee argued, as he and his team already had in their appellate briefs, that this time around Apple was entitled to an injunction despite unfavorable results in prior proceedings, attempting to distinguish the present injunction push from previous ones on three bases:

  1. feature-based rather than product-based injunction

  2. availability of designarounds (at least at the end of a sunset period)

  3. reputational injury

In its responsive brief, filed in December 2014, Samsung said that no matter what Apple says, it still couldn't tie patented features to lost sales. But that's what the causal nexus requirement that was at the heart of previous Apple-Samsung injunction denials is all about.

A majority of the three-judge panel -- specifically, Chief Judge Prost and Circuit Judge Moore -- appears to be unimpressed with Apple's new twist. Mr. Lee tried hard to win them over, but at the end of the day they appear to feel that none of Apple's "new" arguments get Apple over the decisive hurdle of showing a causal nexus between the infringements identified by the jury (those findings are on appeal and at least a partial reversal is quite a possiblity) and the irreparable harm it claims to suffer. Apple would like its "new" arguments to have a bearing on all eBay factors, but the most critical one, irreparable harm to Apple, must be shown regardless of the scope of the injunction and regardless of the availability of designarounds at the end of a sunset period. A purely reputation-based argument (having to compete against one's own features) doesn't appear to have traction either. Samsung's counsel, Quinn Emanuel's Kathleen Sullivan, noted that neither Apple nor Samsung ever advertised the features in question.

Samsung's counsel also had to answer some questions that appeared reasonably tough, but the one that was posed most emphatically ("why are you fighting [Apple's injunction request if you say you don't infringe anyway]?") had absolutely nothing to do with Apple's need to establish a causal nexus.

Of the three judges, Circuit Judge Reyna appears (only relatively speaking) most sympathetic to Apple's appeal. He expressed great admiration for Apple's contribution to innovation in a 2013 ruling in an Apple v. Motorola case. However, the patent Judge Reyna described as an example of true innovation at the time related to much more fundamental technology than anything at issue between Apple and Samsung (at least the patent in that Motorola case might have been important if a more powerful claim had survived, which it should have in Judge Reyna's dissenting opinion).

This appeal is unlikely to give Apple strategic leverage. Also, I'd like to point you to this IPWatchDog post on why a recent Supreme Court ruling should (adversely) affect the design patent-related part of Apple's first Samsung case. The related Federal Circuit hearing took place three months ago, so a ruling could come down anytime. There's a third Apple-Samsung appeal pending before the Federal Circuit. In that one, Apple is trying to get a more favorable outcome than at last year's trial while Samsung (which could easily live with last year's result) is also trying to improve its position. Samsung will file its appellate brief any moment now (its counsel announced this at yesterday's hearing).

Is it really in Apple's interest to get appellate decisions in those cases? I don't think so. I have said before that Apple should rather settle before a decision (on design patents, for instance) comes down. Based on how yesterday's hearing went, I think a settlement makes even more sense for Apple. Every time it is denied an injunction, things get harder the next time. Apple should look past the Samsung dispute (as it has in all other jurisdictions than the United States) and focus on matters such as its royalties fight with Ericsson, where there's a key issue (the proper royalty base) that can have far more impact on Apple's bottom line over the next five years or more than the remaining issues it has to sort out with Samsung at this stage.

For now, Apple is doing extremely well despite Android's huge worldwide market share. Should this change, then it may have to try again to obtain injunctions. And then it may have a stronger case for irreparable harm than it has in the current climate.

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Wednesday, January 28, 2015

Industry body says Apple advocates rules that would give patent trolls access to injunctions

Recently the Federal Circuit scheduled the hearing on Apple's appeal of the denial of a permanent injunction against Samsung after last year's trial. The hearing will be held on March 4. From the outside it looks like one of the last steps before this dispute will be history.

Three weeks ago I wrote about Apple's opposition to an amicus curiae brief submitted by Google, SAP, Red Hat, Rackspace, and -- notably -- Samsung competitors LG and HTC. The brief was accepted by the Federal Circuit over Apple's objections. Apple may have opposed the filing just because this was an opportunity to highlight Google's special involvement with the case in an effort to diminish the brief's credibility, but even if one viewed Google (like Apple suggested) as a de facto party to the case, the other filers have quite some credibility.

Cases should be decided on the merits, not on amicus brief campaigns. That said, it says something that Apple has support only from Nokia and Ericsson -- the company with which Apple now has a dispute over potentially much more money than what the remaining parts of the Samsung case are about, especially since the Apple-Ericsson situation is very unbalanced (Apple has much less offer to Ericsson in terms of a patent license, so it won't be able to offset the inbound licensing cost with much of an outbound licensing revenue stream).

Besides the aforementioned group of companies, the Computer & Communications Industry Association (CCIA), whose members are listed here, also submitted a brief. It already did so back in mid-December, but it appeared on the Federal Circuit docket only yesterday. I've also found it (PDF document) in the Briefings & Filings section of CCIA's website.

It focuses on two issues. The first one is about whether a feature-specific injunction should be easier for Apple to obtain. CCIA argues that the scope of the injunction was already considered.

There's a second, shorter part that raises an issue I wish to highlight. CCIA says "the special treatment Apple requests would open the door to patent assertion entities [i.e., patent trolls] to demand injunctions."

CCIA takes issue with the notion that a patent holder shouldn't have to prove a causal nexus between the infringement of a small feature of a multifunctional device and the alleged irreparable harm because it's so easy to work around.

In light of strict page limits, it would be unfair to both Apple and CCIA not to consider an important nuance: while this particular part of Apple's pro-injunction argument could indeed open the floodgates to injunctions obtained by patent trolls (which could also hurt Apple in the future), I understand Apple's position as being about the combination of the availability of workarounds and the patent holder having a "reputation for innovation." The second part would be much harder (though not impossible) for a patent troll to satisfy.

CCIA nevertheless has a point. In order to obtain an injunction against Samsung (over patent claims that are too narrow to give Apple strategic leverage), Apple must try different things to lower the hurdle. Apple wants to have its cake and eat it (get an injunction against Samsung but preserve much of its ability to fend off injunction demands by trolls), and that's always risky. Presumably the perfect outcome from Apple's point of view wouldn't be that the court reverses Judge Koh's injunction denial just based on the availability-of-workarounds basis. Apple almost certainly hopes for the aforementioned combination of that one with the "reputation for innovation" criterion. However, this here could go wrong in two ways:

  1. An appellate decision that emphasizes the "small feature" part (or is based entirely on it) would have exactly the effect CCIA warns against, whether or not this would have been Apple's intention. Apple can make its case but it can't write the decision even if it prevails.

  2. I've previously criticized the "reputation for innovation" criterion as a very vague and soft one, and I think it runs counter to the traditional logic of the patent system, which is all about technological merits (what contribution was made to the state of the art relative to the prior art?). If this approach was adopted by the court, patent law would depart from its focus on rewarding inventiveness and start to reward PR and marketing. A patent troll (not a small one, obviously) could spend a lot of money promoting its inventions and its research and development efforts to maximize the leverage it gets from its patents. And if it has other licensees, those are arguably harmed by infringement, and by extension, the patent holder is then harmed as well.

Apple is doing so well. It doesn't really need an injunction (over patent claims of limited scope) other than for publicity and pride. In terms of natural allies for Apple when it comes to balanced patent policy, the likes of Google, Samsung and SAP -- companies that also have a strong reputation for innovation -- would clearly be a better fit (because their uncompromised priority is on making real products) than Nokia and Ericsson. It's possible that just the increased cost of licensing patents from Nokia and Ericsson in the future (those also have non-standard-essential patents, so FRAND alone can't solve the entire problem for Apple) will outweigh any positive effects that Apple could get, in the most optimistic scenario, from a successful appeal.

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Thursday, January 8, 2015

Competing device makers HTC and LG join Google, SAP in backing Samsung against Apple

Apple, Samsung and Google are three of the most significant members of an industry coalition that is fighting the good fight for balanced rules of procedure for Europe's future Unified Patent Court, particularly with respect to access to injunctive relief. But as the industry coalition stated repeatedly, including at the November 2014 hearing, some of its members are actually embroiled in patent litigation--in which they have sought or are seeking injunctions--with each other. That fact only adds to the credibility of that industry group because it shows that some of its members, such as Apple, are more interested in obtaining sales bans over patents than others, such as Google and Samsung, yet they all agree that the current proposal would make Europe a patent trolls' paradise and hurt all innovative operating companies. Nothing could better demonstrate just how bad those proposed rules are.

The most notable case in which members of the UPC industry coalition stand on opposing sides is Apple's appeal of Judge Lucy Koh's August 2014 denial of a permanent injunction against Samsung over the patents on which Apple had prevailed at the spring 2014 trial. Apple says that a feature-specific injunction should be granted here and claims to have better evidence in place this time around (Apple filed a reply brief this week that reinforces the points made in its opening brief) but Samsung argues that Apple still can't tie patented features to lost sales. Google sides with Samsung on this and has, together with other significant companies (LG, HTC, SAP, Red Hat, Rackspace), asked the Federal Circuit for permission to file an amicus curiae brief.

Apple formally opposes the proposed filing, noting that Google accepted to indemnify Samsung with respect to certain patents. However, no liability was established with respect to those patents, and as a result, they are not at issue in this injunction appeal. Apple also points to various business relationships between Google and some of the other amici curiae, even including some small-scale business partnerships compared to which there's actually a much closer cooperation between Apple and Samsung in certain (component-related) areas. Notably, HTC and LG compete with Samsung, and since HTC has a ten-year license agreement in place with Apple, it has no reason to be concerned about the particular patents at issue here.

I've seen LG enforce some of its patents (such as patents on the Blu-ray standard) rather aggressively.

There have also been some other filings. Industry group CCIA and the National Black Chamber of Commerce filed other briefs in support of Samsung, while Apple's pursuit of an injunction is backed by Ericsson and Nokia, two companies that used to build smartphones but exited that business and increasingly focus on patent licensing (and that are obviously not members of the aforementioned UPC industry coalition). While it's certainly good for Apple to have at least some support from third parties, the fact that no current smartphone maker was prepared to back Apple here shows that Cupertino is somewhat isolated in its industry when it comes to this issue. They all face too many patent assertions all the time and have to think about their interests as a defendant, even if they engage in some enforcement (Microsoft, for example). And there could be a future situation in which Apple itself will fight an injunction bid against its products and someone else will use Apple's own pro-injunction arguments against it.

I'm not an expert in the admissibility of amicus curiae briefs, so I can't predict whether Google itself will be formally allowed to appear as a "friend of the court" here, but there cannot be the slightest doubt about the other filers.

It's an interesting brief that this blog is first to make available to the general public (access is still restricted on the Federal Circuit docket; this post continues below the document):

14-12-24 Google HTC LG Rackspace RedHat SAP Amicus Brief by Florian Mueller

The amicus brief focuses on the bearing of a certain Federal Circuit decision from 2013, Douglas Dynamics, on the present case. In that case, which involved two snowplow manufacturers, then-Chief Judge Randall Rader stressed that if a workaround is available, an infringer should choose the path of legality. At the time I thought this was going to be very helpful to Apple (at that time, in connection with its first California case against Samsung, while the current appeal relates to the second case). But it turned out that it didn't help Apple too much. Smartphones and snowplows are different markets with different characteristics, and there's obviously a much smaller number of features in a snowplow than in a smartphone. While Apple won a remand of the denial of a permanent injunction in that first Samsung case, Judge Koh again (while taking into account the additional guidance from the Federal Circuit) denied an injunction. Last summer Apple dropped its related cross-appeal and, thereby, forever accepted that denial.

The above amicus brief has two parts. Section A explains that Apple still has to establish a causal nexus between the infringements identified (Samsung is appealing those findings, by the way) and the alleged irreparable harm, regardless of the scope of the injunction it is seeking. In other words, the standard isn't lowered just because a proposed injunction wording is very specific to particular features. That makes sense and may be part of the reason why Apple tries to reduce the credibility of that amicus brief, but I'm now going to focus on Section B, which addresses Apple's argument that Douglas Dynamics supports its injunction push now (though it didn't help in the previous case).

The "causal nexus" question never came up in Douglas Dynamics. That's the primary reason for which it didn't help Apple before and may not help now. According to the amicus brief (and I'm obviously not able to verify this), "Douglas's patents were directed to an entire snowplow blade assembly, not a specific feature of that assembly." The brief goes on to discuss another key difference from the Apple-Samsung dispute:

"Second, the core innovation of Douglas's patented snowplow design allows a user to easily remove the assembly, reducing stress on the vehicle's suspension. [...] Douglas promoted this 'easy on, easy off' feature in advertising for its own snowplow assemblies by incorporating the concept into its trademark – Minute Mount – to ensure that snowplow customers associate the patented feature with Douglas. [...] Here, there is no evidence that the patented features are core innovations of Apple’s products or that Apple has advertised them as such. Apple certainly has not incorporated those features into its product brand names."

As for the last part, the iPhone is certainly not sold or advertised as the "slide-to-unlock phone" or the "quick-links phone."

The brief also says that "Douglas never licensed the patents-in-suit and intentionally chose not to, thus insuring that the innovative design would (absent infringement) be exclusively associated with Douglas in the minds of its customers," and contrasts this no-outbound-licensing-ever approach with the fact that "Apple has licensed the patents-in-suit to several competitors, including IBM, Nokia, HTC and Microsoft." I would agree with the amici that "there is simply no evidence that anyone exclusively associates the patented features with Apple," with the exception that Apple's particular implementation of slide-to-unlock, with the slider bar, is certainly a signature feature, but Apple didn't even accuse the more recent products at issue in this case (and those are already a couple years old) of infringement of its slide-to-unlock patent. In the prior art context it has been stated over and over that the iPhone was not the first phone to come with a slide-to-unlock mechanism, which is why the related patent family is so weak. With respect to "quick links," that's a feature that consumers typically can't distinguish from other links, such as the ones found on a webpage like this. And autocomplete is also something that you find in all products from all sorts of vendors.

A key concern of the amici is that the way Apple would like Douglas Dynamics to be applied to cases like this one "would unfairly create a lower standard for proving causal nexus for companies with a reputation for innovation." Apple argues that Douglas Dynamics made the patent holder's reputation as an innovator a key factor. The amici concede that there is direct competition between Apple and Samsung, and that Apple has a reputation as an innovator, but say that evidence is "scant, at best," with respect to claims that Samsung has a less prestigious reputation, that Apple makes efforts to maintain exclusive control over its patented features, and that an injunction was necessary to demonstrate to consumers that Apple does protect its intellectual property rights.

Against this background, the amicus brief says:

"So the proposed 'Douglas Dynamics test,' as Apple has framed it, is this: if a patentee has a reputation for innovation and its patent is infringed by a competitor, then the patentee's reputation will necessarily be harmed by that infringement – no matter how trivial the patented feature – because consumers might believe the patentee did not enforce its intellectual property rights. No further proof of causal nexus is needed. The logical leap is astounding."

The appellate hearing will take place in a matter of months, and I'll listen to the official recording as soon as it becomes available (usually on the day of the hearing). I understand Apple's desire for a sales ban and I said before that, while Samsung doesn't need to infringe the related patents (and the liability findings are subject to an appeal, with the autocomplete patent also being under reexamination pressure), an injunction would make Apple look and feel better. However, it wouldn't make sense to lower the standard for access to injunctive relief if an injunction bid comes from a company with a reputation for innovation. In Apple's case, that reputation is based on a definition of innovation that is inconsistent with the one applied in patent law. In patent law, it's about who's first to come up with something, not who's first to convince millions of consumers to buy and use technologies that, for the most part, others created before Apple.

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Monday, December 22, 2014

Samsung argues Apple still can't tie patented features to lost sales, latest bid for ban should fail

On Wednesday, Samsung responded to Apple's opening brief (shown in this October 2014 post) in its appeal of Judge Koh's August 2014 denial of a permanent injunction based on the spring 2014 trial in the second California litigation between these parties. The public version of Samsung's brief became available late on Friday (this post continues below the document):

14-12-17 Samsung Brief (Reponse to Apple Appeal of Injunction Denial) by Florian Mueller

As usual in the dispute between these parties, it's a very persuasively-written document. Apple argued in its opening brief that it should, at long last, get a permanent injunction because it believes is evidence of a causal nexus between the infringements identified (Samsung notes that it's appealing the merits in parallel) and the alleged irreparable harm is better and because it's now seeking a more feature-specific kind of injunction than before. Now Samsung is saying that Apple's causal-nexus evidence is still too weak and the distinction between a "product" injunction and a "feature" injunction is "mere semantics, since an injunction targeting 'features' in complex, technological 'products' would equally force the 'products' with those features 'off the market'" and, in Samsung's opinion, just as much as any other injunction "threatens to unfairly sow fear, uncertainty, and doubt about the product in the marketplace; to hinder competition; and to grant overprotection to patents."

It's an interesting debate to follow. Of the four ways in which legal blogging can give value to readers (identifying otherwise-overlooked facts, digesting/summarizing, putting into context, commentary), I'll focus on the latter two because, without context, this is all very confusing. As Samsung's brief mentions, this is already the fourth time for the Federal Circuit to look into an injunction question involving the Apple-Samsung dispute. All previous decisions were basically saying "yes, a patent holder can obtain an injunction in principle, but these are the requirements." It's obvious that Apple can find a number of "yes, you can" passages in those prior rulings (and from decisions in cases involving different parties) while Samsung can find (even more) "however, provided that" type of statements.

It's difficult to predict the outcome because what one party argues to be a fundamentally stronger case for an injunction can often be described by the other party as merely a gradual (at best) or cosmetic (at worst) improvement. In the past I tended to be too optimistic for Apple. In the first half of this year, a failure by Apple to win an injunction was the only major smartphone IP decision on which this blog made the wrong call (while it got five other key decisions right). I now tend to come down on the skeptical side, and that's to some extent also (though not only) because this second California Apple v. Samsung case was already fairly advanced when the more recent decisions relating to injunctive relief came down, so I believe Apple may not have been able to present its strongest case simply because some procedural doors had closed when everyone was wiser after some other event.

Assuming for the sake of the argument that my skepticism is wrong, inhowfar would it matter if Apple obtained some kind of an injunction this time around? I can see a couple of tangible benefits to Apple. More than anything else, this would show to the industry at large that Apple finally figured out how to obtain sales bans over individual, arguably minor features of highly complex and multifunctional products. That would serve as a deterrent going forward, not with respect to patents that have been asserted before and have turned out to be of a rather narrow valid scape, but possibly with respect to future patents. And, generally speaking, it would make Apple look and feel better. But none of that means that this would hurt Samsung's business: with the particular patent claims-in-suit here, Samsung would have a strong workaround case for every one of them (the clearest one is slide-to-unlock since Apple didn't even accuse all of the products at issue in this year's trial of infringing that one).

I know it sounds cynical but chances are that, apart from the aforementioned benefits to Apple, this would merely be an opportunity for lawyers to have arguments about workarounds in light of the "no more than colorably different" standard. These two companies kept many smartphone patent litigators around the world very busy for a few years. The days of the Smartphone Patent Litigators Full Employment Act are over, but if Apple got an injunction, we might see some wrangling in the form of contempt motions and hearings over, for example, the '647 "quick links" patent. There would be some more clarity about the limits of that patent but Apple could try to relitigate the claim construction that Judge Posner adopted and the Federal Circuit previously affirmed. That is so because after the Federal Circuit ruling, no formal mandate was issued before Apple and Google entered into a second-class settlement. It would obviously be an uphill battle to try this, and I'm not even sure they would try, but that's the kind of thing that could happen if Apple won an injunction. Samsung would have to handle it, and it would be able to handle it, I'm sure.

It's really time for them to settle the U.S. part of their dispute as well (everything outside the U.S. already ended this summer), as I wrote in my previous post. But as long as they don't, the question of injunctive relief is probably Apple's highest priority--not because the devalued and defanged "quick links" patent could deal a major blow to Samsung but because Apple wants the world to see that it knows how to enforce its patents against rival smartphones and tablet computers.

It may be helpful now to do a quick recap of Apple's previous attempts to obtain injunctions (not talking about ITC import bans here) against Samsung in the U.S.:

  1. In 2011, Judge Koh originally denied Apple a preliminary injunction over three design patents and the rubberbanding software patent. Apple's motion failed for a combination of liability and equitable (access to injunctive relief) issues.

    Apple appealed, and in May 2012, the Federal Circuit reversed Judge Koh's decision only with respect to a tablet-related design patent. The remand was more of a formality (Judge O'Malley did not even deem it necessary, but the other two judges on the panel did want to leave it to Judge Koh to reevaluate the question). Apple finally obtained a "preliminary" injunction, at a time when the product has pretty much reached the end of its lifecycle. And that one had to be lifted after the 2012 jury did not hold that design patent infringed.

  2. In the early summer of 2012, Apple won a short-lived preliminary injunction against the Galaxy Nexus smartphone over a unified search-related patent (this was already part of the second California case). Shortly after it entered into force, that preliminary injunction was stayed pending the appeal. It never became enforceable again because the Federal Circuit held that Apple was not entitled to an injunction over this patent for equitable reasons (no Nexus injunction for lack of a causal nexus between infringement and alleged irreparable harm). Also, the appeals court expressed serious doubt about the underlying merits. This combination was a worst-case scenario for Apple, and the "causal nexus" part of that ruling generally upped the ante for Apple's further pursuit of injunctive relief against Samsung.

  3. Meanwhile the first California Apple v. Samsung case had gone to trial and Apple was able for the first time in this litigation to seek a permanent injunction. But Judge Koh said no. While Apple had several liability findings from the jury trial in its favor, Judge Koh applied the "causal nexus" standard the way she understood it from the Nexus preliminary injunction ruling, and the result was that Apple didn't get its sales ban. Apple appealed, and in late 2013 the Federal Circuit upheld the denial of an injunction over certain design patents but with a view to three software patents found that Judge Koh had not given enough consideration to a piece of evidence (a so-called conjoint survey). But the appeals court did not direct Judge Koh to enter an injunction. She just had to look at that piece of evidence again, but she ultimately wasn't impressed and denied Apple's renewed motion for a permanent injunction.

    Apple's initial reaction was that it wanted to fight and give it a third try. But it probably realized that none of the three software patents was likely to give it much leverage (if any). And litigation fatigue set in after this year's trial didn't go too well for Apple (it got only about 6% of the damages award it demanded). So in late July 2014, Apple dropped its cross-appeal (Samsung had meanwhile, after a partial retrial, been able to appeal the underlying merits; the related hearing took place last week).

Everyone's wiser after the event. If Apple had known all of the above decisions (the reasons more so than the outcome) at the outset of the Samsung litigation, it might have been able to present theories that would have been more likely to succeed than the ones it used based on the knowledge it had at the time it had to make its choices. But I don't think this is Apple's biggest problem here. The biggest problem is that those devices are multifunctional and Samsung's products are substantially lawful. In this industry, no one can build a complex, highly multifunctional product without being held to infringe a third-party patent from time to time. That's everyone's problem, not just Apple's, and especially not just Samsung's. In light of this reality, courts are hesitant to give too much leverage to patent holders unless they can really prove that something is a reasonably significant driver of demand. With "quick links" and stuff like that, and with claims that can be worked around (Apple itself doesn't even implement all of them), a causal nexus probably couldn't be established even if Apple could go back in time, use today's knowledge and develop and present its evidence accordingly.

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Friday, December 19, 2014

Apple loses very important round over its pinch-to-zoom API patent, Samsung tells appeals court

Two weeks ago, the United States Court of Appeals for the Federal Circuit held a hearing on the damages award and underlying liability issues in the first Apple v. Samsung case. In my commentary on the official recording of the hearing, I also talked about something that was not discussed at the hearing at all: Samsung's challenges to the validity of the '915 pinch-to-zoom API-related patent. The fact that the judges didn't ask questions about it and that counsel had a different focus does not at all mean that the related part of Samsung's appeal is going nowhere. The only thing it suggests is that everyone felt that everything had already been said and that the issue was ripe for decision. And it would increasingly be a surprise if that decision was favorable to Apple:

Earlier this week Samsung informed the appeals court of a decision by a Patent Trial and Appeal Board (PTAB) of the United States Patent and Trademark Office (USPTO) that could cost Apple up to $150 million just in that one lawsuit. The '915 patent, Apple's relatively most valuable software patent in the first Samsung case (most of the damages related to design patents, but Apple's per-unit royalty claim was higher for the '915 patent than for rubber-banding and tap-to-zoom-and-navigate), has been on a rough reexamination ride for some time. From the first Office action two years ago, the USPTO's Central Reexamination Division has consistently held all claims of this patent, including the one Apple asserted against Samsung (claim 8), invalid. Another thumbs-down Office action (called "final" though it wasn't "final" in the true sense of the word) came down in July 2013. About a year ago, Apple realized that the only option it had left was to appeal the examiner's rejection decision within the USPTO, to a PTAB. On appeal, the examiner stood by his decision as I reported in July (this year). A PTAB hearing was held recently, and the three-judge panel just affirmed the examiner's rejection of all claims (this post continues below the document):

14-12-16 PTAB Decision Affirming Rejection of Apple's '915 Patent by Florian Mueller

In a notice filed with the Federal Circuit, Samsung's counsel argues that "[a] final decision by an administrative body has collateral estoppel effect" and describes this as "an additional reason to reverse the $114 million in lost profits awarded for infringement of the '915 patent and to vacate the $35 million in royalties awarded for infringement of the three utility patents-in-suit."

The latter part about vacating that award would, even though the amount is relatively small by the standards of these companies and their dispute, require a damages retrial involving more or less all products at issue. And a retrial may be necessary anyway because of the design patent and/or trade dress damages issues in the case (which the appellate hearing focused on).

So for the first Apple v. Samsung lawsuit, there is no end in sight. And the process concerning the '915 patent isn't over either. Apple can choose to immediately appeal the '915 decision to the Federal Circuit. Samsung's notice to the appeals court also says that "Apple can request a discretionary [PTAB] rehearing."

Even if the appeals court disagreed with Samsung on collateral estoppel, the USPTO decision can't be ignored. The credibility problem the '915 patent faces is that no one at the USPTO who looked at this patent after an anonymous requester presented some new invalidity theories-- by now, four persons: the (re)examiner and the three PTAB judges--believed at any point that a single claim of this patent deserved to be upheld. That is, frankly, pretty damning. Of course things can always change, but it's less and less likely.

If the appeals court didn't agree with Samsung on collateral estoppel, it would still have to make its own decision on Samsung's invalidity theories. The legal standard for invalidating a patent in an infringement litigation is higher (clear and convincing evidence) than at the USPTO (preponderance of the evidence), but the consistent stance of the USPTO (again, four persons) has been clear and convincing.

Apple's decision in the summer to drop its cross-appeal (i.e., not to pursue an injunction anymore in that case) may also have to do with Apple's realization that this patent is going down the tubes even though it still can appeal the USPTO's final decision to the Federal Circuit. The '915 patent was the only patent in the first California case with respect to which Apple argued that Samsung continued to infringe (though Samsung said it had a workaround). If there was any patent in the first Samsung case over which Apple would have liked to win an injunction (in order to then have a debate over whether the workaround indeed is a workaround), it would have been this one. But Apple is now, instead, fighting hard for an injunction in the second California case against Samsung, which Judge Koh denied in August. Samsung had a deadline this week to respond to Apple's opening brief on appeal, and the docket indicates that the filing was made but it's not yet publicly accessible (I'll comment on it when it's available).

The state of Apple's patent enforcement efforts and the strategic landscape

Apple's patent assertions, despite the undoubtedly great work performed by the lawyers involved, have massively underperformed the expectations I used to have for some time (even in the summer of 2013 I still thought that, after some setbacks, there were signs of Apple still turning this around). I do know that a lot of people in different places were very surprised when they felt this year that my tone had changed. I can understand that, but conspiracy theories are a poor substitute for facts. The reason I adjusted my position was that after the summer of 2013, several important things happened that showed to me Apple wasn't going to get huge leverage. There came a point when I had to face those facts and draw the appropriate conclusions. And I was indeed thoroughly disappointed when I saw Apple bring an outsized damages claim in the second Samsung case. It looked to me like a desperate act after repeatedly failing to win (lasting) sales bans, and it was inconsistent with Apple's own positions on the value of patents in other contexts--positions I always supported and never disagreed with.

Apple itself vindicated the adjustment of my positions through its strategic retreat. It agreed with Google/Motorola to drop all pending litigation between those companies; it then agreed to confine the once-earth-spinning Samsung dispute to only one jurisdiction, the United States. And it hasn't brought any new cases, neither against long-time rival Samsung nor against any other Android device maker, in a long time. So it wasn't just me who determined this year that this was going nowhere for Apple. Apple's leadership recognized this and decided accordingly.

Even the remaining part of the Apple-Samsung will go away at some point--I find it hard to imagine that they (meaning both companies, but particularly Apple because it started this) really want to have a third California trial in just their first lawsuit (or a fourth trial in total).

For as much as Apple's supposedly "thermonuclear war on Android" underperformed my expectations, Apple's ability to command premium prices and still sell incredibly high volumes of products, has to a comparable extent outperformed them. According to Gartner's latest data, more than 83% (five out of six) of smartphones sold in the world run on Android, and more than 12% on iOS. But then there's also data that shows iPhone and iPad users are really much more active, and obviously many low-cost Android phones are technically smartphones but practically used as feature phones. In fact, just for app testing purposes I bought various low-cost Android phones (all of them in the 50 euro price range) from different vendors with screen sizes from 3" to 4". If you look at it strictly through a functionality lens, those are smartphones and you can run a million apps or so on them. But Apple is still doing very well. Incredibly well in fact.

I also bought an iPhone 6 Plus and an iPad Air 2. I now use the iPhone alternatingly with an Android phablet. My Android phablet has a significantly higher resolution, and when you view photos, it's quite a difference, and it's even noticeable when you just look at the standard user interface. But there's definitely some magic detail about the iPhone user experience. For example, when switching (in a test program for a component of an app I'm working on) from portrait to landscape (or the other way round), it's not just a sudden repositioning of all items but a smooth animation that I haven't seen in any Android app to date. That animation won't be patentable. But it's one example (and I could give more of these) of how Apple still manages to differentiate. Without litigation. Without injunctions.

What also still helps Apple to justify a price premium (and also has nothing at all to do with patent litigation) is the average quality of the apps available for the two platforms. I regularly look at many apps on both platforms. The two game categories I follow most closely are trivia games and puzzle games. In the trivia game genre, there's no noticeable difference in quality between Android and iOS, thus no reason to pay a premium price for an iPhone. In the puzzle games field, however, the difference is rather significant. While Candy Crush and some other titles from major publishers look and feel the same on both platforms, I've seen some really great games in this genre from smaller developers that exist only on iOS (or all you may get for Android is an unauthorized clone of inferior quality). There's still a lot of talented developers who develop primarily for iOS and invest more heavily in their iOS versions, despite the fact that you can reach so many more people in the world with an Android app. That's because iPhone users have more purchasing power than Android users.

It turns out that patent litigation was neither a winning strategy nor a necessary last resort for Apple. I can still understand why they thought they had to enforce their rights, but Apple's greatest strategic assets appear to be unprotectable by patents. IP has never been the only entrance barrier in this industry. It will continue to be important, and even Apple may at some point get more leverage out of its patents in different contexts. But stuff like a patent on a pinch-to-zoom-related API turned out to be of no value in the end. It's time for the U.S. part of Apple v. Samsung to end. With the Holiday Season so close, it may not happen this year, but next year is most probably the year for the definitive settlement.

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