Apple’s bid for Samsung sales ban revived

Apple will return to court with fresh hope of winning a permanent US injunction against Samsung smartphones and tablets following an appeals ruling on Monday.

The US Court of Appeals for the Federal Circuit vacated a decision to reject a ban on Samsung products held to infringe three Apple utility patents, and demanded another review.

But the court said Judge Lucy Koh, who rejected the injunction requests in December 2012, was correct to avoid imposing a sales ban covering three design patents and Apple’s trade dress.

A jury at the US District Court for the Northern District of California found in August 2012 that 26 Samsung smartphones and tablets infringed one or more of six Apple patents. Six phones were held to dilute Apple’s trade dress for the iPhone.

Apple was awarded more than $1 billion in damages, but they are currently being reassessed in court.

The utility patents protect inventions including the “double-tap-to-zoom” feature, which allows a user to enlarge the text of a document, and the “multi-touch display” function, a system enabling a device to distinguish single-touch commands and multi-touch gestures.

Assessing Koh’s decision from December last year, Judges Prost, Bryson and O’Malley said they found “no reason to dislodge” the conclusion that Apple failed to demonstrate that it was irreparably harmed by Samsung’s infringement of its design patents.

But they added that “with respect to Apple’s utility patents, we conclude that the district court abused its discretion in its analysis and consequently remand for further proceedings”.

When deciding on a sales ban, Koh assessed whether Samsung’s infringement has caused Apple irreparable harm; remedies (such as damages) are inadequate to compensate for that injury; the balance of hardships tips in Apple’s favour; and that a ban would not disserve the public interest.

Prost, Bryson and O’Malley said Koh had abused her discretion when analysing the first two factors, but backed her findings on the remaining two.

Apple had submitted a range of evidence, from testimonies to surveys, in a bid to show that there was a casual nexus – a direct link – between Samsung’s infringement and the consequent irreparable harm suffered.

Koh found this evidence inadequate, but the appeals judges rejected that finding. They said the court erred by ignoring certain survey evidence, which purported to show that consumers would be willing to pay fairly significant amounts for the features claimed in Apple’s utility patents.

“We see no reason why, as a general matter of economics, evidence that a patented feature significantly increases the price of a product cannot be used to show that the feature drives demand for the product,” they explained.

A Samsung spokesman said the company was confident of avoiding an injunction because the district court will only have to review a "very narrow" scope of evidence.

While conventional wisdom says the ruling is good news for Apple, it is not everything the company could have wished for, said Rodney Sweetland, partner at Duane Morris LLP.

“It only allows Apple another chance to seek an injunction,” he said.

This is the first US case dealing with a permanent injunction in which a causal nexus is required, Sweetland said, meaning there are many “open questions” left in this dispute.

Apple either needed a “bigger win” to avoid this causal nexus question, he explained, or for the federal circuit to have left less discretion on the issue with the district court.

He added: “The assertion of the casual nexus requirement, which came out of nowhere in this case, is an unfortunate development for patent owners – it’s going to have repercussions down the road.”

But the ruling may be good for Apple ahead of its separate trial, beginning next year, with Samsung, said Florian Müller, writing on the  FossPatents blog.

“From a strategic point of view, it's way more important for Apple to obtain injunctive relief over its utility patents than its design patents and trade dress. It's easy to design around design patents and trade dress, and for those types of intellectual property rights, damages are a substantial opportunity. Apple isn't asserting any design patents or trade dress in the second California case against Samsung, so any changes in the standard for injunctive relief over such IPRs wouldn't have had implications for next year's post-trial proceedings.”

Apple did not respond to a request for comment.