Window Cracks for Apple to Ban Samsung Products

     (CN) – Apple should get a second chance to permanently ban the sales of 26 Samsung smartphones and tablets – assuming it can prove “some connection” that demand led to infringement, the Federal Circuit ruled.
     The Tuesday ruling partially vacates U.S. District Judge Lucy Koh’s denial of the sales ban a year ago, despite a $1 billion jury award that found Samsung had “slavishly copied” the iPhone and iPad to produce its products. Koh said Apple failed to explain how it had been damaged and why an injunction was necessary.
     Apple had appealed Koh’s denial to the Federal Circuit within days.
     In a 41-page opinion, the Washington-based appellate panel agreed that Koh correctly refused to order a ban over Apple’s design patents and trade dress. The panel said Koh set the bar too high, however, over three utility patents, including the famed “bounceback” feature, the two-fingered “pinch to zoom” element and the “double-tap to zoom” action now synonymous with Apple’s iDevices.
     “We find no reason to dislodge the district court’s conclusion that Apple failed to demonstrate irreparable harm from Samsung’s infringement of its design patents,” Judge Sharon Prost wrote for the three-judge panel. “Accordingly, we affirm the denial of injunctive relief with respect to those patents. However, with respect to Apple’s utility patents, we conclude that the district court abused its discretion in its analysis.”
     Specifically, Koh went too far in requiring Apple to show that “one of the patented features is the sole reason consumers purchased Samsung products,” according to the ruling.
     “It is true that Apple must ‘show that the infringing feature drives consumer demand for the accused product,'” Prost wrote, citing a prior decision by the Federal Circuit denying Apple’s request for a preliminary injunction. “It is also true that this inquiry should focus on the importance of the claimed invention in the context of the accused product and not just the importance, in general, of features of the same type as the claimed invention. However, these principles do not mean Apple must show that a patented feature is the one and only reason for consumer demand. Consumer preferences are too complex – and the principles of equity are too flexible – for that to be the correct standard. Indeed, such a rigid standard could, in practice, amount to a categorical rule barring injunctive relief in most cases involving multi-function products, in contravention of EBay v. MercExchange, LLC.”
     Prost added: “Thus, rather than show that a patented feature is the exclusive reason for consumer demand, Apple must show some connection between the patented feature and demand for Samsung’s products. 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 appellate judges also criticized Koh’s refusal to let Apple aggregate its patents for an irreparable harm analysis. They surmised that their own prior dealings with Apple and Samsung may have led Koh to think aggregating was unacceptable.
     “We believe there may be circumstances where it is logical and equitable to view patents in the aggregate,” Prost wrote. “For example, 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. To hold otherwise could lead to perverse situations such as a patentee being unable to obtain an injunction against the infringement of multiple patents covering different – but when combined, all – aspects of the same technology, even though the technology as a whole drives demand for the infringing product.”
     Koh also abused her discretion through a wholesale discounting of a survey done by Apple expert Dr. John Hauser, who showed that consumers are willing to pay a premium for Apple devices with the utility patents in question, according to the ruling.
     “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,” Prost wrote. “This is not to suggest that consumers’ willingness to pay a nominal amount for an infringing feature will establish a causal nexus. For example, consumers’ willingness to pay an additional $10 for an infringing cup holder in a $20,000 car does not demonstrate that the cup holder drives demand for the car. The question becomes one of degree, to be evaluated by the district court. Here, the district court never reached that inquiry because it viewed Dr. Hauser’s survey evidence as irrelevant. That was an abuse of discretion.”
     Meanwhile, a jury in San Jose continued to deliberate Wednesday as to whether Apple deserves $380 million in damages for Samsung’s infringement in producing 13 products from its popular Galaxy line of smartphones and tablets. Koh had halved the original $1.05 billion award after finding the jury in the first trial last year failed to follow her 700-question verdict form by using improper formulas to calculate damages.
     Samsung conceded it had “crossed the line” with its product designs, but argued that, if it owes Apple anything at all, the price tag should be in the neighborhood of $52 million – less than half a percent of its third-quarter profit in 2013 alone.
     Jury deliberations could grind to a halt, however, in light of an opinion Wednesday by the U.S. Patent and Trademark Office that Apple’s “pinch to zoom” feature is not actually a valid patent.
     Although Apple can appeal the preliminary finding, Samsung wasted no time in asking Koh to halt the proceedings and send the jury home.
     “This decision by the PTO jeopardizes the jury’s findings in the damages trial and may render all of the post-trial proceedings a waste of time and resources,” Samsung’s attorneys said in an emergency motion filed Wednesday afternoon. “Samsung should not be compelled to face damages for a patent that the PTO has already found to be invalid. Accordingly, Samsung moves for an immediate stay of this action and requests that this matter be heard by the court immediately, before the jury completes its deliberations. This court has already recognized that a stay of proceedings is likely appropriate should the PTO finally determine that Apple’s patents are invalid.”
     Koh has yet to rule on the emergency motion, and the jury has been working through lunch to render a verdict before the Thanksgiving holiday.

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