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Federal Circuit Partially Vacates Judge Koh’s Order Denying Apple’s Motion for a Permanent Injunction Against Samsung

[Cross-posted at Comparative Patent Remedies]

In an appeal arising from Judge Koh’s December 2012 order denying Apple’s request for a permanent injunction against Samsung, following the high-profile August 2012 jury verdict in Apple’s favor, Judge Prost writing for the panel (1) affirms Judge Koh’s ruling denying a permanent injunction with respect to Samsung’s infringement of three design patents and its dilution of Apple’s trade dress; and (2) vacates the portion of the ruling denying a permanent injunction with respect to the three utility patents.  The opinion can be downloaded from here.  My previous write-up on the case following oral argument in August 2013 is here.

The principal issues were (1) whether Judge Koh was correct to require proof of a causal nexus between Samsung’s infringement and Apple’s (established) loss of market share and downstream sales to Samsung, and (2) if so whether she correctly applied the “causal nexus” concept.  (The “causal nexus” requirement itself comes from two previous Federal Circuit decisions on preliminary injunctions, referred to in the opinion as Apple I and Apple II).  On the first issue, the Federal Circuit says yes:  “the district court was correct to require a showing of some causal nexus between Samsung’s infringement and the alleged harm to Apple as part of the showing of irreparable harm.”  The court rejected Apple’s argument that “causal nexus” is an “unprecedented fifth requirement,” and reaffirms that “causal nexus . . . is part of the irreparable harm factor.”  On the second issue, however, the court “agree[s] with Apple that certain of the standards arguably articulated by the district court go too far.”  Specifically:

First, the district court appears to have required Apple to show that one of the patented features is the sole reason consumers purchased Samsung’s products. . . .

It is true that Apple must “show that the infringing feature drives consumer demand for the accused product.” Apple II, 695 F.3d at 1375. 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.

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 second principle on which we disagree with the district court is its wholesale rejection of Apple’s attempt to aggregate patents for purposes of analyzing irreparable harm.

While it is true that this court analyzed causal nexus on a patent-by-patent basis in Apple I, we did not mean to foreclose viewing patents in the aggregate. Rather, we believe there may be circumstances where it is logical and equitable to view patents in the aggregate. 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.

Applying these rules, the court concluded that Judge Koh did not abuse her discretion in finding no causal nexus between the design patent infringement and Apple’s harm; but that she must reconsider the matter with respect to three utility patents.  (The court agreed with Judge Koh that there was no evidence Samsung would resume the trade dress dilution, and affirmed the denial of an injunction with respect to those rights on that ground.) With regard to the utility patents, the court wasn’t swayed by Apple’s survey evidence that “ease of use, in general, is important to the iPhone” or that Samsung copied.  This evidence, though relevant, wasn’t enough by itself to show causal nexus.  But the court did find evidence in the form of a conjoint survey potentially more probative: Read the rest of this entry

Online Symposium: Comparative Patent Remedies

Professor Daniel Sokol’s Antitrust and Competition Policy Blog is hosting an online symposium on my book Comparative Patent Remedies:  A Legal and Economic Analysis (Oxford University Press 2013), with commentary by Professors Norman Siebrasse, Marketa Trimble, and Peter Yu.  Links to the reviews are here:

Many thanks to Professor Sokol for putting this together!

Standards for Preliminary and Permanent Injunctions: Judge Newman’s Mote or Professor Crouch’s Beam?

Professor Crouch at Patently-O discusses the Federal Circuit’s recent reversal of a denial of a preliminary injunction in Revision Military, Inc. v. Balboa Manufacturing Co. The Professor takes aim at Federal Circuit Judge Newman for failing to cite eBay v. MercExchange, 547 U.S. 388 (2006) anywhere in the opinion:

While the appellate court does a fine job of criticizing the district court judgment, one interesting optical mote in Judge Newman’s written opinion is that it fails to mention the leading Supreme Court case on injunctive relief, eBay v. MercExchange. That case is important here. A major element of eBay is the Supreme Court’s suggestion that the law of injunctive relief in patent cases should be the same law that is applied in other areas of law.

Did Judge Newman make a mistake in failing to cite to or even apply eBay in a preliminary-injunction case? Perhaps, according to the professor. But if so, she’s in good company with another judge: Chief Justice Roberts. The Chief Justice authored Winter v. Natural Resources Defense Council, Inc., 129 S. Ct. 365 (2008), which involved an appeal from the grant of a preliminary injunction, like Revision Military.

Chief Justice Roberts’s majority opinion in Winter neither cites to nor applies eBay, decided just two years earlier. The four justices who concurred or dissented in Winter don’t mention eBay, either. eBay’s directive—that the law of injunctive relief in patent cases should be uniform with other areas of the law—still holds. But the substantive standard for a preliminary injunction comes from Winter (2008), not from eBay (2006). Judge Newman applies Winter in Revision Military.

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