The “Apple v. Samsung” Global Patent Battles Continue

Meera El-Farhan

 

What started a year ago, with Apple filing suit in the U.S. District Court for the Northern District of California against Samsung Electronics Co., has now expanded to more than 50 patent war lawsuits across four continents and at least eight countries. Throughout this escalating legal global battle, with billions of dollars at stake, the smartphone and tablet powerhouses continue, however, to be dependent business partners, and Samsung remains Apple’s largest semiconductor component supplier for iOS devices (a deal worth $8 billion). [1]

In its initial 38-page complaint, Apple claimed unfair competition, trademark infringements, and patent infringements; whereby, Apple alleged Samsung’s smartphones and Galaxy Tab 10.1 “slavishly” copied the iPhone and iPad designs. Samsung responded to Apple’s design patent and trade dress infringement claims by filing cross-claims. Samsung sought revocation of the patent claims and further alleged that the iPhone and iPad infringed on Samsung’s technology patents (including wireless data communication technology). Additionally, Samsung filed suit in South Korean, Japanese, and German courts.

On December 2, 2011, the district court denied Apple’s motion for preliminary injunction for the following devices:

(1) Samsung Galaxy S 4G and Infuse 4G smartphones for allegedly infringing on U.S. Des. Patent No. 618, 677 (“the D’677 patent”), U.S. Des. Patent No. 593,087 (the D’087 patent”), and (3) U.S. Patent No. 7, 469,381 (the ‘381 patent).

(2) Samsung Galaxy Tab 10.1 tablet computer for allegedly infringing on U.S. Des. Patent No. 504,889 (the D’889 patent”), and U.S. Patent No. 7469,381 (the ‘381 patent).

(3) Samsung 4G LTE smartphone for allegedly infringing on U.S. Patent No. 7,469,381 (the ‘381 patent”)[2]

The federal circuit affirmed the court’s order in part, but remanded for further proceeding with respect to the D’889 Patent. [3]  On June 26, 2012, the district court found the balance of hardship for the D’889 patent to tip in Apple’s favor.[4] The court acknowledged that “although Samsung will necessarily be harmed by being forced to withdraw its product from the market before the merits can be determined after full trial, the harm faced by Apple absent an injunction on the Galaxy Tab 10.1 is greater.”[5]  The court further found the design to be an important driver for sales; thus the injunction was not based on “one aspect of the overall product.”[6] However, as a condition of the injunction, the court ordered Apple to secure a $2.6 billion bond to repay Samsung for any damages in the event the injunction is found to have been issued wrongfully.[7]

With the trial starting on July 30, 2012, Apple demanding $2.5 billion in damages in addition to an injunction barring the sale of any infringing Samsung devices, in addition to the U.S. large electronic consumer market, the two electronic giants face high stakes in the trial’s outcome.

Germany: a preliminary injunction in August of 2011 was ordered by a German court to ban the sales of Galaxy 10.1 Tab in all the European Union except for the Netherlands. A week later, the ban was scaled back to Germany, and the 10.1 tab was returned to the EU shelves. Samsung sidestepped the injunction by introducing a Galaxy Tab 10.1N model for Germany. Apple contested the new design immediately. Although Apple lost twice on appeal for banning the sale of the 10.1 Tab, the German court in July, 2012 ruled in favor of Apple by banning the sale of Galaxy Tab 7.7 in Europe.

Australia: the battle extended to an Australian Federal Court in October, 2011. Apple sought, and was granted, an interlocutory injunction restraining Samsung from releasing the 10.1 Tab. Although the Australian Court granted Apple an interlocutory injunction, Samsung won on appeal. Apple continued to file for an appeal to the High Court.  The High Court, in refusing a special leave, allowed Samsung to sell the 10.1 just in time for  Christmas season. Samsung counter-sued Apple in April, 2012. The federal court began its hearing in late July, 2012.

Other Countries: The UK court ruled in favor of Samsung by finding Tablets 10.1, 8.9, and 7.7 did not infringe upon the alleged Apple patent.  Samsung and Apple continue to battle in patent-related lawsuits in Japanese, Korean, and European courts.

 

Aftermath

The multi-billion dollar patent warfare is likely to reshape legal and production strategies for both parties. Unfortunately, in the expanding smartphone market, price effects on consumer electronics are too uncertain to predict for now; however, the outcome of lawsuit battle will draw the line between competition and protection of intellectual property in the smartphone industry.


[2] Apple, Inc. v. Samsung Electronics Co., Ltd., 11-CV-01846-LHK, 2011 WL 7036077 (N.D. Cal. Dec. 2, 2011) aff’d in part, vacated in part, remanded, 678 F.3d 1314 (Fed. Cir. 2012)

[3]Apple, Inc. v. Samsung Electronics Co., Ltd., 678 F.3d 1314 (Fed. Cir. 2012)

[4] Apple, Inc. v. Samsung Electronics Co., Ltd., 11-CV-01846-LHK, 2012 WL 2401680 (N.D. Cal. June 26, 2012)

[5] Id.

[6] Id.

[7] Id.

Feature Comment: Injunctions in Copyright Not Automatic

By Christopher Reaves

In the face of the Supreme Court’s eBay opinion, two Ninth Circuit panels both found that its command against presumptions of irreparable harm applied to copyright. These decisions harmonize the Ninth Circuit’s law with the Second’s, and continue the trend of standardizing injunctive relief into the four-factor test, full stop.

Military Bid Leads to Infringement Suit, Injunction

In 2008, Precision Lift, Inc. and West Coast Weld Tech sought a contract to design a maintenance platform for the Air Force’s C-130. Under the joint venture agreement, Precision would handle the bidding process and West Coast would design and manufacture the platforms. However, while the bidding was still in progress, Flexible Lifeline Systems purchased most of West Coast’s business, including all IP rights to the design drawings used in the Air Force bid. After Flexible expressed disinterest in continuing the joint venture, Flexible substituted in one of Flexible’s competitors as manufacturer on the bid, but continued to use the original design and drawings.

Flexible then registered the design drawings with the Copyright Office and sought a preliminary injunction to halt their use in the bidding. The District of Montana found that Flexible was likely to succeed on the merits, and that the public interest and equities both supported an injunction save for purposes of the Air Force bidding, which Flexible had shown no interest in participating in. Flexible did not present, and the court did not find, any particular facts showing irreparable harm absent the injunction; both instead relied on Ninth Circuit precedent that irreparable harm is presumed in a copyright case. The court therefore allowed Precision to continue the Air Force bid but otherwise enjoined Precision’s use of the drawings.

But Presumption Rejected in Search Engine War

Perfect 10 supplies nude images through its password-protected website to its subscribers; it holds copyright in those images. Third parties sometimes copy these images to their own websites and blogs, infringing on the copyright and making them available for free. If these copies are on a public website, Google’s “web crawler” inevitably links to these copies, as part of its automatic indexing process. Additionally, Google owns the Blogger service, whose users have posted some of Perfect 10’s images directly. When Perfect 10 began sending take-down requests to Google, Google obeyed some but found others deficient.

Perfect 10 began a lengthy infringement suit against Google, and sought a preliminary injunction to force Google to remove all the images and links. After remand from an earlier appeal on issues of fair use and secondary liability, the Central District of California held that Perfect 10 had failed to show sufficient evidence of irreparable harm. Specifically, it found that Perfect 10’s expert had only shown a decrease in business without demonstrating causation between Google’s actions and the slump. Perfect 10 appealed again, asking the Circuit Court to apply the presumption of harm instead.

Ninth Circuit: The Presumption is Dead, Twice Over

On August 3, 2011, Judge Ikuta, joined by Chief Judge Kozinski and Judge Hawkins, ruled that the presumption was no longer good law, and upheld the rejection of Perfect 10’s injunction. The Supreme Court in eBay v. MercExchange had overturned a similar presumption in the contexts of patent infringement and permanent injunctions. The panel saw no reason to limit the decision to patents, citing the eBay court’s references to the similarities between patent and copyright and its broad language as to the applicability of “traditional equitable principles.” It also looked to the example of the Second Circuit, which had interpreted eBay the same way in Salinger v. Colting the previous year.

As for any distinction between preliminary and permanent injunctions, the panel quoted Amoco Production Co. v. Gambell, where the Supreme Court rejected the distinction while overturning yet another injunctive presumption. The court therefore ruled that the presumption was invalid in the context of a preliminary injunction in a copyright case, and also held that the district court had not abused its discretion in finding that Perfect 10 had not shown evidence of causation between the infringement and the alleged irreparable harm.

Two weeks later, on August 22, Circuit Judges Schroeder, McKeown, and Callahan echoed the Perfect 10 court with a per curiam opinion in Flexible. Repeating much of Ikuta’s reasoning, the panel also noted similar rulings in not only the Second Circuit (Salinger) but also the First (CoxCom v. Chaffee) and Fourth (Christopher Phelps & Assocs. v. Galloway) Circuits, and a supporting shift in post-eBay treatises. Then, having removed the presumption, the panel quickly found that the district court had failed to make any other findings that would support a finding of harm, and remanded for further development of the record.

Post-Case Analysis: It’s Over, But Not Over

The Supreme Court has a long history of eliminating presumptions, and even lenient standards (see Winter v. NRDC), in the context of injunctive remedy, regularly pushing courts back into the four corners of the traditional equitable test. IP infringement held out against this pattern longer than most, due to its ties to trespass of traditional property. Nonetheless, once eBay came down, the copyright presumption was not long for this world, as other circuits quickly realized. Thus the only question in either of these cases was whether the Ninth Circuit would put it out of its misery or leave that job for an inevitable appeal to SCOTUS. And with both major copyright circuits in agreement, the matter seems quite settled.

Yet this is hardly the end for IP injunctions. The Federal Circuit very recently stated in Robert Bosch LLC (in the context of patents) that “[w]hile the patentee’s right to exclude alone cannot justify an injunction, it should not be ignored either.” It then emphasized the property nature of patents, and the heavy likelihood of harm in any competitive environment. In other words, the exclusive rights of IP are still to be considered as part of the irreparable harm analysis. The factor is no longer the instant win it once was, but when the parties are competitors, as they were in Robert Bosch, it should not be a hard point to argue.

The Perfect 10 opinion (99 U.S.P.Q.2d 1533, No. 10-56316) is available at: http://www.ca9.uscourts.gov/datastore/opinions/2011/08/03/10-56316.pdf

Oral arguments can be heard at: http://www.ca9.uscourts.gov/media/view_subpage.php?pk_id=0000007250

 

The Flexible Lifeline opinion (99 U.S.P.Q.2d 1837, No. 10-35987) is available at: http://www.ca9.uscourts.gov/datastore/opinions/2011/08/22/10-35987.pdf

Oral arguments can be heard at: http://www.ca9.uscourts.gov/media/view_subpage.php?pk_id=0000007437

Federal Circuit Finds Prior Licensing Activity Does Not Per Se Prevent Permanent Injunction

In Acumed v. Stryker Corp., 551 F3d 1323; 89 USPQ2d 1612 (Fed. Cir. 2008), Stryker Corporation, Stryker Sales Corporation, Stryker Orthopedics, and Howmedica Osteonic Corporation (collectively, “Stryker”) appealed the District Court for the District of Oregon’s grant of a permanent injunction in favor of Acumed.  Acumed LLC is the assignee of U.S. Patent 5,472,444 (“the ‘444 patent”), which is directed to a proximal humeral nail (“PHN”) used for treatment of fractures of the upper arm bone. Acumed’s PHN is sold under the name Polarus®.

Stryker sold a competing product: the T2 PHN.   Acumed sued Stryker in April 2004 for infringement of the ‘444 patent based on the sales of the T2 PHN. Stryker was found to have willfully infringed the ‘444 patent and was granted a reasonable royalty and lost profits.  Acumed moved for a permanent injunction.  Upon a hearing in February 2006, the district court granted Acumed’s motion for a permanent injunction, applying the old rule that as long as there was not an exception circumstance to justify denial of injunctive relief, an injunction would issue in patent cases if infringement and validity were found. While Stryker’s appeal to this decision was pending, however, the Supreme Court decided eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 394 (2006) which held that the traditional four-factor test for permanent injunctions had to be applied in patent cases just as in other types of cases. On April 12, 2007, the Federal Circuit affirmed the finding of willful infringement, but vacated the permanent injunction and remanded the case to the district court for reconsideration of the four-factor test set forth by the Supreme Court in eBayAcumed LLC v. Stryker Corp., 483 F.3d 800, 811; 82 USPQ2d 1481 (Fed. Cir. 2007). Continue reading