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Judge Koh Says No to Apple on Non-Jury Claims re FRAND ~pj
Thursday, December 13 2012 @ 08:25 PM EST

Judge Lucy Koh has issued her first post-hearing order [PDF] -- regarding Apple's brief [PDF] on non-jury issues (waiver, equitable estoppel, unclean hands, and unfair competition) which it lodged against Samsung in connection with two Samsung FRAND patents. She decided not to decide. This is a blow to Apple's anti-Android FRAND strategy.

The jury ruled [PDF] in August at trial that Apple did not infringe Samsung's patents, so there isn't any relief she needs to provide, as these issues Apple raised were defenses to infringement:

Because the Court finds that these defenses cannot affect the outcome of the present case in light of the jury’s finding of noninfringement, the Court, in its discretion, will not consider these defenses at this time.
She also chooses not to rule because "a decision on Apple’s equitable claims would require the Court to interpret a policy of the European Telecommunications Standards Institute (ETSI) that is governed by French law." Apple was claiming violations of those ETSI policies [PDF]. Plus, to rule, she'd have to unravel the "precise contours of the implied factual findings underlying a jury verdict", and you know what kind of Herculean task that would be with this jury's peculiar verdict as your only guide. It'd be like untying such a huge knot in your toddler's shoe laces you can't figure out where to begin.

Here's the precise relief Apple had asked for:

Apple respectfully requests that the Court exercise its equitable powers to find that Samsung has engaged in waiver, equitable estoppel, unclean hands, and unfair competition. Moreover, Apple asks the Court to hold Samsung’s ’516 and ’941 patents unenforceable against all UMTS-compliant products, including those sold by Apple.
Can you imagine? "Unenforceable against all UMTS-compliant products". Well, not today, Apple. Not today.

The entry in the docket:
2195 - Filed & Entered: 12/13/2012
ORDER re [1981] Brief regarding non-jury claims, filed by Apple Inc.. Signed by Judge Lucy H. Koh on 12/13/2012. (lhklc2, COURT STAFF) (Filed on 12/13/2012)
While not techically moot, the judge decided that until it's a live controversy, she won't rule. What does she mean, then, about "at this time"? When she eventually rules on Apple's motion for judgment as a matter of law, Apple's argument that she should find Samsung violated the California Unfair Competition Law if she rules in Apple's favor could be relevant.

And as for Apple's desire that she issue a ruling that would have policy implications for standards bodies -- Apple's real goal -- she thinks it's better to wait and get it right:

Finally, Apple has argued that because these questions have important policy implications for standards-setting organizations, the Court should decide them now. The Court finds that the importance of the questions counsels against deciding them in a case where the issue is no longer squarely presented. The issue is best left for a case in which the parties have every incentive to brief and argue the issue as thoroughly as possible, to ensure that the decision eventually issued on this question is a correct one. Accordingly, the Court takes no position on the merits of Apple’s equitable claims, and declines to decide whether Samsung’s patents are unenforceable as against all UMTS-compliant products under the doctrines of waiver, equitable estoppel, and unclean hands.
Apple fought hard to get to make these arguments in full, and it was all for naught. So, another loss in the Apple-Microsoft anti-Android FRAND strategy.

The judge quotes from Fletcher v. United States 116 F.3d 1315, 1321 (10th Cir. 1997), which held “Under the doctrine of prudential mootness, there are circumstances under which a controversy, not constitutionally moot, is so attenuated that considerations of prudence and comity for coordinate branches of government counsel the court to stay its hand, and to withhold relief it has the power to grant.”

And here it is, the judge's order, as text, the only change being urls inserted by me, so you can find references she alludes to, and I notice one of them, S. Yuba River Citizens League v. Nat'l Marine Fisheries Serv., is about when a permanent injunction is and is not appropriate, so that's on the judge's mind, one assumes:

****************

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
SAN JOSE DIVISION

APPLE, INC., a California corporation,

Plaintiff,

v.

SAMSUNG ELECTRONICS CO., LTD., A
Korean corporation; SAMSUNG
ELECTRONICS AMERICA, INC., a New York
corporation; SAMSUNG
TELECOMMUNICATIONS AMERICA, LLC,
a Delaware limited liability company,

Defendants.

________________

Case No.: 11-CV-01846-LHK

ORDER RE: WAIVER, EQUITABLE
ESTOPPEL, UNCLEAN HANDS, AND
UNFAIR COMPETITION

________________

In this patent case, Samsung accused Apple of infringing two of Samsung’s patents that Samsung has declared essential to the Universal Mobile Telecommunications System (UMTS) standard: U.S. Patent No. 7,675,941 (“the ’941 Patent”), and U.S. Patent No. 7,447,516 (“the ’516 Patent”).1 At trial, the jury found that Apple had not infringed either of these patents. See Amended Jury Verdict, ECF No. 1890 [PDF], at 17. Now before the Court is Apple’s motion for a ruling on its equitable defenses to infringement. ECF No. 1981 [PDF]. Specifically, Apple asserts that Samsung’s conduct related to the development of the UMTS bars Samsung from asserting these claims against standard-compliant products under the doctrines of waiver, equitable estoppel, and

unclean hands.2 Because the Court finds that these defenses cannot affect the outcome of the present case in light of the jury’s finding of noninfringement, the Court, in its discretion, will not consider these defenses at this time.

Apple argued at the hearing on December 6, 2012, that its equitable defenses are not technically moot because they would render the entire patents unenforceable against all standard- compliant products, while the jury’s verdict was limited to certain claims and certain products. The Court agrees that under Federal Circuit precedent,3 the issue is not technically moot so as to deprive this Court of subject matter jurisdiction. See In re Omeprazole Patent Litigation, 483 F.3d 1364, 1375 (Fed. Cir. 2007) (“The inequitable conduct claim was not technically moot, because it would have rendered the entire ’281 patent unenforceable, rather than just the claims that were held invalid.”).

However, both parties agreed at the December 6, 2012 hearing that the equitable defenses no longer present a live issue between the two parties in this case, and that the only effect of a ruling on Apple’s claims would come through collateral estoppel in future cases. Both parties further agreed that while this Court does have subject matter jurisdiction to decide the equitable defenses, it would be within this Court’s discretion to not decide these issues until they are before the Court as a live controversy. Indeed, courts have long recognized that in some situations, there is wisdom in refraining from issuing a ruling that would have no practical effect. See, e.g., Fletcher v. United States, 116 F.3d 1315, 1321 (10th Cir. 1997) (“Under the doctrine of prudential mootness, there are circumstances under which a controversy, not constitutionally moot, is so attenuated that considerations of prudence and comity for coordinate branches of government

2

counsel the court to stay its hand, and to withhold relief it has the power to grant.”) (internal quotation marks omitted); S. Yuba River Citizens League v. Nat'l Marine Fisheries Serv., CIV S-06-2845 LKK, 2010 WL 4746187 at *2 (E.D. Cal. Nov. 16, 2010) (“Under the doctrine of prudential mootness, district courts may dismiss a claim where not technically moot, but nonetheless where circumstances [have] changed since the beginning of litigation that forestall any occasion for meaningful relief.”) (citing Hunt v. Imperial Merchant Servs., Inc., 560 F.3d 1137 (9th Cir.2009) (internal quotation marks omitted)).

In this case, a decision now would not provide Apple with any meaningful relief, because the jury has already found that Apple is not liable to Samsung for infringing these patents. Further, a decision on Apple’s equitable claims would require the Court to interpret a policy of the European Telecommunications Standards Institute (ETSI) that is governed by French law. See Apple’s Brief Regarding Non-Jury Claims, ECF No. 1981, at 1 (arguing for equitable defenses due to violation of ETSI policy); PX74 at Art. 12 (ETSI policy choice of law clause). Moreover, the jury decided several claims stemming from the same factual predicate at issue in the equitable defenses, including a breach of contract claim and an antitrust claim. Consequently, resolution of Apple’s equitable defenses would entail a delicate inquiry into precisely what factual findings must underlie the jury’s verdict, as the Seventh Amendment right to a jury trial in civil cases requires the Court to credit those factual findings in resolving the equitable claims. See Beacon Theatres, Inc. v. Westover, 359 U.S. 500, 510 (1959). The Court does not find it advisable to issue binding interpretations under foreign law, or to inquire into the precise contours of the implied factual findings underlying a jury verdict, where it is not necessary for the resolution of the currently pending case.

Finally, Apple has argued that because these questions have important policy implications for standards-setting organizations, the Court should decide them now. The Court finds that the importance of the questions counsels against deciding them in a case where the issue is no longer squarely presented. The issue is best left for a case in which the parties have every incentive to brief and argue the issue as thoroughly as possible, to ensure that the decision eventually issued on this question is a correct one. Accordingly, the Court takes no position on the merits of Apple’s

3

equitable claims, and declines to decide whether Samsung’s patents are unenforceable as against all UMTS-compliant products under the doctrines of waiver, equitable estoppel, and unclean hands.

IT IS SO ORDERED.

Dated: December 13, 2012

[signature]
LUCY H. KOH
United States District Judge

_______________
1 Samsung asserted infringement of several other patents, but only these two patents are the subject of the defenses at issue here.

2 Apple also argues that the Court should find that Samsung violated the California Unfair Competition Law, but asks the Court to make such a finding only if the Court grants judgment as a matter of law in favor of Apple on its breach of contract claim. Mot. at 11. As the Court has not yet issued an Order on Apple’s motion for judgment as a matter of law, the Court will not address the unfair competition claim at this time.

3 Federal Circuit law governs the application of Article III to patent disputes. See Schreiber Foods, Inc. v. Beatrice Cheese, Inc., 402 F.3d 1198, 1202 (Fed. Cir. 2005) (“[Q]uestions of the district court's jurisdiction – upon which this court's jurisdiction depends – are always determined under Federal Circuit law.”).

4


  


Judge Koh Says No to Apple on Non-Jury Claims re FRAND ~pj | 136 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Apple isn't going to be happy...
Authored by: Anonymous on Thursday, December 13 2012 @ 09:00 PM EST

I have to admit to a lot of curiosity. Exactly how much impact did the other
cases that Apple is involved in have on the Judge's decision?

Judge Posner was, um, quite direct in his criticism. So was the British court
which ordered Apple to post the apology on their website.

Wayne
http://madhatter.ca

[ Reply to This | # ]

Corrections
Authored by: Kilz on Thursday, December 13 2012 @ 09:33 PM EST
Please mention the mistake in the title of your post.

[ Reply to This | # ]

Off Topic
Authored by: Kilz on Thursday, December 13 2012 @ 09:35 PM EST
For all posts that are not On Topic.

[ Reply to This | # ]

Newspicks
Authored by: Kilz on Thursday, December 13 2012 @ 09:37 PM EST
Please mention the news story's name in the title of the top
post. A link back to the story in the top post is also
helpful because they eventually fall off the Home page.

[ Reply to This | # ]

Comes
Authored by: Kilz on Thursday, December 13 2012 @ 09:40 PM EST
Please post all transcriptions of Comes exhibits here for PJ
to find. Please post the html in plain text Post Mode so that
they can be easily copied.

[ Reply to This | # ]

The verdict will stand?
Authored by: Anonymous on Thursday, December 13 2012 @ 09:54 PM EST
"The Court does not find it advisable to issue binding interpretations
under foreign law, or to inquire into the precise contours of the implied
factual findings underlying a jury verdict, where it is not necessary for the
resolution of the currently pending case."

Sounds to me like she is hinting that she is going to let the verdict stand in
total. Oh well. On to the CAFC.

Mouse the Lucky Dog

[ Reply to This | # ]

Judge Koh Says No to Apple on Non-Jury Claims re FRAND ~pj
Authored by: Anonymous on Thursday, December 13 2012 @ 10:53 PM EST

It would seem Apple isn't getting the sweetheart deal they expected from an American court. Good. Now if the judge in Washington state can wake up to the reality that Microsoft is playing him ... Samsung I'm less then happy with, but that's personal.

My Samsung Rugby Smart, touted as being waterproof to 3 ft, dust and dirt proof, scratch proof ... a phone good for a contractor that drops phones, is broken at three months. The front bezel, a plastic ring around the surface, is pealing off; that's what keeps the dust and water out. The phone's only heavy use is going into my trouser pocket. According to Samsung, this type of physical damage is not warrantied. I'll be filing a complaint with the State of California over that. Normal, expected, use should be covered.

Imagine Toyota saying the paint pealing in the rain was not covered? Perhaps Koreans don't have trouser pockets, so this property wasn't tested?

AT&T's song and dance that they just 'pass' on the manufacturer's warranty, well that's got me thinking finding a cell phone company with a brain. For some types of damage they should hold the manufacturer's feet to the fire.

Likely it's time to buy the Google Nexus and divorce a commitment to any cell phone company.

[ Reply to This | # ]

"She decided not to decide."
Authored by: tiger99 on Friday, December 14 2012 @ 07:04 AM EST
I just love that phrase! It is typical of certain politicians, mediocre managers, and others, who are too scared to make decisions in case they are wrong. Each of us will know of a few who do that regularly. Very frustrating for everyone around.

Some call it sitting on the fence. I hear that does no good at all to certain parts of the anatomy.....

[ Reply to This | # ]

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