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Apple and Samsung File the Extra Briefs the Judge Asked For ~pj Updated
Thursday, April 11 2013 @ 10:13 AM EDT

The parties in Apple v. Samsung have filed the extra briefs the Hon. Lucy Koh asked for in her April 2nd order. She asked for the following:
To assist the Court in resolving the many pending disputes, the Court sets the following briefing schedule:

(1) On April 9, 2013, Apple shall file a response, not to exceed six pages, to Samsung’s contention that a new trial on damages alone violates the Seventh Amendment. See Samsung Opposition to Apple’s Motion Seeking an April 3 Case Management Conference, ECF No. 2286 at 5-10. On April 16, 2013, Samsung may file a reply, not to exceed five pages.

(2) On April 9, 2013, Samsung shall file a response, not to exceed five pages, to Apple’s contention that immediate appeal of this Court’s Order Re: Damages filed on March 1, 2013 is not viable. See Apple’s Motion Seeking an April 3 Case Management Conference, ECF No. 2283, at 2. On April 16, 2013, Apple may file a reply, not to exceed four pages.

(3) On April 9, 2013, both parties shall file a statement, not to exceed four pages per party, regarding when their US PTO reexaminations of the opposing party’s patents will conclude and what effect the concluded reexaminations will have on any new trial or appeal. On April 16, both parties may file a response, not to exceed two pages per party.

There will be more on all this, as you can see each gets to respond to the other's brief.

Apple filed its brief [PDF], as requested, on the issue raised by Samsung that holding a new trial for damages alone -- instead of damages and liability -- would violate the Seventh Amendment. That's the amendment that guarantees a trial by jury. Apple's position in a nutshell is that it's too late to ask for this. Samsung waived it when it asked for -- and got -- a new trial on damages alone:
The Court’s March 1 Order granted Samsung what it asked for: a new trial on damages. ... The Court did exactly that, ordering “a new trial on damages” for specified products. (Dkt. 2271 at 26.) Samsung now seeks to expand its request, claiming “a right to a new trial on liability and damages for products that will be the subject of the new trial.”
In any case, Apple argues, the Seventh Amendment "does not bar the Court from holding a new trial in which the new jury is instructed that infringement has been decided and that its task is limited to determining damages for Samsung’s infringement." So that's what Apple wants, and without delay.

And Samsung has filed a statement with the court regarding the pending reexaminations of Apple's ‘381 and ‘915 patents. Samsung says it didn't file the reexamination requests, but it would like a delay of a predicted 18 months or less, assuming Apple appeals, so that they can be finally ruled on first. It's more efficient, and considering that all but three of the damages verdicts were about those two now-questionable patents, delay would avoid a third trial:

Second, a stay of the new trial could avoid the need to hold a subsequent third trial on damages and thus permit the claims that require retrial to be retried all at once. All but three of the damages verdicts that remain extant, following this Court’s new trial order, were based in part on findings of infringement of the ‘381 and/or ‘915 patents. Dkt. 1931 at 2-3. But these damages verdicts were not patent-specific, and the amounts attributable to the ‘381 and ‘915 patents are unknown—so these verdicts cannot survive the invalidation of Apple’s patents.
Why have a trial now over patents that may turn out to be dead in the water? There's no prejudice to Apple, in that "Samsung has ceased sales of all but three of the products accused at trial (and has implemented non-infringing design arounds as to those three)." Finally, Samsung filed a brief [PDF] answering Apple's claim that Judge Koh's March 1 Order is not "viable". Samsung says that order is not appealable "in its entirety", not being final regarding 14 products, but that is why Samsung is asking her to issue a partial final judgment, which would be:
For the reasons set forth below, Samsung agrees that the March 1 Order itself is not appealable insofar as it vacates damages on 14 Samsung products and sets those products for new trial. By contrast, a Rule 54(b) partial final judgment as to Samsung’s counterclaims and the 14 Samsung products as to which liability and damages have been finally resolved would be immediately appealable, as Samsung has explained (Dkt. 2281, 2290)....

In sum, although a Rule 54(b) judgment is appealable, and may encompass all issues on which the March 1 Order leaves liability and damages finally resolved as to 14 products, the March 1 Order is not presently appealable as to the 14 other products set for new trial.

I've done all three of these briefs for you as text. There should be one more, from Apple, on reexaminations of Samsung patents, and when it shows up, I'll add it.

The filings:

2300 - Filed & Entered: 04/03/2013
CERTIFICATE OF SERVICE by Apple Inc. re [2295] Declaration in Support (Jacobs, Michael) (Filed on 4/3/2013)

2301 - Filed & Entered: 04/08/2013
NOTICE by Apple Inc. re [2250] Administrative Motion to File Under Seal APPLE'S CORRECTED RENEWED MOTION TO SEAL NOTICE OF LODGING OF CORRECTED EXHIBIT TO APPLE'S CORRECTED RENEWED MOTION TO SEAL (Bartlett, Jason) (Filed on 4/8/2013)

2302 - Filed & Entered: 04/08/2013
RESPONSE (re [2292] Administrative Motion to File Under Seal re Court's March 17, 2013 Order ) Non-Party Intel's Memorandum of Points and Authorities in Support of Samsung's Renewed Motion to Seal filed byIntel Corporation. (Attachments: # (1) Declaration of Josef Hausner)(Kelley, Christopher) (Filed on 4/8/2013)

2303 - Filed & Entered: 04/09/2013
RESPONSE to re [2286] Opposition/Response to Motion,, Apple's Response to Samsung's Argument Regarding Effect of Seventh Amendment on New Damages Trial by Apple Inc.. (Jacobs, Michael) (Filed on 4/9/2013)

2304 - Filed & Entered: 04/09/2013
RESPONSE to re [2291] Statement of Recent Decision, Samsung's Statement Regarding Pending Reexamination Proceedings Pursuant to April 2, 2013 Order by Samsung Electronics Co. Ltd.. (Attachments: # (1) Maroulis Declaration, # (2) Exhibit A, # (3) Exhibit B, # (4) Exhibit C)(Maroulis, Victoria) (Filed on 4/9/2013)

2305 - Filed & Entered: 04/09/2013
RESPONSE to re [2288] Opposition/Response to Motion, Samsung's Response to April 2, 2013 Order (ECF No. 2299) Regarding Appealability of March 1 Order Re: Damages by Samsung Electronics Co. Ltd.. (Maroulis, Victoria) (Filed on 4/9/2013)

[ Update: And here it is:
2308 - Filed & Entered: 04/16/2013
RESPONSE to re [2304] Response ( Non Motion ), Apples Response to Samsung's Statement Regarding Patents in Reexamination by Apple Inc.. (Jacobs, Michael) (Filed on 4/16/2013)
End update.]

And here are all three as text, in numerical order:

Here's #2303, Apple's Response to Samsung's Argument Regarding Effect of Seventh Amendment on New Damages:

HAROLD J. MCELHINNY (CA SBN 66781)
[email]
MICHAEL A. JACOBS (CA SBN 111664)
[email]
RACHEL KREVANS (CA SBN 116421)
[email] JENNIFER LEE TAYLOR (CA SBN 161368)
[email]
MORRISON & FOERSTER LLP [address, phone, fax]

WILLIAM F. LEE
[email]
WILMER CUTLER PICKERING
HALE AND DORR LLP
[address, phone, fax]

MARK D. SELWYN (SBN 244180)
[email]
WILMER CUTLER PICKERING
HALE AND DORR LLP
[address, phone, fax]

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALILFORNIA

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; and SAMSUNG
TELECOMMUNICATIONS AMERICA,
LLC, a Delaware limited liability company,

Defendants.

___________

Case No. 11-cv-01846-LHK

APPLE’S RESPONSE TO
SAMSUNG’S ARGUMENT
REGARDING EFFECT OF SEVENTH
AMENDMENT ON NEW DAMAGES
TRIAL

Despite requesting—and winning—a new trial on damages, Samsung now argues that the Seventh Amendment requires a retrial of liability issues too. Samsung fails to offer any basis for reconsidering the order granting Samsung the precise relief it requested. Even if considered, Samsung’s argument fails on the merits, as courts routinely hold that patent damages can be tried independently of liability and the infringement findings here are law of the case.

A. Samsung's Argument Improperly Seeks Reconsideration of An Order That
Samsung Requested

The Court’s March 1 Order granted Samsung what it asked for: a new trial on damages. Samsung’s request was crystal clear: “The Court should vacate the award and grant a new trial on damages.” (Dkt. 2013 at 24.) The Court did exactly that, ordering “a new trial on damages” for specified products. (Dkt. 2271 at 26.) Samsung now seeks to expand its request, claiming “a right to a new trial on liability and damages for products that will be the subject of the new trial.” (Dkt. 2286 at 1.) But Samsung must accept the consequences of its litigation strategy; it cannot now change course to seek a different remedy after having received the remedy it sought. See Robert Bosch LLC v. Pylon Mfg. Corp., 659 F.3d 1142, 1156 n.7 (Fed. Cir. 2011) (rejecting defendant’s argument that it could not develop damages record during bifurcated liability trial it requested over plaintiff’s objection, as defendant “cannot now complain about the natural consequences of the procedure it asked the court to adopt.”). That the Seventh Amendment is involved makes no difference. See, e.g., Perez-Farias v. Global Horizons, Inc., No. 10-35397, 2012 WL 6043051 (9th Cir. Dec. 5, 2012) (“These actions by Workers constitute waiver of their Seventh Amendment right to a jury trial.”); Fuller v. City of Oakland, 47 F.3d 1522, 1530 (9th Cir. 1995) (“There is no dispute that the Seventh Amendment right to a jury trial, like other constitutional rights, can be waived.”).

Moreover, Samsung cannot satisfy the requirements for effectively seeking reconsideration of the order that it sought. “A motion for reconsideration ‘may not be used to raise arguments or present evidence for the first time when they could reasonably have been raised earlier in the litigation.’” Marlyn Nutraceuticals, Inc. v. Mucos Pharma GmbH & Co., 571 F.3d 873, 880 (9th Cir. 2009) (citation omitted). Samsung cannot satisfy any of the limited

1

bases on which Local Rule 7-9(b) permits reconsideration. Civil L.R. 7-9(b). Nor has Samsung complied with Local Rule 7-9, which requires that a party seeking reconsideration of an interlocutory order first move for leave to make such a request. Civil L.R. 7-9(a). The Court should reject Samsung’s request that the Court revisit the very relief Samsung requested.

B. The Seventh Amendment Does Not Preclude a New Trial on Damages Alone

Samsung’s argument also fails on the merits. The Seventh Amendment does not bar the Court from holding a new trial in which the new jury is instructed that infringement has been decided and that its task is limited to determining damages for Samsung’s infringement.

The Federal Circuit has made clear that the Seventh Amendment’s “‘prohibition is not against having two juries review the same evidence, but rather against having two juries decide the same essential issues.’” In re Innotron Diagnostics, 800 F.2d 1077, 1086 (Fed. Cir. 1986) (quoting Paine, Webber, Jackson & Curtis, Inc. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 587 F. Supp. 1112, 1117 (D. Del. 1984)); see also Gardco Mfg., Inc. v. Herst Lighting Co., 820 F.2d 1209, 1213 (Fed. Cir. 1987) (citing Innotron for same language and upholding bifurcation of inequitable conduct claim). That some issues would overlap when a case is retried does not result in a constitutional violation. The Seventh Amendment precludes separate trials only if separation would “constitute a clear and indisputable infringement of the constitutional right to a fair trial.” Innotron, 800 F.2d at 1086) (affirming separate trials on patent infringement and patent antitrust claims).1

2

In Innotron, the Federal Circuit adopted the Seventh Amendment standard articulated in Paine, Webber, Jackson & Curtis, Inc. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 587 F. Supp. 1112 (D. Del. 1984). See Innotron, 800 F.2d at 1086. In Paine the court applied that standard to hold that bifurcating a patent infringement trial and presenting liability and damages to separate juries would not deny the defendant’s Seventh Amendment jury rights, even though the issue of commercial success would be considered in both trials. 587 F. Supp. at 1116-17.

Separate damages trials are commonplace in patent cases. See, e.g., Federal Judicial Center, Manual for Complex Litigation, Fourth § 32.23 (2004) (“The most common type of bifurcation in patent cases involves separating liability from damages.”). The Federal Circuit has never held that a separate damages trial violates the Seventh Amendment, and in fact routinely discusses them without criticism (see, e.g., Seachange Int’l, Inc. v. C-COR Inc., 413 F.3d 1361, 1366 (Fed. Cir. 2005) (discussing bifurcated liability and damages trials without criticism or reference to Seventh Amendment)) and remands cases for new damages trials. See, e.g., Uniloc USA, Inc. v. Microsoft Corp., 632 F.3d 1292, 1323 (Fed. Cir. 2011) (remanding for new trial on damages); Whitserve, LLC v. Computer Packages, Inc., 694 F.3d 10, 16 (Fed. Cir. 2012) (same).2

C. Samsung’s Cases Are Distinguishable and Its Arguments Misplaced

Having now reversed course from the position it advocated last fall, Samsung fails to provide support for its new position. Samsung points to only two decisions that discuss the Seventh Amendment: Gasoline Products Co. v. Champlin Refining Co., 283 U.S. 494, 499 (1931), and Hasbrouck v. Texaco, Inc., 663 F.2d 930 (9th Cir. 1981). (Dkt. 2286 at 5-6.) Neither

3

decision analyzes the Seventh Amendment in the context of patent damages trials, and neither holds that a retrial of damages requires a retrial on liability. Far from barring retrials on damages, in Gasoline Products the Supreme Court held for the first time that the Seventh Amendment “does not compel a new trial of [an] issue even though another and separable issue must be tried again.” 283 U.S. at 499. The Court remanded that case for a retrial on damages and liability because the jury had issued a general verdict lacking any specific findings. Id. at 499-500. The jury’s highly detailed special verdict in this case, of course, is completely different. (Dkt. 1931.) Hasbrouck offers no guidance as to separate trials of damages and liability in patent cases, as it addressed the unique requirements of a Clayton Act claim. 663 F.2d at 934 (retrial on damages alone improper due to “overlap between proof of injury for liability purposes and for damage calculation purposes under Clayton section 4”); see Alabama v. Blue Bird Body Co., 573 F.2d 309, 317 (5th Cir. 1978) (trial on damages alone is improper in Clayton Act case because proof of injury is element of liability for that statute).

The remaining cases Samsung cites regarding patent damages provide no support for its Seventh Amendment position. BIC Leisure Products, Inc. v. Windsurfing International, Inc., 1 F.3d 1214, 1218 (Fed. Cir. 1993), addresses the scope of competition between two products when evaluating a lost profits claim without discussing the Seventh Amendment or revisiting infringement. Uniloc USA, Inc. v. Microsoft Corp., 632 F.3d 1292, 1318 (Fed. Cir. 2011), remanded for a new trial on damages alone. Id. at 1323. So did ResQNet.com, Inc. v. Lansa, Inc., 594 F.3d 860, 869 (Fed. Cir. 2010).

D. Samsung’s Proposal Would Violate the Doctrine of Law of the Case

Samsung’s argument that the second jury must evaluate which applications infringed the ’381 patent would violate the doctrine of law of the case. The first jury rendered a verdict that particular Samsung products infringe the ’381 patent. That determination is now binding, and cannot be revisited in a second damages trial. See In re Innotron Diagnostics, 800 F.2d at 1085 (issues in first half of bifurcated trial “will be determined and will become law of the case and thus removed” from second half of trial); Hypertherm, Inc. v. American Torch Tip Co., 05cv373, 2008 WL 5412894, at *1 (D.N.H. Dec. 23, 2008) (“Issues decided in the first half of a bifurcated

4

case become law of the case for the remainder of the proceedings”) (citing Innotron); Polycom, Inc. v. Codian, Ltd., 05-cv-520, 2007 WL 7658922, at *3 (E.D. Tex. Apr. 23, 2007) (“bifurcating the claims will promote judicial economy because the patent infringement trial will resolve issues of validity. The resolution of such issues will become the law of the case and could potentially moot issues in the antitrust claims”).

Samsung’s non-infringement arguments at trial, moreover, did not distinguish among the three applications, and it cannot now argue such differences are crucial. Samsung’s arguments, together with the verdict form, make clear that infringement extends to all of the applications identified for each accused product. The Galaxy Tab (Tr. 1808:9-1809:4), Nexus S 4G (Tr. 1753:4-8), and Replenish (Tr. 1753:4-8) were each accused of infringing only through the Gallery application. The jury found that all three infringed the ’381 patent, confirming that the Gallery application infringes. The Gem was accused of infringing only through the Contacts application. (Tr. 1754:1-18.) The jury found that the Gem infringed, confirming that the Contacts application infringes. The only two products subject to the new trial that infringe through the Browser application are the Galaxy S II (AT&T) and the Exhibit 4G. Samsung did not present any non-infringement arguments specific to the Browser applications in these products. Apple’s expert, Dr. Balakrishnan, was cross-examined about the browser application, but only as to products Apple had not accused of infringing in that application. (See, e.g., Tr. 1789:10-12 (“I have not accused the Vibrant of infringing the ’381 patent in the Browser application”).) Thus, contrary to Samsung’s contention, there is no question as to the scope of infringement.

Samsung never argued that the amount of Apple’s recovery differs depending on which applications violate the ’381 patent. To the contrary, Mr. Wagner testified that Samsung should pay a single, paid-up lump sum of approximately $10,000 for all infringement of the ’381 patent regardless of how many applications or how many Samsung products infringed the patent. (Tr. 3068:7-10.) Samsung has waived any argument that Apple’s recovery is dependent on the number of applications in a product that infringes the ’381 patent. Cf. Fresenius USA, Inc. v. Baxter Intern., Inc., 03-cv-1431 PJH, 2011 WL 2160609, at *2 (N.D. Cal. May 26, 2011)

5

(denying motion for new trial on damages after Federal Circuit invalidated two of three patents that had been presented as infringed in a bifurcated damages trial, and where jury had “returned a single, generalized verdict covering all asserted claims from three Baxter patents,” where defendant did not argue that damages depended on number of patents infringed).

E. Samsung's Arguments Are Inapplicable to the Damages Award for Apple's
Design Patents

The argument that a jury must reevaluate infringement is even more attenuated with respect to design patents. Design patent damages may include total profits, meaning “the entire profit on the sale of the article to which the patented design is applied, not just the portion attributable to the design or ornamental aspects covered by the patent,” ((Dkt. 1903, Inst. No. 54); that figure does not turn on the nature of Samsung’s infringement because no apportionment is permitted. (Dkt. 2271, at 12 (“there is simply no apportionment requirement for infringer’s profits in design patent infringement under § 289”).) Evaluation of Apple’s lost profits does not turn on the scope of Samsung’s infringement but on differences in opinion regarding whether design matters and the length of time required to design around Apple’s patents.

CONCLUSION

In sum, no part of the new trial on damages will demand a reevaluation of infringement questions themselves. Even if Samsung’s belated Seventh Amendment objection had not been waived—and it was—nothing in this case distinguishes the Federal Circuit’s repeated and consistent holdings permitting a retrial of damages alone. Indeed, Samsung relied on many of those holdings last fall in its (successful) attempt to convince this Court to order a new trial on damages. That new trial may and should proceed promptly on damages alone, a common occurrence in patent cases, without violating the Seventh Amendment.

Dated: April 9, 2013

MORRISON & FOERSTER LLP

By: /s/ Michael A. Jacobs
MICHAEL A. JACOBS
Attorneys for Plaintiff
APPLE INC.

___________
1 Federal Circuit law governs the specific patent-related questions on which Samsung’s argument relies, such as the “scope of infringement” (Dkt. 2286, at 6). Cf. LaserDynamics, Inc. v. Quanta Computer, Inc., 694 F.3d 51, 66-71 (Fed. Cir. 2012) (applying regional circuit law to decide whether new trial issues were waived, but Federal Circuit law when analyzing substantive arguments about alleged error). Nevertheless, Ninth Circuit law also supports trying damages separately from liability. E.g., Wharf v. Burlington N.R.R. Co., 60 F.3d 631, 638 (9th Cir. 1995) (retrial of damages appropriate even though second jury would determine cause of plaintiff’s injury to allocate damages). In asserting that Ninth Circuit law governs, Samsung cites only a Tenth Circuit case having nothing to do with patent law (Haynes Trane Serv. Agency, Inc. v. Am. Standard, Inc., 573 F.3d 947 (10th Cir. 2009)), and a Federal Circuit case in which the issue governed by regional circuit law was the standard of review on a reduction in damages without offering a new trial. (Minks v. Polaris Indus., Inc., 546 F.3d 1364, 1370 (Fed. Cir 2008)). (Dkt. 2286, at 6 n.1.) Moreover, in Minks, the Federal Circuit ordered the precise relief that Samsung now claims to be unconstitutional—a new trial on damages. 546 F.3d at 1381. In Haynes, the court found a general verdict form would not guide a second jury on specifics of fraud liability (573 F.3d at 967), but here, there is a 20-page verdict form, on which the first jury indicated infringement on a patent-by-patent, product-by-product basis. (Dkt. 1931.)

2 The Federal Circuit has confirmed that district courts have wide discretion in how patent cases may be divided, approving bifurcation of more than just liability and damages. See, e.g., Arthrocare Corp. v. Smith & Nephew, Inc., 406 F.3d 1365, 1367 (Fed. Cir. 2005) (noting without criticism that trial was bifurcated into first phase encompassing “infringement, invalidity, and inequitable conduct” and second phase addressing “damages, willfulness, and the antitrust counterclaim”); Agfa Corp. v. Creo Prods., 451 F.3d 1366, 1373 (Fed. Cir. 2006) (separating trial on inequitable conduct).

6

Here's #2304, Samsung's Statement regarding the reexaminations by the USPTO:
QUINN EMANUEL URQUHART & SULLIVAN, LLP
Charles K. Verhoeven (Cal. Bar No. 170151)
[email, address, phone, fax]

Kathleen M. Sullivan (Cal. Bar No. 242261)
[email]
Kevin P.B. Johnson (Cal. Bar No. 177129)
[email]
Victoria F. Maroulis (Cal. Bar No. 202603)
[email, address, phone, fax]

Susan R. Estrich (Cal. Bar No. 124009)
[email]
Michael T. Zeller (Cal. Bar No. 196417)
[email, address, phone, fax]

Attorneys for SAMSUNG ELECTRONICS
CO., LTD., SAMSUNG ELECTRONICS
AMERICA, INC. and SAMSUNG
TELECOMMUNICATIONS AMERICA, LLC

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA, SAN JOSE DIVISION

APPLE INC., a California corporation,

Plaintiff,

vs.

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

Defendants.

_________

CASE NO. 11-cv-01846-LHK

SAMSUNG’S STATEMENT REGARDING
PENDING REEXAMINATION
PROCEEDINGS PURSUANT TO APRIL
2, 2013 ORDER (ECF NO. 2299)

Pursuant to the Court’s April 2, 2013 Order, Samsung respectfully submits this statement regarding the timing and significance of the PTO’s pending reexaminations of Apple’s patents. Samsung has previously shown that, to avoid waste and inefficiency, the new trial this Court has ordered should be stayed pending appeals from a Rule 54(b) partial final judgment, which are likely to alter the scope and management of the new trial. Dkt. 2281. It likewise would be wasteful and inefficient if the Court proceeds with the ordered new trial immediately, despite the reexaminations (which will likely conclude in a year and a half or less), and the PTO then invalidates Apple’s patents, as that would mean (1) the new trial involved claims that need not be tried at all, and (2) there would have to be a subsequent third trial addressing other products and claims. The risk of this waste further supports Samsung’s request for a stay or postponement of the new trial, accompanied by entry of a partial final judgment.

I. THE REEXAMINATIONS WILL LIKELY CONCLUDE IN 18 MONTHS OR LESS

Two of the three Apple utility patents at issue in this case—the ‘381 and ‘915 patents—are subject to pending ex parte reexamination proceedings before the PTO. These reexaminations were filed by an anonymous third-party, not Samsung. The request for reexamination of the ‘381 patent was filed on May 23, 2012. On October 13, 2012, the PTO issued a first office action rejecting claim 19, the only claim at issue in this action, as anticipated by two references. Dkt. 2079. After Apple responded, the PTO then issued a final office action rejecting claim 19 on March 29, 2013. Dkt. 2291. The request for reexamination of the ‘915 patent was filed on May 30, 2012. On December 19, 2012, the PTO issued a first office action rejecting claim 8, the only claim at issue in this action, as anticipated and obvious. Dkt. 2022. Apple responded on March 19, 2013, and the PTO is expected to issue a final office action in approximately May, 2013.

Assuming Apple appeals the final rejection of the ‘381 patent to the Patent Trial and Appeals Board (“PTAB”), the PTAB’s final decision will likely issue 14-16 months from the date of the March 2013 final office action. Apple’s notice of appeal is due by May 29, 2013 (MPEP 2273; Dkt. 2291 at 1, 2291-1 at 85); Apple’s appeal brief is due by July 29, 2013 (MPEP 2274); the examiner’s answer is due by September 29, 2013 (MPEP 1207.02); and Apple’s reply brief and request for oral hearing are due by November 29, 2013 (MPEP 1208; MPEP 2276). The PTAB

1

will then hold a hearing and issue the PTO’s final decision. MPEP 2277. As the PTO expedites ex parte reexamination proceedings that involve patents in concurrent litigation (MPEP 2286; see MPEP 2282 (requiring Apple to inform the PTO of ongoing activity in this action)), the PTAB will likely issue a final decision 6-8 months after the request for oral hearing is filed—yielding an overall timeline of 14-16 months for completion of the ‘381 reexamination proceedings, and 16-18 months for the ‘915 proceedings.1

The Court can ensure expedition of the reexaminations by ordering Apple to inform the PTO of this litigation. MONKEYmedia, Inc. v. Apple, Inc., Case No. 1:10-CV-00319 (E.D. Tex.), Dkt. 103 at 2 (granting Apple request for stay and requesting PTO (and ordering plaintiff) to expedite reexaminations), Maroulis Decl. Ex. A. If Apple cooperates in expediting the PTO proceedings, which the Court should require, the proceedings will reach completion promptly.

II. FINAL INVALIDITY DETERMINATIONS BY THE PTO WOULD HAVE
SUBSTANTIAL EFFECTS ON THE ORDERED NEW TRIAL

Samsung has previously demonstrated that Federal Circuit rulings on appeal in this case could affect the scope and management of the ordered new trial, and that a partial final judgment and stay of the ordered new trial are therefore appropriate. Dkt. 2281 at 8-10. A final invalidity determination by the PTO would have a similar impact on the trial, and this potential impact further warrants a stay or postponement of trial under the factors this Court typically considers—“(1) the stage of the case; (2) whether a stay will simplify the court proceedings; and (3) whether a stay would unduly prejudice or present a clear tactical disadvantage to the nonmoving party,” Network Appliance, Inc. v. Sun Microsystems Inc., 2010 WL 545855, *2 (N.D. Cal. Feb. 11, 2010)—as (1) the required new trial is yet to occur, (2) a stay of the trial is likely to both simplify the trial and avoid the need for a third one, and (3) there is no cognizable prejudice to Apple.2

2

First, a stay of the ordered new trial could narrow the scope of claims to be tried, and moot the need to try Apple’s claims as to 8 products altogether (the Gem, Indulge, Infuse 4G, Galaxy SII AT&T, Captivate, Continuum, Droid Charge, and Epic 4G). In its damages order, the Court granted Samsung JMOL on the notice date issue and determined that it was able to reduce the jury’s awards as a matter of law to reflect correct notice dates. Dkt. 2271 at 26. It did not make that correction—which could be done without a new trial—only because it could not calculate damages for infringement of the ‘381 patent. Dkt. 2271 at 23-24 (as “the Court cannot calculate the appropriate amount of Apple’s lost profits or a reasonable royalty for the ’381 Patent . . . there is no readily identifiable amount that the Court could remit to remedy this problem”). But if the PTO invalidates the ‘381 patent no damages could properly issue for its infringement, and the Court would thus be able to correct damages for other violations as a matter of law. See 35 U.S.C. § 307(a) (claims in patents will be cancelled upon PTO rejection); Tan v. Integrated Silicon Solutions, Inc., 2008 WL 2340217, at *4 (N.D. Cal. Jun. 5, 2008) (infringement claim is barred following PTO invalidation); see also Cellport Systems, Inc. v. Peiker Acustic GmBH & Co., KG, 2013 WL 24298, *21 (D. Co. Jan. 2, 2013) (citing authorities that a cancelled patent is “void ab initio”).

Second, a stay of the new trial could avoid the need to hold a subsequent third trial on damages and thus permit the claims that require retrial to be retried all at once. All but three of the damages verdicts that remain extant, following this Court’s new trial order, were based in part on findings of infringement of the ‘381 and/or ‘915 patents. Dkt. 1931 at 2-3. But these damages verdicts were not patent-specific, and the amounts attributable to the ‘381 and ‘915 patents are unknown—so these verdicts cannot survive the invalidation of Apple’s patents. Verizon Servs. Corp. v. Vonage Holdings Corp., 503 F.3d 1295, 1310 (Fed. Cir. 2007) (“[W]here the jury rendered a single verdict on damages, without breaking down the damages attributable to each patent, the normal rule would require a new trial as to damages.”).3 If the Court holds a new trial immediately and either of Apple’s patents is then invalidated, yet another trial will thus be required—even if the

3

invalidation occurs after appeals are taken. See, e.g., Dana Corp. v. NOK, Inc., 882 F.2d 505, 507- 08 (Fed. Cir. 1989) (reversing based on collateral ruling of invalidity raised for first time on appeal).

Accordingly, proceeding with the new trial despite the pending reexamination proceedings could both (1) involve a trial on claims that need not be tried, and (2) require a subsequent third trial as to other products. The risk of such waste and inefficiency further supports Samsung’s request for a stay of the new trial pending appeal, which will both permit the Court to obtain the benefit of the Federal Circuit’s guidance on issues subject to final judgment and “narrow the issues” that remain for trial on other claims by avoiding “the waste of significant time and resources if the patents-in-suit were in fact improvidently granted.” MercExchange, L.L.C. v. eBay, Inc., 500 F. Supp. 2d 556, 566 (E.D. Va. 2007) (granting stay pending reexamination in five-year-old case where, following reversal on appeal, a trial was required); see Stryker Trauma S.A. v. Synthes (USA), 2008 WL 877848, *2-4 (D.N.J. Mar. 28, 2008) (granting stay where infringement but not damages had been tried). That the PTO’s rejection of claim 19 of the ‘381 patent has been confirmed in a final office action makes that claim’s final invalidation all the more likely, and a postponement of trial all the more provident. See Network Appliance, Inc. v. Sun Microsystems Inc., 2010 WL 545855, *3 (N.D. Cal. Feb. 11, 2010) (granting stay following PTO office action rejecting patent); Ohio Willow Wood Co. v. Alps South LLC, 2011 WL 2358649, *5 (S.D. Ohio June 9, 2011) (same).

Nor can Apple show any undue prejudice. The Court has already rejected Apple’s claims for injunctive relief, and Samsung has ceased sales of all but three of the products accused at trial (and has implemented non-infringing design arounds as to those three). Dkt. 2054 at 13-14. A stay would thus cause at most delay in Apple’s ability to recover monetary damages, but an award of prejudgment interest eliminates any prejudice from such delay and “delays inherent in the reexamination process do not alone constitute undue prejudice.” Network Appliance, 2010 WL 545855, *4; see also Ohio Willow Wood, 2011 WL 2358649, *4. Moreover, because Samsung seeks only a stay of the ordered new trial and not of appellate or other proceedings, Apple’s appeal of the Court’s injunction order and litigation over Apple’s claims that have become final will move forward promptly. The demonstrable benefits of the limited new trial postponement that Samsung seeks greatly outweigh any claims of prejudice that Apple may make.

4

DATED: April 9, 2013

QUINN EMANUEL URQUHART &
SULLIVAN, LLP

By /s/ Victoria F. Maroulis
Charles K. Verhoeven
Kathleen M. Sullivan
Kevin P.B. Johnson
Victoria F. Maroulis
Susan R. Estrich
Michael T. Zeller
Attorneys for SAMSUNG ELECTRONICS
CO., LTD., SAMSUNG ELECTRONICS
AMERICA, INC., and SAMSUNG
TELECOMMUNICATIONS AMERICA, LLC

___________
1 This timeline is consistent with recent experience specifically with ex parte reexaminations that involve patents in concurrent litigation. For example, after an ex parte reexamination request was filed on Apple’s U.S. Patent No. 5,915,131, which Apple had asserted in pending litigations, the PTO issued a final office action on August 15, 2011 and a final decision following appeals to the PTAB on December 18, 2012—16 months later. Maroulis Decl. Ex. B.

2 As Apple itself has argued, courts apply a “liberal policy in favor of granting motions to stay proceedings pending the outcome of USPTO reexamination or reissue proceedings.” Ho Keung Tse v. Apple Inc., Case No. 06-cv-06573, Dkt. 78 at 5 (N.D. Cal. July 25, 2007) (citing ASCII Corp. v. STD Entertainment USA, Inc., 844 F. Supp. 1378, 1381 (N.D. Cal. 1994)), Maroulis Dec. Ex. C.

3 Specifically, invalidation of the ‘915 patent will require vacatur of the damages awards as to the Galaxy S II (T-Mobile), Galaxy S 4G, Galaxy Tab 10.1 (WiFi), Fascinate, Mesmerize, and Vibrant products, and invalidation of the ‘381 patent will require vacatur as to the same set of products except for the Galaxy S II (T-Mobile).

5

Here's #2305, Samsung's Response to Opposition/Response to Motion:
QUINN EMANUEL URQUHART & SULLIVAN, LLP
Charles K. Verhoeven (Cal. Bar No. 170151)
[email, address, phone, fax]

Kathleen M. Sullivan (Cal. Bar No. 242261)
[email]
Kevin P.B. Johnson (Cal. Bar No. 177129)
[email]
Victoria F. Maroulis (Cal. Bar No. 202603)
[email, address, phone, fax]

Susan R. Estrich (Cal. Bar No. 124009)
[email]
Michael T. Zeller (Cal. Bar No. 196417)
[email, address, phone, fax]

Attorneys for SAMSUNG ELECTRONICS
CO., LTD., SAMSUNG ELECTRONICS
AMERICA, INC. and SAMSUNG
TELECOMMUNICATIONS AMERICA, LLC

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA, SAN JOSE DIVISION

APPLE INC., a California corporation,

Plaintiff,

vs.

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

Defendants.

_____________

CASE NO. 11-cv-01846-LHK

SAMSUNG’S RESPONSE TO APRIL 2,
2013 ORDER (ECF NO. 2299)
REGARDING APPEALABILITY OF
MARCH 1 ORDER RE: DAMAGES

Introduction

Pursuant to the Court’s April 2, 2013 Order (Dkt. 2299), Samsung respectfully submits this response to Apple’s contention (Dkt. 2283) that immediate appeal of the Court’s March 1 Order Re: Damages (Dkt. 2271) is not viable. For the reasons set forth below, Samsung agrees that the March 1 Order itself is not appealable insofar as it vacates damages on 14 Samsung products and sets those products for new trial. By contrast, a Rule 54(b) partial final judgment as to Samsung’s counterclaims and the 14 Samsung products as to which liability and damages have been finally resolved would be immediately appealable, as Samsung has explained (Dkt. 2281, 2290).

Argument

Samsung takes seriously the Court’s expressed desire for appellate review prior to any new trial on damages as to the 14 accused Samsung products as to which the March 1 Order vacated damages. The March 1 Order, however, is not appealable insofar as it vacates damages and orders new trial as to those 14 products, for the following reasons:

First, the March 1 Order is not ripe for appeal under 28 U.S.C. § 1295(a)(1), as it is neither “a final dispositive ruling that ends litigation on the merits,” Nissim Corp. v. ClearPlay, Inc., __ Fed. App’x __, 2012 WL 6116664, *5 (Fed. Cir. Dec. 11, 2012) (unpublished) (quoting Copelands’ Enters., Inc. v. CNV, Inc., 887 F.2d 1065, 1067 (Fed. Cir. 1989) (en banc)), nor an appealable collateral order, see, e.g., Hardie v. United States, 367 F.3d 1288, 1291 (Fed. Cir. 2004) (collateral order doctrines applies where ruling “[1] conclusively determine[s] the disputed question, [2] resolve[s] an important issue completely separate from the merits of the action, and [3] [is] effectively unreviewable on appeal from a final judgment”) (quotation marks omitted).

Second, the March 1 Order is not subject to interlocutory appeal under 28 U.S.C. § 1292(c)(1),1 asitneitherconstitutesanorder“granting,continuing,modifying,refusingor dissolving [an] injunction[], or refusing to dissolve or modify [an] injunction[]” subject to

1

interlocutory appeal under 28 U.S.C. § 1292(a)(1), nor involves “a controlling question of law as to which there is a substantial ground for difference of opinion” subject to certification under 28 U.S.C. § 1292(b) (emphasis added).2 To the contrary, the Court’s decision to grant a new damages trial with respect to 14 Samsung products reflects application of established law to the unique factual circumstances of this case. (See Dkt. 2271, at 14-15, 22-24, 25-26.) Nor would an appeal from the new trial order “materially advance the ultimate termination of the litigation,” 28 U.S.C. § 1292(b), for an appeal on damages issues as to the 14 products subject to the new trial order would leave unresolved issues of liability as to those products, which would necessitate further appeals. And even were the Court to certify the March 1 Order under Section 1292(b) & (c), an appeal could proceed only with the permission of the Federal Circuit. Ritz Camera & Image, LLC v. SanDisk Corp., 463 Fed. App’x 921, 922 (Fed. Cir. 2012) (unpublished) (Federal Circuit “must exercise its own discretion in deciding whether it will grant permission to appeal interlocutory orders certified by a trial court.”) (citing In re Convertible Rowing Exerciser Patent Litig., 903 F.2d 822 (Fed. Cir. 1990)).

Third, immediate appellate review of the March 1 Order is not available under 28 U.S.C. § 1292(c)(2), as that order is neither a “judgment” nor “final except for an accounting.”3

By contrast, a partial final judgment under Rule 54(b), as Samsung has respectfully urged the Court to enter, would be immediately appealable. (See Dkt. 2281.) As a result of the March 1 Order, both liability and damages have been finally resolved as to the 14 products as to which the Court declined to vacate damages and order new trial. All prior orders of the Court implicating those 14 products, including the March 1 Order insofar as it declined to grant new trial as to those products, would merge into a Rule 54(b) judgment and thus could be reviewed by the

2

Federal Circuit on an appeal from that judgment. See, e.g., Hall v. City of Los Angeles, 697 F.3d 1059, 1070 (9th Cir. 2012) (“Once a district court enters final judgment and a party appeals, ... earlier, non-final orders become reviewable.”); cf. Invitrogen Corp. v. Clontech Labs., Inc., 429 F.3d 1052, 1069 (Fed. Cir. 2005) (“As a general proposition, when a trial court disposes finally of a case, any interlocutory rulings ‘merge’ with the final judgment. Thus both the order finally disposing of the case and the interlocutory orders are reviewable on appeal.”) (quotation marks omitted).

Entry of partial final judgment on the 14 products as to which no new trial is ordered, and a stay of new trial pending appeal from that judgment, would serve the interests of judicial economy and efficiency by affording appellate guidance on issues affecting the scope of any new trial. For example, on appeal of the Rule 54(b) judgment, the Federal Circuit could consider whether the Court properly entered judgment on the $380 million award for products found to infringe design patents and dilute Apple’s unregistered trade dress, notwithstanding improper notice dates, on the ground that “[d]amages for dilution of unregistered trade dress do not require notice” (Dkt. 2271, at 21); a reversal of that ruling would require a new trial in which damages would be recalculated based on correct notice dates. (See Dkt. 2281, at 9.) Similarly, since products as to which a Rule 54(b) judgment may now be entered were found to infringe Apple’s design patents, an appeal of that judgment would encompass the Court’s rulings on design patent liability and damages, including the ruling that there is “no apportionment requirement for infringer’s profits in design patent infringement under § 289.” (Dkt. 2271, at 12.) Reversal of any of those rulings would affect the scope of the new trial insofar as it involves design patent liability and damages.

In sum, although a Rule 54(b) judgment is appealable, and may encompass all issues on which the March 1 Order leaves liability and damages finally resolved as to 14 products, the March 1 Order is not presently appealable as to the 14 other products set for new trial.

Conclusion

The March 1 Order is not presently appealable in its entirety.

3

DATED: April 9, 2013

QUINN EMANUEL URQUHART &
SULLIVAN, LLP

By /s/ Victoria F. Maroulis
Charles K. Verhoeven
Kathleen M. Sullivan
Kevin P.B. Johnson
Victoria F. Maroulis
Susan R. Estrich
Michael T. Zeller
Attorneys for SAMSUNG ELECTRONICS
CO., LTD., SAMSUNG ELECTRONICS
AMERICA, INC., and SAMSUNG
TELECOMMUNICATIONS AMERICA, LLC

_______
1 Section 1292(c)(1) states that the Federal Circuit has exclusive jurisdiction over “an appeal from an interlocutory order or decree described in [28 U.S.C. § 1292(a) or (b)] in any case over which the court would have jurisdiction of an appeal under [28 U.S.C. § 1295].”

2 Section 1292(b) states in relevant part: “When a district judge, in making in a civil action an order not otherwise appealable under this section, shall be of the opinion that such order involves [1] a controlling question of law [2] as to which there is substantial ground for difference of opinion and [3] that an immediate appeal from the order may materially advance the ultimate termination of the litigation, he shall so state in writing in such order.”

3 Section 1292(b) states in relevant part: “When a district judge, in making in a civil action Section 1292(c)(2) states that the Federal Circuit has exclusive jurisdiction over “an appeal from a judgment in a civil action for patent infringement which would otherwise be appealable to the ... Federal Circuit and is final except for an accounting.”

4


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