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Apple v. Samsung Appeal - Oral Argument Aug. 9 - Can you go? ~pj
Wednesday, July 17 2013 @ 10:58 AM EDT

Correction: I jumped the gun. This is the appeal of the N.D. Cal.'s decision not to award Apple an injunction against Samsung, in the case where the trial was held last year, not the one about Samsung's successful injunction against Apple at the ITC. Who can keep track of all the smartphone patent trials? I should. But I goofed. So here's the correct info.

Oral argument has been set [PDF] in this Apple appeal of Judge Lucy Koh's ruling that no injunction would be ordered against Samsung in the first Apple v. Samsung litigation. That's docket # 2013-1129 at the US Court of Appeals for the Federal Circuit. Argument on the appeal of this one issue will be on August 9 in Washington DC, at 10:00 A.M in Courtroom 203 before the US Court of Appeals for the Federal Circuit, Howard T. Markey National Courts Building, 717 Madison Place, N.W., Washington, D.C. Each side gets only 15 minutes to speak, so it will be quick. It's Quinn Emanuel's Kathleen Sullivan for Samsung and Wilmer Hale's William F. Lee for Apple. If there is any way any of you out there can attend and be our eyes and ears, that would be awesome.

It's possible that oral argument will be cancelled at the last minute, so be sure to contact me, so I have your plan and email, so I have a way to let you know if that happens. Alternatively, if you contact the court the day before, it will tell you if oral argument is still set for the 9th.

Some recent filings, particularly the scheduling notice, #81:

07/15/2013 - 80 - Notice from Appellant Apple Inc. regarding conflicts with oral argument (September 9-10). Service: 07/15/2013 by clerk. [91543]

07/15/2013 - 81 - NOTICE OF CALENDARING issued. Panel: 1308H. Calendar date/location: Friday, 08/09/2013, 10 a.m., Washington, D.C. Courtroom 203. Response to oral argument order due: 07/18/2013 [91640]

07/16/2013 - 82 - Response to oral argument order from the Appellees Samsung Electronics America, Inc., Samsung Electronics Co., Ltd. and Samsung Telecommunications America, LLC designating Kathleen M. Sullivan as arguing attorney. Service: 07/16/2013 by email Designated time for argument: 15 minutes. Designated time for rebuttal: 0 minutes. [91904]

07/16/2013 - 83 - Response to oral argument order from the Appellant Apple Inc. designating William F. Lee as arguing attorney. Service: 07/16/2013 by clerk Designated time for argument: 12 minutes. Designated time for rebuttal: 3 minutes. [91916]

Here's the calendar notice:

United States Court of Appeals for the Federal Circuit

ORAL ARGUMENT ORDER

2013-1129

APPLE INC. V. SAMSUNG ELECTRONICS CO., LTD

This appeal is scheduled for oral argument in the U.S. Court of Appeals for the Federal Circuit, Howard T. Markey National Courts Building, 717 Madison Place, N.W., Washington, D.C.:
Date: Friday August 9, 2013

Time: 10:00 A.M.

Courtroom No. 203

Argument Time: 15 MIN PER SIDE

Counsel for the appellant/petitioner/ intervenor(s): William F. Lee

Counsel for the appellee/respondent/cross-appellant/ intervenor(s): Kathleen M. Sullivan

The appeal having been placed on the oral argument calendar, counsel need not submit the statement allowed by Fed. R. App. P. 34(a), setting forth the reasons why oral argument should be heard. Notwithstanding the scheduling for oral argument, the panel of judges that will decide the appeal, upon further consideration, may yet disallow oral argument, under the circumstances set forth in Fed. R. App. P. 34(a), and, is so, counsel will be duly notified by the clerk. Counsel shall be advised that the date for oral argument will not be postponed except on motion showing compelling circumstances.

Please respond to the argument order by ECF no later than July 18, 2013. See the Notice to Counsel on Oral Argument on the court’s website for further information: www.cafc.uscourts.gov

See the Notice

FOR THE COURT
/s/ Daniel E. O’Toole
Daniel E. O’Toole
Clerk

July 15, 2013

cc: Counsel of record

Here's that Notice to Counsel webpage referenced.

Here are the appeal filings, as PDFs:

Apple's appeal brief
Samsung's brief
Apple's reply
Apple's initial filing opened like this:
Apple brought this lawsuit to halt Samsung’s deliberate copying of Apple’s innovative iPhone and iPad products. After a jury found that Samsung infringed numerous Apple patents and diluted Apple’s protected trade dress, Apple sought a permanent injunction. Apple proved to the district court’s satisfaction that: (1) “Apple has continued to lose market share to Samsung,” which “can support a finding of irreparable harm” (A5); (2) Samsung’s actions took market share from Apple with respect to not only smartphones and tablets, but also substantial downstream sales of other products, such that Apple “may not be fully compensated by the damages award” (A16); (3) Samsung’s arguments concerning the balance of hardships were unavailing because Samsung claimed to have stopped selling or to have developed design-arounds for the infringing products and “cannot now turn around and claim that [it] will be burdened by an injunction that prevents sale of these same products” (A18-19); and (4) “the public interest does favor the enforcement of patent rights” (A20).

Under eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006), these findings should have led to a permanent injunction against Apple’s adjudicated infringing competitor. Nevertheless, the district court denied relief because it believed that Apple was required to show “not just that there is demand for the patented features” connecting Apple’s irreparable harm to Samsung’s infringement, “but that the patented features are important drivers of consumer demand for the infringing products.” A12. The district court stated that, “[w]ithout a causal nexus, [the court] cannot conclude that the irreparable harm supports entry of an injunction.” Id.

This additional “causal nexus” requirement—particularly when applied as rigidly as the district court did here—is contrary to the Supreme Court’s and this Court’s permanent injunction precedents. Unless corrected, the district court’s ruling that a strong showing on the four eBay factors is defeated by a supposed lack of “causal nexus” will create a bright-line rule that precludes injunctive relief even “in traditional cases, such as this, where the patentee and adjudged infringer both practice the patented technology.” Robert Bosch LLC v. Pylon Mfg. Corp., 659 F.3d 1142, 1150 (Fed. Cir. 2011). This Court should correct that course by reversing the district court’s order.

Samsung's answered in its brief, from the introduction:
In a detailed opinion that carefully applied well-established precedents of this Court to the facts of this case, the district court denied Apple’s request for a broad permanent injunction against 26 accused Samsung smartphones and tablet computers as well as other devices never accused or adjudicated below. In this interlocutory appeal, Apple seeks to overturn that decision even before this Court has the chance to review the liability determinations upon which Apple’s argument depends—liability determinations that have been widely criticized1 and that Samsung will vigorously contest when the judgment below becomes final and appealable. Apple’s arguments should be rejected, and the district court’s denial of a permanent injunction should be affirmed. The district court was well within its discretion to conclude that not a single one of the traditional injunctive relief factors favors a permanent injunction based on patent infringement.

First, the district court properly found that Apple failed to show the irreparable harm necessary for an injunction. To show irreparable harm, Apple must prove causal nexus between infringement and injury, but the district court properly found that the most Apple did was to introduce evidence that some consumers value “design” and “ease of use” in general, a far cry from a showing that the limited features covered by Apple’s design and utility patents drive consumer demand for Samsung products. Apple argues that it should not have to prove causal nexus, but that argument defies this Court’s binding precedents making such a showing a well-established feature of irreparable harm analysis. Apple also argues that such a requirement applies only to preliminary and not permanent injunctions, but such a distinction is baseless.

Second, the district court properly found that Apple also failed to show that monetary remedies will be inadequate in light of its long history of licensing its patents, including its offer to license to Samsung.

Third, the district court did not find that the balance of hardships tips in favor of Apple, and in fact, Samsung would suffer the greater hardship from the broad-ranging injunction Apple seeks. Such an injunction would not stop any ongoing infringement, for Samsung has either discontinued the accused products or designed around any infringing features in the ones it still sells. Thus, the only effect of an injunction would be to confuse and intimidate Samsung’s carriers and retailers with respect to non-accused products never adjudicated in this case, harming Samsung’s longstanding market relationships.

Fourth, the district court properly found that an injunction would not serve the public interest, for it would suppress sales of complex products, only minor features of which were found to infringe.

The district court similarly acted well within its discretion in denying a permanent injunction based on unregistered trade-dress dilution, a decision that is further supported by the absence of irreparable harm to Apple, a factor the district court incorrectly ruled inapplicable under the Federal Trademark Dilution Act.

The order denying a permanent injunction should be affirmed. ________
1 See, e.g., Chares Duhigg & Steve Lorr, The Patent Used as a Sword, N.Y. TIMES, Oct. 7, 2012; Kal Raustiala & Christopher Sprigman, Apple vs. Samsung: Is Copying Theft or Innovation?, L.A. TIMES, Sept. 4, 2012 (“Does anyone own the rectangle? Should anyone own the rectangle?”); Brian Love, Apple-Samsung patent fight: Fuzzy math, L.A. TIMES, Aug. 30, 2012; Editorial, Apple’s Courtroom Win Reveals Deeper Woes in U.S. Patents, BOSTON GLOBE, Sept. 4, 2012; see also Bonnie Cao, Apple co-founder Wozniak says he hates Samsung patent verdict, FINANCIAL POST, Sept. 14, 2012 (“‘I hate it,’ Wozniak said when asked about the patent fights between Apple and Samsung. ‘I don’t think the decision of California will hold. And I don’t agree with it — very small things I don’t really call that innovative.’”).

Apple's reply, from its introduction:
Samsung does not dispute that its sale of infringing products has caused Apple, its closest and strongest competitor, to lose market share and incalculable downstream sales—precisely the type of irreparable harm that has traditionally warranted permanent injunctive relief. Instead, Samsung argues that the district court’s requirement of proof that each specific patented feature drives consumer demand for the infringing products is a “well-established feature of irreparable harm analysis.” Samsung Br. 2. But Samsung does not identify a single opinion from the Supreme Court or this Court requiring such a “causal nexus” in the permanent injunction context. The reason is simple: no court has ever imposed such a requirement because it is contrary to the traditional equitable principles articulated in eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 393 (2006), and consistently applied by this Court in permanent injunction cases.

Nor is there any reason to import a causal nexus requirement from the preliminary injunction context of Apple I and Apple II into the permanent injunction context. When infringement and validity have been decided by a jury and confirmed by the district court, it is inappropriate to deny a patentee the right to exclude where its competitor’s sale of infringing products has caused irreparable harm. That is especially true in cases, such as this one, in which the competitor deliberately infringed multiple intellectual property rights, where no single one may, by itself, drive consumer demand. Furthermore, the rigid causal nexus requirement applied by the district court here would make it exceedingly difficult for patentees to obtain injunctive relief against a competitor’s infringement of patents that cover features implemented in complex multi-feature devices, effectively converting the statutory right to exclude into a compulsory license in many cases—a result that surely was not envisioned in eBay or authorized by Congress.

Samsung’s arguments under the traditional eBay factors fare no better. Samsung contends that money damages would be an adequate remedy, but only by repeating the district court’s error of demanding proof that Apple’s patents are “priceless.” A18. At the same time, the only hardship that Samsung claims it would suffer from an injunction is the inability to resume its infringement— behavior that the public has a strong interest in preventing. As to Apple’s trade dress, the Federal Trademark Dilution Act does not require proof of ongoing dilution as Samsung suggests, but rather presumes injury from the jury’s finding of dilution and thus underscores the appropriateness of an injunction in this case.

The district court’s order denying a permanent injunction should be reversed or, at least, vacated and remanded for application of the correct legal standard.

This is the one where there have been amicus briefs from Nokia, Google, Rackspace, etc.

Corrected information now replaced, but I'm leaving it here so people don't get confused as to what is being corrected. I apologize if I confused you:

Oral argument has been set [PDF] in the Apple appeal of the ITC injunction against it for infringing a Samsung 3G RAND patent. Argument on the appeal will be on August 9 in Washington DC, at 10:00 A.M in Courtroom 203 before the US Court of Appeals for the Federal Circuit, Howard T. Markey National Courts Building, 717 Madison Place, N.W., Washington, D.C. Each side gets only 15 minutes to speak, so it will be quick. It's Quinn Emanuel's Kathleen Sullivan for Samsung and Wilmer Hale's William F. Lee for Apple. If there is any way any of you out there can attend and be our eyes and ears, that would be awesome.

This is the case where the ITC stated that Apple was guilty of reverse hold-up, to everyone's surprise:

In reverse patent hold-up, an implementer utilizes declared-essential technology without compensation to the patent owner under the guise that the patent owner’s offers to license were not fair or reasonable. The patent owner is therefore forced to defend its rights through expensive litigation. In the meantime, the patent owner is deprived of the exclusionary remedy that should normally flow when a party refuses to pay for the use of a patented invention.
Here's some background on the case from The Essential Patent Blog from last January:
The Samsung-Apple ITC investigation (337-TA-794) originated with a complaint brought by Samsung against Apple back in June 2011, in which Samsung accused various Apple products of infringing five patents. Two of these patents — U.S. Pat Nos. 7,706,348 and 7,486,644 — were alleged by Samsung to be essential to the UMTS 3G cellular standard. Not surprisingly, Apple claimed that Samsung’s FRAND obligations with respect to these SEPs prevent Samsung from receiving an exclusion order, in the event Apple is found to violate Section 337.
Microsoft has been making similar moves in Seattle against Motorola, as I pointed out yesterday. But at the ITC, the gambit didn't work, and an injunction issued. The appeal is to try to stop it from going into effect.

Technically, what the ITC ordered [PDF] is a limited exclusion order, and it issued with a cease and desist order:

Notice is hereby given that the U.S. International Trade Commission has found a violation of section 337 in this investigation and has issued a limited exclusion order prohibiting respondent Apple Inc. of Cupertino, California (“Apple”), from importing wireless communication devices, portable music and data processing devices, and tablet computers that infringe claims 75-76 and 82-84 of U.S. Patent No. 7,706,348 (“the ’348 patent”). The Commission has also issued a cease and desist order against Apple prohibiting the sale and distribution within the United States of articles that infringe claims 75-76 and 82-84 of the ’348 patent. The Commission has found no violation based on U.S. Patent Nos. 7,486,644 (“the ’644 patent”), 7,450,114 (“the ’114 patent”), and 6,771,980 (“the ’980 patent”). The Commission’s determination is final, and the investigation is terminated.
So that's the background.

You can find the earlier filings from both parties in the linked article on The Essential Patent Blog, but here's his summary of the positions taken. First, he explains Apple's position on the FRAND question:

With respect to the FRAND-specific policy questions, Apple asserted that the existence of a FRAND obligation precludes all injunctive relief, including exclusion orders. Apple explained that the use of FRAND-encumbered patents to obtain exclusion orders represents “patent hold-up” that can drive up costs, and drew the ITC’s attention to investigations of Samsung being undertaken by the Department of Justice and the European Commission. Apple claimed that the only remedy for FRAND patent holders is a reasonable royalty, and stated that this royalty should be determined with reference to a standardized royalty base and the level of an “aggregate royalty burden” for the standard. Apple also claimed that rejection of a purported FRAND offer does not factor into the analysis.

As to the SEP-related technical questions, Apple denied that Samsung’s patents are in fact essential to the UMTS standard. Apple also claimed that Samsung’s patents cover trivial portions of the accused devices and could easily be designed around. But in the case that the ITC were to find that Samsung’s patents are essential, Apple asserted that such design-arounds would then not comply with the UMTS standard.

As for Samsung, it argued:
Unsurprisingly, Samsung disagreed with Apple, claiming that there is no legal basis for the position that a FRAND obligation precludes issuance of an exclusion order. Samsung asserted that determining whether a FRAND obligation has been violated requires a fact-intensive and case-specific analysis and noted that the ITC’s public interest analysis (and the district courts’ eBay analysis) are equipped to handle these tasks — but that Apple did not demonstrate such a violation here. Samsung also pointed out that the ETSI patent policy does not expressly prohibit injunctions or exclusion orders. Samsung explained that a ban on injunctive relief would encourage “reverse hold-up,” where a potential licensee refuses to take a license to SEPs because it would know that it could not be enjoined. As far as determining whether an offer is compliant with a FRAND obligation, Samsung claimed that there is no “one size fits all” solution, but that reference can be made to offers made for the same or similar technology.

As to the technical questions, Samsung asserted that both of its UMTS-essential patents are important and that Apple could not design-around them. However, Samsung explained that Apple could sell alternative standards-compliant devices (2G cellular, Wi-Fi, or WiMax) that would not infringe Samsung’s patents.

Arguing that a patent isn't really essential has its dangers, it turned out, as the ITC staff's position shows:
Generally, OUII sided with Samsung — it advocated against a per se bar on exclusion orders for FRAND-encumbered SEPs, instead urging to analyze the merits of FRAND defenses on a case-by-case basis. Interestingly, OUII asserted that in this case, there is no risk of hold-up and no FRAND obligation because Samsung’s patents are not actually UMTS-essential — noting that the ALJ found that certain UMTS-compliant products did not infringe the patents, while certain UMTS-compliant domestic industry products did practice the patents.
You'll find various companies' Public Interest Statements in support of Apple or Samsung on that same page.

Needless to say, Apple's arguments did not prevail. Here are the parties' responses when the ITC asked for input on the subject of public interest, and specifically the FRAND questions back in March that the Essential Patent Blog was summarizing, all PDFs:

Apple has also filed with the USTR, asking the Office of the United States Trade Representative, as the President's representative in such matters, to undo the injunction in the public interest. Samsung opposes. Here's Apple's filing and Samsung's, PDFs.

In short, this case is a very big deal, because it gives the lie to the Apple-Microsoft claim that owners of RAND patents are not allowed to seek injunctions, that doing so is a violation of their RAND obligations. Motorola just cited to the ITC decision in the Seattle case against it on similar claims by Microsoft. The tide is turning, and Apple very much wants to stop that from happening.

Brendan Coffman at Patent Progress provided an analysis of the public interest briefs as well here.

Save all that for the future. It will happen eventually. So, my assessment is that it's not that urgent to be there. I checked with the court, and there will be audio made available very quickly. So I'll leave it up to you to decide if you wish to go or not. When we get to the ITC one, I really feel we need to be there, so if you can only attend once, save it for that one.

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