Thursday, August 28, 2014

Judge Koh Denies Apple a Permanent Injunction Against Samsung

This occurred yesterday afternoon, and is in regard to the case in which a jury awarded Apple $120 million this past May (see previous posts here and here).  Here are links to coverage on Foss Patents, the San Jose Mercury News, and the Wall Street Journal, and a copy of the opinion here.  

The denial is based primarily on the lack of a causal nexus between Samsung's infringement and any proven cognizable harm to Apple.  On irreparable harm in particular, the court concludes:
After careful examination of all the evidence, the Court concludes that Apple fails to prove that “the infringing feature[s] drive[] consumer demand for the accused product[s].” Apple II, 695 F.3d at 1375. Apple’s argument that the causal nexus requirement does not apply to reputational harm overextends Douglas Dynamics and contravenes the Federal Circuit’s guidance on irreparable harm. Apple has not demonstrated that it will suffer irreparable harm to its reputation or goodwill as an innovator without an injunction. Nor has Apple shown that it will suffer lost sales specifically due to Samsung’s infringement of the three patents at issue. For these reasons, the irreparable harm factor favors Samsung and disfavors an injunction.
Furthermore, on the issue of adequacy of legal remedies:
        The Court concludes that damages for Apple’s alleged irreparable harm in connection with alleged lost sales are difficult to quantify. As the Court determined in the 1846 Injunction Order, Apple’s past licensing behavior demonstrates a reluctance to license Apple’s patents to Samsung, and several factors distinguish Apple’s licenses to HTC and Nokia from the present circumstances. Moreover, Samsung has not established that Apple offered to license the ’647 patent to Samsung in August 2010.
          However, this determination does not overcome Apple’s failure to demonstrate a causal nexus between its alleged harm and Samsung’s infringement. As before, the Court will not issue a permanent injunction based on irreparable harm that Samsung’s infringement did not cause, even if monetary remedies will not compensate Apple for that irreparable harm. See 1846 Injunction Order at 37. Apple bears the burden of showing that legal remedies are inadequate to compensate for the specific alleged irreparable harm. See eBay, 547 U.S. at 391 (listing as the first two factors a patentee must show for an injunction “(1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury”) (emphasis added); Apple III, 735 F.3d at 1371 (“Of course, if, on remand, Apple cannot demonstrate that demand for Samsung’s products is driven by the infringing features, then Apple’s reliance on lost market share and downstream sales to demonstrate the inadequacy of damages will be substantially undermined.”). To award an injunction to Apple in these circumstances would ignore the Federal Circuit’s warning that a patentee may not “leverage its patent for competitive gain beyond that which the inventive contribution and value of the patent warrant.” Id. at 1361 (quoting Apple II, 695 F.3d at 1375) (internal quotation mark omitted). The Court ultimately finds that—despite Apple’s apparent unwillingness to license the patents-in-suit to Samsung—monetary remedies would more appropriately remedy Samsung’s infringement than would an injunction. Accordingly, the second eBay factor favors Samsung.
On the balance of hardships:
Samsung repeatedly told the jury that designing around the asserted claims of the three patents at issue would be easy and fast. In light of those admissions, and the narrow tailoring of, and sunset provision in, the requested injunction, Samsung has failed to articulate any hardship. As the Federal Circuit has held, if the infringer “had a non-infringing alternative which it could easily deliver to the market, then the balance of hardships would suggest that [the infringer] should halt infringement and pursue a lawful course of market conduct.” Douglas Dynamics, 717 F.3d at 1345. For the above reasons, the balance of hardships favors Apple.
Finally, on the public interest:
Balancing all of the considerations that the parties have identified, the Court concludes that the public interest factor favors Apple.
Nonetheless, Judge Koh concludes that "[w]eighing all of the factors, the Court concludes that the principles of equity do not support a permanent injunction here.

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On another note, with my teaching responsibilities resuming, starting next week I will go back to blogging only twice a week most weeks (most likely Mondays and Thursdays) unless something of particular importance (e.g., an important Supreme Court or CJEU case) comes down. 

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