Having duked it out over patents on the West Coast, Apple Inc. and Samsung Electronics Co. brought the latest stage of their fight to a federal appeals court in Washington on Friday, arguing over when courts can block the sale of products as a remedy for infringement.
In the U.S. Court of Appeals for the Federal Circuit, Apple is challenging a federal trial judge's denial of the company’s request for a permanent injunction blocking the sale of Samsung products that a jury found infringed on Apple's patents, or ones "not more than colorably different." Apple is claiming the judge improperly created a new standard requiring Apple to prove that the patented features at issue drove consumer demand for Samsung's infringing products.
A Federal Circuit ruling siding with Samsung would "work a fundamental change" in U.S. intellectual property law, Apple's lawyer, William Lee of Wilmer Cutler Pickering Hale and Dorr, told the three-judge appellate panel.
Kathleen Sullivan of Quinn Emanuel Urquhart & Sullivan denied that Samsung was trying to create a new categorical rule. She said courts had already found that the standard for securing an injunction included proving infringed patents were drivers of demand. Apple, Sullivan said, failed to make that connection.
Apple won a $1.05 billion jury verdict against Samsung in U.S. District Court for the Northern District of California last summer. The jury found Samsung infringed on Apple patents in 26 of its products. U.S. District Judge Lucy Koh later struck $450 million from the award and ordered a new trial on damages.
In the meantime, Apple moved for the permanent injunction. In December, Koh denied the request, finding Apple failed to show a "causal nexus" between the infringed patents and consumer demand for the Samsung products Apple wanted to block.
Lee, a litigation partner in Wilmer’s Boston office, argued in the Federal Circuit that Koh adopted a causal nexus standard that no federal circuit court or the U.S. Supreme Court had ever required in the context of a permanent injunction. Samsung was advocating for a standard that would "categorically deny relief," Lee said.
Federal Circuit Judge Kathleen O'Malley said Lee's argument that there should be no nexus standard was problematic because previous case law seemed to point to a nexus, even if it didn't explicitly used that word.
"I can't imagine that you wouldn't have some nexus requirement, regardless of how you'd define it, in every case in which a permanent injunction as considered," she said.
Lee said he agreed there needed to be a connection to irreparable harm suffered by the infringed party. If Apple lost market share because senior executives were indicted for felonies, for instance, there would be no connection, Lee said. But where there was a finding that certain products infringed and those products caused the harm, he said, that should be enough of a connection.
Sullivan said the Federal Circuit had already established the causal nexus standard in previous decisions and that Lee's threats of the death of injunctions were "greatly exaggerated."
Judge Sharon Prost and O'Malley questioned whether Koh went beyond the previous cases in requiring a patent-by-patent analysis. Sullivan said Koh was applying an analysis set out by the Federal Circuit in another dispute between Apple and Samsung in a case known as “Apple II.” Sullivan said Apple failed to prove its patented features, considered individually or together, were drivers of the demand, let alone the major drivers of demand.
Apple had argued that if there was a causal nexus standard, it would still meet the requirement because it presented evidence of how much consumers valued the design features protected by the infringed patents.
Sullivan urged the court to reject Apple's evidence, saying it was too broad and not directly linked to specific patents. That consumers valued good design and "ease of use" was different from being driven to buy a product because of the specific design features at issue, she said. The judges pressed Sullivan to explain why evidence that consumers would pay more for particular product features wasn't proof that they drove demand. Sullivan said consumers' willingness to pay a premium for certain features didn't necessarily explain why they picked one product over another.
Apple also challenged Koh's denial of a permanent injunction for Samsung products the jury found diluted Apple's "trade dress" – the visual and physical appearance of a product. Prost asked Lee if Koh should have given weight to the fact that Samsung said it was no longer selling the diluting products.
Lee said it was a factor that ought to be given very little weight. Once Samsung was found to dilute Apple's trade dress, an injunction telling them to stop selling those products was appropriate. If Samsung wasn't selling the products anymore, they wouldn't be harmed by the injunction.
Sullivan countered that the fact that both Samsung and Apple were no longer selling the products involving the trade dress claims was relevant. To secure the injunction, she said, Apple had to prove Samsung was diluting a current mark. She argued the court shouldn't allow Apple to substitute an injunction for bringing new infringement cases in the future over new products, especially when it came to "amorphous" elements such as design patents and trade dress.
Judge William Bryson also heard the case.
Contact Zoe Tillman at firstname.lastname@example.org.