Pressure is mounting on the U.S. Court of Appeals for the Federal Circuit to weigh in on Apple’s failed bid for a sales ban against Samsung and to clarify the rules for injunctions in patent cases.
The latest entreaty for appellate review comes from an unlikely party — Finnish mobile phone maker Nokia Corp., which fought its own patent battle with Apple from 2009 to 2011 when the companies settled.
U.S. District Judge Lucy Koh in San Jose dealt a major blow to Apple Inc. in December by denying permanent injunctions against 26 Samsung Electronics Co. devices even after a jury issued a sweeping verdict in Apple’s favor.
Nokia’s brief calls on the appeals court to reverse Koh’s order, arguing it sets an impossibly high bar for patent holders to obtain injunctions and represents a "giant leap backwards for U.S. patent enforcement."
As a handset maker, Nokia competes with both Apple and Samsung. In its brief, Nokia’s lawyers at Alston & Bird in Atlanta take no position on the substantive issues on appeal and describe Nokia as amici curiae "in support of neither party." Still, Nokia’s strongly worded backing of Apple is remarkable considering the companies’ antagonistic history.
Nokia, which owns more than 10,000 patents, takes issue with Koh’s application of the so-called "causal nexus" standard that demands patent holders demonstrate consumers are purchasing competing products specifically for their infringing features.
The causal nexus standard makes injunctive relief a virtual impossibility, Nokia’s lawyers argue, which could reduce incentives to innovate, force patent holders to license their technology to competitors, and reduce the value of patent portfolios.
The "district court imposed an overly-strict and undue burden on the patent holder and invented new law out of whole cloth, which threatens to turn the traditional purpose of patent law on its head," wrote Alston & Bird partners Patrick Flinn and Keith Broyles.
Flinn, a former Morrison & Foerster partner, referred a request for comment to Nokia. (Flinn joined MoFo in Palo Alto the same year as Apple lawyer Michael Jacobs.)
According to IP lawyers, Koh’s ruling fostered confusion over the standard for permanent injunctions in patent cases. A key question is whether the same rigorous standard should apply to both preliminary injunctions that are issued before a court’s finding of infringement and to permanent injunctions that are issued upon such a finding.
Citing the need for clarity, Apple’s lawyers at MoFo and Wilmer Cutler Pickering Hale & Dorr tried to fast-track their appeal to an en banc hearing by the Federal Circuit and bypass review by a three-judge panel. That request was denied. Samsung has not yet filed its opposition brief in the pending appeal.
In her order denying permanent injunctions against Samsung, Koh relied heavily on an October decision from the Federal Circuit requiring a "causal nexus," or direct link, between infringement and irreparable harm for issuance of a preliminary injunction.
That opinion in Apple v. Samsung, 12-1507, dubbed Apple II, overturned Koh’s decision to grant a preliminary injunction against Samsung’s Galaxy Nexus phone in a separate lawsuit.
Koh adopted the reasoning to analyze Apple’s request for permanent injunctions against Samsung, referring 19 times to the causal nexus standard. Though the Apple II opinion addressed a preliminary injunction, Koh wrote that nothing in the opinion suggested "its discussion of irreparable harm be limited to the preliminary injunction context."
But another judge in San Jose had a different read. Ruling in January, U.S. Magistrate Judge Paul Grewal entered a permanent injunction sought by Brocade Communications Systems Inc. against rival A10 Networks Inc., noting the appeals court’s recent rulings on permanent injunctions had not applied the causal nexus test.
In its amicus brief, Nokia contends the proper standard for a permanent injunction remains the four-part test laid out by the U.S. Supreme Court’s 2006 decision in eBay v. MercExchange, 547 U.S. 388. Adopting the causal nexus requirement adds a new and unwarranted burden for patent holders and could have dire consequences, wrote Nokia’s lawyers.
"If there is effectively a lesser or even no threat of an injunction from a district court for infringing a competitor’s patented features, Nokia’s brief states, "then companies will have no serious concern about copying those differentiating features, knowing that they will be able to continue using them to attract customers and steal market share."