Apple v. Samsung: Court Denies Permanent Injunction and Allows Samsung to Continue Selling Infringing Devices

By Dennis Crouch

File Attachment: Apple_Samsung_Injunction_Denied.pdf (145 KB).

If the Apple-Samsung patent infringement lawsuit had been litigated back in 2005, the parties would have likely settled by now. Ebay changed that calculus and now an adjudged infringer such as Samsung can afford to push cases and appeals further because there is little downside risk that a US court will actually force the company to stop distributing its well known and respected products.

In an order on December 17, 2012, Judge Koh denied Apple’s motion for permanent injunctive relief to stop Samsung from continuing to infringe Apple’s patents and trade-dress. Thus, Apple must be satisfied with the payment of money damages. Although major, the ruling is not unexpected since based both on the law (eBay) and the fact that the court previously denied Apple’s motion for preliminary injunctive relief based upon Apple’s failure to prove irreparable harm.

In order to be eligible for injunctive relief the prevailing party must show that it will suffer irreparable absent an injunction. A key to current irreparable harm doctrine is proof of the nexus between the infringement and the irreparable harm. I.e., that infringement of the particular features or designs protected by the patent right (as opposed to some other factor) will cause the loss of market share. Unlike infringement and damages, the issues associated with injunctive relief are all seen as equitable issues and therefore decided by the judge rather than a lay jury.

Here, Apple alleged three irreparable injuries: “(1) loss of market share; (2) loss of downstream and future sales; and (3) injury to Apple’s ecosystem.” The court found apple had proven injury, but apple failed to prove the causal nexus between the particular adjudged infringing acts and the irreparable harm. As it turned out, Apple did not even present an analysis of alleged harm on a claim-by-claim or even a patent-by-patent basis. In considering this, the court found that Apple’s had not proven that any of “its three [infringed] design patents covers a particular feature that actually drives consumer demand.” The same problem existed with the utility patent that was found infringed. Rather Apple’s proof was “simply too general.”

Many factors go into making a product easy to use, but the features for which Apple is asserting patent protection are very specific. A consumer may want a phone that is easy to use, but this does not establish that a tap-to-zoom feature, for example, or any given type of gesture, is a driver of consumer demand. Thus, Apple’s evidence of a survey showing the importance of ease of use as a general matter, PX 146.6, does not establish that infringement of any of Apple’s patents caused any harm that Apple has experienced. To establish the required nexus, Apple must make a showing specific to each patented feature. This, Apple has not done.

Without establishing a causal nexus between the proven harm and the proven infringement there is no room for justifying injunctive relief. Therefore Judge Koh denied relief. Apple has an immediate right to appeal this decision to the Federal Circuit even as the district court continues to decide additional post-verdict motions. To be clear, this is a major win for Samsung, but Apple still has a right to appeal and is sitting on a $1 billion verdict.

The court has also released its reasoning for denying the Samsung motion for new trial based upon juror bias.  The motion was based primarily on interviews given by the jury foreman (Velvin Hogan) after the verdict.  Samsung alleged that Hogan was biased and had lied during voir direFile Attachment: Apple_Samsung_New_Trial_Denied.pdf (130 KB).

11 thoughts on “Apple v. Samsung: Court Denies Permanent Injunction and Allows Samsung to Continue Selling Infringing Devices

  1. “There was, however, an additional lawsuit in Mr. Hogan’s past that Mr. Hogan did not disclose during this exchange: Mr. Hogan was sued by his former employer, Seagate, in 1993 (Seagate Tech., Inc. v. Hogan, Case No. MS-93-0919 (Santa Cruz Mun. Ct. Filed June 30, 1993)). Nor did he mention that he filed for personal bankruptcy six months after being sued by Seagate (In re Velvin R. Hogan and Carol K. Hogan, Case No. 93-58291-MM (Bankr. N.D. Cal. Dec. 27, 1993)), which appears, at least in part, to be due to that lawsuit”

    Lulz lulz lulz. Seems that they just so happened to get themselves a sour grape as a juror.

  2. The causal nexus argument may be derived from Ebay but it’s largely lacking in the Ebay and subsequent rulings, and much of Koh’s causal nexus argument appears to be entirely new precedent established by Posner in the previous Apple decision. Otherwise, Koh did find that Apple had presented evidence supporting irreparable harm… What she didn’t find was a direct link between the irreparable harm and the specifics of these patents.

    Not saying this is a surprise, but I think it’s an error to claim that this all derives from Ebay and should have been anticipated.

  3. Post-ebay, I have long felt that a prevailing patent owner might be better off not even requesting a permanent injunction. If you have a judgment of infringement and an award of damages for past infringement, then you just walk away, what does the infringer do at that point? If you don’t ask for a permanent injunction, the trial court really is powerless to grant any sprt of ongoing royalty. So what do you do if you are the infringer? You can’t just keep selling as if nothing happened.

  4. Wait a minute. This decision does NOT mean that Samsung can go on continue infringing without paying Apple. The $1B judgment was for past infringement, not past infringement plus a paid-up royalty for any future infringement. So yes, Samsung clearly is open for potential damages arising from any post-verdict sales of infringing devices. In fact, that’s the whole crux of the irreparable harm analysis–the judge believed (and Samssung argued) that monetary damages would be sufficient to compensate Apple for any future infringement. This decision is not a get out of jail free card for Samsung to continue infringing without recourse.

  5. “Apple did not even present an analysis of alleged harm on a claim-by-claim or even a patent-by-patent basis.”

    Yet one more example of top-notch litigating.

    Yes, I know that Apple is “sitting on a $1B verdict”–but on a recent flight out of San Jose I was sitting beside someone from Samsung who suggested that the $1B was manageable.

    I imagine that it is especially manageable in light of this PI denial, as Samsung will be able to retain for themselves that which Apple attempted to claim to have lost.

  6. It seems to me that at least three major legal issues remain arguable on this subject in somewhat different future situations:

    (1) Could a patent owner still argue for an injunction if a defendant is infringing multiple utility patents that in combination can be shown to significantly provide a major market share advantage?
    (2) Can a continued post-trial infringement be effectively stopped without an injunction by awarding statutory enhanced [up to trebled] damages for post-trial wilfull infringements [which would cause defendants to lose money making such sales]?
    (3) Could a D.C. judge postpone making, or staying, a decision on a perminant injunction until after appeal? Isn’t that what happened in eBay iself?

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