Apple v. Samsung (Fed. Cir. 2016) (En banc)
Note: This SamsApple case is not the design patent damages case now before the US Supreme Court. Rather, this case involves Apple’s patents covering slide-to-unlock; phone number recognition; and auto spell correction. At the district court, the jury found that three of Apple’s touch-screen patents infringed by Samsung devices (resulting in $119.6 million in damages). The jury also found one Samsung patent infringed by Apple, but only awarded less than $200,000 in damages. In a February 2016 opinion authored by Judge Dyk, the Federal Circuit reversed the jury verdicts – finding two of Apple’s patents invalid as obvious and the other not-infringed.
Now, in a surprise en banc ruling Friday, the Federal Circuit has chastised the that original panel in this case – writing to:
[A]ffirm our understanding of the appellate function as limited to deciding the issues raised in the appeal by the parties, deciding these issues only on the basis of the record below, and as requiring appropriate deference be applied to review of fact finding.
Zeroing in here, the en banc found that the original panel had improperly considered “extra-record extrinsic evidence to construe a patent claim term.”
Prior to Teva v. Sandoz (and especially prior to Phillips v. AWH) Federal Circuit panels regularly relied upon extra-record evidence such as dictionary definitions in reaching appellate decisions. In Phillips, the court shifted focus away from dictionary definition toward intrinsic evidence such as the patent document and prosecution history. Then, in Teva, the Supreme Court held that extrinsic factual conclusions of a district court must be given deference on appeal. According to the en banc panel here – “After Teva, such fact findings are indisputably the province of the district court.” With this framework, the en banc majority then offered its holdings:
(1) the appellate court cannot rely on extra-record extrinsic evidence in the first instance or make factual findings about what such extrinsic evidence suggests about the plain meaning of a claim term in the art at the relevant time or how such extra record evidence may inform our understanding of how the accused device operates
(2) the appellate court is not permitted to reverse fact findings that were not appealed; and
(3) the appellate court is required to review jury fact findings when they are appealed for substantial evidence.
In discussing the obviousness determination, the en banc majority noted that the panel (and en banc dissents) raise important questions, but found those questions must wait for a different case since “no party—at the panel or the petition for rehearing en banc stage—invited this court to consider changing the existing law of obviousness.”
After chastising the original panel, the en banc majority then reaffirmed the jury verdicts – finding them supported by substantial evidence and thus reinstated the verdict for Apple.
The en banc
opinion judgment here was 8-4 8-3 with Judge Moore authoring the 7-member majority opinion; Judge Hughes concurring in judgment but without authoring any opinion whatsoever; The original panel members, Chief Judge Prost, Judge Dyk, and Judge Reyna each dissented and each authored their own opinions; and Judge Taranto not participating.
Judge Dyk’s is the most interesting in the way that it reveals some inner-court-workings:
For the first time in 26 years, this court has taken an obviousness case en banc. See In re Dillon, 919 F.2d 688 (Fed. Cir. 1990) (en banc). Remarkably, the majority has done so without further briefing and argument from the parties, amici, or the government, as has been our almost uniform practice in this court’s en banc decisions. . . .
The present en banc decision will have a significant and immediate impact on the future resolution of obviousness issues. While purporting to apply established circuit law, the majority is in fact making significant changes to the law as articulated by the Supreme Court. Indeed, as Judge Reyna convincingly points out, it is difficult to understand how this case would satisfy the requirements for en banc review if the majority’s purpose were not to clarify the law.
The majority states that it takes this case en banc to correct the original panel’s reliance on extra-record evidence. This could hardly be the reason the majority has granted en banc review, since the panel has continuingly expressed willingness, and indeed desire, to eliminate references to any extra-record evidence because of concerns raised in Apple’s petition for rehearing and because they were unnecessary to the panel opinion. . . . [T]he principles that the majority announces are inconsistent with the Supreme Court’s decisions in KSR, Graham v. John Deere, as well as earlier Supreme Court cases, and will make proof of obviousness far more difficult.
Judge’s Prost and Reyna also agreed that the majority’s application of the law in this case is inconsistent with Supreme Court precedent.
If you made it here, then you you see that there is substantially more to discuss – save that for the next post.