Apple Scores a Big Jury Verdict Against Samsung, But What About an Injunction?

There are some very good summaries of the Jury verdict, and there is also a lot of speculation about what happens now that the jury found various Samsung patents infringe Apples patents and trade dress. The jury’s verdict form shows how they answered the various IP claims. In summary, all of Apple’s and Samsung’s patents (utility and design) were found valid. However, none of Samsung’s patents were infringed and the vast majority of Apples were. However, the jury form also gives a some indications of what may happen next in this case.

While a lot will be written in the next week on pending appeals and cross appeals, motions for judgement notwithstanding the verdict (JNOV), and other post trial maneuvers, Judge Koh will also have to decide if she will award an injunction preventing future sales and imports of the infringing products. Injunctions are imposed as an equitable remedy by the judge, not the jury. In deciding whether or not to grant an injunction in patent cases, federal judges must apply the eBay factors, named for the 2006 eBay v. MercExchange case in which the Supreme Court clarified the factors that must be weighed. Those factors that a plaintiff must demonstrate include:

(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;

(3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and

(4) that the public interest would not be disserved by a permanent injunction.

Since that case, courts have been more reluctant to grant permanent injunctions at the end of a patent trial. One reason cited for the decline in injunctions is that the presumption of irreparable harm is dead. This case is a bit different though.

In addition to the patents infringed, Samsung was found to both infringe and dilute Apples iPhone trade dress (both registered and unregistered). The strength of Apple’s trade dress is in its distinctiveness and Apple’s continued use of it. Trade dress protection is only available so long as the trade dress serves as a source identifier for the product. If another manufacturer can sell goods that infringe or dilute Apple’s trade dress going forward, that would likely do irreparable harm to Apples trade dress rights against other parties.

In this case, there is significant overlap between the design patents and Apple’s trade dress. There is even an arguable overlap between the utility patents and trade dress as the rebounding scroll lists covered by some of the utility patents are part of the look and fee of the various iOS devices. In this unique case, Apple is in a position to argue that failing to provide a permanent injunction would pose an irreparable harm to Apples other intellectual property, namely it’s trade dress.

My personal feeling is that Apple has a better than average chance of obtaining a permanent injunction. Whether the rationale behind it will be based solely on the patents, trade dress, or a combination where the various forms of intellectual property reinforce a showing of irreparable harm will be interesting to see. Keep in mind, that while it isn’t a slam dunk, Judge Koh did show a willingness to impose a preliminary injunction early in the case.

As it stands now, Apple will file its motion and brief on August 29, Samsung will reply on or before September 12 (the rumored launch date of the iPhone 5), and a hearing before Judge Koh will be held on September 20.

UPDATED: Judge Koh, has scheduled the hearing for Decmeber 6.

A Review of the Legal Claims in Apple v. Samsung: Utility Patent Infringement

Friday was the last day of evidence in the Apple v. Samsung case. Closing arguments will likely be on Tuesday week and then the jury will get the case. I posted earlier on the trade dress and design patent claims Apple has made against Samsung in Apple’s complaint. In this post I’ll focus on Apple’s utility patents.

Unlike design patents and trade dress, utility patents protect useful articles and methods. Here is a list of the patents originally asserted by Apple in its Complaint:

With over a year of pretrial motions, hearings, and orders, the list of asserted patents has been whittled down to three: the ‘163, ‘381, and ‘915 patents. These patents relate to various features of the iOS UI including pinch to zoom, rebounding list scrolling, and rebounding scrolling on the home screen, respectively. These patents are not so broad as to block any competing smartphone. If fact, earlier versions of the Android operating system did not include rebounding scrolling and

In preparation for closing arguments, Apple prepared and filed a chart outlining which Samsung devices were accused of infringing Apples various patents.

Samsung is arguing that the patents are not valid because the features claimed were already known when Apple filed its patent applications.

A Review of the Legal Claims in Apple v. Samsung: Design Patent Infringement

Today should be the last day of evidence in the Apple v. Samsung case. Closing arguments will likely be on Tuesday next week and then the jury will get the case. I posted earlier on the trade dress claims Apple has against Samsung that are in Apple’s complaint. In this post I’ll focus on Apple’s three asserted design patents related to the iPhone.

Design patents protect the appearance of an article rather than the functional features. Here is a table with the design patents and their titles:

Design Patent Table from Apple’s complaint

When looking at a design patent, the solid lines show what is claimed and protected. Broken lines provide context but don’t limit the patent. So, while the D677 patent shows the iPhone 4, only the front screen area is in solid lines, so the side buttons and other features don’t restrict the scope of the patent. Similarly, the D790 patent claims the GUI. Only the icons and rectangular touch screen limit the scope of the patent. Below is a table comparing the Samsung Galaxy to these three patents:

Apple’s design patent comparison to Samsung’s Galaxy from Apple’s complaint

Samsung is attacking the validity of these design patents by trying to show that phones with the claimed design elements were publicly known prior to the filing of the applications that issued as these patents. Samsung can also avoid liability if they convince the jury that the design features are functional rather than aesthetic.

One thing Samsung won’t be able to rely on is an argument that they independently developed their own design. In copyright cases a defendant can avoid a claim of infringement if they came up with the material without any reference to the copyrighted material. That is because copyright law protects against, as the name suggests, copying. Patent law, however, doesn’t allow for a defense of independent development.

From what I’ve read so far, Samsung isn’t spending much time arguing that their designs are not similar to Apple’s, but are attacking the validity of the design patents. The jury will get to decide that issue.

A Review of the Legal Claims in Apple v. Samsung: Trade Dress Infringement

Two weeks into the Apple v. Samsung trial, there have been some very interesting stories to come out. From lawyers being scolded for making press releases and not having their court admission ducks in a row to evidentiary rulings on the admissibility of evidence of independent development. These stories are interesting in their own right, but I think it would be helpful to see how they relate to the endgame of the litigation. That endgame is actually spelled out, from Apple’s point of view, in the first document filed in the case: the complaint.

Complaints are the legal pleadings that start the ball rolling in a case and can provide a basis for understanding why the parties do what they do. For example, in an earlier post I wrote why certain evidence of independent development was not admitted, much to the chagrin of some tech bloggers and the general public. Unfortunately, I haven’t see a simple dissection of the claims in the complaint.

With that in mind, I’m going to go through the claims in the complaint that relate to IP issues. I’ll leave the other state claims, like unjust enrichment, aside as the facts needed to prove them are similar to the IP issues, but they are likely being plead to provide different damages theories. In this post, I’ll focus on trade dress infringement.

Trade Dress Infringement

There are two types of protectable trade dress: product configuration (which protects the product itself), and product packaging. Apple describes it’s iPhone product configuration as it’s “distinctive shape and appearance — a flat rectangular shape with rounded corners, a metallic edge, a large display screen bordered at the top and bottom with substantial black segments, and a selection of colorful square icons with rounded corners that mirror the rounded corners of the iPhone itself, and which are the embodiment of Apple’s innovative iPhone user interface.”

Apple also alleges that the product packaging of the Samsung GalaxyS infringes the packaging trade dress of the iPhone. Below are the images provided in the complaint.

Product packaging is generally more susceptible to trade dress protection than product configuration. This is because physical attributes of a product are often functional and functional aspects are not protectable as trade dress. To limit the scope of product configuration trade dress protection, it is only available for product designs that have become become distinctive as a result of an acquired secondary meaning. That is, the design must evoke, in the mind of the consumer, a particular source of the product.

There are also two statutory mechanisms for recover for trade dress infringement. The Lanham act codified common law principles of trademark and unfair competition and allows for federal suits in cases involving unregistered trade dress. The Act also allows for registered trade dress. The legal difference is that a registered trade dress is likely entitled to some presumption of protectability, but the damages and equitable relief available are roughly the same.

However, having a protectable trade dress isn’t enough. Apple will have to show that Samsung’s product configuration and/or packaging are confusingly similar to Apple’s. It’s important to note that the gauge for confusion is the relevant consumer. While tech bloggers may not confuse the two, the question really is if a typical consumer would.

Next up, I will provide a little background for the utility and design patent infringement allegations in Apple’s complaint.

Legislation Limiting Certain Design Patents Hits the House: The PARTS Act

I recently wrote on the power of design patents but now they are under attack, at least in one industry. Reps. Darrell Issa (R-CA) and Zoe Lofgren (D-CA) introduced a bill to be known as the PARTS Act to the House on February 2, 2012 and it had a subcommittee hearing on August 1. Gene Quinn of ipwatchdog.com does a good job of connecting the dots from the witnesses at the subcommittee hearing to vehicle insurance trade groups. The bill would retroactively remove design patent protection for automotive replacement parts. This isn’t about engine components, but rather body panels and interior components that are designed for not just a function but an aesthetic.

With respect to a design patent that claims a component part of a motor vehicle as originally manufactured —

(A) it shall not be an act of infringement of such design patent to make or offer to sell within the United States, or import into the United States, any article of manufacture that is similar or the same in appearance to the component part that is claimed in such design patent if the purpose of such article of manufacture is for the repair of a motor vehicle so as to restore such vehicle to its appearance as originally manufactured; and

(B) after the expiration of a period of 30 months beginning on the first day on which any such component part is first offered to the public for sale as part of a motor vehicle in any country, it shall not be an act of infringement of such design patent to use or sell within the United States any article of manufacture that is similar or the same in appearance to the component part that is claimed in such design patent if the purpose of such article of manufacture is for the repair of a motor vehicle so as to restore such vehicle to its appearance as originally manufactured.

While these patents can protect the appearance of a particular model, automotive companies and their suppliers also pursue design patents on these components to protect their position in the replacement part market. While they could pursue protection on the entire vehicle appearance, typical body repairs involve only one or two body panels. Accordingly, it’s advantageous to obtain a design patent on each new panel design independent of the others.

Under current law, a design patent may be obtained that will have a 14 year term from the date of issue. That effectively covers the life of many cars. The result of the bill would be a wholesale devaluing (really an elimination of value) for design patents already issued in this area. Replacement parts manufacturers would be able to immediately start producing and marketing exact copies of the OEM panels. Two and a half years after the first offer for sale of a vehicle having the patented part, anyone could sell or use the copies.

While this could conceivably reduce repair costs (a boon to car insurance companies) it will also reduce the return on investments in new vehicle design and body styles. There are pros and cons to the concept of trying to increase competition in a particular market, but immediately devaluing design patents is not the way to promote competition in the area.

Like the SHIELD Act, the PARTS Act targets a specific industry and aims to weaken patents in those industries. It seems that efforts to weaken intellectual property protection in the United States are moving away from comprehensive changes and are instead being applied to specific industries.

An Example of a Brand Effectively Using Social Media

Listening pays dividends. We’ve all heard that you have to listen before speaking when it comes to social media. But the listening doesn’t stop once you start talking. So please, bear with me as I provide more background than necessary about my lunch.

My wife and I planned to meet for lunch on our anniversary at our favorite sushi place @bluesushiomaha. I tweeted out that was the plan and included the twitter handle of the restaurant in question. The manager recognized me from my twitter profile picture. and brought us a complimentary appetizer (their wonderful mango crab rangoon).

My wife and I both ordered a two maki lunch special that was as wonderful as always.  As we were finishing, the manager brought a complimentary desert — tempura fried ice cream with raspberry and chocolate sauce. It was a desert we’d had before and hadn’t bee too impressed with it. We likely wouldn’t have tried it again, but the manager had brought it out for us and it turned out to be so much better than the last time. The batter had been fried to a crispy perfection and stood up to the melting ice cream like a champ. Its our new favorite desert at this restaurant.

In short, the food was excellent and the service was superb. It always is at Blue and that’s why we go there as often as we do.

But, why am I blogging about lunch? Because social media made it the experience it was. I had no expectation of a comped appetizer and desert when I let people know my lunch plans, but the manager made a point to say, “thanks for tweeting.” The restaurant wasn’t just using twitter as a way to send out micro blasts as advertisements. They were actively listening to their customers, and in the process, providing a wonderful experience for the type of customer who could try to reward them — one who is pretentious enough to think people will read a blog entry about his lunch.

Bill in the House Would Make Losing Patent Owners Pay Some Litigation Costs

Reps. Peter DeFazio (D-OR) and Jason Chaffetz (R-UT), have introduced the “Saving High-Tech Innovators from Egregious Legal Disputes (SHIELD) Act.” The bill, if passed, would award attorney’s fees and costs to the winning putative infringer if the judge finds that the patent owner “did not have a reasonable likelihood of succeeding…” The bill is limited to patents related to computer hardware and software.

There are a few things I want to point out. First, despite the statement (reported by arstechnica.com) from Rep. Chaffetz that “A single lawsuit, which may easily cost over $1 million if it goes to trial, can spell the end of a tech startup and the jobs that it could have created,” this bill will likely not affect cases that go to trial. While not congruent with the standard for summary judgement or a Rule 12(b)(6) motion, I don’t think many cases that make it to trial would fit the standard set out in the SHIELD Act.

Second, the bill does not address the situation of an accused infringer who loses a case in which they did not have a reasonable likelihood of succeeding. This puts a disincentive on patent owners, especially small business patent owners (many of whom are technology startups), who would otherwise want to defend their intellectual property. At the same time, it encourages infringers to drag their feet, avoid settlement, and force the patent owner to rack up legal fees even if the infringer has a strong feeling they may lose on summary judgement.

Many technology startups chose to use patents to protect their ideas. Those patents are only useful if they can be enforced and this one-sided legislation will make it harder for small businesses to do so. It may also impact their value to potential suitors who may chose to emulate the technology rather than acquire it.

A better approach would be to impose a “loser pays” system across all patent cases (or even all cases brought in federal court). Whatever is done, it should be done across the board to apply to all technology areas.

As the bill stands, I doubt it will impact the behavior of patent trolls. Defendants will still settle because the mere hope of recovering their defense costs won’t offset the potential downside of not settling. The suits that will be deterred are those brought by innovative startups who now will have to fear paying the accused infringer’s costs should the startup lose. Those costs could break a small company and the fear of paying them will keep small businesses from asserting valid patents.

Apple v. Samsung: Independent Development is Not a Defense

There has been a lot of coverage of the Apple v. Samsung case going on. I’ve posted on the value of design patents that this litigation highlights. One topic is that of the public release of excluded evidence by Samsung’s lawyers. Some tech blogs have taken issue with the ruling saying Samsung should be able to show evidence that the design was their own idea.

This misses a critical point. Independent development is not a defense to patent infringement. Even if you never saw the design or the patent you are accused of infringing, that will not protect you. This is true even in you came up with the idea first.

Unless an earlier developed design fits into a statutory category of prior art (such as a printed publication, patent, article for sale, etc.) then its existence is irrelevant to validity and infringement. This surprises some people and it is different than other areas of intellectual property law.

For example, trade secret law protects against misappropriation; copyright law protects from copying. In these areas, a defendant can avoid liability by demonstrating independent development. I’m sure the attorney’s for Samsung were well aware of this, and it will be interesting to see what Judge Koh does in response to the public statements and release of evidence that was deemed irrelevant.

Apple v. Samsung: The Power of Design Patents

Design patents are often maligned as limited in their usefulness. Many clients want to obtain one or more utility patents for their new products but don’t think of the potential power of design patents. In the United States, design patents are used to protect the aesthetic aspects of a product. That may sound narrow or easy for competitors to design around, but that may not always be the case.

Apple’s design patents for the iPhone are an extreme example of the potential power of design patents. It should be noted that nearly 80% of Apple’s damages claim is based on design patent infringement.

Like any other patent, Apple can (and has) also assert infringement in the International Trade Commission. The result of a finding of infringement in the ITC is not damages, but rather an exclusion order that is enforced by customs who prevent the infringing devices from being imported. In the electronics (and many other industries) where production is done offshore, this is a heavy hammer to wield that effectively excludes the infringing products from one of the larges consumer markets in the world.

Because ITC proceedings are streamlined, they are considerably less expensive than litigation. This makes them available to a broader range of patent owners, including smaller companies.

Update —

The Federal Circuit has again held that patent licensing companies can utilize the ITC. There is a requirement that their be potential damage to “domestic industry” and licensing satisfies that requirement.