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2008: Decision Year for RIAs - October 20-22, 2008 San Jose


Apple Loses Fight to Ban Samsung Widgets
Concurrently, the court threw out Samsung’s bid for a new trial

Apple late Monday lost its bid to get a permanent injunction barring 26 of Samsung's Android-based widgets that a jury found infringed six of Apple's patents from the American market.

Concurrently, the court threw out Samsung's bid for a new trial.

The Korean company claimed the jury, which awarded Apple $1.05 billion in damages, was misled by a foreman that 20 years ago was involved in a lawsuit with Seagate, his former employer and a company Samsung later bought into. The suit drove him into bankruptcy and he supposedly introduced "incorrect and extraneous legal standards" into the jury's deliberations that may have produced a faulty verdict.

The judge didn't buy it. Samsung should have asked better questions during voir dire, she said.

FOSS Patents says without the injunction the "jury verdict has little more than symbolic value."

Apple is bound to appeal the decision claiming the bar it was supposed to clear was set too high in the judge's application of the legal principle known as causal nexus, a requirement for an injunction, and a rather new development in American case law.

In her decision she followed Federal Circuit's prior Apple-Samsung rulings, and, as FOSS Patents points out, the Court of Appeals for the Federal Circuit looks kind of like it may yield to Apple's request for an en banc rehearing of the toppling of the Galaxy Nexus injunction and the causal nexus issue will be the central legal question in that case.

Anyway, US District Judge Lucy Koh denied Apple's motion in its entirety.

FOSS Patents says, "It may be unprecedented in the legal history of the United States for an injunction motion to be denied across-the-board despite such a large number of infringement findings (roughly half a dozen) by a jury and, especially, in light of the competitive situation between the two as well as the jury's findings of willful infringement. If no injunction is ordered in such a case, it is hard to see how any patent holder could ever prevail on such a motion, and I doubt that this is what the appeals court will consider the right outcome. But the appeal will take a year or more, and in the meantime, this is a huge defensive success for Samsung's lawyers."

Judge Koh has yet to decide if the giant award will stand. Samsung wants the amount cut by at least $600 million because the verdict form wasn't discrete enough for its tastes. Apple wants it increased by $536 million for willfulness, which Samsung denies.

As to the all-important injunction that Apple wanted Judge Koh found that Apple didn't establish that popular demand for the Samsung products was specifically driven by the technology it lifted from Apple as opposed to its sheer competitiveness.

"Customer demand for a general feature of the type covered by a patent was not sufficient; Apple must instead show that consumers buy the infringing product specifically because it is equipped with the patented feature," she said.

"The fact that Apple may have lost customers and downstream sales to Samsung is not enough to justify an injunction," she ruled. "Apple must have lost these sales because Samsung infringed Apple's patents. Apple has simply not been able to make this showing."

She didn't think that Apple was that harmed. Blatant evidence that Samsung stole from Apple didn't seem to matter.

"Though evidence that Samsung attempted to copy certain Apple features may offer some limited support for Apple's theory, it does not establish that those features actually drove consumer demand," she said.

According to her "Samsung may have cut into Apple's customer base somewhat, but there is no suggestion that Samsung will wipe out Apple's customer base, or force Apple out of the business of making smartphones."

Koh also said the public interest wouldn't be served by banning products only parts of which infringed.

Meanwhile, the fact that Apple licensed its utility patents at issue in agreements with Nokia, IBM and HTC left Judge Koh with the impression that monetary compensation is sufficient. She did not deal with the anti-cloning provision in the HTC deal, the only agreement whose terms have even been hinted at.

Only three of the 26 products are still being sold, the others having been retired on account of age. Apple won't have a chance to go after current Samsung products until a second infringement suit goes to trial in March of 2014. An injunction at this point would have given it more leverage in the next case.

Apple wouldn't comment on Koh's decision. Samsung said it would review the court's finding before deciding whether to take "further measures."

IDC says Samsung's share of the smartphone market was 31% in the third quarter, up from 23% a year earlier. Apple was in second place with a market share of 15%, up from 14% a year earlier.

Apple reckons Samsung moved into the US market with infringing products just when consumers were moving to smartphones and developing "platform loyalty." It cut Apple off from its organic market.

IDC also figures that Google's Android operating system has a worldwide market share of 68.3% compared with 18.8% for Apple's and estimates Apple will remain the "clear number two platform behind Android" through 2016, gaining a mere 0.3% of the worldwide market by then.

See www.scribd.com/doc/117202522/show-temp and www.fosspatents.com/2012/12/judge-denies-apple-permanent-injunction.html.

About Maureen O'Gara
Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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