Author: Stefano Barazza (Studio Legale Barazza)
Apple Inc v Samsung Electronics Co Ltd, District Court for the Northern District of California, 12-CV-00630, Order Granting Preliminary Injunction, 29 June 2012
Journal of Intellectual Property Law & Practice (2012) doi: 10.1093/jiplp/jps174, first published online: December 4, 2012
The court issued a preliminary injunction in Apple's favour, enjoining the Samsung Galaxy Nexus, on the basis of four patents infringed by the smartphone's operating system, Google's Android. The judgment may yield serious consequences for manufacturers of Android-based devices.
Legal context and facts
In early 2012 Apple filed suit against Samsung, claiming patent infringement, in relation to several of the Android-based devices manufactured by the Korean firm. Apple also brought a motion for a preliminary injunction, aiming to stop the defendant making and selling, in the United States, the Galaxy Nexus smartphone.
The motion focused on four patents (out of the eight asserted in the original Complaint), allegedly infringed by the smartphone's operating system, Google's Android 4.0 (‘Ice Cream Sandwich’):
* the ‘604 patent, which essentially depicts a unified search interface, allowing the retrieval of information from a plurality of sources (including local storage and the internet);Analysis
* the ‘647 patent, concerning a system that detects specific data structures (eg phone numbers, email addresses, dates) and allows the user to perform actions directly on them (eg dialling the number, sending an email);
* the ‘721 patent, describing a method of unlocking a portable electronic device, by performing a predefined gesture on an unlock image displayed on a touch sensitive screen;
* the ‘172 patent, which takes into account the difficulty of inputting text on the small keyboard area of a portable device, providing word recommendations that the user can select while typing.
The court noted that the preliminary injunction is an ‘extraordinary and drastic remedy’: Intel Corp v ULSI Sys Tech Inc, 995 F 2d 1566, 1568 [1993]. It then recalled the factors to be assessed, which include the likelihood of success on the merits, the likelihood of irreparable harm, the balance of the hardships and the public interest: Winter v Natural Res Def Council, 555 US 7, 20 [2008].
On the burden of proof, Judge Koh explained that, even during the preliminary proceeding, patents enjoy a presumption of validity. Consequently, the defendant has the initial burden of providing evidence of invalidity, to which the plaintiff must respond with contrary arguments, as substantial questions on the validity of the asserted patents prevent the issuing of an injunction: AstraZeneca LP v Apotex Inc, 633 F 3d 1042, 1050 [2010].
To assess the likelihood of success on the merits, the court first evaluated patent infringement, applying a two-step process (claim construction and verification of the presence of the claim limitations in the accused device), and consequently analysed the invalidity challenges brought by the defendant. Judge Koh clarified that claim construction is to be conducted from the perspective of a person of ordinary skill in the art in question, at the time of the invention, in light of the entire patent, including specifications, taking into account the prosecution history and other extrinsic evidence: Phillips v AWH Corp, 415 F 3d 1303, 1313 [2005]. In relation to patent invalidity, as defined by 35 USC s 102, she noted that the court must verify whether all claim limitations are found in a prior art reference and if the latter enables a person of ordinary skill in the art ‘to make the invention without undue experimentation’: Bard Peripheral Vascular Inc v WL Gore & Assocs, 670 F 3d 1171, 1184 [2012].
With regard to the ‘604 patent, the court evaluated the limitations pertaining to the heuristic modules and algorithms used by the search interface: two modules of the Google Quick Search Box, present in the Galaxy Nexus operating system, infringed the patent at issue. The judgment excluded claims of invalidity based on anticipation and obviousness, observing that prior art references did not disclose all the characteristics of the patent, nor rendered the innovation obvious, as obviousness cannot be demonstrated by merely showing that each of the elements of the claim was, independently taken, known in the prior art: KSR International Co v Teleflex Inc, 550 US 398 [2007].
As for the ‘647 patent, the court assessed whether the web browser application in the Galaxy Nexus infringed it by allowing users to perform actions on detected structure. Constructing the claim, Judge Koh relied extensively on the findings made by Judge Posner in Apple Inc v Motorola Inc (ND Ill, No 1:11-cv-08540), concluding that the disputed device infringed the Apple patent. It was held that prior art references either implemented a mechanism that implied user input, or limited the detection to only one type of data. Further, claims of obviousness were dismissed, as the defendant offered only limited evidence of concurrent inventions.
Construing the ‘721 patent, the court assessed both dependent and independent claims, applying the claim differentiation doctrine. It established that the unlock feature of the Galaxy Nexus (displaying a circle with a padlock in the centre, which the user has to move to another region of the touch screen) infringed the patented innovation. A prior art reference, which described the use of touchscreen toggles to control home devices, was found to disclose only some of the limitations of the asserted claims, without rendering the unlocking mechanism obvious. An additional reference was disqualified for failure to provide evidence of priority, as required by 35 USC sec 102. Finally, the court dismissed Samsung's arguments of indefiniteness, which arises only when the claims are ‘not amenable to construction or insolubly ambiguous’: Datamize LLC v Plumtree Software Inc, 417 F 3d 1342, 1347 [2005].
Similar findings of infringement were made with reference to the word recommendation system protected by the ‘172 patent. Claims of anticipation and obviousness were dismissed, as the prior art references either did not disclose all the technical details of the invention or aimed at solving problems different from those addressed by the patent at issue. The court rejected Samsung's additional arguments, which pointed at some of the asserted claims as hybrid or indefinite.
On irreparable harm, the court recalled previous case law, noting that loss of market share, in the context of a market where the parties are direct competitors, may result in serious potential harm: i4i Ltd P'ship v Microsoft Corp, 598 F 3d 831, 861 [2010]. In the case in hand, the parties were direct competitors in the rapidly growing smartphone market; loss of market share in relation to first-time buyers, whose purchasing decision normally determines their future system allegiance, supported findings of irreparable harm. Judge Koh also accepted Apple's arguments on network effects, observing that the loss of market share in the smartphone market may yield negative effects on the sale of other devices manufactured by Apple, due to brand loyalty and ‘platform stickiness’. However, the court found no likelihood of irreparable harm due to loss of goodwill: Apple's asserted claims of loss of brand distinctiveness were dismissed, as the plaintiff failed to identify case law and evidence supporting it.
The judgment also provided an in-depth assessment of the causal nexus between infringement and irreparable harm required by Voda v Cordis Corp, 536 F 3d 1311, 1329 [2008], which is established ‘by showing either that the patented feature is an affirmative driver of consumer demand, or that the patented feature's absence would suppress consumer demand’. The court held that the unified search interface protected by the ‘604 patent drove consumer demand in such a way to substantially affect market share, on the basis of surveys, product reviews and even Samsung's and Google's documents. The nexus could not be established in relation to the other patents.
The balance of hardship tipped in Apple's favour. Even though the consequences of a preliminary injunction may be severe upon the enjoined manufacturer, ‘the harm faced by Apple absent an injunction is greater’, especially since Apple had presented a strong case on the merits. In light of the findings pertaining to the other factors, the enforcement of Apple's patents was in the public interest, as the protection of valid and infringed intellectual property encourages innovation and investment-based risk: Sanofi-Synthelabo v Apotex Inc, 470 F 3d 1368, 1383 [2006].
A bond of $95,637,141.60 was required, and promptly posted, to enforce the injunction. A motion to stay pending appeal was dismissed by Judge Koh, but subsequently granted by the United States Court of Appeals for the Federal Circuit.
Practical significance
Apple has recently brought several lawsuits, in the United States and Europe, against Android-based devices of Samsung and other manufacturers (see LG München, 21 O 26022/11, recently upheld by the Oberlandesgericht; Rechtbank's-Gravenhage, 24 August 2011, LJNBR577; ITC Inv No 337-TA-710, 19 December 2011). Judge Koh's ruling represents a significant victory for Apple, as all four asserted patents were deemed likely valid and infringed. Thus Apple could seek to enforce them against other Android-based devices, which implement the same features of the Galaxy Nexus.
The juxtaposition of a growing number of decisions exacerbates the risk of non-congruent rulings, either due to the different evidence brought by the parties in front of the courts or to the judicial interpretation of patent claims and prior art. In this judgment, the court extensively recalled Judge Posner's findings in relation to the claim construction of the ‘647 patent. However, in evaluating the anticipation and obviousness of the innovation disclosed in the ‘721 patent, it took a different view to that recently expressed by the Patents Court for England and Wales in HTC Europe Co Ltd v Apple Inc [2012] EWHC 1789 (Pat), in relation to the similar European patent EP1964022.
Preliminary proceedings, in relation to patent (and design: see Judge Koh's judgment, between the same parties, in the Order Granting Preliminary Injunction, 26 June 2012) infringement, face the difficulty of analysing technically complex claims and references. Although the court is required to provide only a prima facie assessment in this regard, it appears that the magnitude of the relief requested, which may have devastating consequences upon the defendant's business, warrants an in-depth investigation which, at this stage, typically resolves in an over-reliance upon the declarations provided by the parties' experts.
Finally, Judge Koh repeatedly highlighted the necessity of identifying the effects of patent infringement on consumers. She clarified that this factor yields significant importance not only in relation to the assessment of the casual nexus between infringement and irreparable harm, but also in assessing the loss of brand distinctiveness as loss of goodwill, a theory towards which she exhibited a cautious, but sensitive, approach.
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