Today the United States Court of Appeals for the Federal Circuit denied, without stating any particular reasons, Apple's petition for a rehearing of its mid-October opinion on the Galaxy Nexus preliminary injunction matter. Apple had asked for a rehearing by the panel of three judges who made the original decision or, preferably, a rehearing en banc (full-bench review). Such rehearings are rarely granted, but the question of whether patent holders would be able to bar direct competitors from continued infringement of patents without having to prove that the patented features drive consumer demand appeared important enough to warrant high-level attention.
Samsung opposed Apple's petition. Apple then asked for permission to file a reply to Samsung's opposition brief. Simultaneously with today's order denying a rehearing, Apple's motion for leave to file a reply was also denied.
Apple stressed the importance of the issue on a couple of other occasions as well. It warned that the costs to innovation would be profound if the "causal nexus" requirement (that a particular patented feature drives consumer demand, as opposed to the lower hurdle of proving that a competing product having, among other things, infringing features causes competitive harm) had to be satisfied by smartphone patent holders. For multifunctional products it's extremely hard, if not impossible, to show that a particular feature drives consumer demand. Apple also emphasized the importance of the question in a petition for an initial hearing by the full appeals court of Judge Koh's recent denial of a permanent injunction against Samsung despite a multiplicity of infringement findings by a California jury.
The appeal of that denial of a permanent injunction is now the next opportunity for Apple to improve its position vis-à-vis Android device makers such as Samsung. Despite today's denial of a rehearing I believe there is a chance that the Federal Circuit agrees with Apple, at least to a certain degree, that the de facto unavailability of injunctive relief in a large number of cases, including the highest-profile cases in the history of patent law, is not really reconcilable with the notion of intellectual property. While Judge Koh in the Northern District of California applied the "causal nexus" standard in just the same way to a preliminary (pre-trial) and permanent (post-trial) injunction analysis, the Federal Circuit could still set a different standard in connection with permanent injunctions.
At this stage it appears extremely difficult for patent holders like Apple to win meaningful remedies in U.S. federal court. Not only has the "causal nexus" requirement raised the bar for injunctive relief but it also isn't particularly hard for a defendant found liable for infringement of valid patents to avoid a finding of willful conduct: earlier this week Judge Koh held that even though a jury was convinced of Samsung's subjective infringement of several Apple patents, Samsung had sufficiently reasonable defenses so as not to have committed objectively willful acts of infringement. Injunctions and damages enhancements (potentially triple damages) for willful infringement are the two most impactful remedies capable of discouraging infringement. But if they aren't available to Apple in a dispute with its largest direct competitor, Samsung, who else is going to win such remedies in the United States in the foreseeable future?
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