The low percentage of smartphone patent infringement assertions that ultimately prove meritorious is an industry-wide problem as my recent analysis of 222 assertions brought by Apple, Microsoft, Motorola, Nokia and Samsung in the U.S., Germany and the UK showed. Apple has an additional problem more so than anyone else: even in cases in which it has, so far, established liability, it has repeatedly been denied injunctive relief. This also happened to Samsung when the Obama Administration vetoed an ITC import ban, but only in that one U.S. case (and over standard-essential patents in a couple of other countries).
Samsung's lead counsel in the recent trial, John Quinn, added insult to injury from Apple's perspective when he said that this patent enforcement effort against Android had become "Apple's Vietnam" and highlighted Apple's failure to win a sales ban. Later, Apple finally gave up its pursuit of a sales ban in the first California case and dropped a cross-appeal. A few months after the trial in the second case, history repeated itself and, in late August, Judge Koh decided that this year's trial win didn't entitle Apple to injunctive relief for failure to establish irreparable harm caused by any infringements identified.
Almost three years and a half after it first sued Samsung, and a couple of months after agreeing on a withdrawal of all pending Samsung actions outside the U.S., Apple is still acting, with respect to U.S. patent remedies, like there's no tomorrow. It's pursuing a postjudgment royalties motion in district court, theoretically seeking $6.46 per device infringing three patents, while also pursuing an appeal to the Federal Circuit of the late-August injunction denial.
I regret to say so, but the way Apple is now pushing for mutually exclusive remedies -- you get a sales ban or you get ongoing royalties, but you'll never get both at the same time -- in two U.S. courts (the Federal Circuit Judge Koh's district court) in parallel comes across as desperate. I can't help but suspect that Apple feels utterly insecure about the non-final liability win from the spring trial. The logical thing to do now would be to get a final judgment in California, have the appeals court in Washington D.C. look at it, and seek a reversal of the injunction denial on that basis; alternatively, ongoing royalties could still be sought thereafter. At least there would be clarity about liability. The patents underlying Apple's trial win have some serious validity issues, and one can also disagree on some of the infringement theories. Apple is now trying to get as much leverage out of a less than solid trial win at the very earliest opportunity, which looks desperate.
It's always been a problem (not only for Apple but also for some other litigants, such as Microsoft and Oracle) that the courts don't move as fast as the mobile devices market does. Various tactics have been tried to accelerate the process. Preliminary injunction requests have turned out to be long shots (whatever Apple won got overturned) in the U.S. and in Germany. The ITC has a forceful remedy and is usually faster than district courts but is more difficult to persuade on the liability side than layperson juries (and remands have slowed down some of the cases considerably). But it's not just that the legal process is slow. The root cause of Apple's patent remedies problem is that it patents, to the extent they turn out valid and infringed at all, cover too small parts of the overall feature set of today's smartphones and tablet computers to give it huge leverage.
For as much as I understand Apple's frustration, I just doubt that judges will consider it a wise allocation of court and party resources to seek rulings on two mutually exclusive remedy requests in parallel when neither kind of decision should be made at this stage of the proceedings, i.e., where there is reasonable doubt that the district court's liability findings in Apple's favor will all stand.
In recent days there have been some more filings related to Apple's parallel pursuit of mutually exclusive remedies. Last week, Apple filed the opening brief in its Federal Circuit appeal of the injunction denial, and it did so five weeks (!) ahead of the filing deadline (this post continues below the document):
14-10-03 Apple's opening brief in injunction-related appeal.pdf by Florian Mueller
Maybe Mr. Quinn's "Vietnam" comment created an even greater sense of urgency on Apple's (and its lawyers') part to win a U.S. sales ban. There's a long list of lawyers on that brief and I'm sure they were able to do great work even under massive time constraints. Theoretically, the entitlement to injunctive relief can be clarified before the liability-related appeal, but this approach almost puts the cart before the horse.
Apple is now obviously trying hard to argue that everything's different from the cases in which it was previously denied injunctive relief. It basically says its patent claims are stronger than in the past, its evidence of a causal nexus between alleged infringements and alleged irreparable harm was better, and it places more emphasis than ever on the availability of workarounds -- an aspect that I felt Apple didn't stress enough in at least one previous injunction appeal. But the truth is that Apple picked relatively narrow claims for this year's trial (so narrow that its current products don't even implement all of the asserted claims), and that structurally Apple's "causal nexus" evidence faces the same issues as before.
With most major tech companies having to defend themselves against patent assertions many times (including Apple itself), it's admittedly not easy for Apple to garner support from similar companies for a pro-injunction initiative. Companies that increasingly rely on patent monetization (rather than building real products) are Apple's best shot. Nokia is such an example. Another one of those types of companies is Ericsson, which was just granted an extension to file an amicus curiae brief. Officially, Ericsson will support "neither party," but make no mistake, it will support Apple's strategic interests here, either entirely or almost entirely.
Meanwhile, Samsung asks Judge Koh for permission to file a sur-reply to Apple's reply in support of its postjudgment royalties motion. Samsung says Apple raised new issues in its reply that it needs to respond to (this post continues below the document):
14-10-06 Samsung's proposed sur-reply re. ongoing royalties.pdf by Florian Mueller
It will be very interesting to see how Judge Koh deals with Apple's postjudgment royalties motion. One of Samsung's arguments is that Apple isn't entitled to postjudgment royalties anymore because Judge Koh limited the number of post-trial motions and Apple would have had to requests this remedy before (rather than just seek damages, which relate to past infringement). An outright denial would be really bad for Apple. Of all the possibilities the one that seems relatively most likely is that the postjudgment royalties matter will be stayed pending an appeal of a final ruling on the merits.
A possible explanation for Apple's try-everything-at-once approach could be that Apple and Samsung may be in final settlement negotiations to put the U.S. part of the dispute to rest as well, and Apple may just want to build as much pressure as it can at this stage, given that its position isn't too strong anyway. But this isn't necessarily what this is about. It could also be that no settlement will happen until all appeals have been exhausted. In that case, things would take so long that the five weeks Apple saved by filing its opening brief way ahead of schedule wouldn't make much of a difference in the greater scheme of things.
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