Docket No. 2014-1802
PROST (D), MOORE, REYNA (C)
September 17, 2015
Brief Summary: DC decision denying of Apple’s request for a permanent injunction against Samsung vacated and remanded because it erred in deciding the first two eBay factors (irreparable injury (with a “causal nexus”), and “remedies available at law” (e.g., monetary damages) are inadequate) did not weigh in Apple’s favor.
Summary: Apple appealed from DC denial of its request for a permanent injunction (PI) against Samsung for infringement of Apple’s patents directed to smartphone and tablet interfaces. The jury awarded Apple over $119 million in damages for infringement by nine Samsung products of two Apple patents (‘647 and ‘721 patents). Apple’s request for a permanent injunction was directed to the infringing features of Samsung’s phones, not the phones per se, and included a 30 day “sunset” period during which Samsung would be able to redesign its products after granting of the injunction. The DC denied Apple’s request, finding it “had not shown that it would suffer irreparable harm without an injunction” and “could not establish that monetary damages were inadequate”. Under eBay (US 2006), a party seeking a PI must show irreparable injury (with a “causal nexus”), that “remedies available at law” (e.g., monetary damages) are inadequate, “a remedy in equity is warranted” “considering the balance of hardships”, and that “the public interest would not be disserved”. A DC decision regarding a PI is reviewed for an abuse of discretion and its underlying factual findings for clear error. Apple argued there is “no causal nexus requirement when the patentee is seeking, as in this case, a narrow injunction, limited to the infringing features”. The FC panel disagreed and found no error with the DC finding Apple could not satisfy this requirement. The DC also found no irreparable harm with respect to lost sales (no causal nexus). The FC panel disagreed because “a finding that the competitor’s infringing features drives consumer demand for its products satisfies the causal nexus inquiry” (the inquiry being “a flexible analysis, as befits the discretionary nature of the four-factor test for injunctive relief…‘some connection’” must be shown; no need to prove “infringement was the sole cause of lost downstream sales”). It agreed with the DC “that evidence of copying does not, by itself, establish a causal nexus” but noted “that does not make the evidence wholly irrelevant” (“Here, too, we must avoid categorical rules.”) The first factor was therefore found to favor Apple. The FC panel agreed with the DC conclusion that “Apple’s sales-based losses were difficult to quantify” (as “individual customers have a ‘network effect’ by which they advertise Apple’s product to their friends, family, and colleagues…“the loss by Apple of a single smartphone or tablet customer may have a far-reaching impact on Apple’s future revenues”). The second factor was therefore found to “strongly weigh in favor of Apple”. The balance of hardships factor was also found “strongly favor granting Apple the relief requested” (agreeing with the DC). The FC panel also found no error with the DC finding that the public interest favors an injunction (“the public interest nearly always weighs in favor of protecting property rights in the absence of countervailing factors, especially when the patentee practices his inventions” (Sanofi-Synthelabo, FC 2006); “This is not a case where the public would be deprived on Samsung’s products.”) Thus, the DC decision was vacated and remanded. Judge Reyna’s concurrence argued “that Samsung’s infringement amounted to an irreparable injury to Apple’s right to exclude.” Judge Prost’s dissent argued Apple’s alleged evidence of ‘copying’” was “insufficient to show nexus to Apple’s alleged lost sales.”