‘Tis the Season for More Smartphone “Patent War” Court Rulings

phoneboothCross-posted at WLF’s Forbes.com contributor page

As we remarked in a late December 2011 Legal Pulse post, federal judges have no qualms with keeping lawyers, reporters, legal commentators, and other interested parties busy during the holiday season by releasing decisions in high-profile cases.

That has certainly been the case this week, which featured decisions from two different forums on high-tech patents. These are the latest developments in the so-called smartphone patent war, a wide-ranging battle has kept many judges busy and lawyers fully employed this year.

The first development arises from the Apple v. Samsung litigation in Judge Lucy Koh’s chambers in the Northern District of California. We’ve poked fun at that particular jurisdiction on this blog, dubbing it “The Food Court” (see, e.g. here) for being a favorite forum for food labeling class action suits. Perhaps “The Phone Booth” might be a secondary moniker.

Judge Koh’s December 17 decision could have major implications for patent litigation involving complex products, like smartphones, which feature hundreds of features. In that case, a jury in August found that features in Samsung phones infringed upon Apple patents and awarded Apple damages of over $1 billion. However, as commentators in a Recorder article noted, what Apple really wants (and what most plaintiffs in similar cases ultimately want) is a permanent injunction against Samsung, which would set Samsung back significantly in the smartphone marketplace.

Judge Koh’s recent ruling rejected Apple’s demand for an injunction. Following U.S. Court of Appeals for the Federal Circuit precedent, she rigorously applied the Supreme Court’s eBay test for patent litigation injunctions, requiring that Apple show “a sufficiently strong causal nexus [relating] the alleged harm to the alleged infringement.” That required Apple to prove that customers bought Samsung phones because of the specific feature or function on which Apple holds a patent. And that inquiry examines patents one-by-one, not by looking at a group of patents as Apple urged. Apple was not able to meet this standard, nor was it able to meet the other three parts of the eBay test.

Apple will certainly appeal Judge Koh’s decision to the Federal Circuit. If the result withstands appeal, it’s fair to wonder whether any patent plaintiff seeking to enjoin sales of a complex product can obtain an injunction in federal court. Forcing competitors to spend money on legal fees and extracting damages for infringement bring limited satisfaction compared to injunctive relief. The result may be fewer blockbuster federal patent lawsuits and, as a commentator in The Recorder story opined, more actions at the U.S. International Trade Commission (USITC), where U.S. market exclusion is the exclusive remedy and eBay is not applicable.

This point offers a convenient segue into the second recent smartphone patent war development, this one at the USITC. As we learned from the FOSS Patents blog, a commission judge reached an “Initial Determination” in an investigation involving Apple and Motorola where Motorola is alleging infringement and seeking market exclusion. The judge found that a domestic industry existed and Apple had infringed Motorola’s patent in the U.S., but the patent in controversy was no longer valid. That is of course not the end of the road for Apple, as the Commissioners will review the determination and Apple can appeal the Commission’s final ruling to the Federal Circuit.

With these two decisions being mere initial rulings, and with many other smartphone patent suits pending, there’s much more to stay tuned for (or, perhaps, stay on the line for?) in this area in 2013.

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