Apple Inc v Samsung Electronics Company Ltd., et al., (No. 14-1802 Fed. Cir.)
Obtaining an injunction for patent infringement may have just got a bit easier. In this case, the United States Court of Appeals for the Federal Circuit (“CAFC”) held that a patentee does not have to prove that the infringing features of a competitor’s product were the exclusive or predominant reason why consumers bought the competitor’s product to obtain an injunction for patent infringement. Rather, it is sufficient to prove that there was some connection between the infringing features and the demand for the competitor’s product. In so deciding, the CAFC vacated the lower court’s decision not to issue a permanent injunction and remanded. [at 3]
This decision was an appeal from the District Court for Northern California (“DC”) refusing to award Apple a permanent injunction after finding Samsung had infringed two of Apple’s patents covering innovative technology related to the iPhone. Apple sought a permanent injunction to bar Samsung from using software or code capable of implementing the infringing features in its products. The District Court denied Apple’s request, holding that Apple failed to show both that it would suffer irreparable harm without an injunction, and that monetary damages were inadequate.
In order to be granted a permanent injunction, the onus was on Apple to establish a causal nexus between irreparable harm and Samsung’s infringement. Judge Moore, writing for the majority of the CAFC, confirmed that, “the causal nexus requirement ensures that an injunction is only entered against a defendant on account of a harm resulting from the defendant’s wrongful conduct, not some other reason. For example, it ensures that an injunction is not entered on account of ‘irreparable harm caused by otherwise lawful competition.’” [at 8]
Error of Law of the Lower Court
The CAFC found that the DC erred when it required Apple to prove that the infringing features were the exclusive or predominant reason why consumers bought Samsung’s products to find irreparable harm. [at 10] The CAFC held that to establish the requisite causal nexus, it was sufficient for Apple to prove that there was merely some connection between the infringing features and the demand for Samsung’s products. [at 10] The CAFC thus found that Apple was entitled to a narrow, feature-based injunction against Samsung. In reaching this conclusion, the CAFC agreed with Apple that Samsung’s infringement would likely cause Apple to lose downstream sales. [at 19]
Additionally, Judge Reyna noted in his concurring decision that this ruling allows for the possibility of obtaining an injunction in cases involving infringement of a multi-patented device, a door he believed appears to be near shut under current law. [Concurring Opinion, at 2]
Judge Reyna referred to eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 395 (2006) cautioning that, “though we read eBay to overrule our presumption of irreparable injury, we cautioned that courts should not necessarily ‘ignore the fundamental nature of patents as property rights granting the owner the right to exclude.’ Yet our recent cases have done precisely that, ignoring the right to exclude in determining whether to issue an injunction. Indeed, our opinions in the most recent cases between Apple and Samsung do not even mention the right to exclude as a possible basis for injunctive relief.” [Concurring Opinion, at 4] Judge Reyna stated that infringement on the right to exclude is an “injury” that is sometimes irreparable. An “injury” is not, according to Judge Reyna, limited to tangible violations – it encompasses “violation[s] of another’s legal right, for which the law provides a remedy; a wrong or injustice.” [Concurring Opinion, at 5]
The dissenting opinion, written by Chief Judge Prost, strongly disagreed with the majority, holding that the majority on both the law and on the record in this case, and ultimately that “the majority has no legitimate basis to reverse the district court.” [Dissenting Opinion, at 2, 6]
Although the CAFC granted Apple a permanent injunction against Samsung, Samsung successfully appealed the underlying infringement action in a later case.
Interestingly, the Supreme Court of the United States has since granted a hearing for an appeal of another design patent case between Apple and Samsung that will answer the question:
Where a design patent is applied to only a component of a product, should an award of infringer’s profits be limited to those profits attributable to the component?
Oral argument is set for October 11 2016.