Federal Circuit Reverses Preliminary Injunction Granted in Apple v. Samsung

Apple Inc. v. Samsung Elecs. Co. By David LeRay – Edited by Michael Hoven Apple Inc. v. Samsung Elecs. Co., No. 2012-1507 (Fed. Cir. Oct. 11, 2012) Slip opinion The Federal Circuit reversed the Northern District of California, which had granted a preliminary injunction against Samsung’s Galaxy Nexus smartphone. The case was decided by Judges Prost, Moore, and Reyna, who acted unanimously. The Federal Circuit held that the district court abused its discretion in finding that Apple established it was at risk of irreparable harm, one of the necessary factors under the eBay test elaborated by the Supreme Court to determine whether to grant a preliminary injunction. See Apple, No. 2012-1507, slip op. at 5 (citing eBay Inc. v. MercExchange, LLC, 547 U.S. 388, 391 (2006)). Specifically, Apple did not prove that a “sufficiently strong causal nexus relates the alleged harm to the alleged infringement.” Id. at 6. Patently-O provides an overview of the case and argues that the decision elevates the preliminary injunction standard and thus makes it more difficult for patentees to obtain injunctive relief. Reuters states that the case is an implicit endorsement of Judge Richard Posner’s skepticism regarding remedies in the context of smartphone feature patents and that the case is a “palpable blow” to Apple’s smartphone legal strategy. The patent at issue was U.S. Patent No. 8,086,604 (“604 patent”), titled a “Universal interface for retrieval of information in a computer system.” Apple initially alleged infringement of the ‘604 patent in February 2012, and, after the Federal Circuit (in an opinion covered by the Digest) reversed and remanded the trial court’s initial denial of an injunction, the trial court issued a preliminary injunction in June 2012. The Federal Circuit then granted a stay of the injunction until it decided this opinion. The patent claim will be litigated as part of an Apple lawsuit distinct from the recently completed Apple v. Samsung trial (also reported by the Digest). The new case has a trial date scheduled for March 2014. Apple alleges the Galaxy Nexus infringes claim 6 of the patent, an apparatus claim, because the device utilizes the Quick Search Box ("QSB") feature implemented in the Android operating system. Slip op. at 4. Presumably as a defensive measure, Samsung and Google released software patches removing the QSB feature to avoid infringement. The court’s reasoning focused on the irreparable harm factor, noting that as part of this factor a plaintiff must establish a “sufficiently strong causal nexus relates the alleged harm to the alleged infringement.” Id. at 6. The district court interpreted “causal nexus” to mean whether removal of the patented features “will diminish the value or substantially interfere with the functionality of the accused device.” Id. at 9. The Federal Circuit stated that the district court’s interpretation of “causal nexus” is too inclusive: the plaintiff must establish that consumers “buy the Galaxy Nexus because it is equipped with the apparatus claimed in the ’604 patent.” Id. at 10 (emphasis added). Having established the legal standard for a causal nexus, the court applied the standard to Apple’s evidence of causation. Apple presented three documents that indicated that QSB was considered an important feature for the Android platform including the Android user manual and two internet blogs. Id. at 11. Apple also presented consumer survey data indicating the popularity of Siri, the iPhone implementation of universal search and the ‘604 patent. Apple argued that since Siri is a popular feature driving demand for the iPhone, QSB must be a popular feature driving demand for the Galaxy Nexus, and thus removal will “diminish the value” of the Galaxy Nexus. Id. The court held this evidence did not meet the higher causal nexus standard, dismissing it as “too tenuous to support a finding of irreparable harm.” Id. This case substantiates the “causal nexus” language of the “irreparable harm” factor for preliminary injunctions, and, by adopting a strict but-for causation standard, makes it difficult for plaintiffs to obtain preliminary injunctions in the future. The case also represents a significant setback for “feature patents,” many of the patents at issue in the so-called smartphone wars. It will be very difficult for owners of feature patents to prove but-for causation because the devices at issue typically have hundreds or thousands of features, none of which are the but-for cause of purchase.