Apple demonstrated irreparable harm would occur without injunction against Samsung, Federal Circuit says
17 September 2015-Author: Can Celik
Apple established that it would suffer irreparable harm absent a permanent injunction barring Samsung from implementing certain infringing features in its phones, a federal appeals court said in a ruling vacating an order denying Apple’s request for such an injunction.
In a 2-1 opinion, the US Court of Appeals for the Federal Circuit said Apple showed that there was a “causal nexus” between Samsung’s copying of certain patented features and Apple’s lost sales. Proving a causal nexus requires showing “some connection” between the patented features and the demand for the infringing products, the court said.
“Apple does not need to establish that these features are the reason customers bought Samsung phones instead of Apple phones — it is enough that Apple has shown that these features were related to infringement and were important to customers when they were examining their phone choices,” US Circuit Judge Kimberly A. Moore wrote for the majority.
“It was clear error in the face of this evidence for the district court to conclude that Apple failed to establish ‘some connection’ between the patented features and demand for the infringing products,” the majority said regarding US District Judge Lucy Koh’s decision denying Apple’s request for the injunction.
A Samsung spokeperson said the company will seek an en banc review of the decision.
“We agree with Chief Judge [Sharon] Prost’s dissent that Apple’s request for an injunction is unfounded. We will pursue our rights to have the full Court of Appeals review today’s decision,” the spokeperson said.*
While Koh correctly held that evidence of copying doesn’t, by itself, establish a causal nexus, that doesn’t make such evidence wholly irrelevant, the majority said.
Evidence that the patented features were important to product sales and that customers sought those features in phones they purchased, while not as strong as proof that customers bought the phones only because of those features, “is still evidence of causal nexus for lost sales and thus irreparable harm,” the majority said. A party seeking a permanent injunction must demonstrate that it will suffer irreparable harm without one.
Before turning to whether Apple had met the causal nexus requirement, however, the majority first rejected the company’s argument that the requirement shouldn’t apply when a proposed injunction is for a narrow set of features, rather than an entire product.
That the injunction would only apply to features “says nothing” about whether Apple is irreparably harmed by Samsung’s infringement, the court said.
“The purpose of the causal nexus requirement is to establish the link between the infringement and the harm, to ensure that there is ‘some’ connection between the harm alleged and the infringing acts,” the court said. “Thus, a causal nexus linking the harm and the infringing acts must be established regardless of whether the injunction is sought for an entire product or is narrowly limited to particular features.”
Having found that Apple established a causal nexus and therefore irreparable harm, the court then turned to the other factors a party must demonstrate when seeking a permanent injunction: the inadequacy of remedies at law to remedy the irreparable harm, the balance of hardships between the parties, and whether the public interest would not be disserved by a permanent injunction.
On the question of the inadequacy of a remedy, the majority agreed with Koh’s determination that Apple’s sales-based losses were difficult to quantify, particularly because of uncertain effect lost sales would have on future revenues — such as sales of accessories, computers, applications and future phones and tablets.
While they agreed with Koh’s analysis, the majority found that “because the district court’s finding that Apple did not suffer any irreparable harm stemming from its losses of sales was predicated on a legal error, it also erred when it found that this factor weighs against an injunction.”
In fact, the majority said, the difficulty in quantifying lost sales weighs strongly in favor of granting the injunction.
The majority agreed with Koh’s determination that the balance of hardships weighed in Apple’s favor, citing Samsung’s assertions during the trial that design-arounds for the infringing features would be simple or already exist.
Finally, the court held that Koh properly found that the public interest favors an injunction.
While the public generally benefits from competition, it generally “does not benefit when that competition comes at the expense of a patentee’s investment-backed property right,” the majority said. “To conclude otherwise would suggest that this factor weighs against an injunction in every case, when the opposite is generally true.”
The public wouldn’t be deprived of Samsung’s products, but rather Samsung would only be prevented from profiting from infringing features, and the record shows that the company “can effect the removal of the patented features without recalling any products or disrupting customer use of its products,” the court said.