Analysis: Apple bid for Samsung sales ban faces skeptical court

SAN FRANCISCO Mon Jan 7, 2013 3:34pm EST

Customers gather outside an Apple store before the release of iPhone 5 in Munich early September 21, 2012. Apple Inc's iPhone 5 hit stores around the globe on Friday, with fans snapping up the device that is expected to fuel a huge holiday quarter for the consumer giant. REUTERS/Michael Dalder

Customers gather outside an Apple store before the release of iPhone 5 in Munich early September 21, 2012. Apple Inc's iPhone 5 hit stores around the globe on Friday, with fans snapping up the device that is expected to fuel a huge holiday quarter for the consumer giant.

Credit: Reuters/Michael Dalder

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SAN FRANCISCO (Reuters) - Apple Inc faces long odds in its attempt to overturn a U.S. appeals court ruling that threatens to undermine its smartphone patent war against Samsung Electronics Co Ltd.

Apple has asked the full Federal Circuit Court of Appeals to revisit an October decision by a three-judge panel of the court, which rejected its request to impose a sales ban on Samsung's Galaxy Nexus smartphone ahead of a trial set for March 2014.

In that ruling, the Washington D.C.-based appeals court raised the bar for potentially market crippling injunctions on product sales based on narrow patents for phone features. The legal precedent puts Samsung in a much stronger position by allowing its products to remain on store shelves while it fights a global patent battle against Apple over smartphone technology.

Apple hopes the full Federal Circuit, made up of nine active judges, will reverse the panel's findings. But legal experts say the specific legal issues involved are not likely to be controversial enough to spur full court review.

Furthermore, the three judges who issued the ruling were unanimous, whereas the Federal Circuit tends to review a case "en banc" - with all of the active judges - when an earlier ruling showed a split.

The Federal Circuit fight comes after Apple won a $1.05 billion verdict last year against Samsung in a California federal court. The same trial judge will preside over the legal battle surrounding the Nexus phone, which involves a patent not included in the earlier trial.

The fight has been widely viewed as a proxy war between Apple and Google Inc. Samsung's hot-selling Galaxy smartphones and tablets run on Google's Android operating system, which Apple's late co-founder, Steve Jobs, once denounced as a "stolen product."

Google has not had much luck in obtaining injunctions against Apple, either. In a deal with federal antitrust regulators announced last week, the Android developer agreed to limit when it can use certain swaths of its patent portfolio to seek injunctions.

Samsung's legal papers arguing against full court review of the Federal Circuit ruling on Galaxy Nexus sales are due this week. To win a rehearing before the full court, Apple needs five out of the nine judges to vote in favor.

Representatives for Apple and Samsung both declined to comment.

RAISING THE BAR

In the October ruling, the three-judge panel found that Apple did not have enough evidence of a "causal nexus" between its patented search capability and iPhone sales to prove that Samsung has caused harm justifying an injunction.

U.S. District Judge Lucy Koh in San Jose, California, who has presided over much of the Apple/Samsung litigation in the United States, cited the panel's decision in a December order rejecting Apple's request for permanent sales bans on several Samsung phones. Apple has said it would appeal Koh's ruling.

A wide sales ban against Samsung products could be devastating. Apple claims that 22.7 million of Samsung's total unit sales from mid-2010 to March 2012 - or $8.16 billion in U.S. revenue - came from products that infringed Apple patents.

It will be hard to convince the Federal Circuit to revisit the injunction issue because the legal arguments involved are not among those that have caused the most recent controversy at the court, said R. Polk Wagner, a professor at University of Pennsylvania Law School and a former Federal Circuit clerk.

For example, no outside groups have filed briefs supporting Apple's bid for en banc review, according to court records.

In contrast, the court last year granted en banc review in a case about the scope of software patents, currently a hot topic in intellectual property debates. A three-judge panel in that case split 2-1, and outside advocacy groups filed briefs urging full court review. Oral arguments are set for February.

The Federal Circuit is eight times more likely to grant an en banc petition if a third party files a brief urging it to do so, according to a 2010 study by Colleen Chien, a professor at Santa Clara Law in Silicon Valley. The study covered 20 years of Federal Circuit activity.

While tough for Apple, persuading the court to grant en banc review is not impossible, court watchers say.

Some of the Federal Circuit judges, including Chief Judge Randall Rader - who was not part of the panel that issued the October ruling - are considered by legal experts to be pro-plaintiff, believing that injunctions are a crucial tool for enforcing patent rights.

If Apple loses at the Federal Circuit, the company could ask the U.S. Supreme Court to take up the matter.

However, the Supreme Court has made it more difficult for patent plaintiffs to secure sales injunctions in recent years, suggesting it would be unlikely to review this case, said Wagner, of the University of Pennsylvania.

"If they don't get it now," he said of Apple's petition for en banc review, "any chance they have won't come again for a long time."

The case in the Federal Circuit is Apple Inc. vs Samsung Electronics Co Ltd et al, 12-1507.

(Reporting By Dan Levine; Editing by Martha Graybow, Tiffany Wu and Steve Orlofsky)

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Comments (4)
bobber1956 wrote:
Apple should know that since Microsoft donated heavily to obama’s inauguration that they will not get anywhere with this. We should also see a big bill for a computer upgrade for the White House soon-to Windows 8…..wannna bet. Samsung’s phone does Win 8 you know.

Jan 07, 2013 4:20pm EST  --  Report as abuse
Telstar wrote:
I am so sick of this political junk I could scream!

Jan 07, 2013 5:19pm EST  --  Report as abuse
ProfKnowItAll wrote:
Good. I hope Apple loses. I have been using Apple products personally since the early 90s and professionally since 2001 and I have never been more pissed at them. They have completely lost their soul. The used to make products for creative professionals, now they have forsaken that market for grandmas and college students. You’d think being the richest company on Earth they could cater to both, but year after year since the iPhone came out the have walked further and further away from the power user.

This patent war with Samsung is an anti-competetive monopolistic power grab. Its not like Samsung is unfairly free-riding on the coat tails of Apple’s R&D. The are suing over round corners and non-proprietary ‘inventions’ like that. Most software patents are complete BS and should never have been awarded by the patent office in the 1st place. There are patents so broad that they cover ALL COMMERCE taking place on the internet. That’s like claiming a patent for the invention of the wheel.

Jan 07, 2013 7:45pm EST  --  Report as abuse
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