Intellectual Property Law

Fed. Circuit Says Trial Judge Abused Discretion in Smartphone Sales Ban, Aligns with Posner View

In a Thursday ruling in one of several recent patent cases related to smartphone technology, a federal appeals court said a U.S. District Court judge in California abused her discretion by granting a pretrial injunction sought by Apple Inc. that banned sales of the Galaxy Nexus marketed by Samsung Electronics Co. Ltd.

While the appellate decision by the influential U.S. Court of Appeals for the Federal Circuit isn’t likely to have a major impact on the parties, since the Nexus is no longer considered cutting-edge by buyers, it could have a major impact on corporations seeking pretrial relief in other patent cases, Reuters reports.

Another Reuters article analyzes yesterday’s decision and links to a copy on Westlaw. It also notes that the Federal Circuit gave the nod to an alternative approach taken by Judge Richard Posner of the Chicago-based 7th U.S. Circuit Court of Appeals in a “smartphone patent wars” case he volunteered to oversee in federal district court in Chicago.

Posner threw out competing claims made by both sides in that case, saying that he couldn’t see how patenting “little gimmicks” entitled a smartphone maker to big damages, the Reuters analysis recounts.

And, in denying Apple Inc.’s request for a sales injunction in that case regarding Google Inc.’s Motorola Mobility unit, the article continues, Posner wrote that “an injunction could force Motorola to remove lucrative products from the market for as long as it took to remove the infringing features—minor features in complex devices most features of which are not alleged to infringe.”

This accords, Reuters says, with what the Federal Circuit held in its Thursday ruling—that a sufficient causal link between alleged infringement and consumer demand to support the need for such injunctive relief, based on the irreparable harm that otherwise would result, is not established merely by the maker’s own consumer surveys.

Apple and Samsung either declined to comment or didn’t immediately respond when contacted by Reuters.

While the Federal Circuit reversal of U.S. District Judge Lucy Koh’s grant of injunctive relief to Apple still leaves Apple with a big win in another smartphone patent case, the company’s earlier $1.05 billion verdict could eventually be dwarfed by the impact of the Thursday restriction on pretrial injunctive relief, an expert tells the news agency.

Absent a different result in an en banc review, the new standard for injunctive relief set by the Federal Circuit will strike a “palpable blow” to Apple’s smartphone legal strategy, said attorney Nick Rodelli. He is a CFRA Research adviser to institutional investors,

“When you weigh the relative importance between this decision and that [$1.05 billion] jury verdict, I think there is a case to be made that in the fullness of time, it is more important,” Rodelli told Reuters.

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