Apple, Inc. v. Samsung Electronics Co. Ltd. focuses on the first prong of the four-part test courts must apply in weighing whether to grant a permanent injunction in a patent infringement case—in particular, the “causal nexus” required between the alleged irreparable harm and the infringement.
What This Means to You
- Plan early on the evidence you will need to support a permanent injunction.
- Consider a narrowly focused injunction targeting only the patented features when complex, multi-featured products are at issue.
- It is not necessary to show the patented features were the reason consumers purchased the product, but you will need to prove the patented features are important to consumers.
Samsung’s phones were found to infringe three valid Apple patents covering: a slide to unlock feature; detecting data structures (e.g., identifying a phone number in an email and creating a link allowing the user to dial it or save it); and a method for auto-correction of spelling errors on touchscreen devices. Apple was awarded about $120 million in damages for this infringement.
Apple requested an injunction against Samsung’s use of the patented features with a 30-day period for Samsung to design around the features (which Samsung had testified at trial was more than enough time).
The district court denied the injunction because it found Apple failed to show irreparable harm.
At the Federal Circuit, the majority (Judges Moore and Reyna) reversed and remanded for entry of injunction. Chief Judge Prost dissented. The majority reversed the finding of no irreparable harm and agreed with the district court that the other factors weighed in favor of an injunction.
Under the Supreme Court’s decision in eBay Inc. v. MercExchange, L.L.C., a patentee seeking an injunction must demonstrate: (1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction.
This case focuses on the first prong of this four-part test, in particular, the “causal nexus” required between the alleged irreparable harm and the infringement.
Requiring such a causal connection precludes a patentee from leveraging its patent for a competitive gain beyond that which the inventive contribution and value of the patent warrant. A patentee must show a causal nexus even where the injunction is limited to infringing features.
The majority found irreparable harm based on Apple’s lost sales. Apple established the necessary causal connection by showing “some connection” between the patented features and demand for the infringing products, based on evidence that: Samsung valued Apple’s patented features; Samsung copied Apple’s patented features; carriers disapproved of alternatives to the slide to unlock feature; users criticized Samsung’s non-infringing word correction as “jarring,” causing Samsung to switch to Apple’s method; and survey evidence indicated many consumers would not have purchased Samsung phones without those patented features. “Fierce” direct competition between Apple and Samsung weighed in favor of finding irreparable harm.
The majority stated “Apple does not need to establish that these features are the reason customers bought Samsung phones . . . it is enough that Apple has shown that these features were related to infringement and were important to customers.”
This decision is difficult to reconcile with other Federal Circuit decisions which suggest a higher bar for proving the causal connection. For example, in Apple v. Samsung, 695 F.3d 1370, 1375 (Fed. Cir. 2012) (same panel), the Federal Circuit held that the “relevant question is not whether there is some causal relationship between the asserted injury and the infringing conduct . . . . [The] patentee must . . . show that the infringing feature drives consumer demand for the accused product.”
Samsung has petitioned for en banc review.
Obtaining a permanent injunction in cases involving complex, multi-featured products requires careful planning. A narrowly focused injunction targeting the infringing features may be easier to obtain. Consider gathering evidence that designing around and removing the patented features will not be difficult for the infringer. The Federal Circuit found that fact helped balance the equities in favor of Apple in this case.
Consider what evidence you can obtain to support a causal connection between the irreparable harm and the infringement. Survey evidence can be very helpful in this regard, especially survey evidence showing that: consumers are willing to pay significant price premiums for the patented features; the absence of the patented feature would make the product significantly less desirable; or the patented feature is the reason (or one of several reasons) that consumers purchase the infringing product. Evidence that the infringer valued and copied the patented features and consumer criticism of non-infringing alternatives can also help show the necessary causal connection.
According to this case, it is not necessary to show the patented features were the reason consumers purchased the product, but you will need to prove the patented features are important to consumers (in order to show the causal connection between the irreparable harm and the infringement). However, other Federal Circuit cases suggest a higher bar, requiring that the patented features be a significant driver of consumer demand or make the product significantly more desirable to consumers.
Samsung has petitioned for en banc review. Though such review is rare, this area of the law could benefit from additional clarity. Stay tuned—the law on injunctions continues to evolve.