updated 11:03 pm EST, Mon December 17, 2012
Judge: no proof of lost sales; jury presumably followed the law
Both Apple and Samsung have won minor victories in the first group of post-trial hearing rulings from Judge Lucy Koh. Late Monday afternoon, Koh issued her initial rulings following the December 6 post-trial hearing between Apple and Samsung regarding matters raised by the verdict of the first smartphone patent trial. The judge has refused product sales embargoes desired by Apple on the infringing Samsung devices, saying that when only a small amount of the product is found to be infringing, it fails to merit a ban on the whole product. Additionally, the judge rejected Samsung's motion for a mistrial based on juror misconduct, saying that inadmissible statements after the trial didn't count as "evidence properly before the Court" to consider a hearing to examine the jury.
Apple will also certainly appeal the ruling, since Koh's finding that Apple had failed to establish a "causal nexus" that warranted a ban is unusual in light of the multiple jury findings of infringement by Samsung. Koh said that Apple was unable to show any harm other than "trade dress dilution," meaning the outward copying of the iPhone and iPad design. She noted that an outright ban on the products -- even though most of the Samsung devices in question are no longer sold -- would not be in the public's best interest, since the smartphone market is largely split between the two companies, with few others making a dent in mass acceptance.
Related to that ruling, the judge deferred a request from Apple for additional money -- up to another half-billion dollars -- in recompense for damages due to lost sales and future downstream revenue that Apple says it lost due to the patent infringement. The company has a slightly better chance of getting more money out of the award from Samsung in light of Koh's refusal to issue a sales ban, but will still have to show better evidence that the copying (and predatory pricing of the copied products) led directly to some customers choosing Samsung over Apple. Apple won a fine of over a billion dollars in the initial trial against Samsung, which could still be tripled based on wilful infringement in future rulings.
"The phones at issue in this case contain a broad range of features, only a small fraction of which are covered by Apple's patents," the judge wrote in her order on the motion. "It does not follow that entire products must be forever banned from the market because they incorporate, among their myriad features, a few narrow protected functions." She did suggest that Samsung had used the copying to lure customers away from Apple, but added that "there is no suggestion that Samsung will wipe out Apple's customer base, or force Apple out of the business of making smartphones."
Analyst Florian Mueller believes Apple stands a good chance of a reversal of the ruling on appeal, but that this wouldn't happen for a year or more. Although the proposed injunctions were against mostly-obsolete Samsung products, a ruling in Apple's favor would have forced Samsung to work around all patent-infringing problems: without it, the company can continue to infringe without further short-term penalty if it chooses.
"A damages award doesn't give Apple major leverage against Samsung," Mueller wrote, saying the jury verdict now has "little more than symbolic value" at this point -- because both companies are insanely cash-rich to the point where a billion dollars means much less than it would for most companies.
Apple is already pursuing an appeal on one of Koh's previous rulings, which turned down a sales ban on the Galaxy Nexus. The Court of Appeals, Mueller says, is considering a rehearing en banc (full-bench review) because Apple believes "that the bar has now been set too high for patent holders seeking to stop infringement of their rights by competitors," and will likely submit Koh's latest ruling (which largely ignored Samsung's intent to copy in favor of emphasizing the lack of a "causal nexus") as evidence of that thesis.
"As Apple basically told the Federal Circuit in its petition for a rehearing," Mueller wrote, "it's hard to see how anyone can win a sales ban in US federal court against a multifunctional smartphone or tablet computer if a single feature has to be shown to be a driver of demand." He concluded that "prior to some kind of correction or clarification by the Federal Circuit, patent holders are increasingly going to choose jurisdictions such as Germany, where injunctive relief is a given once infringement has been proven (except under certain circumstances specific to standard-essential patents)."