By Megan Rahman
On May 14, the U.S. Court of Appeals for the Federal Circuit in Apple, Inc. v. Samsung Electronics Co. Ltd.,No. 2012-1105 (Fed. Cir. May 14, 2012) affirmed-in-part, vacated-in-part and remanded the district court's denial of a preliminary injunction awarded to Apple with respect to three design patents and one utility patent relating to smartphones and tablet computers. With respect to three of Apple's four patents-in-suit, the Federal Circuit affirmed the district court's denial of a preliminary injunction. With respect to Apple's fourth patent, the Federal Circuit vacated the district court's denial of preliminary injunctive relief finding the district court erroneously concluded that the patent claims were obvious over prior art, and that Apple was therefore unlikely to succeed on the merits. As a result, the Federal Circuit remanded the case for a consideration of factors that the district court had not already reached in its decision on preliminary injunctive relief and the fourth patent.
On appeal, the Court affirmed the denial of preliminary injunctive relief with respect to three of the patents based on a lack of irreparable harm. On the issue of irreparable harm, the Court held "that the district court was correct to require a showing of some causal nexus between Samsung's infringement and the alleged harm to Apple as part of the showing of irreparable harm." The Court concluded that "a likelihood of irreparable harm cannot be shown if sales would be lost regardless of the infringing conduct." Further, a "mere showing that Apple might lose some insubstantial market share" as a result of the infringement is not enough, as a party seeking injunctive relief must make a "clear showing" that it is at risk of irreparable harm. The Court agreed with Apple that a wholesale rejection of design dilution as a theory of irreparable harm would have been improper, but disagreed that the district court had done that. Rather, the Court found that even if brand dilution could arise from design patent infringement, Apple had not shown that brand dilution was likely to occur. Finally, while the Court stated that the district court should not have faulted Apple for failing to file suit as early as the release of the first infringing products, it was reasonable for the district court to consider the issue of delay and find that Apple had not proceeded as quickly as it otherwise could have in seeking relief.
The Court vacated the denial of preliminary injunctive relief with respect to the last patent, agreeing with the district court's conclusion that Apple was likely to suffer irreparable harm, but holding that the district court erred in finding that there was a substantial question of validity concerning the patent. The district court had concluded that the validity of the patent was subject to substantial challenge based on two prior art references, its holding based primarily on its finding that when compared with a 1994 tablet design, the patent created the same visual expression. The Federal Circuit disagreed. In design patent obviousness analysis, a primary reference must be "something in existence, the design characteristics of which are basically the same as the claimed design in order to support a holding of obviousness." The Court found significant differences between the 1994 tablet design and the Apple patent and held that it was not a proper primary reference. Moreover, the secondary reference "could not bridge the gap."
Having found a substantial question of validity concerning the last patent, the district court "did not make any findings with regard to the remaining two questions bearing on whether to issue a preliminary injunction-the balance of hardships and the public interest." The Federal Circuit, as a result, remanded that portion of the case back to the district court to consider whether a preliminary injunction should issue based on the fourth patent.
In a partial dissent, Judge O'Malley found a remand unnecessary. In his view, "the only remand appropriate in this case is for entry of a preliminary injunction with respect to the [the fourth patent] . . . ." Judge O'Malley stated that the Court's decision was "unwarranted because: (1) remand will cause unnecessary delay, which is inconsistent with the very purpose of preliminary injunctive relief; and (2) once we reject its validity analysis, the district court's decision, taken in its entirety, reveals that all of the prerequisites for preliminary injunctive relief are satisfied."
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