Saturday, October 13, 2012

US Federal Circuit Overturns Preliminary Injunction That Had Blocked Sale of Samsung Galaxy Nexus in the USA

We have been right all along in our postings on the Apple-Samsung patent litigation fiascos, but we were nevertheless quite pleasantly astonished at the recent Federal Circuit order finding an abuse of discretion by Cupertino's Judge Koh, who has been issuing preliminary injunctions in favor of the local Cupertino-based Apple firm.

That Federal Circuit order overturns Koh's injunction blocking the sale of Samsung's Galaxy Nexus in the United States.

The reasoning of the Federal Circuit in the order written by Circuit Judge Sharon Prost here should be instructive to judges around the world who are wrongfully and repeatedly issuing injunctions because of patent infringement claims under the theory of avoiding irreparable harm:
"[I]n cases such as this - where the accused product includes many features of which only one (or a small minority) infringe - a finding that the patentee will be at risk of irreparable harm does not alone justify injunctive relief. Rather, the patentee must also establish that the harm is sufficiently related to the infringement.... Thus, to satisfy the irreparable harm factor in a patent infringement suit, a patentee must establish both of the following requirements: 1) that absent an injunction, it will suffer irreparable harm, and 2) that a sufficiently strong causal nexus relates the alleged harm to the alleged infringement....

[A]lthough the irreparable harm and the causal nexus inquiries may be separated for the ease of analysis, they are inextricably related concepts. As this court recently explained:

To show irreparable harm, it is necessary to show that the infringement caused harm in the first place. Sales lost to an infringing product cannot irreparably harm a patentee if consumers buy that product for reasons other than the patented feature. If the patented feature does not drive the demand for the product, sales would be lost even if the offending feature were absent from the accused product. Thus, a likelihood of irreparable harm cannot be shown if sales would be lost regardless of the infringing conduct. Apple I, 678 F.3d at 1324.
In other words, it may very well be that the accused product would sell almost as well without incorporating the patented feature. And in that case, even if the competitive injury that results from selling the accused device is substantial, the harm that flows from the alleged infringement (the only harm that should count) is not. Thus, the causal nexus inquiry is indeed part of the irreparable harm calculus: it informs whether the patentee's allegations of irreparable harm are pertinent to the injunctive relief analysis, or whether the patentee seeks to leverage its patent for competitive gain beyond that which the inventive contribution and value of the patent warrant." [emphasis added by LawPundit]
We have emphasized that last sentence because it accurately describes the actual motivation for many patent infringement actions being brought today, asking for injunctive relief as a means to stifle competition far beyond what some minor -- and often erroneously granted -- patent would warrant.

Howard Mintz has the story at Samsung wins round in legal battle with Apple - San Jose Mercury News and links to the original order.

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