Apple bid for Samsung sales ban faces skeptical court

SAN FRANCISCO Tue Jan 8, 2013 3:22am IST

A man using a mobile phone walks past a Samsung Electronics' advertisement in Seoul October 5, 2012. REUTERS/Kim Hong-Ji/Files

A man using a mobile phone walks past a Samsung Electronics' advertisement in Seoul October 5, 2012.

Credit: Reuters/Kim Hong-Ji/Files

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SAN FRANCISCO (Reuters) - Apple Inc (AAPL.O) faces long odds in its attempt to overturn a U.S. appeals court ruling that threatens to undermine its smartphone patent war against Samsung Electronics Co Ltd (005930.KS).

Apple has asked the full Federal Circuit Court of Appeals to revisit an October decision by a three-judge panel of the court, which rejected its request to impose a sales ban on Samsung's Galaxy Nexus smartphone ahead of a trial set for March 2014.

In that ruling, the Washington D.C.-based appeals court raised the bar for potentially market crippling injunctions on product sales based on narrow patents for phone features. The legal precedent puts Samsung in a much stronger position by allowing its products to remain on store shelves while it fights a global patent battle against Apple over smartphone technology.

Apple hopes the full Federal Circuit, made up of nine active judges, will reverse the panel's findings. But legal experts say the specific legal issues involved are not likely to be controversial enough to spur full court review.

Furthermore, the three judges who issued the ruling were unanimous, whereas the Federal Circuit tends to review a case "en banc" - with all of the active judges - when an earlier ruling showed a split.

The Federal Circuit fight comes after Apple won a $1.05 billion verdict last year against Samsung in a California federal court. The same trial judge will preside over the legal battle surrounding the Nexus phone, which involves a patent not included in the earlier trial.

The fight has been widely viewed as a proxy war between Apple and Google Inc (GOOG.O). Samsung's hot-selling Galaxy smartphones and tablets run on Google's Android operating system, which Apple's late co-founder, Steve Jobs, once denounced as a "stolen product."

Google has not had much luck in obtaining injunctions against Apple, either. In a deal with federal antitrust regulators announced last week, the Android developer agreed to limit when it can use certain swaths of its patent portfolio to seek injunctions.

Samsung's legal papers arguing against full court review of the Federal Circuit ruling on Galaxy Nexus sales are due this week. To win a rehearing before the full court, Apple needs five out of the nine judges to vote in favor.

Representatives for Apple and Samsung both declined to comment.

RAISING THE BAR

In the October ruling, the three-judge panel found that Apple did not have enough evidence of a "causal nexus" between its patented search capability and iPhone sales to prove that Samsung has caused harm justifying an injunction.

U.S. District Judge Lucy Koh in San Jose, California, who has presided over much of the Apple/Samsung litigation in the United States, cited the panel's decision in a December order rejecting Apple's request for permanent sales bans on several Samsung phones. Apple has said it would appeal Koh's ruling.

A wide sales ban against Samsung products could be devastating. Apple claims that 22.7 million of Samsung's total unit sales from mid-2010 to March 2012 - or $8.16 billion in U.S. revenue - came from products that infringed Apple patents.

It will be hard to convince the Federal Circuit to revisit the injunction issue because the legal arguments involved are not among those that have caused the most recent controversy at the court, said R. Polk Wagner, a professor at University of Pennsylvania Law School and a former Federal Circuit clerk.

For example, no outside groups have filed briefs supporting Apple's bid for en banc review, according to court records.

In contrast, the court last year granted en banc review in a case about the scope of software patents, currently a hot topic in intellectual property debates. A three-judge panel in that case split 2-1, and outside advocacy groups filed briefs urging full court review. Oral arguments are set for February.

The Federal Circuit is eight times more likely to grant an en banc petition if a third party files a brief urging it to do so, according to a 2010 study by Colleen Chien, a professor at Santa Clara Law in Silicon Valley. The study covered 20 years of Federal Circuit activity.

While tough for Apple, persuading the court to grant en banc review is not impossible, court watchers say.

Some of the Federal Circuit judges, including Chief Judge Randall Rader - who was not part of the panel that issued the October ruling - are considered by legal experts to be pro-plaintiff, believing that injunctions are a crucial tool for enforcing patent rights.

If Apple loses at the Federal Circuit, the company could ask the U.S. Supreme Court to take up the matter.

However, the Supreme Court has made it more difficult for patent plaintiffs to secure sales injunctions in recent years, suggesting it would be unlikely to review this case, said Wagner, of the University of Pennsylvania.

"If they don't get it now," he said of Apple's petition for en banc review, "any chance they have won't come again for a long time."

The case in the Federal Circuit is Apple Inc. vs Samsung Electronics Co Ltd et al, 12-1507. (Reporting By Dan Levine; Editing by Martha Graybow, Tiffany Wu and Steve Orlofsky)

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