AIPLA Standards and Open Source Committee Minutes
Date : February 24, 2014
Time : 10:00 am – 11:00 am PT (1:00 pm – 2:00 pm ET)
Attendees : Joanne Montague, William Rothwell, Peter Koch, Per Larsen, Sandy Block, David Long,
Andy Updegrove, Gordon Hill, Matt Larson, Chuck Chesney, Ashok Mannava, Doug Sorensen, Monica
Barone, Andrei Popovici, Ben Siders, Stuart Langley, Jack Rafter, Jeff Gluck, Terry Saad, Robert Bauer,
Meghan Donohoe, Jack Pate, Michael Atlass, Sharon Israel
1.
Chair’s Report
– Introductions – Monica welcomed new member Matt Larson to the Committee.
2.
Minutes – The January 6, 2014 meeting minutes will be posted on the Committee website. If corrections are needed, please contact Monica and Joanne.
3.
Mid-Winter Institute – Our Committee had a booth for the committee expo at the Mid-Winter
Institute. Several Committee members helped with the booth. Many of the meeting attendees were interested in the information we had at our booth. Interest in open source has ratcheted up. Our
Committee, like it usually does, met socially at the Mid-Winter Institute.
4.
Subcommittee Reports –
Policy/Project Subcommittee – (Latonia and Joe not present) – No report given.
Open Source Subcommittee – Michael A. (Jackquelyn not present) – The Subcommittee continues to hold monthly calls. The Subcommittee is planning a CLE for the Spring Meeting, which will also be presented as a webinar. Most of the speakers have provided their speaker acknowledgement forms. The Subcommittee has generated a list of topics, which will be sent to the Committee membership listserv. On the last Subcommittee call, one of the members provided two recent complaints in the open source area. Jack P. will report on those two complaints on the next
Committee call, after discussing the analysis with the Subcommittee. Monica requested that the
Subcommittee report on a hot topic on each Committee call.
Program Subcommittee – David L. –
Spring Meeting – The Subcommittee is finalizing speakers for the track session on SEPs.
Annual Meeting – Our Committee needs to come up with potential topics for the 2014 Annual
Meeting. It was suggested that potential topics should differ from topics we have presented in the last few years.
Management Subcommittee – Joanne – Nothing to report.
5.
Liaison Reports
–
Nothing to report.
6.
Newsworthy Cases and/or Events
–
EU Report
– Peter –
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IPCom v. Apple (Dist. Ct. Mannheim) – IPCom, which owns more than a thousand patents, has sued Apple for more than US$ 2B in damages. IPCom did not request injunctive relief. The court will determine whether there has been infringement before ruling on the amount of damages. The court could test the damages claim in light of FRAND obligations. The case will not be decided until the fall.
EC Investigation of Samsung – Samsung has put forth a new proposal. The European
Commission is reportedly in favor of this new proposal. There will be a market test. If the proposal is accepted, the EC would drop the antitrust investigation against Samsung.
DOJ Investigation of Samsung – David – The DOJ has closed its antitrust investigation against
Samsung.
Apple v. Samsung (Fed. Cir. November 2013) – Terry – This case does not involve SEPs, but injunctive issues in the case may be of interest to our Committee.
PROCEDURAL POSTURE

Apple appealed order from N.D. Cal. denying application for permanent injunction against
Samsung.

Jury found that 26 Samsung smartphones and tablets infringed one or more of 6 Apple patents, awarding more than $1 billion in damages.

Application for injunction was based on infringement of 3 design patents and 3 utility patents, as well as against dilution of iPhone trade dress.

Federal Circuit had previously reviewed two other decisions regarding injunctive relief relating to these patents, but both involved preliminary injunction, not permanent.
LEGAL STANDARD
 eBay v. MercExchange 4 Factors - Plaintiff must demonstrate: o that it has suffered irreparable harm; o that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; o that considering the balance of hardships between the Plaintiff and Defendant, a remedy in equity is warranted; o that the public interest would not be disserved by a permanent injunction.

Reviewable on appeal for abuse of discretion.
DECISION

The Court affirmed the denial of injunctive relief with respect to the design patents.

The Court found that the district court abused its discretion in its analysis of the utility patents and remanded for further proceedings.
IRREPARABLE HARM

Court cited to standards previously set forth in previous Apple v. Samsung reviews (Apple I and Apple II). To satisfy the irreparable harm factor in a patent infringement suit, a patentee must establish both: o that absent an injunction, it will suffer irreparable harm; o that a sufficiently strong causal nexus relates the alleged harm to the alleged infringement.
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
Apple argued that the court erroneously adopted a causal nexus requirement in the permanent injunction context. Only should apply in preliminary injunction context. o Court rejected this argument. o Citing the Supreme Court as holding that the standard for a preliminary injunction is essentially the same as for a permanent injunction, with the exception that the plaintiff must show a likelihood of success on the merits rather than actual success.

Court explained the need for a causal nexus: o The causal nexus requirement is a way of distinguishing between irreparable harm caused by patent infringement and irreparable harm caused by otherwise lawful competition. o To show irreparable harm, it is necessary to show that the infringement caused harm in the first place – this is the causal nexus.

Causal nexus is not a separate factor from irreparable harm. The causal nexus is part of the irreparable harm factor. Without a showing of causal nexus, there is no relevant irreparable harm.

In the alternative to its argument that a causal nexus is not required for a permanent injunction, Apple argued that it satisfied any reasonable causal nexus requirement.
 Apple’s evidence: o documents and testimony regarding ease of use of the iPhone design; o evidence of deliberate copying by Samsung; o survey performed by Apple’s expert purported to show the price premium that Samsung customers would pay for Apple’s patented features.

Federal Circuit agreed with Apple that the standards articulated by the district court for showing a causal nexus go too far. o The district court required that the patent features be the sole reason consumers purchased Samsung products. o Apple must show that the infringing feature drives consumer demand from the accused product. But, Apple does not need to show that a patented feature is the one and only reason for consumer demand. o Such a rigid standard could amount to a categorical rule barring injunctive relief in most cases involving multi-function products. o Rule Statement: Rather than show that a patented feature is the exclusive reason for consumer demand, Apple must show some connection between the patented feature and demand for Samsung’s products.

Apple also argued that the combined harm from the patents and trade dress in the aggregate justifies an injunction. o The District Court rejected this argument. o But the Federal Circuit agreed that there may be circumstances where it is logical and equitable to view patents in the aggregate. o For example, it may make sense to view patents in the aggregate where they all relate to the same technology or where they combine to make a product significantly more valuable.

But, with regards to the utility patent, the Court remanded back to the district court for further consideration of the causal nexus issue.
THREE OTHER EBAY FACTORS

Adequacy of legal remedies – District Court erred in not considering the differences between
Apple’s previous licensing practices and the current situation with Samsung. Vacated and remanded for further consideration.
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
Balance of hardships – District Court did not err in finding this factor neutral.

Public Interest – District Court did not abuse its discretion in finding this factor in favor of
Samsung.
SUMMARY

Causal nexus is required for showing of irreparable harm for permanent injunction.

Plaintiff must show that the infringing feature drives consumer demand from the accused product. But, does not need to show that a patented feature is the one and only reason for consumer demand.

Certain circumstances warrant evaluating patents in the aggregate with respect to the collective harm caused by their infringement.
Samsung v. Apple (Japan) – Terry and Sandy – SEP v. non-SEP:

Samsung v. Apple in Japan is an example where standard essential patents are evaluated differently from non-SEP patents.

Japanese court found that Samsung had not met the required good faith standard required when FRAND terms are required in not disclosing how it reached its demanded royalty rate.

Samsung was precluded from obtaining injunction until it met the good faith standard.

Not only was an injunction precluded, collection of royalties was precluded. (Note that in the Rambus case, Rambus was allowed to collect royalties.)

The Tokyo High Court has asked for comments.
TruePosition v. Ericsson (D. Penn.) – TruePosition alleged anticompetitive conduct by several companies and standards bodies (ETSI and 3GPP). A standards body alleged that TruePosition violated its membership agreement (procedures). The district court found that because of indefiniteness of the agreement, the alleged breaches did not preclude TruePosition from bringing the action.
ARRIS Group v. Rockstar Consortium (D. Del.) – Rockstar acquired its patent portfolio from
Nortel and has been offering licenses. ARRIS brought an unfair competition claim, alleging that some of the patents are SEPs and that Rockstar has refused to offer licenses to ARRIS and its customers on FRAND terms. ARRIS also alleges that the defendants are concealing the true owner of patents and concealing the complete list of patents the defendants believe ARRIS’s customers are infringing. There is a question as to whether SEPs are involved.
New Business – Monica will send out an email or survey regarding Committee member interests.
Members are asked to please respond after receiving it.
Next conference call meeting: Monday, March 10 at 10:30 a.m. – 11:30 a.m. PT (1:30 p.m. – 2:30 p.m. ET).
Adjourned.
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