Apple and Samsung hit by latest US ruling

The California judge overseeing a key US patent case between Apple and Samsung has dealt a blow to both sides with her latest rulings, denying Samsung’s motion for a new trial and turning down Apple’s request to ban 26 devices which a jury found infringed its patents.

In August, a nine-person jury in San Jose, California, awarded Apple more than $1bn in damages after they found that Samsung’s smartphones infringed the iPhone’s design and utility patents.

In early December, the two technology groups returned to the courtroom to argue their cases in the next steps of what has been hailed a landmark ruling.

On Monday evening, Judge Lucy Koh handed down responses denying two of the parties’ central requests against the other.

Apple’s petition for a permanent injunction banning 26 Samsung products from sale was turned down because “Apple had not demonstrated irreparable harm from the likely infringement” of some of its patents, Judge Koh said. She added that she “rejected Apple’s theory that infringement diminished the value of Apple’s brand, which could not be separated from its products”.

With regard to other patents, Apple failed to convince the court that the specific designs covered in the infringed patents were drivers of consumer demand for smartphones.

Samsung argued in the earlier hearing that only three of the products against which Apple sought an injunction are still on sale in the US, and that those had been redesigned so as not to infringe Apple’s patents.

Although Apple established “irreparable harm” from Samsung’s dilution of its trade dress (the overall physical appearance of its product), the fact that the offending devices were no longer on sale means that Apple “cannot credibly claim to suffer any significant hardship”, Judge Koh said.

Apple failed to prove a direct connection between Samsung’s infringement and any lost iPhone sales to the Galaxy S2 and other Samsung smartphones involved in the case.

“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,” Judge Koh said. “Though Apple does have some interest in retaining certain features as exclusive to Apple, 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 added: “The public interest does not support removing phones from the market when the infringing components constitute such limited parts of complex, multi-featured products.”

In spite of the $1bn award of damages – which Samsung has attempted to reduce and Apple would like to see increased – injunctions banning products from sale is often seen as a more harmful penalty.

Apple, which is widely expected to appeal the ruling, declined to comment on Monday evening.

Samsung welcomed the decision. “We are pleased that the judge today denied Apple’s move to limit consumer choice, and restrict fair competition in the marketplace,” the company said in a statement.

Analysts said the ruling will probably force the two sides to reach a compromise on their patent disputes. “This time, the ruling is not against Samsung. The judge seems to have considered the criticism that patent disputes hurt consumer benefits,” said Park Kang-ho, an analyst at Daishin Securities. “It shows that a patent case cannot be completely in favour of one side, meaning that the two sides may be nearing talks for a compromise.”

Judge Koh also denied Samsung’s attempt to have the entire case thrown out and retried. Samsung alleged that the jury foreman, Velvin Hogan, had misled the court about his personal involvement in a patent case with Seagate – in which Samsung is a large shareholder – which the South Korean company claimed may have biased his judgment.

Judge Koh said that, while Samsung’s argument rested on its relationship with Seagate, its legal team missed the opportunity to investigate his background and question Mr Hogan about any bias as a result of his personal legal battle, despite mentioning that he worked for the company in pre-trial questioning.

“It is not clear whether Mr. Hogan was intentionally dishonest,” Judge Koh said on Monday. “Further, it is not even clear that Mr Hogan knew of any relationship between Seagate and Samsung.”

“Because Samsung failed to exercise reasonable diligence, Samsung’s argument pertaining to Mr Hogan’s dishonesty is waived,” Judge Koh said. “Samsung’s request for an evidentiary hearing or a new trial on this ground is denied.”

Additional reporting by Song Jung-a in Seoul