Here’s Why Apple Really Wants a Court-Imposed Sales Ban on Samsung

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Last week, on March 6, Apple (NASDAQ:AAPL) appealed a California district court ruling denying a permanent injunction against 23 out-of-date Samsung (SSNLF.PK) devices that were found to have infringed the iPhone maker’s patents; once again, the iPhone maker failed to prove to Judge Lucy Koh a “causal nexus” between the infringement of its design patents and irreparable harm to its business to warrant the injunction. Less than a day later, Samsung responded by appealing the California court’s final judgment of the original 2012 Apple vs. Samsung patent trial that awarded the iPhone maker $929 million in damages.

Apple has already filed a one-paragraph notice on March 11 in the United States District Court for the Northern District of California that announced the company will ask the U.S. Court of Appeals for the Federal Circuit in Washington to review the denial of the permanent injunction ruling.

The iPhone maker’s current quest for a permanent injunction against Samsung dates back to December 2012, when U.S. District Court Judge Lucy Koh initially denied a motion seeking a permanent sales ban against 23 Samsung devices, writing that, “In sum, to the limited extent that Apple has been able to show that any of its harms were caused by Samsung’s illegal conduct (in this case, only trade dress dilution), Apple has not established that the equities support an injunction.”

The iPhone maker then secured a partial appeal of the ruling in a federal circuit court, which sent the motion back to Judge Koh in November 2013. The appeals court affirmed Koh’s denial of patents for trade dress — a legal term that refers to the visual appearance of a product or its packaging that signify the source of the product to consumers. However, it did find that the district court should reexamine Apple’s claims of infringement of its software patents, ruling that Koh set too high a standard in requiring Apple to show that the patented features of its iPhone are the “sole driver” of consumer demand.

Apple filed a suite of four design patents covering the basic shape of the iPhone just four days before the smartphone was first introduced to the world on January 5, 2007. Those patents were followed that June by a design patent covering 193 screen shots of various iPhone graphical user interfaces, and those filings — along with Apple’s utility patents, registered trademarks, and trade dress rights — are the intellectual property that the iPhone maker claims Samsung has violated.

But, even though Apple was thought to have chance at winning a sales ban, Judge Koh has remained unconvinced by the company’s arguments. The fact that Koh was not swayed by Apple’s arguments is concerning; the injunction had much broader implications than merely obtaining a sales ban against Samsung’s 23 out-of-date products. Had the ruling gone the other way, the iPhone maker could have established a precedent for obtaining such injunctions in future court proceedings, like the upcoming, second installment of the California patent trial. It is now clear that Apple’s lawyers will have to find a new argument for show the “causal nexus” between patent infringement and irreparable harm as Koh’s rulings indicate she has found Samsung’s competition to be lawful.

“Apple, in other words, cannot obtain a permanent injunction merely because Samsung’s lawful competition impacts Apple in a way that monetary damages cannot remedy,” read the March 6 order. “To award an injunction to Apple in these circumstances would ignore the Federal Circuit’s warning that a patentee may not ‘leverage its patent for competitive gain beyond that which the inventive contribution and value of the patent warrant.’”

Koh’s decision in Samsung’s appeal of the original verdict could give the South Korean electronics maker leverage as the two smartphone manufactures discuss a possible settlement with a mediator.

For several years, Samsung and Apple have been competing for dominance in the high-end smartphone market, and since that battle extended to the courtroom in 2011, the two companies have together spent hundreds of millions of dollars in legal fees arguing that each copied key features of the other’s products.

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