Editor’s note: Brian J. Love is an assistant professor of law at Santa Clara University School of Law, where he teaches courses in patent law and remedies. You can find him on Twitter at @BrianJLove and download his latest articles on SSRN.
The next installment of the ongoing patent-fueled saga between smartphone superpowers Apple and Samsung will unfold on December 6 in San Jose. On the heels of losing a jury trial and a billion-dollar verdict to Apple in August, Samsung must now attempt to persuade U.S. District Judge Lucy Koh not to issue an injunction banning sales of phones found to infringe Apple’s patents.
Forget the record-setting verdict for now. Whether or not you think Samsung should have to, rest assured that it can absorb the blow. A billion dollars is less than 1 percent of Samsung’s annual revenue.
In fact, ignore most of the Samsung phone models involved in this case. All are now well over two years old, making them the smartphone equivalent of octogenarians. Only 8 of 24 total accused products remain on store shelves.
The real question on the tech community’s mind is whether Apple can leverage its trial victory to achieve a court-ordered prohibition on sales of other, much newer Samsung products — namely the Galaxy S III, presently the world’s best-selling smartphone.
Technology and legal reporters around the world have raised the possibility. Articles published by Reuters, the Financial Times, the Guardian, and numerous tech-focused media outlets, like PC Magazine and CNET, have reported that a sword of Damocles now hangs over Samsung’s flagship product.
Indeed, consumers themselves appear to fear an impending Galaxy S III sales ban. Sales of the phone spiked following the jury’s verdict.
Shockingly, these analysts and consumers are almost certainly wrong.
The Court of Appeals for the Federal Circuit, the D.C.-based federal appellate court that hears all appeals in patent cases, has been perfectly clear on the point in cases like KSM Fastening v. H.A. Jones Co. Court orders prohibiting the sale of products following a patent trial do not extend beyond the specific “devices previously admitted or adjudged to infringe” with one exception: “other devices which are no more than colorably different therefrom.”
Which devices are only “colorably different”? Again, the court has been clear. Only those that are “essentially the same.” In other words, infringing devices that have been modestly, if at all, modified “for the purposes of evasion of the court’s order.” In short, a sales injunction of the sort Apple seeks against Samsung applies only to the specific products accused in the case and any subsequent versions thereof that represent little more than feeble attempts to circumvent the court’s order.
The Galaxy S III is neither a phone accused by Apple in this case (though it does stand accused in another, much newer case), nor a minor variation of an existing Samsung product introduced to skirt a future injunction should one be issued. The Galaxy S III hit store shelves months before trial and was publicly announced and demonstrated even earlier. Also, compared to its closest counterpart held to infringe Apple’s rights to the iPhone’s look and feel — Samsung’s Galaxy S II — the S III is taller and wider, has a larger screen and rounder corners, and is sold with an operating system four versions newer than the one running on devices found to infringe at trial.
Why the mass confusion then? Surprisingly, district courts routinely issue injunctions that violate the law.
As University of Texas law professor John Golden found in a recent study, the majority of injunctions issued by U.S. district courts in patent cases fail to comply with controlling Federal Circuit authority. Rather than specifically banning the products at issue in the case and “colorable” variations thereof, about two-thirds of issued injunctions purport to forbid the defendant from ever again infringing the patent-in-suit in any way shape or form without limitation.
How is this possible in the hierarchical world of law? For one, blame inertia. Lawyers have been drafting injunctions this broad for centuries and in other countries they remain legal. Also, blame patent owners who are usually tasked with drafting a proposed injunction for the court’s signature. Given the chance, who wouldn’t write themselves the broadest right conceivable?
But, more importantly, blame the Federal Circuit. Despite the prevalence of overbroad injunctions, the Federal Circuit does nothing to punish those who draft them or the judges who sign them. Rather, if a case is appealed, the Federal Circuit simply “reinterprets” broad injunctions in narrower form as though nothing ever happened.
But overbroad injunctions, even if not enforceable, do have an impact. Consider the position of adjudged infringers who lack either the money to appeal or the legal expertise to discover the counterintuitive fact that all injunctions are interpreted the same, even if they aren’t written the same. Undoubtedly, fear of violating the court’s order — and the possibility of facing civil or even criminal contempt charges as a result — frequently stops them from selling products they otherwise have every right to. Commerce is chilled, and consequently consumers face fewer choices and higher prices.
Even sophisticated companies like Samsung, which understand the lawful scope of injunctions, suffer when investors lose confidence and customers lose interest due to unjustified concern about the viability of new products.
Can anything be done to bring this odd, archaic practice to an end? The Federal Circuit could begin to vacate overbroad injunctions, of course. Remanding for a required rewrite and, in the process, delaying enforcement would likely be an adequate deterrent.
Another option is the legal system’s solution to the vagaries of party-drafted jury instructions: widespread adoption of model language blessed by the courts and hashed out ex ante by scads of lawyers from both sides of the bar. If the Federal Circuit Bar Association were to add “model” injunction language to its highly influential collection of model jury instructions, patent owners and courts would find lawful injunction language much harder to ignore.