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Apple v. Samsung: After Remand from the Federal Circuit, Apple Wins Preliminary Injunction Against Samsung

Last December, the district court in the Northern District of California denied Apple’s motion for a preliminary injunction. Apple had moved for the preliminary injunction based on alleged infringement of three design patents and one utility patent. After the denial of the preliminary injunction motion, Apple appealed the order to the Federal Circuit. The Federal Circuit affirmed most of the district court’s order denying the preliminary injunction but remanded to the district court for further proceedings on one of the design patents. On remand, the Federal Circuit directed that the district court consider the balance of hardships and whether the public interest favored an injunction with respect to the one design patent.

The district court had found that Apple had established that the Samsung Galaxy Tab 10.1 likely infringed the design patent and that Apple was likely to suffer irreparable harm as a result of the infringing conduct. But the district court denied the motion because it found that the design patent was likely invalid based on several prior art references. The Federal Circuit upheld the findings of infringement and irreparable harm, but reversed the district court’s finding of invalidity as to one design patent.

Based on the Federal Circuit’s ruling that Samsung had not raised a substantial question as to the validity of the design patent, the district court found that the balance of hardships tips in Apple’s favor. The district court reached this conclusion because “although Samsung will necessarily be harmed by being forced to withdraw its product from the market before the merits can be determined after a full trial, the harm faced by Apple absent an injunction on the Galaxy Tab 10.1 is greater. Apple’s interest in enforcing its patent rights is particularly strong because it has presented a strong case on the merits. This Court previously found the Galaxy Tab 10.1 to be substantially similar ‘in the eyes of the ordinary observer’ to the” Apple design patent and the district court had previously found the tablets “virtually indistinguishable.” The district court also found it significant that there was some evidence that Samsung altered its design to make the product look more like Apple’s and because Apple will be required to post a substantial bond.

Samsung raised two arguments to assert that the balance of hardships tips in its favor: (1) that an injunction is overbroad because it is based on only one aspect of the overall product; and (2) that an injunction would harm Samsung’s business relationships with wireless carriers that provide the Galaxy Tab 10.1 to their customers. The district was not persuaded.

With respect to the first argument, the district court had previously found that the design of the product “is an important driver in the demand for the tablet sales. . . . Even though the Tab 10.1 may be a ‘complex technological device,’ there is no basis to revisit the Court’s finding on this point.”

On the second argument, the district court also found that this argument had no merit as it is settled law that on who elects to build a business on an infringing product cannot complain if an injunction against a continuing infringement destroys the infringing business. “Samsung cannot be heard to complain about broken business relationships that it has established on infringing products.”

The district court also considered whether the public interest favored the issuance of the injunction and concluded that it did. “As a patent holder, Apple has a valid right to exclude others from practicing Apple’s invention. In order to protect that right, and promote the ‘encouragement of investment-based risk,’ the public interest weighs in favor of Apple.

Accordingly, the district court issued in the injunction in favor of Apple.

Apple, Inc. v. Samsung Electronics Col, LTD., et al., Case No. 11-CV-01846-LHK (N.D. Cal. June 26, 2012)