By Thomas Long, J.D.
A jury verdict that Samsung infringed three Apple patents on multiple aspects of smartphone operations was supported by substantial evidence, the U.S. Court of Appeals for the Federal Circuit has decided in a divided en banc opinion. A panel opinion holding to the contrary, issued in February 2016, was vacated by the eight-to-three en banc decision, and the district court’s judgment in favor of Apple was affirmed with respect to those patents, putting Samsung back on the hook for $120 million in damages. According to the en banc court, the panel improperly made factual findings of its own and reversed nearly a dozen of the jury’s fact findings regarding infringement, motivation to combine, the teachings of prior art references, commercial success, industry praise, copying, and long-felt need, based on extrinsic evidence not in the record. The panel opinion regarding four other Apple patents, as well as Samsung’s counterclaims against Apple with respect to two Samsung patents, was reinstated. Each of the three judges from the panel wrote dissenting opinions (Apple Inc. v. Samsung Electronics Co., Ltd., October 7, 2016, Moore, K.).
Patent infringement dispute. Apple accused Samsung’s smartphones of infringing seven Apple patents covering different aspects of mobile device technology. The district court granted summary judgment that Samsung’s accused devices infringed the asserted claim of U.S. Patent No. 8,074,172 ("the ’172 patent"), which covered the iPhone’s "autocorrect" feature.
After a 13-day trial, the jury found that Samsung infringed the asserted claim of U.S. Patent No. 5,946,647 ("the ’647 patent"), which disclosed a computer-based system for recognizing certain structures—such as a telephone number—on a touchscreen, and for linking certain actions—such as calling the telephone number—to the structure. The jury also found the asserted claim of U.S. Patent No. 8,046,721 ("the ’721 patent")—directed to the "slide to unlock" feature of Apple’s iPhone—infringed and not invalid and the asserted claim of the ’172 patent not invalid. Separately, the jury found that Samsung had not infringed the asserted claims of Apple’s U.S. Patent Nos. 7,761,414 ("the ’414 patent") or 6,847,959 ("the ’959 patent"). Additionally, the jury found that Apple had infringed the asserted claim of one Samsung patent but had not infringed the asserted claim of another Samsung patent and awarded Samsung $158,400 in damages.
Decision to grant en banc review. The district court denied Samsung’s requested judgments as a matter of law (JMOL) and entered judgment accordingly. Samsung appealed the district court’s grant of summary judgment of infringement as to the ’172 patent, denial of JMOL of noninfringement as to the ’647 patent, and denial of JMOL of obviousness as to the ’721 and ’172 patents. A three-judge panel of the Federal Circuit reversed the denial of JMOL with regard to the jury verdict of infringement as to the ’647 patent and non-obviousness as to the ’721 and ’172 patents.
Apple filed a petition for rehearing en banc. Apple’s petition argued that the panel reversed the jury’s finding of infringement of the ’647 patent by improperly relying on extra-record evidence. The court stated that it granted Apple’s en banc petition to affirm its understanding of the appellate function as limited to deciding the issues raised on appeal by the parties, deciding these issues only on the basis of the record made below, and as requiring appropriate deference be applied to the review of fact findings.
The ’647 patent. The jury found that Samsung infringed claim 9 of the ’647 patent and awarded Apple $98.7 million in damages. The district court denied Samsung’s JMOL of non-infringement, and Samsung appealed that denial. Claim 9 of the ’647 patent depended on claim 1, which read in relevant part: "A computer-based system for detecting structures in data and performing actions on detected structures, comprising … an analyzer server for detecting structures in the data, and for linking actions to the detected structures …" (emphasis in original). The panel reversed the district court’s denial of JMOL of non-infringement, determining that no reasonable jury could have concluded that the accused Samsung devices had an "analyzer server for detecting structures in the data, and for linking actions to the detected structures." The en banc court held to the contrary, concluding that substantial evidence supported the jury’s verdict.
According to the en banc court, the panel used extra-record extrinsic evidence to modify the construction of "analyzer server," which the parties had agreed upon and which neither party had appealed. The panel independently construed "analyzer server" to require that server to be a piece of software that: (1) ran separately; (2) received data from a client application; (3) performed the "detecting" and "linking" steps; and (4) returned that data to the client application. It then held that Samsung’s accused products did not meet the claim limitation because their software library programs were not "standalone" programs that ran separately. Neither party had asked for the changed construction, and there was no foundation for it in Federal Circuit precedent, the en banc court said.
Under the agreed-upon construction, "analyzer server" was "a server routine separate from a client that receives data having structures from the client." Samsung argued that its products’ Browser and Messenger applications did not meet this limitation because each contained its own routine within the application for analyzing data. The Federal Circuit rejected this argument, holding that the evidence supported the jury’s finding that the accused products met the claim limitation. Apple’s expert testified that Samsung’s shared library code and client applications were "separate" because they were located in separate parts of memory. The jury was entitled to consider Apple’s expert more persuasive than Samsung’s expert.
The en banc court also found that there was substantial evidence to support the jury’s finding that the accused devices meet the "linking actions" limitation of the asserted claim. In a prior related decision, the court construed "linking actions to the detected structures" as "creating a specified connection between each detected structure and at least one computer subroutine that causes the CPU to perform a sequence of operations on that detected structure." This construction did not require a specified connection between detected structures and the applications that performed operations on them. Apple presented substantial evidence that the accused devices contained a specified connection between a detected structure and a computer subroutine that caused the CPU to perform a sequence of operations. The jury reasonably relied on expert testimony to reach its verdict, the court said.
The ’721 patent. The jury entered a verdict that claim 8 of the ’647 patent—covering Apple’s "slide to unlock" feature—was infringed and would not have been obvious. Samsung did not appeal the infringement aspect of the verdict, but it asserted that claim 8 would have been obvious in light of two prior art references ("Neonode" and "Plaisant"). Neonode disclosed a mobile phone, and Plaisant disclosed a wall-mounted touchscreen for an air conditioning controller. The panel agreed with Samsung, but the en banc court determined that the panel improperly make its own factual findings with respect to whether a person of ordinary skill would have been motivated to combine the teachings of Neonode and Plaisant to create the "slide to unlock" feature. There was expert testimony that, while Neonode disclosed the use of a touch gesture on a touch screen to unlock a smartphone, Plaisant taught away from the use of a "slider toggle." In addition, the jury could have reasonably decided that Plaisant—which described wall-mounted devices, not portable mobile phones—was not relevant prior art, particularly in light of the fact that Apple’s invention was designed to address the problem of "pocket dialing," which was specific to mobile devices.
In addition, Apple provided evidence of non-obviousness, including industry praise, copying, commercial success, and long-felt need. The en banc court stated that it presumed the jury found this evidence to be sufficient to establish each by a preponderance of the evidence, and the court determined that there was substantial evidence in the record to support these findings. The en banc court emphasized that it was not the appellate court’s role to reweigh the evidence or consider what the record might have supported. Based on the jury’s well-supported factual findings, the court concluded that, as a matter of law, Samsung failed to establish that it would have been obvious to a skilled artisan to combine Neonode and Plaisant to arrive at the claimed invention.
The ’172 patent. The district court ruled on summary judgment that Samsung infringed claim 18 of Apple’s ’172 patent—covering the "autocorrect" feature—and the jury decided that the claim would not have been obvious. The jury award Apple nearly $18 million in damages. On appeal, the panel agreed with Samsung’s contention that claim 18 was invalid in light of two prior art references: (1) "Robinson," which was directed to a "keyboard system with automatic correction," and (2) "Xrgomics," which disclosed a "letter and word choice text input method" and described the "quick selection of choices to be implemented seamlessly for reduced keyboard systems," like those in mobile devices. The en banc court vacated the panel’s determination and affirmed both the judgment of infringement and the judgment as to invalidity.
Robinson was directed to an enhanced text entry system that used word-level disambiguation to automatically correct inaccuracies in user keystroke entries. Xrgomics was directed to a method of entering text efficiently by providing letter or word choices. Apple’s expert testified that the combination of Robinson and Xrgomics did not contain all of the limitations of claim 18, and the jury was entitled to deem Apple’s expert more persuasive than Samsung’s. Apple also provided substantial evidence of non-obviousness. In the en banc majority’s view, the panel exceeded its proper role by reweighing the evidence and independently investigating potential arguments regarding the prior art that were not raised by the parties.
Dissenting opinions. Chief Judge Sharon Prost opined that the majority misapplied the substantial evidence standard of review with respect to the invalidity analysis, "finding evidence in the record when there is none to support the jury’s implicit factual findings." In Judge Prost’s view, the majority appeared to deemany evidence as sufficient to meet the "substantial evidence" standard, whereas the standard required evidence that a reasonable person might accept as adequate to support a conclusion. According to Judge Prost, no jury could rationally conclude that the ’721 and ’172 patents were not obvious, or that Samsung infringed the ’647 patent.
Circuit Judge Timothy B. Dyk expressed his disagreement with the majority’s decision to take the case en banc without any further briefing and argument from the parties, amici, or the government, differing from the usual practice in the Federal Circuit’s en banc decisions. Judge Dyk also wrote that any references to extra-record evidence in the panel decision could simply have been eliminated, because they were unnecessary to the panel’s opinion. According to Judge Dyk, the majority’s decision will have a substantial impact on the law of obviousness, making proof of obviousness far more difficult. First, Judge Dyk said, the majority turned the legal question of obviousness into a factual issue for a jury to resolve, both as to the sufficiency of the motivation to combine and the significance to be given to secondary considerations. Second, he argued that the majority lowered the bar for nonobviousness by refusing to take account of the trivial nature of the claimed inventions. Third, Judge Dyk stated that the majority concluded that combinations of prior art used to solve a known problem were insufficient to render an invention obvious as a matter of law, and that there must be evidence of a specific motivation to combine. Both aspects of these conclusions, Judge Dyk opined, were contrary to the U.S. Supreme Court’s holding in KSR International Co. v. Teleflex Inc., 550 U.S. 398 (2007), which held that the reason to combine features of prior art may be found as a matter of law in the solution to a known problem, and that evidence of a specific motivation to combine was not required.
Circuit Judge Jimmie V. Reyna wrote separately to express his view that the court should not have granted en banc review. In Judge Reyna’s opinion, the en banc decision neither resolved a disagreement among the court’s decisions nor answered any exceptionally important question. Judge Reyna also agreed with Chief Judge Prost’s and Judge Dyk’s dissents in that the majority’s application of law to the facts of this case was inconsistent with Supreme Court precedent on obviousness and substantial evidence.
The case is Nos. 2015-1171, 2015-1195, and 2015-1994.
Attorneys: William F. Lee (Wilmer, Cutler, Pickering, Hale and Dorr, LLP) for Apple Inc. Kathleen M. Sullivan (Quinn, Emanuel, Urquhart & Sullivan, LLP) for Samsung Electronics Company, Ltd.; Samsung Electronics America, Inc.; and Samsung Telecommunications America, LLC.
Companies: Apple Inc.; Samsung Electronics Company, Ltd.; Samsung Electronics America, Inc.; Samsung Telecommunications America, LLC
MainStory: TopStory Patent FedCirNews
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