Federal Circuit en banc Vacates Obviousness and Noninfringement of Patents in Apple, Inc. v. Samsung Electronics

October 13, 2016

By: N. Scott Pierce

Hamilton Brook Smith Reynolds Alert

 

  • $120M award against Samsung reinstated in latest chapter of litigation with Apple
  • Federal Circuit en banc grant of Apple's petition "affirms [the majority's] understanding of appellate function"
  • Three separate dissenting opinions assail "significant and immediate impact on future resolution of obviousness issues"

 

The Court of Appeals for the Federal Circuit restored a $120 million verdict against Samsung for infringement of three United States Patents.  The decision was made en banc by a vote of 8 to 3 and vacated a panel decision by Judges Prost, Dyk and Reyna, all of whom wrote separate dissenting opinions.  The majority opinion, written by Judge Moore, stated that the en banc petition by Apple had been granted to "affirm our understanding of the appellate function as limited to deciding issues raised on appeal by the parties," apparently admonishing the previous three-judge panel for considering "extra-record extrinsic evidence to construe a patent claim term," and for usurping the fact-finding role of the district court and jury contrary to the Supreme Court's decision in Teva Pharmaceuticals, Inc. v. Sandoz, 135 S.Ct. 831 (2015).
 
Infringement of the first patent hinged on satisfaction of the claim limitations "analyzer server" and "linking actions to the detected structures," according to claim construction that had been agreed upon by the parties.  With respect to both terms, the en banc majority found that there was substantial evidence to support the jury verdict and that there was no error in the district court's denial of Samsung's request for judgment notwithstanding the verdict (JMOL).

Similarly, the court upheld infringement of the second patent, directed to a "slide-to-unlock feature" on a portable electronic device.  Samsung charged that the invention was obvious in view of two prior art references, one teaching a mobile device with a touch-sensitive screen, and the other describing a "touchscreen toggle design."  Reviewing the "ultimate legal determination" of obviousness de novo, the court concluded that "it would not have been obvious to a skilled artisan to combine the prior art to arrive at the claimed invention," explaining that "common sense and real world indicators indicate that to conclude otherwise would be to give in to hindsight, to allow the exact ex post reasoning against which the Supreme Court cautioned...."  This, despite the fact that the motivation to make the combination was found in a need to avoid "pocket dialing" on cell phones, and that one of the two references relied upon stated that sliding movement of a touch screen toggle is "less likely to be done inadvertently."  In reversing the panel decision, the majority also relied heavily on so-called "secondary considerations" of commercial success, industry praise, copying by others, and the existence of long felt but unsatisfied need for the invention, and found that the jury verdict was supported by substantial evidence.

The third patent was directed to a graphical user interface that included a display of a "current character string" in a "first area," and both a "current character string" and a suggested replacement in a "second area."  Again relying on secondary considerations, the majority en banc found that there was substantial evidence to support the jury verdict.

All three dissenting judges stated that there was no need to take this case en banc.  Chief Judge Prost concluded that, according to the majority's reasoning, "the existence of any evidence that could theoretically support a jury verdict would seem to end our substantial evidence review on appeal."  She also criticized the majority's failure to articulate a nexus between secondary considerations of success and the patented features of the claimed device, stating that "there is no evidence tying that success specifically to the features embodied in the claimed invention."

Judge Dyk openly questioned the majority's stated motivation for granting en banc review, and predicted that the "present en banc decision will have a significant and immediate impact on the future resolution of obviousness issues."  According to Judge Dyk, the "majority makes significant changes to the law of obviousness even though these important issues are raised by the court sua sponte without the opportunity for the parties and amici to address them."  Among these changes were:

  • "[Turning] 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 significance to be given to secondary considerations."
  • "[Lowering] the bar for nonobviousness by refusing to take account of the trivial nature of the two claimed inventions," namely, the "slide-to-unlock feature" of the second patent and the "auto correct feature" of the third patent.
  • "[Requiring] evidence of a specific motivation to combine," contrary to the Supreme Court decision of KSR Int'l Co. v. Teleflex, 515 U.S. 398 (2007).
  • "[C]abining the relevant technology in the field of prior art," thereby creating "significant opportunities to dismiss relevant prior art and find almost any patent nonobvious by narrowly defining the relevant technology."
  • "[E]levating secondary considerations of nonobviousness beyond their role as articulated by the Supreme Court," which, according to Judge Dyk "are relevant only in a close case where all other proof leaves the question of invention in doubt."
  • Failing to demonstrate that a "nexus exists between the claimed features of the invention and the objective evidence offered to show nonobviousness."

According to Judge Dyk, the "majority's approach is inconsistent with our appellate function."

Judge Reyna, the third dissenting judge, found that none of the criteria for granting en banc review had been met, such as to:  overrule precedent; "consider whether prior decisions remain sound in light of later Supreme Court decisions"; "review whether a panel properly interpreted the statute, such as in a case of first impression"; or "'set forth the law' on an issue the Supreme Court has invited us to revisit."  Rather, according to Judge Reyna, "the majority's en banc review is simply a do over."  On the other hand, Judge Reyna identified two issues that "could or should have explicitly" been addressed en banc on this case, namely, clarifying the meaning of the "substantial evidence standard" necessary to support the "factual findings underlying jury verdicts," and the "role of objective indicia" in the "ultimate determination of obviousness."

This case is one of several disputes between Apple and Samsung.  Another is the first design patent case heard by the Supreme Court in the last one-hundred twenty years, and involves a $548 million award to Apple.  Oral arguments before the Supreme Court were heard yesterday.

 

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October 13, 2016

By: N. Scott Pierce

Hamilton Brook Smith Reynolds Alert

 

  • $120M award against Samsung reinstated in latest chapter of litigation with Apple
  • Federal Circuit en banc grant of Apple's petition "affirms [the majority's] understanding of appellate function"
  • Three separate dissenting opinions assail "significant and immediate impact on future resolution of obviousness issues"

 

The Court of Appeals for the Federal Circuit restored a $120 million verdict against Samsung for infringement of three United States Patents.  The decision was made en banc by a vote of 8 to 3 and vacated a panel decision by Judges Prost, Dyk and Reyna, all of whom wrote separate dissenting opinions.  The majority opinion, written by Judge Moore, stated that the en banc petition by Apple had been granted to "affirm our understanding of the appellate function as limited to deciding issues raised on appeal by the parties," apparently admonishing the previous three-judge panel for considering "extra-record extrinsic evidence to construe a patent claim term," and for usurping the fact-finding role of the district court and jury contrary to the Supreme Court's decision in Teva Pharmaceuticals, Inc. v. Sandoz, 135 S.Ct. 831 (2015).
 
Infringement of the first patent hinged on satisfaction of the claim limitations "analyzer server" and "linking actions to the detected structures," according to claim construction that had been agreed upon by the parties.  With respect to both terms, the en banc majority found that there was substantial evidence to support the jury verdict and that there was no error in the district court's denial of Samsung's request for judgment notwithstanding the verdict (JMOL).

Similarly, the court upheld infringement of the second patent, directed to a "slide-to-unlock feature" on a portable electronic device.  Samsung charged that the invention was obvious in view of two prior art references, one teaching a mobile device with a touch-sensitive screen, and the other describing a "touchscreen toggle design."  Reviewing the "ultimate legal determination" of obviousness de novo, the court concluded that "it would not have been obvious to a skilled artisan to combine the prior art to arrive at the claimed invention," explaining that "common sense and real world indicators indicate that to conclude otherwise would be to give in to hindsight, to allow the exact ex post reasoning against which the Supreme Court cautioned...."  This, despite the fact that the motivation to make the combination was found in a need to avoid "pocket dialing" on cell phones, and that one of the two references relied upon stated that sliding movement of a touch screen toggle is "less likely to be done inadvertently."  In reversing the panel decision, the majority also relied heavily on so-called "secondary considerations" of commercial success, industry praise, copying by others, and the existence of long felt but unsatisfied need for the invention, and found that the jury verdict was supported by substantial evidence.

The third patent was directed to a graphical user interface that included a display of a "current character string" in a "first area," and both a "current character string" and a suggested replacement in a "second area."  Again relying on secondary considerations, the majority en banc found that there was substantial evidence to support the jury verdict.

All three dissenting judges stated that there was no need to take this case en banc.  Chief Judge Prost concluded that, according to the majority's reasoning, "the existence of any evidence that could theoretically support a jury verdict would seem to end our substantial evidence review on appeal."  She also criticized the majority's failure to articulate a nexus between secondary considerations of success and the patented features of the claimed device, stating that "there is no evidence tying that success specifically to the features embodied in the claimed invention."

Judge Dyk openly questioned the majority's stated motivation for granting en banc review, and predicted that the "present en banc decision will have a significant and immediate impact on the future resolution of obviousness issues."  According to Judge Dyk, the "majority makes significant changes to the law of obviousness even though these important issues are raised by the court sua sponte without the opportunity for the parties and amici to address them."  Among these changes were:

  • "[Turning] 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 significance to be given to secondary considerations."
  • "[Lowering] the bar for nonobviousness by refusing to take account of the trivial nature of the two claimed inventions," namely, the "slide-to-unlock feature" of the second patent and the "auto correct feature" of the third patent.
  • "[Requiring] evidence of a specific motivation to combine," contrary to the Supreme Court decision of KSR Int'l Co. v. Teleflex, 515 U.S. 398 (2007).
  • "[C]abining the relevant technology in the field of prior art," thereby creating "significant opportunities to dismiss relevant prior art and find almost any patent nonobvious by narrowly defining the relevant technology."
  • "[E]levating secondary considerations of nonobviousness beyond their role as articulated by the Supreme Court," which, according to Judge Dyk "are relevant only in a close case where all other proof leaves the question of invention in doubt."
  • Failing to demonstrate that a "nexus exists between the claimed features of the invention and the objective evidence offered to show nonobviousness."

According to Judge Dyk, the "majority's approach is inconsistent with our appellate function."

Judge Reyna, the third dissenting judge, found that none of the criteria for granting en banc review had been met, such as to:  overrule precedent; "consider whether prior decisions remain sound in light of later Supreme Court decisions"; "review whether a panel properly interpreted the statute, such as in a case of first impression"; or "'set forth the law' on an issue the Supreme Court has invited us to revisit."  Rather, according to Judge Reyna, "the majority's en banc review is simply a do over."  On the other hand, Judge Reyna identified two issues that "could or should have explicitly" been addressed en banc on this case, namely, clarifying the meaning of the "substantial evidence standard" necessary to support the "factual findings underlying jury verdicts," and the "role of objective indicia" in the "ultimate determination of obviousness."

This case is one of several disputes between Apple and Samsung.  Another is the first design patent case heard by the Supreme Court in the last one-hundred twenty years, and involves a $548 million award to Apple.  Oral arguments before the Supreme Court were heard yesterday.

 

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