Apple Inc. v. Samsung Elecs. Co.

• Decision Date: 31 January 2013
• Docket Number: No. 2012–1507.,2012–1507.
• Parties: APPLE INC., Plaintiff–Appellee, v. SAMSUNG ELECTRONICS CO., LTD., Samsung Electronics America, Inc., and Samsung Telecommunications America, LLC, Defendants–Appellants.
• Court: U.S. Court of Appeals — Federal Circuit

695 F.3d 1370

APPLE INC., Plaintiff–Appellee,

v.SAMSUNG ELECTRONICS CO., LTD., Samsung Electronics America, Inc., and Samsung Telecommunications America, LLC, Defendants–Appellants.

No. 2012–1507.

United States Court of Appeals,Federal Circuit.

Oct. 11, 2012.

Rehearing En Banc Denied Jan. 31, 2013.

Mark A. Perry, Gibson, Dunn & Crutcher LLP, of Washington, DC, CA, argued for the plaintiff-appellee. With him on the brief were, Josh A. Krevitt and H. Mark Lyon, of Palo Alto, California. of counsel on the brief were Harold J. McElhinny, Michael A. Jacobs, Richard S.J. Hung And Brian R. Matsui, Morrison & Foerster, LLP, of San Francisco, California.

John Quinn, Quinn Emanuel Urquhart & Sullivan, LLP, of Los Angeles, CA, argued for the defendants-appellants. On the brief were William C. Price, Patrick M. Shields and Derek L. Shaffer; and Charles K. Verhoeven, Kevin P.B. Johnson and Victoria F. Maroulis, of Redwood Shores, California.

Kevin X. McGann, White & Case, LLP, of New York City, for amicus curiae, Google Inc. With him on the brief was Christopher J. Glancy.

Jonathan N. Zerger, Shook, Hardy & Bacon L.L.P., of Kansas City, Missouri, for amicus curiae, Sprint Spectrum, L.P. With him on the brief was Angel D. Mitchell.

Before PROST, MOORE, and REYNA, Circuit Judges.

PROST, Circuit Judge.

Samsung Electronics Company, Ltd., Samsung Electronics America, Inc., and Samsung Telecommunications America, LLC (collectively, “Samsung”) appeal from the district court's order granting Apple, Inc., a preliminary injunction and enjoining Samsung from selling its Galaxy Nexus smartphone. Because the district court abused its discretion in entering an injunction, we reverse and remand.

Background

On February 8, 2012, Apple brought suit against Samsung, alleging that Samsung's Galaxy Nexus smartphone infringes eight patents, including U.S. Patent No. 8,086,604 (“'604 patent”), which is the only patent at issue in this appeal. Asserted independent claim 6 of the '604 patent is directed to an apparatus for “unified search” that uses heuristic modules to search multiple data storage locations. Unified search refers to the ability to access information on more than one data storage location through a single interface. For example, a device equipped with unified search allows the user to search the local memory of the device as well as the Internet by entering a single search query.

The apparatus disclosed in claim 6 recites a specific and particular implementation of unified search that uses modules to conduct the search. For the purpose of this appeal, we assume that a search module is a software program or subroutine that employs a particular search algorithm. According to claim 6, when the user inputs a search query in the unified search interface, the query is submitted to different heuristic modules, each of which is assigned a predetermined search area. The search results that are returned by the search modules are then gathered (and perhaps further filtered) and displayed to the user. Claim 6 recites:

6. An apparatus for locating information in a network, comprising:

an interface module configured to receive an inputted information descriptor from a user-input device;

a plurality of heuristic modules configured to search for information that corresponds to the received information descriptor, wherein:

each heuristic module corresponds to a respective area of search and employs a different,

predetermined heuristic algorithm corresponding to said respective area, and the search areas include storage media accessible by the apparatus; and

a display module configured to display one or more candidate items of information located by the plurality of heuristic modules on a display device.

'604 patent col.8 11.26–41 (emphases added).¹

Apple alleges that the Quick Search Box (“QSB”), which is the unified search application of Samsung's Galaxy Nexus, infringes claim 6. QSB is a feature of Android, an open-source mobile software platform developed by Google, Inc. Any software developer may use Android to create applications for mobile devices, and any handset manufacturer can install Android on a device. Galaxy Nexus is only one of more than 300 Android smartphones available on the market. The release of the allegedly infringing version of the Android platform predates the release of the Galaxy Nexus, but Google, Inc. is not a defendant in this suit.

Along with the complaint, Apple also filed a motion for a preliminary injunction, seeking to enjoin the sales of the Galaxy Nexus. Four of the eight asserted patents formed the basis of Apple's request for relief. The district court found that Apple's allegations with regard to three of the patents did not justify granting Apple's motion. It determined, however, that an injunction should issue based on the alleged infringement of the '604 patent. Accordingly, on June 29, 2012, the district court enjoined the sales of Galaxy Nexus. Samsung moved the district court to stay the injunction pending appeal, but the district court denied its request. Samsung appealed. At the outset, this court granted Samsung's motion for a temporary stay of the injunction, expedited the appeal, and in that light held in abeyance Samsung's subsequent motion for a stay pending appeal. We exercise jurisdiction pursuant to 28 U.S.C. §§ 1292(c)(1) and 1295(a)(1).

Standard of review

On an appeal from the grant of a preliminary injunction, we must review the district court's legal rulings de novo and its ultimate decision to grant a preliminary injunction for abuse of discretion. Gonzales v. O Centro Espirita Beneficente Uniao do Vegetal, 546 U.S. 418, 428, 126 S.Ct. 1211, 163 L.Ed.2d 1017 (2006); McCreary Cnty. v. Am. Civil Liberties Union of Ky., 545 U.S. 844, 867, 125 S.Ct. 2722, 162 L.Ed.2d 729 (2005).

Discussion

“A plaintiff seeking a preliminary injunction must establish that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the public interest.” Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 20, 129 S.Ct. 365, 172 L.Ed.2d 249 (2008) (citation omitted). These traditional four factors “apply with equal force to disputes arising under the Patent Act.” eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391, 126 S.Ct. 1837, 164 L.Ed.2d 641 (2006). The parties dispute the district court's decision to grant injunctive relief based on its analysis of the likelihood of success and irreparable harm factors. To the extent we deem necessary, we address these arguments below.

I. Irreparable Harm

It is well established that as the party seeking emergency relief, Apple “must make a clear showing that it is at risk of irreparable harm, which entails showing a likelihood of substantial and immediate irreparable injury.” Apple, Inc. v. Samsung Electronics Co., 678 F.3d 1314, 1325 (Fed.Cir.2012) (hereinafter Apple I ) (citing Winter, 555 U.S. at 22, 129 S.Ct. 365;Weinberger v. Romero–Barcelo, 456 U.S. 305, 311, 102 S.Ct. 1798, 72 L.Ed.2d 91 (1982); O'Shea v. Littleton, 414 U.S. 488, 502, 94 S.Ct. 669, 38 L.Ed.2d 674 (1974)); see also Beacon Theatres, Inc. v. Westover, 359 U.S. 500, 506–507, 79 S.Ct. 948, 3 L.Ed.2d 988 (1959) (“The basis of injunctive relief in the federal courts has always been irreparable harm and inadequacy of legal remedies.”). But in cases such as this—where the accused product includes many features of which only one (or a small minority) infringe—a finding that the patentee will be at risk of irreparable harm does not alone justify injunctive relief. Rather, the patentee must also establish that the harm is sufficiently related to the infringement. Apple I, 678 F.3d at 1324. Thus, to satisfy the irreparable harm factor in a patent infringement suit, a patentee must establish both of the following requirements: 1) that absent an injunction, it will suffer irreparable harm, and 2) that a sufficiently strong causal nexus relates the alleged harm to the alleged infringement.

Here, Samsung challenges the district court's decision on both grounds: it argues that it was abuse of discretion for the district court to find that Apple will be irreparably harmed in the absence of an injunction, and that Apple sufficiently established a causal nexus between the harm alleged and the infringing conduct. We hold that the district court abused its discretion in determining that Apple established a sufficient causal nexus. In that light, we do not address Samsung's argument with respect to the sufficiency of Apple's allegations of harm.

We initially point out, however, that although the irreparable harm and the causal nexus inquiries may be separated for the ease of analysis, they are inextricably related concepts. As this court recently explained:

To show irreparable harm, it is necessary to show that the infringement caused harm in the first place. Sales lost to an infringing product cannot irreparably harm a patentee if consumers buy that product for reasons other than the patented feature. If the patented feature does not drive the demand for the product, sales would be lost even if the offending feature were absent from the accused product. Thus, a likelihood of irreparable harm cannot be shown if sales would be lost regardless of the infringing conduct.

Apple I, 678 F.3d at 1324. In other words, it may very well be that the accused product would sell almost as well without incorporating the patented feature. And in that case, even if the competitive injury that results from selling the accused device is substantial, the harm that flows from the alleged infringement (the only harm that should count) is not. Thus, the causal nexus inquiry is indeed part of the irreparable harm calculus: it informs whether the patentee's allegations of irreparable harm are pertinent to the injunctive relief analysis, or whether the patentee seeks to leverage its patent for...