Apple, Inc. v. Samsung Electronics Co.
| Decision Date | 29 June 2012 |
| Docket Number | Case No.: 11-CV-01846-LHK |
| Court | U.S. District Court — Northern District of California |
| Parties | APPLE, INC., a California corporation, Plaintiff and Counterdefendant, v. SAMSUNG ELECTRONICS CO., LTD., A Korean corporation; SAMSUNG ELECTRONICS AMERICA, INC., a New York corporation; SAMSUNG TELECOMMUNICATIONS AMERICA, LLC, a Delaware limited liability company, Defendants and Counterclaimants. |
Defendants and Counterclaimants Samsung Electronics Co., Ltd., Samsung Electronics America, Inc., and Samsung Telecommunications America, LLC (collectively "Samsung") filed a motion for summary judgment against Plaintiff and Counterdefendant Apple, Inc. ("Apple") on May 17, 2012 ("MSJ"). Apple filed its opposition on May 31, 2012 ("Opp'n"). Samsung filed its reply on June 7, 2012 ("Reply"). The Court held a hearing on June 21, 2012. The pretrial conference in this matter is set for July 18, 2012; the trial will begin on July 30, 2012. Because the parties require a ruling on this motion on an expedited basis, the Court will keep its analysis brief.
The parties are familiar with the factual and procedural background of this case, and the Court will not repeat it in detail here. In sum, at the center of the parties' dispute in this lawsuit are Samsung's cellular telephones and tablet computers. Apple alleges that Samsung's products infringe on Apple's utility and design patents as well as Apple's trade dress. In addition, Samsung filed counterclaims against Apple alleging that Apple products infringe Samsung patents. Because several of Samsung's asserted patents are incorporated into the UMTS standards ("standards essential patents"), Apple also alleges, in its counterclaims in reply, that Samsung's refusal to license its standards essential patents on fair, reasonable, and non-discriminatory ("FRAND")terms, constitutes antitrust violations. Additional facts are discussed below, as necessary, in the Court's analysis.
In order to prepare this case for trial on July 30, 2012, the parties stipulated to dismiss many of the claims originally asserted in the complaint, counterclaims, and counterclaims in reply. Samsung moves for summary judgment on all of Apple's affirmative claims. At issue in this motion for summary judgment are the following claims: (1) trade dress infringement; (2) trade dress dilution; (3) utility patent infringement; (4) design patent infringement; and (5) antitrust claims. After hearing oral argument on the matter, and reviewing the briefing by the parties, the evidence offered in support of the briefing, and the relevant case law, the Court DENIES Samsung's motion for summary judgment. Each of Samsung's arguments challenging Apple's claims is addressed in turn below.
Under Federal Rule of Civil Procedure 56(a), "the court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Material facts are those that may affect the outcome of the case. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute as to a material fact is "genuine" if the evidence is such that "a reasonable jury could return a verdict for the nonmoving party." See id. "[I]n ruling on a motion for summary judgment, the judge must view the evidence presented through the prism of the substantive evidentiary burden." Id. at 254. The question is "whether a jury could reasonably find either that the [moving party] proved his case by the quality and quantity of evidence required by the governing law or that he did not." Id. "[A]ll justifiable inferences must be drawn in [the nonmovant's] favor." See United Steelworkers of Am. v. Phelps Dodge Corp., 865 F.2d 1539, 1542 (9th Cir. 1989) (en banc) (citing Liberty Lobby, 477 U.S. at 255).
The moving party bears the initial responsibility for informing the district court of the basis for its motion and identifying those portions of the pleadings, depositions, interrogatory answers, admissions and affidavits, if any, that it contends demonstrate the absence of a genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). A party opposing a properlysupported motion for summary judgment "may not rest upon the mere allegations or denials of [that] party's pleading, but . . . must set forth specific facts showing that there is a genuine issue for trial." See Fed. R. Civ. P. 56(e); see also Liberty Lobby, 477 U.S. at 250. The opposing party need not show the issue will be resolved conclusively in its favor. See Liberty Lobby, 477 U.S. at 248-49. All that is necessary is submission of sufficient evidence to create a material factual dispute, thereby requiring a jury or judge to resolve the parties' differing versions at trial. See id.
TrafFix Devices, Inc. v. Marketing Displays, Inc., 532 U.S. 23, 28 (2001). To succeed on its trade dress claims, Apple must satisfy three elements: nonfunctionality, distinctiveness, and likelihood of confusion. See Disc Golf Ass'n, Inc. v. Champion Discs, Inc., 158 F.3d 1002, 1005 (9th Cir. 1998). On its motion for summary judgment, Samsung only argues that Apple's product designs are unprotectable because they are functional. Functionality is a factual question. Clicks Billiards, Inc. v. Sixshooters, Inc., 251 F.3d 1252, 1258 (9th Cir. 2001) (citation omitted).
The burden of proof of functionality on trade dress claims depends upon whether the trade dress is registered or not. A party asserting protection for unregistered marks "has the burden of proving that the matter sought to be protected is not functional." 15 U.S.C. §1125(a)(3) (2006). In contrast, a registered mark enjoys the presumption of validity. However, this presumption can be rebutted through "law, undisputed facts, or a combination thereof that the mark is invalid" such that registration alone does not protect the trademark holder against summary judgment. Tie Tech, Inc. v. Kinedyne Corp., 296 F.3d 778, 783 (9th Cir. 2002). Apple continues to assert "[t]he iPhone trade dress (based on the trade dress Registration No. 3,470,983, the unregistered combination iPhone trade dress, and the unregistered iPhone 3G trade dress)1 " as well as "[t]he iPad trade dress (based on unregistered iPad/iPad 2 trade dress)." See ECF No. 902. Apple clarified at the hearingon the Daubert motions that the only iPhone trade dress claim asserted was trade dress dilution. Apple continues to assert both trade dress infringement and trade dress dilution as to the iPad.
Trade dress protection "must subsist with the recognition that in many instances there is no prohibition against copying goods and products." TrafFix Devices, Inc., 532 U.S. at 29. Therefore, "[t]he functionality doctrine prevents trademark law, which seeks to promote competition by protecting a firm's reputation, from instead inhibiting legitimate competition by allowing a producer to control a useful product feature." Qualitex Co. v. Jacobson Prod. Co., 514 U.S. 159, 164 (1995).
The Supreme Court has recognized two types of functionality: a "traditional rule" and a second rule addressing "aesthetic functionality." TrafFix, 532 U.S. at 32-33. First, if a product feature is "essential to the use or purpose of the article or if it affects the cost or quality of the article," it is functional and cannot be protected by trade dress. Id. at 32. Second, in cases where the first test is not satisfied, the question becomes whether trademark protection would place competitors at a "significant non-reputation-related disadvantage." Id. (internal quotation marks omitted); see also Au-Tomotive Gold, Inc. v. Volkswagen of Am., Inc., 457 F.3d 1062, 1072 (9th Cir. 2006). The Court will address each of the types of functionality recognized by the Supreme Court in turn.
As explained above, under the traditional, utilitarian functionality test, a trade dress is functional "when it is essential to the use or purpose of the device or when it affects the cost or quality of the device." TrafFix, 532 U.S. at 33. In applying this test, the Ninth Circuit assesses four factors: "(1) whether advertising touts the utilitarian advantages of the design, (2) whether the particular design results from a comparatively simple or inexpensive method of manufacture, (3) whether the design yields a utilitarian advantage and (4) whether alternative designs are available." Talking Rain Beverage Co. v. S. Beach Beverage Co., 349 F.3d 601, 603 (9th Cir. 2003) (citing Disc Golf, 158 F.3d at 1006); see also Au-Tomotive Gold, Inc., 457 F.3d at 1072 n.8 (). While the existence of alternative designs does not alone prevent a finding of functionality, alternative designs mayprovide evidence as to whether the trademark "embodies functional or merely ornamental aspects of the product." Id. (citations and quotation marks omitted).
Samsung first argues that each feature of the trade dress Apple seeks to claim serves utilitarian functions, and that the combination of utilitarian features is functional. MSJ at 3-5. Samsung's argument, however, is in tension with Ninth Circuit precedent, which requires that in evaluating functionality, the trade dress should be considered as a whole rather than as a collection of individual elements. Clicks Billiards, 251 F.3d at 1259. "The fact that individual elements of the trade dress may be functional does not necessarily mean that the trade dress as a whole is functional; rather, functional elements that are separately unprotectable can be protected together as part of a trade dress." Adidas-Solomon AG v. Target Corp., 228 F. Supp. 2d...
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