Patentech, Commercialization of Patents
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פטנטק, מסחור פטנטים

01.01.2013

Despite proving that Samsung is infringing its patents, Apple failed to get a U.S. Court to ban the sale in the United States of Samsung smartphones.

Apple requested a ban that would have stopped the sale in the United States of 26 current and future products of Samsung. This request came after a California court ruled that Samsung had infringed six Apple patents. The ban was important to Apple as it wanted to force Samsung to make changes to its products and thus give Apple time to grab of a piece of the Galaxy sales. This ban would have been a value to Apple above and beyond the $1.05 billion judgment that Apple was awarded against Samsung.

Up until 2006, patent infringements resulted in an automatic bans. This was the case in NTP vs. RIM (Blackberry). There, a non-producing entity (“Troll”) proved that RIM infringed its patents. NTP produced no products or services and would not be damaged by RIM continuing to sell the Blackberry and offer its email service. However, NTP held a sword of both a ban and stoppage of service over RIM. To avoid this draconian punishment, RIM was forced to settle for $625 million.

In 2006, seeking to avoid such blackmail and harm to consumers, the U.S. Supreme Court ruled that injunctions for patent infringement should not be automatic. Instead, courts must consider balance several factors in deciding whether or not to grant an injunction. These factors included (1) whether money damages were enough to compensate the patent owner or whether an injunction is required, and (2) whether the public would be harmed by an injunction.

As set forth in other blog entries, what is clear is that bans and injunctions harm the public. Given their post-2006 discretion, courts try to find ways to compensate the patent owner with money damages but strongly prefer not to grant injunctions or bans.

In the Apple case, the judge was not satisfied with the fact that Samsung infringed Apple patents. Instead, Judge Lucy Koh make Apple prove that the patents infringed were important to consumers when purchasing a smartphone. While Samsung infringed patented features of the iPhone design, the Judge said the entire design of the phone, not isolated patented characteristics, is what drives sales of the iPhone. Accordingly, she demanded that Apple prove that the patented features in question covered features that drove iPhone sales. While it is clear that design does play a major part in a consumer's decision-making, Apple did not prove that the specific design features Samsung had infringed actually influenced a consumer's decision to purchase a specific smartphone.

Prior to 2006, Apple would not have had to prove anything beyond infringement. But as was the case in the Google case, both the U.S. courts and Government disfavor injunctions which stand at the center of the patent wars. Accordingly, by reducing the availability of bans and injunctions, the U.S. courts and Government are using their power to limit the patent wars.