In December, Judge Koh denied Apple’s permanent injunction demands. The ruling sent Florian Mueller into fits over the state of injunction law in the United States. However, as Dennis Crouch at Patently-O opined, in a post-eBay world Judge Koh’s decision was perfectly sensible: a patentee should not obtain a permanent injunction without a clear showing of both irreparable harm and a causal nexus between the infringement and the irreparable harm. It is the latter test that Apple ultimately failed, and based on Judge Koh’s analysis, it will be tough for anyone to make a clear showing of causal nexus in the smartphone patent wars.
Judge Koh found Apple did not establish with sufficient specificity the connection between individual infringed claims and consumer demand:
A consumer may want a phone that is easy to use, but this does not establish that a tap-to-zoom feature, for example, or any given type of gesture, is a driver of consumer demand.
In a device that features thousands if not tens of thousands of patented features, this makes logical sense. To rule otherwise would permit a patentee that suffered the infringement of a minor feature to stop commercial distribution of the competing product to the detriment of consumers and the marketplace.
The eBay injunction analysis Judge Koh used was identical to her previous injunction analysis as well as the Court of Appeals for the Federal Circuit’s reasoning in prior Apple cases. Losing customers to a competitor is not enough of a justification to grant the extraordinary remedy of injunction – rather, it is more suited for monetary damages (in this case Apple has been awarded over $1 billion by the jury). Apple needed to show that it lost those customers specifically as a result of the infringed claims in the patents – a test that will be challenging to meet based on the patents being litigated by Apple in numerous cases.
On page 22 of her opinion Judge Koh cited to Justice Kennedy’s observation that injunctions are inappropriate when the patented invention is but a small component of the larger product and added:
The phones at issue in this case contain a broad range of features, only a small fraction of which are covered by Apple’s patents. Though Apple does have some interest in retaining certain features as exclusive to Apple, it does not follow that entire products must be forever banned from the market because they incorporate, among their myriad features, a few narrow protected functions. Especially given the lack of causal nexus, the fact that none of the patented features is core to the functionality of the accused products makes an injunction particularly inappropriate here.
This sets up a standard for courts moving forward that would be wise for other jurisdictions to follow. Unless the patent covers the core functionality of the smartphone, an injunction should not be issued. Monetary damages make a lot more sense. And in the case of smartphones, very few patents, if any, get at the core functionality. Which means injunctions would be off the table.