Appeals court ruling is big trouble for Apple and Judge Lucy Koh

Rarely since I started reporting tech legal cases 15 years ago is an appellate order so clear: "We hold that the district court abused its discretion in enjoining the sales of the Galaxy Nexus". More: "Reversed and remanded". Ouch.

Today, the United States Court of Appeals for the Federal Circuit rejected the preliminary injunction that US District Judge Lucy Koh imposed against Samsung Galaxy Nexus and sent the case back to her. Matters are worse for Koh and Apple, if this 18-page order foreshadows anything about the recent jury verdict against Samsung.

That's because the ruling questions Koh's judgment about fundamental matters regarding "irreparable harm", and the appeals court chides her for accepting Apple's arguments. Koh sided with Apple throughout the recent jury trial, which appeal will go to the same judges that slapped her around good today. She still can vacate the jury verdict, and I'm on record demanding that she should.

So, there's no confusion, I refer to separate patent cases before Judge Koh. One went to trial, and a nine-member jury found for Apple and against Samsung on August 24. The other case is still pending, and it's for that one she issued the preliminary injunction barring Galaxy Nexus sales. Separate the cases may be, they're still about patents and eventually headed to the Federal Circuit court of appeals. Koh's lack of good judgment in one could easily be issue in the other before the same judges. Perhaps they sent her a warning.

This is no trivial matter, with Samsung claiming jury misconduct with none other than the foreman and release of court documents showing Apple lawyers played loose with the facts. If the appellate judges so chastise Koh here, surely matters could be a whole lot worse in a jury case with questionable record.

Galaxy Nexus

Let's look at today's ruling, then I'll put it in context of the other case.

Apple contends that the Samsung smartphone, which Google helped develop, violates a search patent and that sales of the offending device would prevent people from buying iPhone. Koh agreed and imposed a preliminary injunction. Samsung appealed and was granted a stay.

Today, the appellate court found that Koh applied flawed reasoning presented by Apple and overstepped her authority: "We hold that the district court abused its discretion. To begin with, to the extent the district court endorsed Apple’s articulation of the causal nexus test, it erred as a matter of law". But the court went further in five-page section "Likelihood of Success":

Having held that the district court’s irreparable harm determination was an abuse of discretion, we would ordinarily refrain from addressing other issues. Here, however, it is in the interest of judicial economy that we address a limited aspect of the district court’s likelihood of success analysis that may become important on remand -- claim construction.

The judges then go on to present a grim analysis that puts the case's future in jeopardy and again questions Apple's arguments and Koh's accepting them.

Jury Trial

The Galaxy Nexus patent case really has little to do with the jury trial recently finished. The players are the same, but the appeals court must rule based on each case record not between them. That said, mistakes Judge Koh makes in one she easily could make in the other. As more information is revealed post-verdict, Samsung's chances of a successful appeal look better and the jury proceeding appears more like a kangaroo court.

In early September, I presented numerous reasons why "Judge Koh should vacate the Apple-Samsung verdict". For starters, foreman Vel Hogan, a 67 year-old engineer, convinced other jurors to accept his wrong interpretation about prior art. Samsung nearly built its entire defense around the idea that Apple patents are invalid because other products predated them.

Since my post, Samsung filed a motion arguing misconduct by Hogan and alleging that he sought revenge against the company. (I think the former allegation has more merit than the other.) Two issues standout:

• Hogan failed to disclose a prior legal proceeding during jury selection.
• That proceeding involved Seagate, in which Samsung is major stakeholder, that led Hogan to file for bankruptcy.

Samsung raises reasonable doubt about Hogan, not just as juror but foreman, and his influence over the jury.

Meanwhile, Judge Koh has been unsealing documents in the case, and some offer a startlingly different story than Apple presented at trial.

Groklaw's Pamela Jones has done a remarkable job combing through the unsealed documents and comparing them to the court record. For example, Apple painted Samsung out to be a copycat, which was central to several areas of the case -- particularly "trade dress", referring to a product's look and feel, that Apple contends Samsung copied from iPhone and applied to devices like Galaxy S II.

But in context, Samsung's internal communications were about applying good design principles, observing how iPhone exhausted some and transcending the device and its user interface. For example, the head of Samsung's mobile division encouraged his team to view iPhone as impetuous to change. Some points:

• "In regards to exteriors, do your best not to create a plastic feeling and instead create a metallic feel". At the time, iPhone had plastic feel.
• "As for UX, see to it that it is a UX that is easy to use regardless of age, occupation, and level of education, that it’s a UX that’s not like a UX, that, just like the flow of water, its alarm rings when you wake in the morning then out comes the news while you’re getting ready to leave for work, see to it that you’re able to come up with that kind of UX". This aptly describes TouchWiz UI's widget/live content approach. The newest version is called "Nature".
• "Our biggest asset is our Screen. It is very important that we make Screen Size bigger, and in the future mobile phones will absorb even the Function of ebooks". Samsung went larger (5.5 inches with Galaxy Note 2), while Apple kept smaller screen size.

Jones' assessment (which I concur with):

To my reading, Apple is distorting what this exhibit was really about. It was not about copying. It was about learning and being inspired and then doing something better. If they wanted to copy, they'd have made the screen smaller to match the iPhone. Instead, they correctly saw that the trend would be toward larger screens, and they were already doing that and saw it as superior to the iPhone. So, they analyzed where they were strong and where they were weak, and the pep talk spoke to both.

The point: The jury verdict looks increasingly vulnerable, and one could interpret the appeals court of sending Judge Koh a subtle but directed message today. She can still do justice by throwing out the verdict and ordering a new trial.

Photo Credit: JustASC/Shutterstock