[00:00:00] Speaker 05:
14-1-8-0-2 Apple versus Samsung.

[00:00:05] Speaker 05:
Give everybody a chance to settle in.

[00:00:46] Speaker 05:
Thank you, Your Honor.

[00:00:50] Speaker 00:
And may it please the Court, my name is Bill Lee, and together with my partner, Richard O'Neill, I represent Apple.

[00:00:56] Speaker 00:
Samsung contends in its brief that this case presents the same facts and the same issues that this Court has already found insufficient at the basis for permanent injunctive relief.

[00:01:08] Speaker 00:
We suggest that it's not the case.

[00:01:10] Speaker 00:
There are similarities, but there are fundamental differences.

[00:01:13] Speaker 05:
And is the main difference you're calling out the fact that the injunction here was limited?

[00:01:18] Speaker 00:
Your Honor, there are actually three differences that I think are key.

[00:01:21] Speaker 00:
That is one of them.

[00:01:22] Speaker 00:
The injunction is feature-based, and I think that that is a critical distinction.

[00:01:28] Speaker 00:
The second distinction is this.

[00:01:30] Speaker 00:
The Samsung represented at this trial that the features of these three patents were easily severable, design-aroundable during a day.

[00:01:40] Speaker 00:
In the prior cases, there were patents.

[00:01:42] Speaker 01:
Did you say a day, or was it a month?

[00:01:45] Speaker 00:
It was a day.

[00:01:46] Speaker 00:
After, Your Honor, what happened is during the course of the testimony, they elicited testimony that it could be signed around in a day.

[00:01:53] Speaker 00:
In one of the arguments, they said, if the day, the most it would be would be 30.

[00:01:59] Speaker 00:
So we went back to the district court and asked for the feature-based injunction.

[00:02:04] Speaker 00:
We also asked, consistent with the Emulex case and the Qualcomm cases here,

[00:02:08] Speaker 00:
for the longest design-around period that they had suggested.

[00:02:13] Speaker 00:
And as the district court noted in her opinion, they haven't contested that period.

[00:02:18] Speaker 00:
They haven't suggested it's insufficient, that it couldn't be designed around.

[00:02:22] Speaker 00:
And to be clear, Your Honor, we are not asking for an injunction that would reach phones in the hands of customers or third parties.

[00:02:31] Speaker 00:
This goes to Samsung.

[00:02:32] Speaker 00:
Now, these are all three software patents.

[00:02:35] Speaker 00:
There could be a software update issued, and in a matter of minutes, these features could be removed.

[00:02:41] Speaker 00:
And the phones could continue to operate with all the other features without any interference at all.

[00:02:48] Speaker 05:
I'm sorry, you had another point.

[00:02:51] Speaker 00:
Yeah, you're right.

[00:02:52] Speaker 00:
I think it's the three.

[00:02:53] Speaker 00:
If I get to the third question, I'll come back to your question.

[00:02:55] Speaker 00:
It's the fact that it's feature-based, not product-based.

[00:02:59] Speaker 00:
And at some point I'd like to come back to how that's consistent with the court's law in the entire market value area.

[00:03:05] Speaker 00:
The second is there is a designer-owned period if it's not contested that is easily achievable.

[00:03:12] Speaker 00:
And third is we have raised the reputational injury argument that had not been present in Apple III.

[00:03:19] Speaker 05:
Okay, leaving the reputational part.

[00:03:21] Speaker 05:
On the other part, it just seems to me that there is, as you know well, that in eBay there are several components and we've got the irreparable harm, which is typically our focus, which encompasses the causal nexus, which is most of the discussion here.

[00:03:35] Speaker 05:
But it seems to me

[00:03:36] Speaker 05:
The narrowness of the injunction, the limited period it would take to design around, all that seems to me to go to the, I think it's the third factor in eBay, which is the relative harm to the party.

[00:03:48] Speaker 05:
All of those arguments persuade me that it would not be a dramatic or drastic hardship on Samsung

[00:03:55] Speaker 05:
if an injunction were imposed.

[00:03:57] Speaker 05:
But I'm not sure how that necessarily gets to the nub of the question before us, where this case was decided, was on irreparable harm, including the possible next.

[00:04:08] Speaker 00:
Your Honor, I think that is a core point, because I have both a legal answer and an answer specific to this case.

[00:04:15] Speaker 00:
The legal answer is that, analytically, there is no reason for the scope of the injunction

[00:04:19] Speaker 00:
should be relevant to two of the eBay factors and not to the other two.

[00:04:23] Speaker 00:
And here's the reason why.

[00:04:25] Speaker 00:
When this court articulated in Apple II the reason for the causal nexus requirement, you said that it had two portions of the test.

[00:04:34] Speaker 00:
The first portion of the test is, if no injunction is granted, will there be irreparable harm?

[00:04:40] Speaker 00:
The second then is, if there will be that irreparable harm, is there a causal nexus to the infringement?

[00:04:47] Speaker 00:
But if I focus on the first part of that test, Your Honor,

[00:04:50] Speaker 00:
Which is, if an injunction is not granted, will there be irreparable harm?

[00:04:54] Speaker 00:
The irreparable harm is defined by the injunction you're requesting.

[00:04:58] Speaker 05:
But the irreparable harm is irreparable harm to the patentee.

[00:05:02] Speaker 00:
But there's different types of irreparable harm.

[00:05:04] Speaker 00:
You're right, for sure.

[00:05:05] Speaker 00:
But in Apple III, the irreparable harm that we identified were sales and downstream market share.

[00:05:12] Speaker 00:
Here, the irreparable harm, setting aside reputational injury, because reputational injury ties very closely to exclusivity.

[00:05:20] Speaker 00:
Here, in the junction, we're requesting the harm is the continued use of our inventions by a competitor when those inventions are immediately severable and they can continue to sell their products.

[00:05:35] Speaker 00:
And you're right.

[00:05:36] Speaker 00:
The first irreparable harm is to define the harm to the patentee.

[00:05:41] Speaker 00:
But if we had asked for it to take our cup holder analogy that we've had before.

[00:05:45] Speaker 04:
It's going on for years.

[00:05:47] Speaker 00:
It's going to live forever.

[00:05:48] Speaker 00:
But if the injunction you had requested was for the whole car, that is different than an injunction that was to the backseat or to the cup holder.

[00:05:57] Speaker 00:
It's the harm that you're trying to.

[00:05:59] Speaker 05:
But if we have the cup, in the cup holder analogy, if the injunction there, and I'm not sure in the other applications we ever talked about the scope of the injunction one way or another is exacting what we were doing.

[00:06:12] Speaker 05:
But if you have an injunction, if you were seeking an injunction exclusively on the cup holder,

[00:06:17] Speaker 05:
would you not still have to show irreparable harm and that monetary damages were not sufficient?

[00:06:26] Speaker 00:
Your Honor, you would have to show irreparable harm and the scope of that irreparable harm would be defined by the injunction that you're requesting.

[00:06:35] Speaker 00:
This is key.

[00:06:36] Speaker 05:
Give me more on that, because I don't understand it.

[00:06:40] Speaker 05:
The scope of the injunction informs the irreparable harm.

[00:06:45] Speaker 05:
But as a practical matter, how so?

[00:06:47] Speaker 05:
Either in your case or in the cup holder case?

[00:06:49] Speaker 00:
Your Honor, I think in our case specifically, when considering the 30 Bay factor, the district court did much more than just consider the harm to SAMHSA.

[00:06:59] Speaker 00:
She explicitly found that we were suffering substantial harm

[00:07:04] Speaker 00:
by having to compete against a competitor's product with our own invention in it.

[00:07:09] Speaker 00:
That is substantial harm, which this court has found to be irreparable harm.

[00:07:14] Speaker 00:
That is what's defined by the scope of the injunction.

[00:07:17] Speaker 00:
Your Honor, if I could go to the analogy.

[00:07:19] Speaker 01:
Isn't the scope of the injunction important?

[00:07:21] Speaker 01:
Because as the Supreme Court has instructed us in the case of Oregon, that an injunction is forward-looking, not backward-looking.

[00:07:30] Speaker 01:
And it's to address harm that's likely to occur.

[00:07:33] Speaker 01:
And by limiting it to the three features, then you're limiting the scope.

[00:07:38] Speaker 01:
And that goes to define irreparable harm.

[00:07:42] Speaker 00:
Your Honor, we agree.

[00:07:43] Speaker 00:
We think there is no analytical reason

[00:07:45] Speaker 00:
that the scope of the injunction wouldn't educate all four factors.

[00:07:50] Speaker 00:
And two points to go to the legal portion, Your Honor.

[00:07:54] Speaker 00:
In Apple II, this court discussed the difference between feature-based injunctions and product-based injunctions.

[00:08:00] Speaker 00:
That discussion was in the irreparable harm section of the opinion.

[00:08:04] Speaker 00:
And we think it belongs there just for this reason.

[00:08:07] Speaker 00:
The second is when Chief Justice Roberts issued his concurrence in eBay and talked about things like maintaining exclusivity

[00:08:15] Speaker 00:
not over products broadly, but over your invention.

[00:08:20] Speaker 00:
He specifically says that that exclusivity that you have just referred to is relevant to the first two factors.

[00:08:27] Speaker 02:
Yeah, but so, you know, I mean, look, my heart's with you.

[00:08:32] Speaker 02:
I think eBay's wrongly decided by the Supreme Court.

[00:08:35] Speaker 02:
Oh, on record, there you go.

[00:08:37] Speaker 02:
I think it's wrong.

[00:08:37] Speaker 02:
I think patentees should get injunctions.

[00:08:40] Speaker 02:
There is something to the idea that we've got this body of precedent now that requires causal nexus.

[00:08:45] Speaker 02:
And I really don't understand your argument

[00:08:49] Speaker 02:
about irreparable harm in the form of a limited injunction.

[00:08:54] Speaker 02:
I do think that Judge Post is, that the question she asked you kind of goes to the heart of what I'm troubled by, which is that the nature of the narrow limit of the injunction quite clearly goes to the hardship, but I don't see how that goes to apple irreparable harm.

[00:09:11] Speaker 00:
Your Honor, let me say two responses.

[00:09:16] Speaker 00:
The first is this.

[00:09:17] Speaker 00:
There are different types of harm that can be alleged to be irreparable.

[00:09:22] Speaker 00:
One can be sales-based, downstream market share.

[00:09:25] Speaker 00:
One can be reputational.

[00:09:27] Speaker 00:
One can be, and both this Court and the Supreme Court has said, it's continued use of the future.

[00:09:33] Speaker 02:
Now we're not saying that...

[00:09:36] Speaker 02:
If I accept that as de facto, which, by the way, I didn't understand that to be your argument below or before us, but maybe you'll show me why I missed it somehow.

[00:09:45] Speaker 02:
I understood your argument to be reputational and lost sales of downstream products.

[00:09:49] Speaker 02:
But even if you're somehow right, why wouldn't that guarantee injunction in every competitor case, period, or automatically at least guarantee irreparable harm any time there's a competitor scenario?

[00:10:00] Speaker 00:
And you're going to answer the first question, but let me answer that first.

[00:10:03] Speaker 00:
We're not saying that

[00:10:05] Speaker 00:
Samsung has suggested we've asked for a categorical rule.

[00:10:08] Speaker 00:
I think this is a critical point in the argument, because the question before the court is, who is urging the categorical rule?

[00:10:14] Speaker 02:
No, I still use stupid labels.

[00:10:17] Speaker 02:
They're irrelevant to me.

[00:10:18] Speaker 02:
What I want to know is, how can you say Apple will be irreparably harmed, and that that alone, push aside reputation or lost sales,

[00:10:28] Speaker 02:
satisfies the irreparable harm inquiry by a competitor continuing to sell, and how does that not create a per se rule?

[00:10:36] Speaker 00:
Well, Your Honor, it doesn't, whether it's categorical or per se, it doesn't create a per se rule.

[00:10:40] Speaker 00:
Because what we're saying to you is this.

[00:10:42] Speaker 00:
In this situation, where we have asked for a feature-based injunction, where the design around the period they concede is sufficient, where it's con... How does that have anything to do with Apple's irreparable harm?

[00:10:55] Speaker 00:
Your Honor, if you look at Apple II,

[00:10:57] Speaker 00:
The panel at Apple II said there's a difference between a feature-based and a product-based injunction.

[00:11:03] Speaker 05:
And a feature-based injunction... But they didn't say that you don't have to show irreparable harm to the patentee if you have a feature-based injunction.

[00:11:10] Speaker 00:
No.

[00:11:11] Speaker 05:
So where is the irreparable harm?

[00:11:12] Speaker 00:
The irreparable harm is specific.

[00:11:14] Speaker 00:
It's what Joe Tarana said.

[00:11:16] Speaker 00:
two things, setting aside reputation, again.

[00:11:19] Speaker 02:
And even, I want to let you finish, I'm sorry, but I can't help myself.

[00:11:23] Speaker 02:
So even though you're saying it's not a per se rule, I don't see how that rule would even apply in this case where you've licensed H, am I allowed to say who you've licensed to?

[00:11:34] Speaker 00:
Well, Your Honor, there are four licensees.

[00:11:35] Speaker 02:
I'm not going to say the amounts of the licenses or anything else, but it's basically every Apple competitor, except for Samsung.

[00:11:41] Speaker 02:
I understand why you guys hate each other and fight over everything, but

[00:11:45] Speaker 02:
you'd like to get every single other i mean my office and i sat around at the table yesterday trying to come up with a possible cell phone that exists that you didn't like to do i don't mean products i mean currently you know available cell phone you've already licensed these patents up the wild blue so why in the world would it be irreparable harm to apple i know you compete with tampon but you also compete with htc and each of the other three licenses so given that you compete why would it be irreparable harm to apple in this case even if i were to

[00:12:14] Speaker 02:
to say in general?

[00:12:16] Speaker 00:
Let me answer that question and come back to Judge Post's question if I could because I think I have four or five questions on the table right now.

[00:12:24] Speaker 04:
We apologize.

[00:12:25] Speaker 04:
The answer to your Honour's question... I'm just saying it's got another one coming down the pipe.

[00:12:31] Speaker 00:
If I can answer the two because I'm at that point... Okay, start with mine.

[00:12:34] Speaker 00:
I'm old enough that I can't remember.

[00:12:38] Speaker 00:
So the answer to your question is in Apple III.

[00:12:42] Speaker 00:
The same four licenses were considered.

[00:12:44] Speaker 00:
One of them is someone who doesn't compete at the end.

[00:12:48] Speaker 00:
Two of them were litigation-induced.

[00:12:50] Speaker 00:
Two of them include anti-cloning provisions.

[00:12:52] Speaker 00:
One of them is a standstill.

[00:12:54] Speaker 00:
Those licenses don't accomplish what you just said.

[00:12:58] Speaker 00:
We have not licensed every competitor.

[00:13:00] Speaker 00:
And in fact, if you go to... Who do you license?

[00:13:04] Speaker 00:
There's only four licenses before the court.

[00:13:07] Speaker 00:
That's all there is in the record.

[00:13:08] Speaker 02:
The people you've licensed to in combination with Apple, excluding Samsung, represent, if you include Samsung, the entire universe of product sales.

[00:13:17] Speaker 02:
I mean, maybe there's a .00001 somewhere because there's some crazy individual company that's making their own phones.

[00:13:23] Speaker 02:
But, you know, you're talking about a limited universe of sellers.

[00:13:26] Speaker 00:
Your Honor, especially, I don't think that's the record.

[00:13:29] Speaker 00:
And if you look at the judge's findings, she actually found

[00:13:33] Speaker 00:
when she got to the third and fourth factors that we try to maintain exclusivity.

[00:13:37] Speaker 00:
There were litigations, but there are the distinctions.

[00:13:40] Speaker 02:
She said you try to maintain exclusivity in general.

[00:13:43] Speaker 02:
She didn't say with regard to these patents.

[00:13:45] Speaker 02:
With regard to these patents, you've licensed them to four competitors.

[00:13:49] Speaker 00:
And, Your Honor, each of those four licenses, which are the only ones in the record before you, were specifically distinguished in Apple III.

[00:13:57] Speaker 00:
They weren't sufficient to reach the conclusion that you reached.

[00:14:00] Speaker 00:
If I could return to Judge Pro's question,

[00:14:03] Speaker 00:
But I think it in part answers Judge Moore's question.

[00:14:06] Speaker 00:
If I do an analogy between the entire market value rule for damages and apportionment, I think it analytically helps answer your question.

[00:14:15] Speaker 00:
If you're going to invoke the entire market value rule, and you have a feature that is a portion of a multi-feature product, you have to show that demand for that product is driven by patented feature.

[00:14:30] Speaker 00:
If you're seeking an injunction on the entire product,

[00:14:33] Speaker 00:
called the Nexus Requirements is you need to show that that feature drives demand for the entire product.

[00:14:39] Speaker 00:
But what if you apportion?

[00:14:42] Speaker 00:
And what Erickson and Brunettex tells us is if you're not seeking the entire market value, you don't have to show your driving demand for the whole product if you apportion.

[00:14:53] Speaker 05:
So you're saying, I mean, I agree, but we all know obviously the entire market value comes up with a whole line of cases in the theory that involves damages.

[00:15:02] Speaker 05:
But is it your view that because that's the way things go down in assessing the viability of the entire market value rule, that we should apply that same rule to causal nexus?

[00:15:13] Speaker 05:
So if we are going down to certain features, we eliminate the causal nexus requirement?

[00:15:18] Speaker 05:
No, we're not suggesting that either as to Douglas Dynamics or as to... Okay, but my real question, if you could just take a minute, is that leaving causal nexus aside, I'm really on irreparable harm.

[00:15:31] Speaker 05:
I'm having a hard time getting past irreparable harm.

[00:15:33] Speaker 05:
So I think the question on the table may have been,

[00:15:35] Speaker 05:
What is the irreparable harm to Apple with regard to these features, and how is that necessarily affected?

[00:15:44] Speaker 05:
Is it greater or less irreparable harm if it's an injunction on the features versus an injunction on the whole product?

[00:15:51] Speaker 00:
And you wanted two parts of the answer, which I'll do quickly because I've actually used my rebuttal time.

[00:15:56] Speaker 00:
But let me give both, because I think that they are critically important.

[00:16:00] Speaker 00:
The irreparable harm in not granting a feature-based injunction

[00:16:05] Speaker 00:
is that Apple has to compete with a competitor who is continuing to use those features even though those features are immediately severable.

[00:16:14] Speaker 00:
And in the 647 patent, even though they said they would design around in a day, they're still here 10 months later.

[00:16:20] Speaker 05:
So the answer, if I could translate that into English.

[00:16:24] Speaker 05:
So the irreparable harm is they could have fixed it, and it's easy for them to fix it, and they're not doing it.

[00:16:30] Speaker 05:
So that reason.

[00:16:31] Speaker 05:
I mean, I'm not a student of that.

[00:16:33] Speaker 00:
I would say it differently, Ron.

[00:16:34] Speaker 00:
And this is actually, if you look at the judges, if you look at the Bosch opinion, where this court talked about the harm from competing against a competitor who is using your patent and invention, the district court judge here specifically found that we're suffering that harm.

[00:16:51] Speaker 00:
That harm, in addition to the reputational injury, is irreparable.

[00:16:55] Speaker 00:
And I know that Judge Moore has cautioned me against labels, but let me just finish with this thought.

[00:17:03] Speaker 00:
In this case, and I'm not going to use the label.

[00:17:07] Speaker 00:
I may have not.

[00:17:08] Speaker 00:
I forgot to come back to Judge Rainier's last question.

[00:17:12] Speaker 00:
In this context, competitor to competitor, an effort to maintain exclusivity,

[00:17:19] Speaker 00:
Evidence of copying, 35 million acts of infringement, continued use of a feature, a feature that could be designed around in a day.

[00:17:32] Speaker 00:
If the injunction we've requested is not appropriate, then there's no injunction relief available.

[00:17:39] Speaker 00:
And the one thing for all the briefings that this Court has seen in Apple I, Apple II, Apple III, you will look in vain

[00:17:48] Speaker 00:
for any suggestion by Samsung that there's any kind of injunction that's available.

[00:17:54] Speaker 00:
That is the type of categorical rule that both this court and the Supreme Court has contempt.

[00:18:00] Speaker 00:
And as we finish the argument, that's the question I would leave for you.

[00:18:04] Speaker 02:
i don't want to let me ask you a question to get a public one to meet the answer is in a scenario where you didn't already like the patent other people maybe you're right because then you've established exclusivity right and that those exclusivity rights are important based on your own personal performance so there are factors you think that if we go against you we've adopted some kind of political i don't see it that way i don't think this is the poster child case for that well you're right

[00:18:32] Speaker 00:
We would respectfully disagree on this issue of licensing.

[00:18:36] Speaker 00:
I would just urge this.

[00:18:38] Speaker 00:
This record on the licensing is identical to what you address in Apple III.

[00:18:44] Speaker 00:
And I think if the court addresses it consistently,

[00:18:47] Speaker 00:
than the question that we've posed is a fair question.

[00:18:49] Speaker 05:
The other thing I just, I'm not answering your question, but I'd also put in addition to the licenses which may distinguish it.

[00:18:57] Speaker 05:
In this case, there were explicit and detailed findings by the district court with regard to whether or not to the harm and to the actual harm to Apple, including its reputation, by the sale of these products.

[00:19:12] Speaker 05:
And there were findings made.

[00:19:14] Speaker 05:
And she rejected some of your testimony and some of your evidence with regard to those findings.

[00:19:19] Speaker 05:
So I think you paint a rule.

[00:19:23] Speaker 05:
But I don't think this rule is going to, I mean, in an instance where there was evidence and there were findings, which we have to defer to the district court based on reputational harm, I think the case might be otherwise.

[00:19:34] Speaker 00:
Right.

[00:19:35] Speaker 00:
Your Honor, two quick answers to that question.

[00:19:37] Speaker 00:
And then I'll cede the floor.

[00:19:39] Speaker 00:
The first is,

[00:19:40] Speaker 00:
For the first 37 pages of her opinion, the question of the scope of injunction never comes up.

[00:19:46] Speaker 00:
It is written identically to a request for a product-based injunction, which is not what we've asked for.

[00:19:51] Speaker 05:
Yeah, but the reputational harm, frankly, would be more if it were, I mean, why is the reputational harm if you're just dealing with these features?

[00:19:59] Speaker 00:
Well, Your Honor, I would draw your attention to A14 and A15.

[00:20:04] Speaker 00:
What the district court judge did there is she imposed the product-based injunction causal nexus requirement on Douglas Dynamics.

[00:20:15] Speaker 00:
And there's no basis to do that.

[00:20:18] Speaker 00:
The key here, Your Honor, this is an abuse of discretion standard.

[00:20:21] Speaker 00:
We don't contend otherwise.

[00:20:23] Speaker 00:
A legal error is an abuse of discretion.

[00:20:26] Speaker 00:
The issue which this court has not addressed before is twofold.

[00:20:31] Speaker 00:
feature-based injunction with a specific sunset period, do you have to prove, which is what she required us to prove, that the feature drives sales for the product?

[00:20:42] Speaker 00:
The answer to that should be no.

[00:20:45] Speaker 00:
For application of Douglas Dynamics,

[00:20:47] Speaker 02:
which is a reputational injury because... But I think that the more difficult question is, what is the causal nexus then?

[00:20:57] Speaker 02:
I'm sympathetic to the idea that your injunction is narrow.

[00:21:01] Speaker 02:
So if you don't think you need to prove causal nexus that these features drive demands and sales of the whole product, what is the causal nexus requirement that you believe is incumbent on you?

[00:21:10] Speaker 00:
I think it's a two-part causal nexus requirement that's articulated in Apple II.

[00:21:15] Speaker 00:
and I may take the parts, I'll fill in how we satisfy it.

[00:21:18] Speaker 00:
First part is, if the injunction request is not granted, what's the harm?

[00:21:24] Speaker 00:
Continued use of the feature is the harm.

[00:21:27] Speaker 00:
How does that?

[00:21:28] Speaker 05:
We're talking harm to Samson, not harm to Apple.

[00:21:31] Speaker 00:
No, no, harm to Apple.

[00:21:33] Speaker 00:
The cause and action for pardon is, what is the harm to Apple?

[00:21:35] Speaker 05:
Exactly.

[00:21:36] Speaker 05:
No.

[00:21:36] Speaker 05:
I thought you were saying, though, that you're referring to the fact that because of the narrowness of the injunction, there's little harm.

[00:21:43] Speaker 05:
We're valuing that.

[00:21:44] Speaker 01:
And it's not only that.

[00:21:45] Speaker 01:
It's what's the harm to Apple in the future?

[00:21:49] Speaker 01:
Right.

[00:21:50] Speaker 01:
Not the past.

[00:21:51] Speaker 00:
Right.

[00:21:51] Speaker 00:
This is Judge Rainier.

[00:21:54] Speaker 00:
And I hope I answered it fairly and correctly.

[00:21:57] Speaker 00:
The answer is having to compete against a product with your feature in the future is irreparable harm.

[00:22:08] Speaker 01:
In fact, Apple 3... Council, to what extent should we give weight, let's say, to a situation where you have a jury verdict of infringement?

[00:22:21] Speaker 01:
Now you're looking to the future and the question is the likelihood of irreparable harm in the future.

[00:22:27] Speaker 01:
But we already have a verdict of infringement, a jury verdict, taboo.

[00:22:31] Speaker 01:
To what extent does the right to exclude come in here?

[00:22:35] Speaker 01:
I don't see a lot written on that particular issue, but it seems to me that the most basic intrusion any time you have an infringement has been on the Panties' right to exclude.

[00:22:49] Speaker 01:
And that, in my mind, must carry some weight.

[00:22:54] Speaker 01:
What weight, if any, do you think that we should give up?

[00:22:58] Speaker 00:
Your Honor, in this context, it should carry a lot.

[00:23:00] Speaker 00:
And this actually is where Douglas Dynamics and Chief Justice Roberts concurrence and evasion tie into what we're saying.

[00:23:09] Speaker 00:
With a jury verdict on three patents of not invalid and infringed, and as one of these, continued use months after the jury verdict.

[00:23:21] Speaker 00:
This goes too close to my effort to articulate the rep department.

[00:23:25] Speaker 00:
The continued use of a product with our feature

[00:23:30] Speaker 00:
patented feature that has been adjudicated to an infringe compromises our exclusivity.

[00:23:37] Speaker 00:
In fact, it eliminates our exclusivity.

[00:23:40] Speaker 00:
And that is irreparable harm.

[00:23:42] Speaker 00:
That's what Douglas, that's the predicate of Douglas.

[00:23:44] Speaker 02:
You already eliminated your own exclusivity when you licensed.

[00:23:47] Speaker 02:
I'm not against you on the big point you're arguing that it is a central form of irreparable harm to force someone who has valued and established their exclusivity to then share it.

[00:24:02] Speaker 02:
I'm not against you that there are scenarios in which that is true, but how is that true here in light of a license?

[00:24:08] Speaker 00:
Your Honor, there are two critical things.

[00:24:11] Speaker 00:
The first is there is no evidence in the record that anybody is using these three features other than Samsung.

[00:24:28] Speaker 02:
evidence of two of the three are basically asking for a presumption and that there there should be a presumption which you know unfortunately nervous because we went down that road and got smacked already but that there should be a presumption of irreparable harm that stems from forcing a patentee to allow his competitor to sell a product with his patented feature

[00:24:47] Speaker 02:
That's basically what you're asking for.

[00:24:49] Speaker 00:
It's not, Your Honor, and that's why I come back.

[00:24:51] Speaker 02:
But you said it should automatically establish irreparable harm.

[00:24:55] Speaker 00:
I didn't say that, Your Honor, and I want to be very clear.

[00:24:57] Speaker 00:
We have a specific set of facts here.

[00:25:00] Speaker 00:
And I know I'm way over my time.

[00:25:02] Speaker 00:
So there are two keys here that I think, three keys, and I'll go through them very quickly.

[00:25:07] Speaker 00:
The first is that however you think it's correct to analyze the future base injunction, the one thing we can agree on is the district court for both

[00:25:17] Speaker 00:
For all the eBay factors and for Douglas Dynamics, analyze it as if we had to prove these features drove demand for the product.

[00:25:26] Speaker 00:
That was a legal error.

[00:25:28] Speaker 00:
The second is this.

[00:25:29] Speaker 02:
But you've never told me what the substitute inquiry is, and I've asked you a billion times.

[00:25:34] Speaker 02:
What is the right inquiry if that's wrong?

[00:25:36] Speaker 02:
Because I might agree with you that it's wrong, but I don't know what it needs to be replaced with.

[00:25:40] Speaker 02:
And you still do have to establish irreparable harm.

[00:25:43] Speaker 00:
And Your Honor, let me finish the two.

[00:25:47] Speaker 00:
Your Honor, in Apple III, the same licenses, if Your Honor were correct,

[00:25:53] Speaker 00:
that those three licenses demonstrated we would freely license anybody.

[00:25:56] Speaker 00:
There never would have been a remand in Apple III.

[00:25:58] Speaker 02:
No.

[00:25:58] Speaker 02:
I didn't say they'd demonstrate you'd freely license everyone.

[00:26:00] Speaker 02:
I said they'd demonstrate that your exclusivity is something you already gave away.

[00:26:05] Speaker 00:
And then Your Honor, Apple III would have been decided differently, because that would have been the end of Apple III.

[00:26:10] Speaker 02:
No, it wouldn't have been, because they had to address the other issues you raised, which had not been previously been addressed on the irreparable harm points.

[00:26:16] Speaker 02:
But anyway, I don't want to argue.

[00:26:18] Speaker 02:
So what?

[00:26:19] Speaker 00:
OK.

[00:26:19] Speaker 00:
The District Court had denied an injunction in Apple III.

[00:26:22] Speaker 00:
So if that were correct, that would be Apple III would have come out differently.

[00:26:30] Speaker 00:
And just to finish the record, there's no evidence that we've licensed everybody.

[00:26:38] Speaker 00:
Motorola's out there, LG's out there, there's a whole bunch of folks.

[00:26:41] Speaker 00:
There's a reason that Apple III reads what it does on the licenses.

[00:26:44] Speaker 05:
OK, thank you.

[00:26:45] Speaker 05:
We'll leave the story at three minutes of rebuttal.

[00:26:48] Speaker 05:
And we're 10 minutes ahead, plus three minutes.

[00:26:52] Speaker 05:
So why don't we give, if you need it, and only if you need it, we'll add 12 minutes to your time.

[00:26:57] Speaker 05:
But really, don't feel compelled.

[00:26:59] Speaker 05:
And yeah, certainly not in the act of questions, most of all at that time.

[00:27:02] Speaker 03:
Thank you, Your Honor.

[00:27:03] Speaker 03:
May it please the court, Kathleen Sullivan for Samsung.

[00:27:06] Speaker 03:
The district court here did not abuse her discretion in denying a permanent injunction for the reasons the colloquy has already shown.

[00:27:13] Speaker 03:
VISTA court meticulously applied the causal nexus standard for the irreparable harm inquiry that's been well established in the prior decisions in this line of cases.

[00:27:23] Speaker 03:
And as you observed, Your Honor.

[00:27:25] Speaker 02:
What I don't understand is why would the causal nexus, namely, that demand, did she require that demand for the patented product had to be established, that these features had to be established in order to assess reputational injury to Apple?

[00:27:46] Speaker 03:
Yes, she applied causal nexus to both, and she found that

[00:27:49] Speaker 02:
Why?

[00:27:50] Speaker 02:
Why is that the right test for reputational injury?

[00:27:52] Speaker 03:
Because it's the test for all harm.

[00:27:55] Speaker 03:
Causal nexus to the harm that justifies the extraordinary relief of injunction.

[00:27:59] Speaker 02:
Correct.

[00:27:59] Speaker 02:
And the extraordinary relief they're seeking is a feature-specific form of relief.

[00:28:05] Speaker 02:
And so why wouldn't the causal nexus have to do with, is there reputation harmed by someone else's uses of these features?

[00:28:13] Speaker 02:
Why isn't that precisely and exactly the right causal nexus inquiry?

[00:28:17] Speaker 03:
Well, the causal index's inquiry is whether the harm that's irreparable has been caused by infringement of the specific features.

[00:28:25] Speaker 05:
If they had shown, if we had a record here where they took these three features and they had unassailable conclusive testimony that the use of these three features is what the essence of Apple's reputation in the marketplace.

[00:28:39] Speaker 03:
then I think that would have all been satisfied, right?

[00:28:42] Speaker 03:
That would be an entirely different case.

[00:28:43] Speaker 03:
There's a factual finding here that there was no causal nexus to reputational harm in this case.

[00:28:49] Speaker 02:
There's also a factual finding here... No, the causal nexus was based on the predicate idea that they had to establish something based on the sale of the whole product.

[00:28:59] Speaker 03:
Correct, Your Honor.

[00:28:59] Speaker 03:
But let me go back and say why the scope of the injunction does not have any bearing on the irreparable harm inquiry whatsoever.

[00:29:06] Speaker 03:
It has no bearing either on the adequacy of monetary damage.

[00:29:10] Speaker 02:
It has bearing on the causal nexus, does it not?

[00:29:13] Speaker 02:
What am I asking you not to be able to do anymore?

[00:29:17] Speaker 02:
So isn't that relevant to whether or not there's a causal nexus between that and the harm to Apple?

[00:29:22] Speaker 03:
Let me go back, if I may, to cup holders.

[00:29:27] Speaker 03:
Mr. Lee, my friend Mr. Lee said, well, we should get an injunction for the cup holder if they are still using it when they could have designed around.

[00:29:35] Speaker 03:
That's not correct.

[00:29:36] Speaker 03:
If the cup holder didn't drive consumer demand for the car, then there would be no entitlement to an injunction.

[00:29:43] Speaker 03:
You could get damages for the cup holder, and let's remember that there is a jury judgment of damages.

[00:29:48] Speaker 03:
We're contesting it.

[00:29:49] Speaker 03:
We'll file our merits appeal later today.

[00:29:51] Speaker 03:
But the point is that you don't get an injunction

[00:29:54] Speaker 03:
unless the feature is what drove consumer demand for the product.

[00:29:58] Speaker 03:
And that's as true for a claim of harm to reputation.

[00:30:01] Speaker 01:
Can't you make the analogy that that's what's happened here?

[00:30:05] Speaker 01:
Or by there seeking a feature-based injunction.

[00:30:08] Speaker 01:
They're limited in injunction to the imprinting features.

[00:30:14] Speaker 01:
That's somewhat

[00:30:17] Speaker 01:
what we ask in the area of damages and laser dynamics and these other cases.

[00:30:22] Speaker 03:
I hear you, Your Honor, but there's no apportionment requirement when we get to injunctions.

[00:30:25] Speaker 03:
It's a different world.

[00:30:26] Speaker 01:
An injunction... No, but there's a weighing of interest, and this is a... Correct, Your Honor.

[00:30:30] Speaker 01:
Right.

[00:30:30] Speaker 01:
So this is an exercise in equity that we're conducting.

[00:30:34] Speaker 03:
Correct, Your Honor, but let me go back to irreparable harm and try to explain why I think the feature-based nature of the injunction does not bear on irreparable harm.

[00:30:43] Speaker 03:
By the way,

[00:30:44] Speaker 03:
This is wordsmithing.

[00:30:45] Speaker 03:
This is semantic sleight of hand.

[00:30:47] Speaker 03:
The fact that the feature is enjoined is going to mean that our products are enjoined because we don't make features, we make products.

[00:30:55] Speaker 01:
What about you, upon our argument that there's evidence in the record that shows that Samsung could address the problem in one day, one to thirty days, and it's boom, it's gone?

[00:31:06] Speaker 03:
Well, Your Honor, we have designed around all of the accused features, all of them.

[00:31:12] Speaker 03:
And we were never even selling products accused of infringing 721 and 172, even at the time of trial.

[00:31:20] Speaker 03:
Those products were off the market at the time of trial.

[00:31:23] Speaker 03:
So the only products that remain to be enjoined in the future are those that allegedly infringe the 647.

[00:31:28] Speaker 03:
We vigorously contest that there is any infringement of a valid 647 claim.

[00:31:33] Speaker 03:
But even if there were, there's only one product left on the market, the GS3, that even infringes that patent.

[00:31:38] Speaker 03:
So, Your Honor, if we're just going to go straight to equities, the equities tip in favor of Samsung, because we've designed around everything, we're not selling the infringing products, and... Are you able to design around the remaining product that's subject to... We have already, Your Honor.

[00:31:53] Speaker 03:
We have already.

[00:31:54] Speaker 03:
So Apple does not need an injunction to stop ongoing infringement.

[00:31:58] Speaker 02:
Your Honor... Then why are you fighting it?

[00:32:00] Speaker 02:
I don't understand.

[00:32:01] Speaker 02:
If you're telling me you've designed around everything, then why am I wasting my time trying to figure out whether they should have gotten injunction or not when you're saying it doesn't affect Samsung at all if you give them one.

[00:32:12] Speaker 03:
So give it to them.

[00:32:13] Speaker 03:
No, Your Honor, because I would like to respectfully refer you to the appendix at page 5008 and 5009.

[00:32:20] Speaker 03:
I may not have had enough zeros.

[00:32:24] Speaker 03:
5008-09.

[00:32:27] Speaker 03:
That's the letter to Sprint.

[00:32:28] Speaker 03:
We've been here before, Your Honor.

[00:32:30] Speaker 03:
And the last time when there was a brief lift, preliminary injunction, Apple went out to customers and carriers.

[00:32:36] Speaker 03:
Sprint is the letter that's in the record at those pages, 5008-09.

[00:32:41] Speaker 03:
And it threatened them with contempt if they sold our product.

[00:32:45] Speaker 03:
We're here because if Apple gets an injunction, we have the fear, uncertainty, and doubt that's leveled on our customers and our retailers.

[00:32:55] Speaker 03:
which will leverage Apple's control far beyond the legitimate reach of their patent because it will stop unaccused features and unaccused product to the extent our customers and retailers are scared.

[00:33:04] Speaker 03:
They sowed plenty of fear, uncertainty, that last time until this court lifted that injunction.

[00:33:08] Speaker 01:
I'm sorry, Your Honor.

[00:33:09] Speaker 01:
Isn't that what makes this case special in a way?

[00:33:11] Speaker 01:
I mean, we're looking at a situation where there's a feature-based injunction.

[00:33:17] Speaker 01:
And all the other injunctions that I've sat on in this court have not been feature-based.

[00:33:22] Speaker 01:
They've addressed the entire device.

[00:33:25] Speaker 03:
You're right, Your Honor, but I respectfully suggest that you should not accept that that change in wordsmithing of the scope of the injunction makes any difference to the causal nexus analysis.

[00:33:35] Speaker 03:
Let me just try to say very simply why an injunction... It's not just wordsmithing.

[00:33:40] Speaker 01:
I mean, it goes to actually shape the injunction.

[00:33:43] Speaker 01:
It has legal effect.

[00:33:45] Speaker 01:
It's not just wordsmithing.

[00:33:47] Speaker 03:
Well, Your Honor,

[00:33:48] Speaker 03:
With respect, we think that we're not selling a software feature.

[00:33:53] Speaker 03:
We're selling phones.

[00:33:54] Speaker 03:
So if you tell us we're enjoining a feature, you're in effect enjoining our phone.

[00:33:59] Speaker 02:
Correct, Your Honor.

[00:34:01] Speaker 03:
But then, Your Honor, the answer is we pay them.

[00:34:05] Speaker 03:
We pay them the adjudicated damages.

[00:34:08] Speaker 03:
And remember, the district court did issue an on... You paid them the damages for the ones you sold before.

[00:34:13] Speaker 02:
We're talking about whether you're allowed to keep doing it.

[00:34:15] Speaker 03:
But Your Honor, we're not doing it.

[00:34:17] Speaker 03:
We have designs around.

[00:34:19] Speaker 03:
We're not doing it.

[00:34:20] Speaker 03:
And we will pay a steep price if Apple's belated request for ongoing royalties, which was granted by the court below,

[00:34:27] Speaker 03:
survive the appeal.

[00:34:28] Speaker 03:
We'll contest it on appeal.

[00:34:30] Speaker 03:
We don't think it was a correct order.

[00:34:31] Speaker 03:
We don't think there's underlying infringement.

[00:34:33] Speaker 03:
We'll contest all of that.

[00:34:34] Speaker 03:
But if the ongoing royalties for any continuing infringement is a form of equitable relief, that would not say that we don't... The ongoing royalty for continuing infringement is not a form of equitable relief.

[00:34:46] Speaker 02:
It's a form of compensatory relief.

[00:34:47] Speaker 03:
Well, Your Honor, it's a compensatory form of...

[00:34:51] Speaker 03:
It's a compensatory form of relief, but Your Honor, we've already explored and you've already revealed why this case is one in which there's adequacy of monetary damages.

[00:35:00] Speaker 03:
This is a case in which Apple gave up exclusivity.

[00:35:03] Speaker 03:
by offering to license to Samsung in August of 2010, and by licensing its own competitors in the smartphone market.

[00:35:09] Speaker 03:
Mr. Lee's distinctions about the nature of the licenses don't matter.

[00:35:14] Speaker 01:
But they haven't disclaimed the patent.

[00:35:16] Speaker 01:
I mean, they still own the patent.

[00:35:17] Speaker 01:
And the fact that they've chosen to license it selectively here and there, that doesn't do away with their entire right of exclusivity.

[00:35:25] Speaker 03:
Well, Your Honor, I think with respect, if you're willing to license your patent

[00:35:31] Speaker 03:
It shows that you're willing to take money for it rather than to maintain exclusive ownership.

[00:35:36] Speaker 01:
Except perhaps from your competitor, which when you have a market where you've only got two competitors.

[00:35:41] Speaker 03:
Well, let's go back to irreparable harm, if I could, Your Honor.

[00:35:43] Speaker 03:
And I'd like to call your attention to the finding of the district court on page 820, where the district court held with respect to the licenses, and now I'm back on irreparable harm, not monetary compensation, 820 at line 16, that after affording due consideration to the circumstances around Apple's licenses,

[00:36:01] Speaker 03:
Those licenses nevertheless suggest that Apple's reputation as an innovator among consumers will not be irreparably harmed without an injunction.

[00:36:09] Speaker 03:
If I'm willing to license this to other people, it can't be that my reputation turns on those exact features.

[00:36:16] Speaker 02:
You can't make categorical statements.

[00:36:19] Speaker 02:
In this case it can't be because she also found Samsung is not recognized as some sort of negative or derogatory producer.

[00:36:25] Speaker 02:
There are circumstances where they might license to good legitimate businesses and then if a competitor comes along that's going to not represent their product well in the market, which is not this case.

[00:36:37] Speaker 02:
That is correct, Your Honor.

[00:36:38] Speaker 02:
That is correct.

[00:36:40] Speaker 02:
You've got to be more careful and not be in such a per se fashion

[00:36:43] Speaker 03:
Accepted, Your Honor.

[00:36:45] Speaker 03:
And I don't mean to suggest for a moment that we're suggesting that any license automatically ends the question.

[00:36:50] Speaker 03:
But I do want to come back to the fact that the district court did make meticulous factual findings here.

[00:36:54] Speaker 03:
She took the learning that this court has provided in Apple I, II, and III.

[00:36:59] Speaker 03:
She went and she waved the record very carefully.

[00:37:01] Speaker 02:
Did she take the learnings, or did she feel strong arms?

[00:37:04] Speaker 03:
Your Honor, I believe it is the duty of the district court to follow this court.

[00:37:10] Speaker 03:
well-established president.

[00:37:12] Speaker 03:
And she did so exactly.

[00:37:14] Speaker 01:
Look at how she addressed her president.

[00:37:15] Speaker 01:
It seems to me that what she's done, and we're talking about not setting some rules in the future, but it may be that she already established some rules.

[00:37:26] Speaker 01:
And one of them is that in a patent infringement case, when you're looking for an injunction, you look at past behavior and you leave it at that.

[00:37:35] Speaker 01:
You're not looking to see what conduct or what behavior we had in the past, and then trying to determine whether there's a likelihood, whether it's likely that this conduct will be repeated in the future.

[00:37:47] Speaker 01:
And it's so, injunctions are forward-looking, and it seems to me that the district court kept it backward-looking.

[00:37:55] Speaker 03:
But Your Honor, it's not just forward-looking, it's forward-looking with a couple of very important conditions.

[00:38:01] Speaker 03:
One, the infringement of the specific features has to be the reason for the irreparable harm, and there has to have been irreparable harm.

[00:38:08] Speaker 03:
Let's start with the second one first.

[00:38:09] Speaker 03:
The district court found a meticulous factual finding that there was no irreparable harm.

[00:38:15] Speaker 03:
First, the district court found that there was no irreparable harm.

[00:38:18] Speaker 01:
Before you go on, I just want to point out Oregon State Medical, United States versus Oregon State Medical, the Supreme Court says that the sole function of an action for an injunction is to forestall future violations.

[00:38:30] Speaker 03:
That's correct, Your Honor, but not all violations.

[00:38:33] Speaker 03:
Obviously, if there's no

[00:38:35] Speaker 03:
irreparable harm that can't be compensated by monetary damages.

[00:38:39] Speaker 01:
But if there's a showing of infringement already, there's a jury verdict of infringement.

[00:38:44] Speaker 01:
Correct, Your Honor.

[00:38:44] Speaker 01:
And it's limited, and the verdict is limited to three features.

[00:38:49] Speaker 01:
You have now a preliminary injunction that is limited in scope to those three features.

[00:38:54] Speaker 01:
Why is that preliminary injunction not forward-looking, such as expressed by the Supreme Court?

[00:38:59] Speaker 03:
It is forward-looking, but that's not enough.

[00:39:02] Speaker 03:
It's got to be forward-looking with respect, A, to irreparable harm.

[00:39:06] Speaker 03:
There's no irreparable harm here because the district court correctly found that the harm here was adequately compensated by monetary damages.

[00:39:14] Speaker 03:
The irreparable harm has to be caused by the infringement.

[00:39:17] Speaker 01:
I think we're similar.

[00:39:18] Speaker 01:
The damages goes to the harm already caused.

[00:39:20] Speaker 05:
Yes.

[00:39:21] Speaker 05:
Correct, Your Honor.

[00:39:22] Speaker 05:
But the ongoing royalty that's contemplated here in the injunction, there's an ongoing royalty right to compensate.

[00:39:30] Speaker 03:
Correct, Your Honor.

[00:39:31] Speaker 03:
The district court has already adjudicated that.

[00:39:33] Speaker 03:
Apple, in an unprecedented fashion, asked for the ongoing royalties belatedly after it had already taken its injunction appeal here.

[00:39:40] Speaker 03:
But not just abstractly, the question of how you deal with future conduct is, one, you have the deterrent effect from the best infringement verdict.

[00:39:49] Speaker 03:
Number two, ongoing royalties are a potential form of compensation for future infringement, if there is any.

[00:39:55] Speaker 03:
There isn't in this case, because we've designed around.

[00:39:58] Speaker 03:
And the reason Apple is here asking for an injunction, as Mr. Lee discussed candidly in prior arguments before this court, is that Apple doesn't think it should have to file new patent suits in the future.

[00:40:08] Speaker 03:
It wants to use the contempt power of the court in enforcing an injunction to forego the filing of new, specific patent claims based on new, specific features.

[00:40:18] Speaker 03:
And the letter to Sprint demonstrates that tactic, and this court shouldn't afford it any leeway.

[00:40:23] Speaker 03:
But Your Honor, I just want to go back to why the scope of the injunction shouldn't change your causal nexus requirements in any way.

[00:40:29] Speaker 03:
Irreparable Harm asks about the harm in the absence of the injunction.

[00:40:34] Speaker 03:
How the injunction is worded can't have any effect

[00:40:39] Speaker 03:
whether there's irreparable harm or not.

[00:40:40] Speaker 03:
The proper question is, did infringement of these three features cause the irreparable harm?

[00:40:45] Speaker 03:
Remember, Apple can be losing market share because Samsung has the better product, the newer form factors, the new new thing, the thing that caused Mr. Schiller and Apple to have to revamp their advertising campaign.

[00:40:58] Speaker 03:
And if Samsung is selling more phones and Apple's losing market share because of its legitimate non-infringing activity, that's not irreparable harm to Apple that was caused by infringement

[00:41:07] Speaker 03:
of the claim features.

[00:41:09] Speaker 03:
So causal nexus is a prerequisite before we get to the question of scope.

[00:41:14] Speaker 03:
Before we ever get to the question of scope, there has to be a showing that there was irreparable harm, can't be compensated by money.

[00:41:21] Speaker 03:
Here the willingness to take a license shows that there was a willingness to take money as a form of compensation.

[00:41:27] Speaker 03:
And the district court also correctly found that monetary compensation was capable of remedying this infringement.

[00:41:35] Speaker 03:
And there's no showing that these features drove demand for the product.

[00:41:40] Speaker 05:
What was the finding on reputational harm and causation?

[00:41:45] Speaker 03:
The finding on reputational harm and causation was that

[00:41:56] Speaker 03:
Evidence does not indicate that Apple's reputation suffered as a result of Samsung's infringement.

[00:42:01] Speaker 03:
That's at A15.

[00:42:03] Speaker 03:
And that's upon review of a battle of the evidence.

[00:42:08] Speaker 03:
It's a resolution of factual findings.

[00:42:10] Speaker 03:
Now remember, Apple never brought up reputation at trial.

[00:42:14] Speaker 03:
Its experts didn't try to prove loss of goodwill.

[00:42:16] Speaker 03:
it's a totally post-trial post-hoc invention on Apple's part where Apple comes in and they try to cherry pick a few statements from their own fact witnesses testimony and say, look, harm to our reputation.

[00:42:28] Speaker 02:
The district court goes through that evidence meticulously and she's like, okay, so just think with me about how to state the law correctly.

[00:42:36] Speaker 02:
It's probably not possible for you, but divorce it from your

[00:42:41] Speaker 02:
advocacy in favor of Samsung.

[00:42:43] Speaker 02:
Because I just want to make sure we get this law right.

[00:42:46] Speaker 02:
Yes, Your Honor.

[00:42:46] Speaker 02:
I feel like maybe you're right about the causal nexus requirement being tied to the whole product and the demand for the product when the form of irreparable harm being sought is lost to him because it's the sale of the whole product.

[00:43:05] Speaker 02:
So we're on the same page so far, right?

[00:43:07] Speaker 02:
Correct, Your Honor.

[00:43:09] Speaker 02:
But if the issue is reputational, the judge processed the question at the beginning and said, well, what if these key features were sort of Apple's trademark?

[00:43:19] Speaker 02:
This is what they were known for.

[00:43:20] Speaker 02:
This is sort of really significant to their brand name and their reputation in the industry.

[00:43:26] Speaker 02:
They wouldn't then need to prove that those key features drove sales, right?

[00:43:31] Speaker 02:
It would be enough for them to be able to show that your use of those features was affecting their reputation, regardless of needing to establish a causal nexus that somehow links the features to sales or demand for the phone itself, right?

[00:43:46] Speaker 03:
I don't agree with the set.

[00:43:48] Speaker 03:
Let me go back, Your Honor.

[00:43:49] Speaker 03:
I don't agree with respect.

[00:43:50] Speaker 03:
I think that the correct statement of the law for any form of irreparable injury

[00:43:55] Speaker 03:
should be that causal nexus to that injury is required.

[00:43:59] Speaker 03:
And in a situation like this, injury from the sales.

[00:44:02] Speaker 03:
Does this dynamics is your case, Your Honor?

[00:44:04] Speaker 03:
Does this dynamics is a case in which it's more of a simple product patent.

[00:44:09] Speaker 03:
And the patent is the product, essentially.

[00:44:13] Speaker 03:
The detachable snow plow assembly that's claimed in the patent is the competing producer's product.

[00:44:19] Speaker 03:
So there's a convergence between the patent and the product.

[00:44:21] Speaker 03:
And in that case, you would have to show, it wasn't discussed in that case, but it was assumed that there was a causal nexus between the infringement and the sale, the harm from law sale, because the patent was the product.

[00:44:33] Speaker 03:
In a complex product like a smartphone,

[00:44:36] Speaker 03:
You can't presume that any minor feature is going to be driving demand.

[00:44:40] Speaker 05:
But I think you're pushing back too hard.

[00:44:42] Speaker 02:
I know.

[00:44:42] Speaker 02:
You don't need to win.

[00:44:44] Speaker 05:
Judge Moore's hypothetical dealt with what if it's something that really is the heart, the essence of the reputation of a company and you're a competitor.

[00:44:53] Speaker 05:
And if that's the feature we're talking about, the infringing feature, goes to the heart.

[00:44:58] Speaker 05:
there's at least a case to be made based on the facts on the record that that was enough of a hit on reputation.

[00:45:04] Speaker 05:
And even if it's the heart of their feature and what they do, there's probably a causal nexus established.

[00:45:11] Speaker 03:
Your Honor, if there were empirical evidence that reputation was harmed apart from an adverse effect on sales, and there was none here,

[00:45:22] Speaker 03:
then perhaps reputational injury could be shown without a causal nexus to lost sales.

[00:45:27] Speaker 03:
I think that's a very improbable hypothetical because if the features, the features are minor features.

[00:45:34] Speaker 03:
Nobody ever advertised them.

[00:45:35] Speaker 03:
Samsung doesn't advertise these features.

[00:45:37] Speaker 03:
Apple didn't depend on these features.

[00:45:38] Speaker 03:
There's unrebutted evidence that these features were minor.

[00:45:41] Speaker 03:
This is the antennas.

[00:45:43] Speaker 01:
You don't need empirical evidence to show harm in the future, correct?

[00:45:46] Speaker 03:
Well, Your Honor, we don't accept that this Court has ever blessed speculative future harm.

[00:45:53] Speaker 01:
You can do a circumstance.

[00:45:54] Speaker 01:
It's not just empirical evidence that you need in order to show harm in the future.

[00:46:00] Speaker 03:
Well, Your Honor, I believe you do have to show some real basis, real world basis.

[00:46:06] Speaker 03:
Absolutely, Your Honor.

[00:46:08] Speaker 03:
A real world basis shown by any form of evidence.

[00:46:11] Speaker 03:
But the key thing I want to say is just that it has to be based in the central feature of your hypothetical.

[00:46:17] Speaker 03:
The feature would have to be important to Apple's reputation.

[00:46:20] Speaker 03:
These features don't come close.

[00:46:22] Speaker 05:
Apple never practiced...

[00:46:25] Speaker 05:
Correct, Your Honor.

[00:46:28] Speaker 03:
The Apple never even practiced 721.

[00:46:31] Speaker 03:
There's no showing in this record that reputation was tied to these features.

[00:46:38] Speaker 03:
In another case, Your Honor, if you could show that reputation and goodwill were tied to the features, there might be a showing of irreparable harm to reputation.

[00:46:45] Speaker 01:
Does it matter that this is a two-player market with respect to reputational harm?

[00:46:50] Speaker 03:
Your Honor, sometimes it might matter if there's a small market.

[00:46:54] Speaker 03:
In your Trebro case, for example, there were eight patented sod harvesters in the world.

[00:47:00] Speaker 01:
For example, if you're talking about lost profits, any sale lost by one competitor is to the gain of the other.

[00:47:08] Speaker 01:
But now if you're talking about reputational harm, then one infringement by one necessarily causes a reputational harm to the other.

[00:47:16] Speaker 03:
That might be, Your Honor, but that's not this market.

[00:47:19] Speaker 03:
In fact, you've already, in the Broadcom versus X-U7 case, you've already distinguished Apple from them.

[00:47:26] Speaker 03:
So you said that's a market with lots of competitors.

[00:47:28] Speaker 03:
And one of the issues here is we're not a two-player market.

[00:47:32] Speaker 03:
Apple's never been able to show that sales are going, would have gone to them rather than to other Android producers.

[00:47:39] Speaker 01:
Did I say it was a two-player market with a lot of ponies and just a four-player market?

[00:47:42] Speaker 01:
Well, you know... I think that was my comment.

[00:47:45] Speaker 03:
Your Honor, let me try to summarize our position this way.

[00:47:48] Speaker 03:
We think that the record here is so profoundly devoid of evidence of causal nexus, either to lost sales or to reputational injury, that in this case, the scope of the injunction can't cure the problem.

[00:48:05] Speaker 03:
The scope of the injunction can't cure the problem.

[00:48:07] Speaker 03:
It's something that you consider after you've shown the prerequisite, which is causal nexus to the injury.

[00:48:12] Speaker 03:
There was no showing of harm to reputation here, and there was certainly no showing of any link between the infringement and the harm.

[00:48:19] Speaker 03:
And Your Honor, maybe I could just point you to the key places in the record where any causal link to reputation is just foreclosed.

[00:48:28] Speaker 03:
Mr. Schiller admitted he was their key reputation and their head of marketing.

[00:48:32] Speaker 03:
He was the key person they relied on for the supposed reputational injury.

[00:48:36] Speaker 03:
But at A10486-87, he admitted that he didn't know if any of the patented features were present in any iPhones.

[00:48:45] Speaker 03:
He also made generic observations, and he talked about supposed copying in general.

[00:48:51] Speaker 03:
And then Mr. Schiller on Apple's behalf admitted that there was no reputational harm.

[00:48:56] Speaker 03:
At A10530, he said the brand wasn't flipping.

[00:48:59] Speaker 03:
At A10-516, he said, no, our brand was unaffected by problems with our map device.

[00:49:06] Speaker 03:
And Apple's other witness, Mr. Josniak, admitted that the antenna problems that Apple suffered didn't hurt the brand.

[00:49:13] Speaker 03:
And that led to a factual finding by the district court that Apple's reputation is robust at A15 again.

[00:49:21] Speaker 03:
So Your Honor, it might be in another case.

[00:49:24] Speaker 03:
It's hard for me to think about it, because it's

[00:49:26] Speaker 03:
Chief Judge Probe's hypothetical is right, that the features were central to the patent.

[00:49:30] Speaker 03:
It's highly likely that they would be causally related to law sales as well as reputational harm.

[00:49:35] Speaker 03:
But in this case, where there's no causal link to law sales or reputational harm, with respect, you should affirm in the form of the patent and have no effect on the outcome.

[00:49:46] Speaker 03:
Thank you, Your Honor.

[00:49:52] Speaker 00:
In my three minutes, let me just reissue this.

[00:49:54] Speaker 00:
One is Douglas Dynamics.

[00:49:55] Speaker 00:
The second is the license issue.

[00:49:57] Speaker 00:
And the third is the basis for the calls and access requirements, ultimately, which I think will bring me back to your first question, Your Honor.

[00:50:05] Speaker 00:
On the licenses, let me just say this.

[00:50:07] Speaker 00:
And I wanted to be sure that I could say it on the public record.

[00:50:13] Speaker 00:
There is nothing in the record, because they're not licensed, to indicate that Google, Motorola, LG,

[00:50:21] Speaker 00:
Huawei or Samsung for licensing.

[00:50:24] Speaker 00:
There are huge numbers of competitors who are not licensed and not licensed for a purpose.

[00:50:29] Speaker 00:
And then I would say that if you take that information and the information that's before you and compare it to the panel's position at 1369 of Apple III, the results should be the same.

[00:50:44] Speaker 00:
On Douglas Dynamics, and Judge Pro's respect, I want to go to your hypothetical, because I think it's critically important.

[00:50:51] Speaker 00:
But I think Douglas Dynamics was actually decided on a different basis.

[00:50:55] Speaker 00:
So to be precise first, when you asked what the district court found on Douglas Dynamics, when you look at A14 to A15, she imposed the burden on us to show that the patented features drove demand for the products in order to invoke Douglas Dynamics.

[00:51:12] Speaker 00:
You will not find that in Douglas Dynamics at all.

[00:51:14] Speaker 00:
And in fact, in Douglas Dynamics, you're going to find three things, and this point's critically important.

[00:51:20] Speaker 00:
In Samsung's brief, they suggest to you just what they argued today, that the patent covered the whole snowfall assembly.

[00:51:28] Speaker 00:
They refer you to the 700 patent.

[00:51:31] Speaker 00:
That's the wrong patent.

[00:51:34] Speaker 00:
That's the patent that had the claim construction issue before it.

[00:51:40] Speaker 00:
So the court has the number precisely correctly.

[00:51:44] Speaker 00:
And this is important to understanding what the court did.

[00:51:47] Speaker 00:
The patent can issue on the injunction with the 978 patent.

[00:51:53] Speaker 00:
And that's why when the panel got to the injunction, it said,

[00:51:58] Speaker 00:
We see that it's a multi-component product, and the patent only covers a portion.

[00:52:06] Speaker 00:
And in fact, your honor, if you look at the 978 patent, which is the right patent to look at, the invention was the latch that lasts the snowplow to the assembly to the larger vehicle.

[00:52:18] Speaker 00:
That was the invention.

[00:52:20] Speaker 00:
There was nothing required in Douglas Dynamics to show that that latch drove demand for the snowplow assembly.

[00:52:28] Speaker 00:
Now, you may say, why?

[00:52:30] Speaker 00:
Is it just that they didn't recognize the calls on Nexus?

[00:52:33] Speaker 00:
Well, Your Honor, two points.

[00:52:34] Speaker 00:
If you go back, you will see that during the briefing, the question of multi-component products was raised.

[00:52:40] Speaker 00:
And even on the on-box hearing briefing, Apple II was raised.

[00:52:44] Speaker 00:
The reason it wasn't raised fifth, it was, as you said in Apple III, Douglas Dynamics is different.

[00:52:51] Speaker 00:
It is premised in the exclusivity.

[00:52:54] Speaker 00:
It's premised in what happens when you lose your exclusiveness.

[00:52:59] Speaker 00:
And it's forward looking.

[00:53:01] Speaker 02:
If someone can take your invention that has been adjudicated to- Did the lower court award a compulsory license going forward already?

[00:53:11] Speaker 00:
Your Honor, and to correct Ms.

[00:53:13] Speaker 02:
Sullivan, we filed the- I don't care whether it was on time or not on time.

[00:53:18] Speaker 02:
Nonsense matters.

[00:53:19] Speaker 00:
She has said that we're entitled to an ongoing royalty, but she's

[00:53:23] Speaker 00:
deferred the amount to after the marriage appeal.

[00:53:25] Speaker 02:
And you're arguing, I assume, correctly, that a hypothetical bargaining position would have changed post-verdict such that the compulsory license should clearly be larger than what the pre-verdict rate would have been assessed by Sherry.

[00:53:40] Speaker 00:
She actually hasn't gotten to that issue yet.

[00:53:42] Speaker 02:
You're arguing, I assume.

[00:53:43] Speaker 00:
We haven't had to argue yet, Your Honor, because she hasn't.

[00:53:45] Speaker 02:
You will, I hope, argue that.

[00:53:49] Speaker 00:
Well, the answer is I'm hoping I don't have to.

[00:53:51] Speaker 00:
The answer, if we do, we'll address it then.

[00:53:55] Speaker 02:
There is, I mean, there's a question about... You're admitting we're going to have to address it because even if we put an injunction in play, don't you have sales between the date of the verdict and the day of the injunction?

[00:54:06] Speaker 00:
And they are.

[00:54:06] Speaker 00:
I don't know where this, we're not infringing any patent.

[00:54:08] Speaker 00:
They're infringing the 647 patent today.

[00:54:10] Speaker 00:
This is Word Games.

[00:54:13] Speaker 00:
It's the particular product that had the 647 feature in.

[00:54:17] Speaker 00:
It's not offered anymore.

[00:54:18] Speaker 00:
New products with different names with the 647 feature on the market today.

[00:54:22] Speaker 00:
But Douglas Dynamics is basically predicated in exclusivity.

[00:54:27] Speaker 00:
And that's why I know so far unsuccessfully when I say competing against your own invention in a competitor's product is irreparable harm.

[00:54:37] Speaker 00:
That's part of what Douglas Dynamics is based in.

[00:54:41] Speaker 00:
If the cause of nexus requirement is as specific as the district court articulated, which is you have to tie the panted features to the product, Douglas Dynamics could never have come out the way it did.

[00:54:57] Speaker 05:
It came out the way it did because... There's no indication that there was an argument made, at least before the panel.

[00:55:03] Speaker 05:
There's no indication, at least reading the opinion, and I think I looked at the brief, that causal nexus was an argument that was raised and debated, right?

[00:55:11] Speaker 00:
Your Honor, I have to say two things.

[00:55:13] Speaker 00:
The question of it being a multi-component invention and the invention of only covering a portion was raised, and the panel opinion explicitly mentions that.

[00:55:21] Speaker 00:
And then on the rehearing petition, Apple II was specifically brought to the court.

[00:55:26] Speaker 05:
I thank all council on the cases submitted.

[00:55:29] Speaker 05:
That concludes our proceedings.