US federal appeals court reverses Galaxy Nexus sales ban

The first thing to understand is this is not an appeal involving the whole case. It's an appeal of the district court's decision to grant Apple a preliminary injunction ("the sales ban"). A preliminary injunction is a legal remedy where the defendant is enjoined (prevented) from engaging in some allegedly harmful conduct before the case is decided on the merits. A judge has the power to grant preliminary injunctions because in some cases, by the time a decision is reached the harm might have already been done. E.g. if you're complaining that some company is illegally dumping nuclear waste onto your property every week, you don't want the dumping to continue while the court decides whether it's legal. In that case, the judge has the discretion to grant you a preliminary injunction, which basically "freezes the status quo" pending the resolution of the case. Note a preliminary injunction will often involve some sort of bond requirement, requiring the plaintiff to post bond to compensate the defendant for any losses arising from the injunction in case the defendant wins.

The judge has discretion to grant a preliminary injunction, but is supposed to only do it when there would otherwise be "irreparable harm." This is what the appeal is about. The court said that the trial judge abused her discretion in granting the preliminary injunction because Apple had not proven irreparable harm. Apple claimed that they would lose market share if shipments were allowed to continue, and that was irreparable harm. What the court said was that unless Apple could prove that there was a "causal nexus" between Samsung infringing the patent and people buying Galaxy Nexus phones, there was no irreparable harm because of lost market share. In other words, Apple had to prove that people were buying Galaxy Nexus phones only because of the infringing patent. It wasn't sufficient to prove, for the purposes of evaluating irreparable harm, whether Samsung's infringement simply made the product more attractive than it would otherwise be.

Incidentally, the "abuse of discretion" language has a very specific meaning. It doesn't mean the judge didn't have the power to grant the injunction. Rather, it means the judge didn't grant the injunction on proper grounds. Generally, appeals courts do not review decisions wholesale ("de novo"). Instead, they give the trial judge a lot of latitude. The amount of latitude depends on the specific type of decision. Decisions that involve "judgment calls" about the sufficiency of evidence are given much more latitude than decisions that involve say an interpretation of statutory language. "Abuse of discretion" is a standard of reviewing a lower court decision that basically means the lower court decision will stand unless the appeals court decides that it was totally in left field. In this case, the appeals court said that granting the injunction was an abuse of discretion because the judge granted the injunction despite Apple's evidence being wholly insufficient to meet the legal requirements for granting the preliminary injunction. It wasn't just a difference in judgment where the appeals court thought the evidence was insufficient to establish irreparable harm but could see how the trial court thought it was sufficient. If that had been the case, the appeals court would have let the decision stand. Instead, the appeals court could see no way to justify the finding of irreparable harm.

"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."

(note this straddles page 12 and 13 of the PDF [1]) I am not a lawyer, I have dealt with many though, and I've dealt with them on patent cases. Reading this from the Appeals court is like Steve Jobs saying "Oh and one more thing." They say "we could have stopped here but in the interest of judicial economy we'll add a bit more." I read that to mean the Federal Circuit disagrees with the possible infringement of this patent in the first place. They go into a long discussion about what Apple is claiming, point out that Apple's legal construction is convoluted and then say,

"We hold that the district court’s determination that 'each' modifies 'plurality of heuristic modules' is erroneous because it contravenes the plain terms of the claim. The word 'each' appears not before 'plurality of modules,' but inside the 'wherein' clause and before the phrase 'heuristic modules.'"

This feels like the Federal Circuit telling Judge Koh she needs to go back and re-examine her whole line of reasoning on this patent.

[1] http://www.cafc.uscourts.gov/images/stories/opinions-orders/...

Wow, is this as big as I think it is?

Or is it just some technicality relating to the sales injunction that's not applicable to determination of infringement in general?