“I think it’s time for global peace,” said Justice Koh at the end the post-trial hearing in San Jose on Thursday. After hearing arguments from both Apple and Samsung, Justice Koh will begin her review of the $1.05 billion awarded to Apple by a jury in August.

Three issues were argued before Justice Koh: (1) whether the damages awarded by the jury were appropriate; (2) whether additional Samsung products should be added to the injunction order; and (3) whether the jury decision should be thrown out because of alleged misconduct from the jury foreman.

Damages: Willful Infringement v Reverse-Engineering

On the first issue, Apple is seeking to add another $770 million to the damage award based on the jury’s finding of willful infringement in August. “Hopefully after an injunction they will be deterred from getting this close to the line and we will not be back in front of you in the future,” Apple attorney Michael Jacobs told Judge Koh.  Samsung wishes to have the damages re-examined by Justice Koh given a number of calculations it found to be anomalous. “You should reverse-engineer (the damages), make sure jury verdict is causally related to the evidence based on legal theory,” Samsung lawyer Kathleen Sullivan submitted.

Injunction: An Interesting Legal Question

On the second issue, Apple is seeking to have 26 additional Samsung products added to the original injunction ordered in August.  Apple is arguing that the additional products are not more than “colourably different” from the ones already banned. Samsung of course opposes this.  Although only three of Samsung’s products at issue in the original verdict  are still on the market, a sweeping ban such as the one argued by Apple would substantially hurt the Korean company’s image with retailers and leave open the possibility of a ban on many more of its devices that are not more than “colourably different” from Apple’s patents.

This raises a couple of interesting legal questions: if Justice Koh accepts Apple’s argument, could it mean that innovators could go after products that have been “designed around” existing patents if they are not colourably different?  Moreover, if a product only infringes one out of  thousands of possible features on a device, should a court ban the entire product? Justice Koh may set an interesting legal precedent with her answer to these questions.

Re-Trial: Jury Misconduct

On the third issue, Samsung is seeking to have the original verdict thrown out and a new trial granted, arguing jury misconduct by jury foreman, Velvin Hogan. Hogan had failed to disclose that he was once sued by his former employer, Seagate, which has a strategic relationship with Samsung. Apple maintains that Samsung should have raised this issue at the voir dire for jury selection. Samsung responded that it did not know of Hogan’s previous law suit at that time.

Justice Koh stated that she would issue separate rulings based on subject matter in the coming weeks.

Why this Matters to Canadians

Thus far, the Canadian market has been left largely untouched by Apple’s legal strategy.  However, on August 7, 2012, the Canadian Intellectual Property Office issued Apple Inc. the Canadian version of its infamous “bounce-back” patent, patent no US7469381 (“‘381”). With this foothold in the Canadian patent system, Canadian companies and taxpayers may be the next to get dragged into this global dogfight.

Like its American cousin, Canadian patent no CA2658177 (“’177”) teaches a method for “intuitively” communicating to a touch-screen user that he or she has scrolled to the edge of an electronic document.  It allows a user to “pull past” the edge of a document when he or she has reached its end, then snaps the displayed content back to the edge of the display area when the user releases the screen.  The specifications between these two patents are nearly identical and the first independent claims are very, very similar. 

As a commercial tool, the “bounce-back” patent has been used in many of Apple’s legal and commercial maneuvers to keep its competitors out of touchscreen markets.  For example, just this past year:

1. The ‘381 patent was the only utility patent asserted by Apple against Samsung in its recent infringement lawsuit against Samsung in California;
2. The ‘381 patent was one of five patents Apple asserted against HTC in a complaint to the United States International Trade Commission of tariff violations; and
3. The Australian version of the ‘381 patent (AU 2008100283, “’283″) is currently one of the patents Apple is asserting in a motion for a preliminary injunction against Samsung’s Galaxy Tab 10.1 in that country.

According to the CIPO patent database, Apple Inc. has been issued 6 Canadian patents since August – bringing the total number of active Canadian patents owned by Apple to 108. While there is no guarantee that Apple will bring the next battle to Canada, with Blackberry 10 due for release early next year and the Canadian government’s recent pledge of $400 million to encourage home-grown entrepreneurship, one wonders if the Canadian market and patent office are prepared should Apple begin flexing its exclusive rights this side of the border.

For companies looking to defend themselves from possible infringement suits, it may be helpful to follow the ex-parte re-examination being conducted by the USPTO on the ‘381 patent to determine if a similar re-examination request can be filed with the Canadian patent office against the ‘177.  For those representing Apple’s interest in Canada, it may be worth considering how the absence of file-wrapper estoppel and jury trials in Canada would affect a Canadian strategy against potential infringers. For lawmakers and benchers, it may be worth considering, more broadly, whether current drafting standards for computer-based patents outlined in the MOPOP really provide sufficient disclosure of claimed subject-matter to qualify as the patentee’s “quid” for the state’s “quo” of an exclusive monopoly as discussed in the recent SCC decision in Teva v Pfizer.

Prospect for Peace? All Eyes on San Jose

As Justice Koh urges both tech giants to work towards a settlement, one thing is clear: all eyes will be on San Jose in the coming weeks.  The legal community will be waiting to see how Justice Koh rules on the above legal questions just as the business community will be watching to see whether or not Apple and Samsung do in fact make peace. According to statements made by Samsung just after the hearing– the ball is in Apple’s court.

Beatrice Sze is a JD Candidate at Osgoode Hall Law School

Posted in Infringement, IP, Jurisdiction, Patents, US