A “Connection” Between the Patented Feature and Consumer Demand Is Enough to Support an Injunction

In Apple Inc. v. Samsung Electronics Co., Ltd., [2014-1802] (Fed. Cir. 2015), the Federal Circuit vacated and remanded the denial of Apple’s request for a permanent injunction.

The trial court denied Apple’s proposed injunction despite public interest favoring the injunction, and the narrowness of Apple’s proposed injunction (which tilted the balance of hardships in Apple’s favor), because these factors did not overcome Apple’s lack of irreparable harm.

Apple argued to the district court that it was irreparably harmed by Samsung’s infringement due to damage to its reputation as an innovator, lost market share, and lost downstream sales.  The district court rejected Apple’s arguments regarding irreparable harm, finding that Apple had not shown that a causal nexus connected Samsung’s infringement to these alleged injuries.

The Federal Circuit held that a causal nexus linking the harm and the infringing acts must be established regardless of whether the injunction is sought for an entire product or is narrowly limited to particular features, rejecting Apple’s argument to the contrary.

The Federal Circuit found the district erred, however, with respect to Apple’s allegations of lost market share and lost downstream sales.  The Federal Circuit said that the patent owner proving a causal nexus requires the patentee to show “some connection” between the patented features and the demand for the infringing products.  The Federal Circuit said that it was legal error for the district court to effectively require Apple to prove that the infringement was the sole cause of the lost downstream sales.  Instead, the Court should have determined whether the features “impact” customer’s purchasing decision.  The Federal Circuit said that the fact that the infringing features are not the only cause of the lost sales may well lessen the weight of any alleged irreparable harm, it does not eliminate it entirely.  Thus, the district court thus erred when it required Apple to prove that the infringing features were the exclusive or predominant reason why consumers bought Samsung’s products to find irreparable harm.

The Court concluded that on the record, applying the correct legal standard for irreparable harm, Apple has established irreparable harm.