Jury or Judge? CAFC struggles with the results of the Apple vs Samsung trial.

Michael Caridi | October 28, 2016

Apple v. Samsung

Case Nos. 2015-1171, 2015-1195, 2015-1994

October 7, 2016

Before:  En banc

Opinion for the court filed by Circuit Judge MOORE, in which NEWMAN, LOURIE, O’MALLEY, WALLACH, CHEN, and STOLL, Circuit Judges, join. Concurring in the result without opinion Circuit Judge HUGHES.

Dissenting Opinion filed by Chief Judge PROST.

Dissenting Opinion filed by Circuit Judge DYK.

Dissenting Opinion filed by Circuit Judge REYNA.


The Court sat en banc amid controversy for doing so without any additional briefing from the parties or amici curiae.  The majority held that the previous CAFC three judge panel (“the panel”) had overstepped in reversing the District Court.  Focusing on the substantial evidence standard of a JMOL (Judgment as a Matter of Law) needed to justify overruling the decision of a fact finder at the District Court level in the 9th Circuit, the majority overruled the prior panel and reinstated the District Court decision.  The dissents opposed- warning that the majority’s ruling would be seen as precedent interfering in the Supreme Court established obviousness standards set down in the Graham and KSR decisions.


I.  Background

The Court sat en banc, rehearing a panel decision which had reversed the District Court’s ruling deny Samsung’s JMOL motions for three Apple patents.  Apple had won at jury trial on all three patents.  The JMOL issues for two of the patents, U.S. Patent No. 8,074,172 (“the ’172 patent”) and U.S. Patent No. 8,046,721 (“the ’721 patent”) involved a non-obviousness determination by the District Court.  The third, U.S. Patent No. 5,946,647 (“the ’647 patent”) involved claim construction.

II.  The Majority Opinion

a.  Opinion Opening Statements

The majority first addressed the decision to sit en banc.  They noted that the grant to Apple’s en banc petition was “to affirm our understanding of the appellate function as limited to deciding the issues raised on appeal by the parties, deciding these issues only on the basis of the record made below, and as requiring appropriate deference be applied to the review of fact findings.”

In regard to the decision not to solicit additional briefing or argument on the question of whether an appellate panel can look to extra-record extrinsic evidence to construe a patent claim term, the majority sought to clarify that their intentions were very limited.  They reiterated that their sole concern was in regard to proper appeal review to the decision of a fact finder.  Citing Teva Pharms.,Inc. v. Sandoz, Inc., 135 S. Ct. 831, 841 (2015): “The Supreme Court made clear that the factual components [of claim construction] include ‘the background science or the meaning of a term in the relevant art during the relevant time period.’”   They further noted that after Teva, “such fact findings are indisputably the province of the district court.”

With this background set, the Court noted that the panel had reversed nearly a dozen jury fact findings including infringement, motivation to combine, the teachings of prior art references, commercial success, industry praise, copying, and long-felt need across three different patents.    In the majority’s opinion this was done despite the fact that some of these findings were not appealed and without ever mentioning the applicable substantial evidence standard of review.

Addressing the dissents’ concerns, the majority concluded:

We did not take this case en banc to decide important legal questions about the inner workings of the law of obviousness. We have applied existing obviousness law to the facts of this case. We took this case en banc to affirm our understanding of our appellate function, to apply the governing law, and to maintain our fidelity to the Supreme Court’s Teva decision.

b.  The ‘647 patent

Samsung argued the district court erred in not granting its motion for JMOL of non-infringement. The Court disagreed and affirmed because there was substantial evidence to support the jury’s verdict.

The terms in dispute were claim 1 “analyzer server”:  “an analyzer server for detecting structures in the data, and for linking actions to the detected structures.

According to the majority, the only real issue on appeal relating to the “analyzer server” limitation was whether there was substantial evidence to support the jury’s fact finding that Samsung’s accused devices satisfy this limitation under a claim construction the CAFC had derived in an earlier law suit (“the Motorola construction”).

The majority found that the panel had used extra-record extrinsic evidence to modify the agreed upon and unappealed construction of “analyzer server” by holding that Samsung’s accused systems did not infringe because “the Samsung software library programs are not ‘standalone’ programs that run separately.”  The Court further noted that neither party asked for this changed construction and held was no foundation in the Motorola construction for this finding.

Rather, the majority determined that the appellate review is limited to the evidence of record before the district court and must be reviewed to determine whether substantial evidence supports the fact finder’s determination.  In the current case, looking primarily at the expert testimony, the Court found substantial evidence supports the jury’s finding that Samsung’s accused devices contain “a server routine separate from a client that receives data having structures from the client” which was the resulting Motorola  construction.

 c.  The ‘721 patent

For the ‘721 patent, Samsung challenged the district court’s denial of JMOL that claim 8 would have been obvious. The majority agreed with the district court that there was substantial evidence to support the jury’s underlying fact findings and that these fact findings supported the conclusion that Samsung failed to establish by clear and convincing evidence that claim 8 would have been obvious.

The Court emphasized that although obviousness is a question of law it is based on underlying facts, citing Kinetic Concepts, Inc. v. Smith & Nephew, Inc., 688 F.3d 1342, 1356–57 (Fed. Cir. 2012). Thus they held that when reviewing a denial of JMOL of obviousness, where there is a “black box” jury verdict, the appeals court must presume the jury resolved underlying factual disputes in favor of the verdict winner and leave those presumed findings undisturbed if supported by substantial evidence. Id.  The legal conclusion is then reviewed de novo in light of those facts. Id. At 1357.

The Court reviewed the relied upon prior art Plaisant combined with Neonode.  They determined that because the jury found the issue of validity in favor of Apple, the Court must presume it resolved the conflicting expert testimony and found that a skilled artisan would not have been motivated to combine the slider toggle in Plaisant with the cell phone disclosed in Neonode.

The majority repeated that the proper review is whether substantial evidence supports this implied fact finding. Reviewing the evidence, they note Neonode discloses a mobile phone; whereas, Plaisant discloses a wall-mounted air conditioning controller.  After review of the evidence, including much directed to secondary considerations they conclude:

Our job is not to review whether Samsung’s losing position was also supported by substantial evidence or to weigh the relative strength of Samsung’s evidence against Apple’s evidence. We are limited to determining whether there was substantial evidence for the jury’s findings, on the entirety of the record. And under the Ninth Circuit standard, we cannot conclude that the evidence affords only one reasonable conclusion and that it is contrary to that of the jury. See Monroe, 248 F.3d at 861.

Apple introduced evidence of industry praise, copying, commercial success, and long-felt need. We presume the jury found that the evidence was sufficient to establish each by a preponderance of the evidence. We find substantial evidence in the record to support each of those findings.

As detailed below, this continued reliance on secondary considerations is noted by the dissents as the likely cause of confusion to the patent bar in interpreting the law of obviousness.

d.  The ‘172 Patent

On appeal, Samsung argued the district court erred by denying its motion for JMOL that the ’172 patent would have been obvious over a combination of two references, Robinson and Xrgomics.

The Court looked to the jury determination that Samsung did not prove by clear and convincing evidence that claim 18 was invalid.   Further, the Court looked to the district court determination that substantial evidence supported the jury’s implicit fact findings on each Graham factor.  Based thereon they determined that: “[i]n light of the jury’s factual findings, this Court cannot conclude that there is clear and convincing evidence that it would have been obvious, as a matter of law, to bridge the gaps between the prior art and claim 18.”

The district court reasoned that the jury impliedly found Dr. Cockburn’s testimony that Robinson and Xrgomics did not disclose all the elements of claim 18 more credible than Dr. Wigdor’s opinion, and the jury impliedly accepted Apple’s evidence of objective indicia of non-obviousness over Dr. Wigdor’s testimony that no such evidence existed. J.A. 67–68. The district court held that these presumed fact findings were supported by substantial evidence and denied Samsung’s motion for JMOL. Id. We see no error in the district court’s weighing of the Graham factors.

III.  Dissent- Prost

Chief Judge Prost  (who had sat on the original panel) dissented, focusing primarily on how even under the standards applied by the majority, the panel’s original ruling was still correct.

a.  the 721 patent-Prost

Addressing the majority’s analysis, Chief Judge Prost agreed that the question was whether there is substantial evidence to support the jury’s implicit finding that there was no motivation to combine Neonode and Plaisant.  Supporting the majority’s opinion, according to the Chief Judge, was only the testimony of Apple’s expert, Dr. Cockburn, to say that a skilled artisan would not be motivated to combine Neonode and Plaisant and the only one fact Neonode concerns a portable telephone and Plaisant concerns wall-mounted touchscreen devices and hence were not similar art.   She concludes that this alone does not rise to the level of substantial evidence.

The problem with that conclusion is that Apple did not present any evidence to support it. Indeed, a review of the entirety of Dr. Cockburn’s testimony on motivation to combine reveals the striking absence of any evidence that a skilled artisan would not look to Plaisant simply because it discloses wall-mounted touchscreens

In sum, there is no support in the record for the majority’s conclusion that substantial evidence supports the jury’s implicit factual finding that a person of ordinary skill in the art would not be motivated to combine Neonode and Plaisant. Substantial evidence may be a lenient standard, but it is a standard nonetheless that cannot be met with the stark absence of evidence.

Prost goes on to review the majorities finding of secondary considerations.  She repeatedly notes that secondary considerations have only been considered in the past when there is dispute as to obviousness and are not properly relied upon when a clear prima facie case of obviousness is established.  With this in mind she proceeds to find that there is insufficient evidence for all of the secondary considerations raised by Apple and found sufficient by the majority.

Even assuming that the jury implicitly found a nexus between Apple’s evidence and the claimed invention, this evidence is insufficient in the face of the strong evidence of obviousness. The testimony of an expert testifying as to a single example of unsatisfactory prior art is, at best, weak. Cf. Cyclobenzaprine, 676 F.3d at 1083 (testimony regarding an expert’s experience over ten years). Similarly, Apple’s evidence of applause at its own press event is also weak evidence of nonobviousness. See In re Cree, 818 F.3d 694, 702 (Fed. Cir. 2016) (finding a company’s press release unpersuasive evidence of non-obviousness). Finally, though Samsung’s internal documents are probative of copying (and industry praise), they do not move the needle in this case. See Tokai Corp. v. Easton Enters., Inc., 632 F.3d 1358, 1370 (Fed. Cir. 2011) (finding evidence of copying unpersuasive evidence of nonobviousness).

Considering the totality of the evidence, Apple’s evidence relating to secondary considerations does not “tip the scales of patentability.” Graham, 383 U.S. At 36;…

b.  The ‘172 patent-Prost

 With respect to the ’172 patent, Chief Judge Prose delivers a similar rebuke to the majority as also erring in finding substantial evidence in support of the jury determination that the ’172 patent is nonobvious. Specifically, she again focuses on the majority’s reliance on “out-of-context statements” by Dr. Cockburn.

c.  The ‘647 patent-Prost

 The Chief Judge also dissented against the majority’s findings for the ‘647 patent, the issues for which centered on the prior (Motorola) claim construction.  She asserts that the majority’s conclusion that, in light of the specification, a program that is “structurally separate,” without more, satisfies the “‘separate’ requirement” improperly cabins the word “separate” in the Motorola construction. She notes that because no two program routines may physically occupy the same memory at the same time (i.e., any two separate program routines are, by definition, separate in storage), the majority’s interpretation effectively and erroneously reads “separate” out of our construction.

In sum, Apple’s evidence only shows, in relevant part, that the shared library code is a piece of code located in a separate part of memory that is used by other applications. That is not sufficient under our previous construction of “analyzer server” to prove infringement of the ’647 patent as a matter of law. No reasonable jury could conclude otherwise.

IV.  Dissent- Dyk

 Dyk had written the opinion for the original panel and was most concerned that the majority’s decision would have a substantial impact on the law of obviousness.

a.  The ’721 and ’172 patents-Dyk

 While for the most part the majority does not express its shifts in obviousness principles explicitly, an examination of the majority’s opinion makes clear its substantial impact on the law of obviousness. And that impact will not be a positive one, for the principles that the majority announces are inconsistent with the Supreme Court’s decisions in KSR, Graham v. John Deere Co., 383 U.S. 1 (1966), as well as earlier Supreme Court cases, and will make proof of obviousness far more difficult.

He first asserts that the majority had turned the legal question of obviousness into a factual issue for a jury to resolve, both as to the sufficiency of the motivation to combine and the significance to be given to secondary considerations.

He then asserts that the majority lowers the bar for nonobviousness by refusing to take account of the “trivial nature” of the two claimed inventions.

Treating such minimal advances over the prior art as nonobvious is contrary to KSR, where the Supreme Court confirmed that the obviousness doctrine is designed to ensure that “the results of ordinary innovation are not the subject of exclusive rights under the patent laws.” KSR, 550 U.S. at 427. On the face of these patents, only ordinary, indeed trivial, innovation is involved. The majority’s holding that these trivial features can render a patent nonobvious will have a significant impact on future cases.

Third, he asserts that the majority’s conclusion results in combinations of prior art used to solve a known problem are insufficient to render an invention obvious as a matter of law and that the decision returns to a pre-KSR standard that there must be evidence of a specific motivation to combine.

Here, the inventions combine features known in the prior art. With respect to the ’721 patent, Apple does not dispute, and the majority agrees, that the combination of the prior art Neonode and Plaisant references produces the claimed invention. Maj. Op. at 27. As discussed below, the same is true with respect to the ’172 patent (combining the Robinson, Xrgomics, and other prior art references). There is no claim that either combination yielded unpredictable results. Both of the patents also address a known problem.  With respect to the ’172 patent, the problem is the need to see text entries. Contrary to KSR, the majority now holds that a known problem is not sufficient and that there must be evidence of a specific motivation.

Fourth, he asserts that the majority errs in cabining the relevant technology in the field of prior art.

The majority invites the factfinder to dismiss prior art evidence on the theory that it concerns a different device than the patented invention, even if the references are directed to solving the same problem and pertain to a related device.

…with respect to the ’721 patent, the majority holds that the jury could dismiss the Plaisant reference because it was directed to wall-mounted rather than portable devices. Maj. Op. at 28–29. With respect to the ’172 patent, the majority makes much of the distinction between word correction versus word completion, rejecting Xrgomics as relevant prior art on that basis, and ignoring the extensive prior art showing text display as a routine feature.

Finally, in the same vein as Chief Judge Prost, he also specifically emphasizes that the majority errs in elevating secondary considerations of nonobviousness beyond their role as articulated by the Supreme Court. He notes that these considerations are relevant only in a close case where all other proof leaves the question of invention in doubt.  However, he determines that the current case is not a close one.

The combination of references, the known problem, the predictable results, and the exceedingly small differences from the prior art make the combination evident and secondary considerations insufficient as a matter of law.

The majority’s secondary considerations analysis repeatedly compares the ’721 and ’172 patents to inferior or non-existent prior art, rather than to the relevant, closest prior art. Specifically, the evidence relied upon by the majority with respect to the secondary considerations makes no comparison, with respect to the ’721 patent, to Neonode and the claimed innovation of the image associated with the slide to unlock feature, and with respect to the ’172 patent, to Robinson and the claimed innovation of displaying the currently typed string of text.

b.  ‘647 patent-Dyk

 Regarding the ‘647 patent and the claim construction issue following the CAFC’s earlier Motorola claim construction, Judge Dyk asserts that the “analyzer server” limitation requires that the analyzer server “run” separately, and there is no substantial evidence that Samsung’s devices embody the “analyzer server” limitation because the shared library code does not run separately. Hence, he concludes that the majority substitutes its own claim construction (requiring only separate storage) for the Motorola construction that the analyzer server must run separately is “both improper and unwise.”

V. Dissent-Reyna

Judge Reyna focused on the Court’s decision to sit en banc for this case, finding the decision unwarranted in light of the precedent of en banc sittings.

Judges on this court have explained that en banc review should be reserved for matters of exceptional importance or to maintain uniformity in our precedent. When a panel opinion “is not viewed as having changed the law,” disagreement with the panel’s decision “is not a sufficient reason for en banc review.” Dow Chem. Co. v. Nova Chems. Corp. (Canada), 809 F.3d 1223, 1227–28 (Fed. Cir. 2015)

The majority opinion is not a response to specific legal questions, as is typically the case for an en banc review. Indeed, en banc questions were not presented to the public, new or supplemental briefing was not ordered, and additional oral argument was not held. The majority based its “substantial evidence” review on the original briefs and record before the court.

He then asserts that the legal issues of substantial evidence and obviousness could have been addressed.

Regarding substantial evidence, he asserts:

The majority opinion implies that any evidence is substantial evidence, and that therefore we cannot actually examine the evidence presented to determine whether it actually supports the findings it is alleged to support.

And on obviousness:

The legal questions I see here include (1) whether an obviousness analysis involving secondary considerations (or objective indicia of non-obviousness) is a one- or two step process and (2) how much weight to accord secondary considerations in the obviousness analysis. These are important issues that should be addressed in the front room of the courthouse, with all stakeholders at the litigation table. Because we failed to do so in this case, I respectfully dissent.

Take Away

 Although the dissenting opinions are adamant that the majority has rewritten the law on obviousness, especially in terms of using secondary considerations to overcome a prima facie case of obviousness, caution should be used in relying upon the opinion in this manner.  Given the strong divide in the Court, as well as the majority’s statements that they have no intention of changing the law governing obviousness, the precedent of Graham and KSR is likely to outweigh the current decision.

The greater precedent set will possible be the limitation on the CAFC in considering a fact finder’s conclusion and weighing the evidence supporting it, particularly for obviousness determinations.

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