District Court's Finding re Irreparable Harm from Infringement of D'677- PART I

Recall that the district court had found in favor of Apple’s likely success on the merits. But when addressing the irreparable harm prong, the court found that Apple had failed to establish likely irreparable harm as a result of Samsung’s D’677 infringement. Because of this failure, district court denied an injunction based upon D’677 infringement against the Infuse 4G and Galaxy S 4G phones. Because of the length of this topic, the court’s finding will be discussed in two parts. This first part will focus on the rejection of Apple’s consumer goodwill argument. The second part will focus on the court’s rejection of Apple’s lost market share argument.

Apple had argued that Samsung’s infringement caused an erosion of Apple’s design and brand distinctiveness, which caused irreparable harm to Apple through loss of consumer goodwill. The court rejected this argument, mainly because Apple had failed to present sufficient proof.

Regarding the loss of design distinctiveness argument, the court felt that Apple had put forth a circular argument, stating its conclusion as the main support for the argument. For example, “Samsung’s phones are similarly designed to the iPhone, so the iPhone must not be so unique anymore, and we must have lost consumer goodwill” (Court Order Denying Apple’s Motion for Preliminary Injunction at 29). The only evidentiary support presented in the actual motion was some sales statistics and advertising descriptions. The court referred to Apple’s experts as having presented declarations and arguments on this point, but apparently those were similarly, ‘conclusory statements and theoretical arguments’.

The crux of the question here was if the dilution of Apple’s design caused consumers to lose goodwill toward Apple. Other than Apple’s claim that it did so, there was such a causal relationship between lost design distinctiveness and any lost consumer goodwill. In essence, the court boiled down to the fact that Apple had not articulated a theory as to how erosion of ‘design distinctiveness’ led to irreparable harm.

Regarding the brand dilution argument: the court was hesitant about this argument since brand dilution is actually a type of harm under trademark (not patent) law. The court was unsure about the applicability of a trademark injury as an irreparable harm for a design patent infringement matter.  However, the court did not have to resolve this issue since it found Apple had not presented sufficient evidence about the likelihood of brand dilution occurring. Surveys could have been conducted to demonstrate either consumer confusion (about the products) or consumer blurring of Apple’s brand with Samsung’s. The court also pointed out that such surveys could have proved the likelihood of brand dilution. However, without any such evidence, the court could not find that there was the likelihood of the harm of brand dilution.

On appeal, the Federal Circuit upheld the court’s rejection of Apple’s irreparable harm argument stating that: “The district court was correct to require a showing of some causal nexus between Samsung’s infringement and the alleged harm to Apple” (Federal Circuit Opinion at 16-17). It is important to note the Federal Circuit did have some interesting points about design and brand dilution, which will be discussed in a later post.

Sources:
1. Court Order Denying Apple’s Motion for Preliminary Injunction at 29.

2. Federal Circuit Opinion at 16-17.

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