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En Banc Federal Circuit Reverses Panel Decision in Apple v. Samsung Battle
October 11, 2016

Introduction
 
On October 7, 2016, the en banc Federal Circuit reversed a panel decision issued earlier this year and reinstated the district court’s decision on multiple issues in Apple Inc. v. Samsung Elecs. Co., Appeal No. 2015-1171 (Fed. Cir. Oct. 7, 2016). The majority decision, authored by Judge Moore, faulted the panel for failing to apply the substantial evidence standard for reviewing a jury decision on obviousness, and instead, engaging in appellate fact-finding. In three separate dissents, the original panel members not only disagreed with the en banc court’s decision, but each faulted the majority for deciding “big questions about how aspects of the obviousness doctrine ought to operate” without inviting further briefing. This decision is another chapter in the Apple v. Samsung saga, which has already spawned Supreme Court review on the issue of damages in design patent cases.
 
Procedural History
 

In the trial court, Apple alleged that Samsung infringed U.S. Patent Nos. 8,074,172 (“’172 patent” or “‘auto-correct’ patent”), 5,946,647 (“’647 patent”), and 8,046,721 (“’721 patent” or “‘slide-to-unlock’ patent”). The district court granted summary judgment that Samsung infringed the ’172 patent and the jury subsequently found the asserted claims of the ’647 patent infringed, the ’172 patent not invalid, and the ’721 patent not invalid and infringed. On appeal, the panel, composed of Chief Judge Prost and Judges Dyk and Reyna, unanimously reversed, holding Apple’s three patents either not infringed or invalid.
 
Apple petitioned for rehearing en banc, arguing that the panel improperly relied upon extra-record evidence “to modify the agreed to and unappealed claim construction.” The court invited a response from Samsung, which was filed on April 14, 2016. The Federal Circuit ended nearly 6 months of silence on the petition when it issued its decision simultaneously granting rehearing en banc, and—without asking for further briefing—reversing the panel and reinstating the jury’s verdict of non-obviousness as to all three patents.
 
Decision
 
The court granted rehearing “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.” The majority justified the unusual step of not requesting further briefing before issuing an en banc decision because of the limited reason for reversal, which the majority viewed as “appl[ying] existing obviousness law to the facts of this case.” The majority also commented that the panel had reversed the district court “without ever mentioning the applicable substantial evidence standard of review.”
 
The decision places substantial deference to the jury’s fact findings in an obviousness analysis, particularly as to secondary considerations. The court observed that while each side provided expert testimony favorable to their positions, “the jury was in the best position to determine whether it found [Apple’s expert] or [Samsung’s expert] more persuasive.” The majority decision also spends nearly ten pages recounting Apple’s evidence of secondary considerations of non-obviousness, which it found supported by substantial evidence.
 
The dispute between the majority and the dissent boils down to the latitude that should be given to the Court in reviewing a trial court or jury determination of obviousness. As the Supreme Court reiterated in KSR Int’l Co. v. Teleflex, Inc., “[t]he ultimate judgment of obviousness is a legal determination” based on the resolution of factual issues. KSR, 550 U.S. 398, 427 (2007). At its core, the court’s differing opinions on obviousness consider the tension of being able to take into account what the dissent characterized as the “trivial nature” of an invention versus ensuring that hindsight bias by an appellate panel does not obviate a jury finding of non-obviousness.
 
Implications

The first takeaway from this decision is that a court cannot substitute its judgment for the jury’s when there is “such relevant evidence as a reasonable mind might accept as adequate to support [the jury’s] conclusion.” (quoting Consol. Edison Co. of N.Y. v. N.L.R.B., 305 U.S. 197, 229 (1938)). Indeed, the decision prompted Chief Judge Prost to write in her dissent that “[i]n the majority’s view, the existence of any evidence that could theoretically support a jury verdict would seem to end our substantial evidence review on appeal.” At minimum, this decision underscores the importance of presenting a compelling case for the jury as the appellate court’s review is deferential. Pre-trial challenges to expert testimony remain important.
 
Second, post-Teva Pharmaceuticals USA, Inc. v. Sandoz, Inc., 135 S. Ct. 831 (2015), the court cannot go fishing for evidence outside of the record to reverse a district court’s claim construction. For example, in this case, the majority disagreed with the dissent’s construction of a claim term that had not been argued in the parties’ briefs on appeal.
 
Third, notwithstanding that obviousness is a legal conclusion, the issue of motivation to combine is also a fact question for the jury.
 
Fourth, the judges appear to disagree as to whether the jury’s determination of fact issues may limit the Court’s review in determining the ultimate issue of obviousness. In one of three strongly-worded dissents by the original panel, one judge expressed concern that the majority’s decision “turns the legal question of obviousness into a factual issue for a jury to resolve.” The majority, however, declined to consider the “legal questions about the inner workings of the law of obviousness” because these issues had not been argued by the parties.
 
Does this case signal a split among the judges on the application of the law of obviousness, or does it simply reflect different opinions on the ultimate outcome under the particular facts of this case?

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