Yesterday Judge Koh denied Samsung’s motion to stay for the injunction on the sale of the Samsung Galaxy Tab tablet. Before she did that, she heard oral arguments mostly about Samsung’s motion to stay for the injunction on the Galaxy Nexus smartphone sales. The following is an account of some of the arguments made in Monday’s hearing.
Koh first wanted to know how long the Court of Appeals for the Federal Circuit (CAFC) would take to rule on an appeal to the stay. Apple counsel explained that, based on his experience, the CAFC would either deny the stay outright or grant a short stay to promptly rule on the appeal. Samsung noted that the motion of appeal was already filed with a request for expedited treatment.
Apple said that there was not even a substantial question that would justify Samsung’s motion for a stay. The only harm Samsung cites is based on third-party deals, a back to school program with cell phone network providers Verizon and Sprint. Even if Samsung has a substantial case on the merits, the standard for granting a stay requires the balance of hardships sharply tipping in Samsung’s favor. The burden is higher than just arguing against summary judgment or the preliminary injunction. With respect to the legal standard, Apple does not believe that Samsung raised any substantial proof that Judge Koh’s factual findings are clearly erroneous. Furthermore, Apple argues that the purpose of the stay is to get Samsung’s phones to college students as part of the back to school program. Samsung is relying on younger customers buying Samsung smartphones to compete with Apple. Therefore, any hardship Samsung claims does not apply to Samsung, applies to a likely infringing product not entitled to a legal defense, and causes more irreparable harm to Apple.
Samsung argued that there were still substantial questions to be raised about irreparable harm to Apple. Changes in Apple’s market share would happen regardless of Samsung’s presence in the smartphone market because Apple’s strategy of release a new phone annually drives the consumer demand as opposed to the phone’s competition. Samsung did not loudly advertise the unified search function, and the Galaxy Nexus smartphone only has a 0.5 percent market share. Additionally Samsung’s phone had quick search back in 2010, but Apple did not add it until October 2011, yet Apple still sold its phone much better.
Samsung’s hardship is the loss of the 0.5 percent market share. People should not assume customers turn down the iPhone to purchase a phone like the Galaxy Nexus. The impact to Samsung is much more than to Apple because both sides know that if Samsung loses a customer to Apple, Apple keeps the customer. When Koh asked about the back to school program, Samsung counsel admitted that Samsung was trying to take market share from Apple. However, Samsung thought Apple was leveraging patents to stop rival businesses when the patents were not relevant to competing products
Today Judge Koh denied Samsung’s motion to stay the injunction against the sale of the Galaxy Nexus smartphone. Another hearing was not scheduled, so check the court calendar online for the next public event related to the Apple v. Samsung trial. As the court goes on holiday, the jury trial edges even closer.