2014-1335, 2015-1029

UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT

APPLE INC., a California corporation,
Plaintiff-Appellee,
v.
SAMSUNG ELECTRONICS CO., LTD., a Korean corporation, SAMSUNG
ELECTRONICS AMERICA, INC., a New York corporation, and SAMSUNG
TELECOMMUNICATIONS AMERICA, LLC, a Delaware limited liability
company,
Defendants-Appellants.
Appeal from the United States District Court for the Northern District of California
Case No. 5:11-CV-1846, Judge Lucy H. Koh.
REPLY IN SUPPORT OF MOTION TO STAY ISSUANCE OF MANDATE
Susan R. Estrich
Michael T. Zeller
Robert J. Becher
B. Dylan Proctor
QUINN EMANUEL URQUHART
& SULLIVAN, LLP
865 S. Figueroa St., 10th Flr.
Los Angeles, CA 90017
(213) 443-3000

Kathleen M. Sullivan
William B. Adams
QUINN EMANUEL URQUHART
& SULLIVAN, LLP
51 Madison Avenue, 22nd Flr.
New York, NY 10010
(212) 849-7000

Victoria F. Maroulis
QUINN EMANUEL URQUHART
& SULLIVAN, LLP
555 Twin Dolphin Dr., 5th Flr.
Redwood Shores, CA 94111
(650) 801-5000

Kevin A. Smith
QUINN EMANUEL URQUHART
& SULLIVAN, LLP
50 California St., 22nd Flr.
San Francisco, CA 94111
(415) 875-6600

Attorneys for Defendants-Appellants

02198-51855/7124022.6

ARGUMENT
In seeking immediate issuance of the mandate, Apple asks this Court to
disregard the waste of judicial and party resources that would result if the Supreme
Court were to vacate the underlying design-patent judgment after proceedings on
remand have already taken place. There is no dispute that an immediate remand
could lead to a costly and time-consuming damages retrial, and that this retrial
would have to be redone should a ruling by the Supreme Court intervene. And
Apples only claim of prejudice is not cognizable, for there is no dispute that the
judgment in its favor is fully secured and accruing interest.
Because good cause thus plainly exists for a stay in light of this substantial
risk of waste and the lack of counterbalancing prejudice to Apple, Apple
downplays the likelihood of certiorari being granted based on assurances that the
Supreme Court will not have any interest (Br. 4-5) in this case. But Apple is
blinding itself to the importance of this Courts rulings on design-patent scope and
damages, and to the widespread commentator recognition that these rulings may
well open the floodgates of design-patent litigation.

The Supreme Court has

shown keen interest in monitoring the development of patent jurisprudence, and

there is every reason to think it will show an interest in this case, by all accounts
the most significant design-patent case in recent history, as well.

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1.

Apple incorrectly argues (Br. 2-3) that Samsung must show

irreparable harm in order to obtain a stay, and that a stay will only be granted in
extraordinary circumstances.

But Federal Rule of Appellate Procedure

41(d)(2)(A) sets forth the governing standard and requires only that the certiorari
petition would present a substantial question and that there is good cause for a
stay. This language was specifically intended to alert the parties to the type
of showing that needs to be made to obtain a stay. FED. R. APP. P. 41 advisory
committees note. Apples arguments conflict with the text of the Rule, and
impermissibly impose additional requirements that are inconsistent with the Rules
explicit terms.
In reciting its purported standard, Apple largely relies (Br. 2-3) on out-ofcircuit cases that do not govern here. The Practice Note to Federal Circuit Rule 41
says nothing of irreparable harm or extraordinary circumstances, see Fed. Cir. R.
41 practice note, suggesting that this Court follows the text of Federal Rule 41 and
considers stay motions under the standard also employed by the Ninth Circuit,
which requires neither irreparable harm, see United States v. Pete, 525 F.3d 844,
850 n.9 (9th Cir. 2008), nor that exceptional circumstances justify a stay, Bryant
v. Ford Motor Co., 886 F.2d 1526, 1528 (9th Cir. 1989), quoted in Pete, 525 F.3d
at 850 n.9. While available precedents are limited, this Court has, in fact, granted
stays of its mandates for [g]ood cause shown, without any indication that the

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higher standard of likely irreparable harm had been shown. See, e.g., Hercules Inc.
v. United States, 309 F.3d 781 (Fed. Cir. 2002) (mem.).
Apple also points (Br. 3) to in-chambers opinions discussing the Supreme
Courts standard for staying a mandate.

But these opinions addressed in-

chambers stay applications seeking [r]elief from a single Justice, and not
motions under Rule 41.

Rostker v. Goldberg, 448 U.S. 1306, 1308 (1980)

(Brennan, J., in chambers); see also FED. R. APP. P. 41 advisory committees note
(The Supreme Court has established conditions that must be met before it will
stay a mandate.) (emphasis added). Because [d]enial of such in-chambers stay
applications is the norm, Conkright v. Frommert, 556 U.S. 1401, 1402 (2009)
(Ginsburg, J., in chambers), those applications stand in stark contrast to motions
under Rule 41, which often result in a stay of the mandate, Pete, 525 F.3d at 850.
The in-chambers opinions cited by Apple thus do not alter the required showing
under Rule 41.
2.

Apple suggests (Br. 3) that Samsungs certiorari petition will not

present a substantial question because this Court rejected Samsungs arguments

without dissent. But that is not the test courts stay their mandates pending
certiorari even when their views are unanimous. E.g., Litman v. Cellco Pship, 655
F.3d 225, 227 (3d. Cir. 2013) (granting motion to stay mandate pending petition
for certiorari despite unanimous circuit opinion); Garb v. Republic of Poland, 440

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F.3d 579, 583-84 (2d Cir. 2006) (same).

And Apple ignores the immense

importance of the design-patent rulings in this case, which commentators recognize

could usher in an era in which design-patent plaintiffs are the new patent trolls.1
The Supreme Court has substantively reviewed rulings of this Court regarding
utility patents no fewer than 8 times in the past 2 years2; there is no reason to doubt

E.g., Gary Griswold, 35 USC 289 After Apple v. Samsung, Time for a BetterCrafted Judicial Standard for Awarding Total Profits? (August 14, 2015)
(recognizing that design patents could becom[e] the next business model for
patent assertion entities and describing troubling signs that increased assertion
activity has already begun), available at
http://patentlyo.com/patent/2015/08/griswold-patent-damages.html; Jason
Rantanen, Apple v. Samsung: Design Patents Win (May 18, 2015) (opining that
panel decision will lead to an explosion of design patent assertions and lawsuits),
available at http://patentlyo.com/patent/2015/05/samsung-design-patents.html;
Florian Mueller, U.S. patent office considers Apple's D'677 iPhone design patent
invalid on multiple grounds, FOSS Patents (August 17, 2014) (recognizing
widespread opposition to unapportioned disgorgement of profits for design
patent infringement by highly complex technology product and opining that
Supreme Court may review this serious threat to innovators), available at
http://www.fosspatents.com/2015/08/us-patent-office-considers-apples-d677.html.
2

See Kimble v. Marvel Enters., Inc., 135 S. Ct. 2401 (Jun. 22, 2015) cert.
granted, 135 S. Ct. 781 (Dec. 12, 2014); Commil USA, LLC v. Cisco Sys., Inc., 135
S. Ct. 1920 (May 26, 2015) cert. granted, 135 S. Ct. 752 (Dec. 5, 2014); Teva
Pharms. USA, Inc. et al., v. Sandoz, Inc., et al., 135 S.Ct. 831 (Jan. 20, 2015) cert.
granted, 134 S.Ct. 1761, (Mar. 31, 2014); Alice Corp. Pty. Ltd. v. CLS Bank Intl.
et al., 134 S.Ct. 2347 (Jun. 19, 2014) cert. granted, 134 S.Ct. 734 (Dec. 6, 2013);
Limelight Networks, Inc. v. Akamai Techs., Inc., et al., 134 S.Ct. 2111 (Jun. 2,
2014) cert. granted, 134 S.Ct. 895 (Jan. 10, 2014); Nautilus, Inc. v. Biosig
Instruments, Inc., 134 S.Ct. 2120 (Jun. 2, 2014) cert. granted, 134 S.Ct. 896 (Jan.
10, 2014); Highmark, Inc. v. Allcare Health Mgmt. Sys., Inc., 134 S. Ct. 1744 (Apr.
29, 2014) cert. granted, 134 S. Ct. 48 (Oct. 1, 2013); Octane Fitness, LLC v. Icon

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that it will use this case as an opportunity to extend its supervision to the designpatent context as well.
Nor are Apples efforts to belittle Samsungs arguments on the merits
availing. Apples claim (Br. 3-4) that the Supreme Courts teachings as to claim
construction have no relevance because utility patents function under a different
set of rules begs the question: in fact, there is no reason that the rule requiring
courts to conduct claim construction should apply only to utility patents, and
certainly not when, as here, a trial courts failure to meaningfully construe the
design patents allowed the jury to find infringement based on unprotected
attributes. And Apples suggestion (Br. 3-4 n.3) that intra-circuit conflicts as to the
need to factor-out functional elements are of no moment because there is no
circuit-split ignores that all appellate patent rulings are issued by this Court, and so
inconsistencies within the Circuit support further judicial review. This Courts
recent decision in Ethicon Endo-Surgery, Inc. v. Covidien, Inc., No. 2014-1370,
2015 WL 4680726 (Fed. Cir. Aug. 7, 2015), has only widened the disparity in
treatment of functionality limitations when considering infringement. Id. at *1823. These internal conflicts warrant further review.

Health & Fitness, Inc., 134 S.Ct. 1749 (Apr. 29, 2014) cert. granted, 134 S. Ct. 49
(Oct. 1, 2013).

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Likewise, Apples suggestion that there is no substantial issue as to damages

is wrong. Numerous amici and commentators, including industry leaders and
dozens of law professors, have weighed in on the incongruity of allowing complete
disgorgement of profits when patents claiming only portions of a products design
are infringed. Apple argues (Br. 5), disingenuously, that this case is different than
prior precedents because the iPhones overall look is not severable from its
inner workings, but that factual claim is frivolous on its face, and in any case was
never submitted to the jury. And Apples argument (Br. 6 n.4) that eBay is offpoint because it dealt with the standard for an injunction, not for liability and
damages, ignores the thrust of that decision warning against allowing overbroad
remedies that could yield undue leverage in negotiations when the patented
invention is but a small component of the product the companies seek to produce.
eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 396-97 (2006) (Kennedy, J.
concurring). The substantial question standard is plainly satisfied.
3.

Apple also ignores the substantial harm from immediate issuance of

the mandate that Samsung has identified, which plainly satisfies the Federal Rules
of Appellate Procedures good cause standard. Following the original trial in
this action, the district court partially granted Samsungs post-trial motions and
then ruled that damages had to be retried, at great expense to the parties and the
courts, as to all products for which damages had been awarded on an

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impermissible legal theory. (Dist. Ct. Dkt. No. 2271 at 26.) Apple itself had
insisted that this damages retrial was required, and does not deny that it will insist
on remand that a third trial must be held to determine damages for the products
wrongly found to dilute trade-dress.
Nor does Apple dispute that if the Supreme Court modifies the holding of
this Court, the damages issues to be addressed on remand will be different. A
ruling reversing or vacating the design-patent judgment would impact damages for
every product for which trade-dress dilution damages were awardedand if the
third trial has already taken place by the time that ruling issues, a fourth may well
be needed. Apple does not, and cannot, dispute that this risk of immense waste of
resources more than satisfies the good cause standard. E.g., U.S. ex rel. Chandler
v. Cook Cnty., 282 F.3d 448, 451 (7th Cir. 2002) (risk of further expense of
preparing for trial that may not be necessary warranted stay of mandate, even
under heightened irreparable harm standard, where countervailing interest was
only the prejudice that comes with any delay in a judicial proceeding).
4.

Finally, Apple cites no authority that its claimed harm from being

unable to execute on the affirmed portion of the judgment is cognizable. It is not.

Apples claimed rights are fully secured by Samsungs bond, the affirmed portion
of the judgment continues to accrue interest, and further proceedings will be
required on remand before a new judgment can be entered in any event. There is

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no legal prejudice to Apple in these circumstances, and thus no counterbalancing

harm suggesting the good cause standard is not met. See, e.g., Olympia Equip.
Leasing Co. v. W. Union Telegraph Co., 786 F.2d 794, 800 (7th Cir. 1986)
(Easterbrook, J., concurring) (explaining that supersedeas bond functions to
protect the judgment creditor's position from erosion during any period that its
right to execute is obstructed by a stay pending appeal); see also Ruckelshaus v.
Monsanto Co., 463 U.S. 1315, 1317 (1983) (delay alone is not . . . irreparable
injury) (quoting Whalen v. Roe, 423 U.S. 1313, 1317 (1975)) (cited in Br. 6).
CONCLUSION
Samsung respectfully requests that the Court stay issuance of the mandate
pending the filing and disposition of Samsungs petition for a writ of certiorari and,
if the petition is granted, pending the Supreme Courts final disposition.
Dated: August 20, 2015

Respectfully submitted,
By: /s/ Kathleen M. Sullivan
Kathleen M. Sullivan
QUINN EMANUEL URQUHART
& SULLIVAN, LLP
51 Madison Avenue, 22nd Floor
New York, NY 10010
Telephone: (212) 849-7000
Facsimile: (212) 849-7100
kathleensullivan@quinnemanuel.com
Attorney for Defendants-Appellants

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PROOF OF SERVICE
The undersigned hereby certifies that on August 20, 2015, I electronically
filed the foregoing REPLY IN SUPPORT OF MOTION TO STAY ISSUANCE
OF MANDATE with the Clerk of the Court for the United States Court of Appeals
for the Federal Circuit by using the appellate CM/ECF system. I certify that all
participants in the case are registered CM/ECF users and that service will be
accomplished by the CM/ECF system.
/s/ Kathleen M. Sullivan

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