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Apple, Inc., A California Corporation v. Samsung Electronics Co.

June 29, 2012


The opinion of the court was delivered by: Lucy H. Koh United States District Judge


Defendants and Counterclaimants Samsung Electronics Co., Ltd., Samsung Electronics America, Inc., and Samsung Telecommunications America, LLC (collectively "Samsung") filed a 16 motion for summary judgment against Plaintiff and Counterdefendant Apple, Inc. ("Apple") on 17

May 17, 2012 ("MSJ"). Apple filed its opposition on May 31, 2012 ("Opp'n"). Samsung filed its 18 reply on June 7, 2012 ("Reply"). The Court held a hearing on June 21, 2012. The pretrial 19 conference in this matter is set for July 18, 2012; the trial will begin on July 30, 2012. Because the 20 parties require a ruling on this motion on an expedited basis, the Court will keep its analysis brief.

Samsung's cellular telephones and tablet computers. Apple alleges that Samsung's products 24 infringe on Apple's utility and design patents as well as Apple's trade dress. In addition, Samsung 25 filed counterclaims against Apple alleging that Apple products infringe Samsung patents. Because 26 several of Samsung's asserted patents are incorporated into the UMTS standards ("standards 27 essential patents"), Apple also alleges, in its counterclaims in reply, that Samsung's refusal to 28 license its standards essential patents on fair, reasonable, and non-discriminatory ("FRAND")

The parties are familiar with the factual and procedural background of this case, and the Court will not repeat it in detail here. In sum, at the center of the parties' dispute in this lawsuit are terms, constitutes antitrust violations. Additional facts are discussed below, as necessary, in the

Court's analysis.

4 of the claims originally asserted in the complaint, counterclaims, and counterclaims in reply.

In order to prepare this case for trial on July 30, 2012, the parties stipulated to dismiss many Samsung moves for summary judgment on all of Apple's affirmative claims. At issue in this 6 motion for summary judgment are the following claims: (1) trade dress infringement; (2) trade 7 dress dilution; (3) utility patent infringement; (4) design patent infringement; and (5) antitrust 8 claims. After hearing oral argument on the matter, and reviewing the briefing by the parties, the 9 evidence offered in support of the briefing, and the relevant case law, the Court DENIES 14 the movant shows that there is no genuine dispute as to any material fact and the movant is entitled 15 to judgment as a matter of law." Material facts are those that may affect the outcome of the case.

"genuine" if the evidence is such that "a reasonable jury could return a verdict for the nonmoving 18 party." See id. "[I]n ruling on a motion for summary judgment, the judge must view the evidence 19 presented through the prism of the substantive evidentiary burden." Id. at 254. The question is 20

"whether a jury could reasonably find either that the [moving party] proved his case by the quality 21 and quantity of evidence required by the governing law or that he did not." Id. "[A]ll justifiable 22 inferences must be drawn in [the non-movant's] favor." See United Steelworkers of Am. v. Phelps 23 255). 25

26 for its motion and identifying those portions of the pleadings, depositions, interrogatory answers, 27 admissions and affidavits, if any, that it contends demonstrate the absence of a genuine issue of 28 material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). A party opposing a properly

Samsung's motion for summary judgment. Each of Samsung's arguments challenging Apple's

claims is addressed in turn below.


Under Federal Rule of Civil Procedure 56(a), "the court shall grant summary judgment if

See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute as to a material fact is 17

Dodge Corp., 865 F.2d 1539, 1542 (9th Cir. 1989) (en banc) (citing Liberty Lobby, 477 U.S. at 24

The moving party bears the initial responsibility for informing the district court of the basis supported motion for summary judgment "may not rest upon the mere allegations or denials of 2

[that] party's pleading, but . . . must set forth specific facts showing that there is a genuine issue for 3 trial." See Fed. R. Civ. P. 56(e); see also Liberty Lobby, 477 U.S. at 250. The opposing party need 4 not show the issue will be resolved conclusively in its favor. See Liberty Lobby, 477 U.S. at 248-- 5

49. All that is necessary is submission of sufficient evidence to create a material factual dispute, 6 thereby requiring a jury or judge to resolve the parties' differing versions at trial. See id. 7

"It is well established that trade dress can be protected under federal law. The design or

9 packaging of a product may acquire a distinctiveness which serves to identify the product with its 10 manufacturer or source." TrafFix Devices, Inc. v. Marketing Displays, Inc., 532 U.S. 23, 28 158 F.3d 1002, 1005 (9th Cir. 1998). On its motion for summary judgment, Samsung only argues 14 that Apple's product designs are unprotectable because they are functional. Functionality is a 15 factual question. Clicks Billiards, Inc. v. Sixshooters, Inc., 251 F.3d 1252, 1258 (9th Cir. 2001) 16

The burden of proof of functionality on trade dress claims depends upon whether the trade 18 dress is registered or not. A party asserting protection for unregistered marks "has the burden of 19 proving that the matter sought to be protected is not functional." 15 U.S.C. §1125(a)(3) (2006). In 20 contrast, a registered mark enjoys the presumption of validity. However, this presumption can be 21 rebutted through "law, undisputed facts, or a combination thereof that the mark is invalid" such 22 that registration alone does not protect the trademark holder against summary judgment. Tie Tech, 23 Inc. v. Kinedyne Corp., 296 F.3d 778, 783 (9th Cir. 2002). Apple continues to assert "[t]he iPhone 24 trade dress (based on the trade dress Registration No. 3,470,983, the unregistered combination 25 iPhone trade dress, and the unregistered iPhone 3G trade dress)*fn1 " as well as "[t]he iPad trade dress 26


(2001). To succeed on its trade dress claims, Apple must satisfy three elements: nonfunctionality, distinctiveness, and likelihood of confusion. See Disc Golf Ass'n, Inc. v. Champion Discs, Inc., 13 (citation omitted). 17 (based on unregistered iPad/iPad 2 trade dress)." See ECF No. 902. Apple clarified at the hearing 27 on the Daubert motions that the only iPhone trade dress claim asserted was trade dress dilution. 2 Apple continues to assert both trade dress infringement and trade dress dilution as to the iPad. 3

4 prohibition against copying goods and products." TrafFix Devices, Inc., 532 U.S. at 29. 5 Therefore, "[t]he functionality doctrine prevents trademark law, which seeks to promote 6 competition by protecting a firm's reputation, from instead inhibiting legitimate competition by 7 allowing a producer to control a useful product feature." Qualitex Co. v. Jacobson Prod. Co., 514 8 The Supreme Court has recognized two types of functionality: a "traditional rule" and a 10 second rule addressing "aesthetic functionality." TrafFix, 532 U.S. at 32-33. First, if a product feature is "essential to the use or purpose of the article or if it affects the cost or quality of the

12 article," it is functional and cannot be protected by trade dress. Id. at 32. Second, in cases where 13 the first test is not satisfied, the question becomes whether trademark protection would place 14 competitors at a "significant non-reputation-related disadvantage." Id. (internal quotation marks 15 omitted); see also Au-Tomotive Gold, Inc. v. Volkswagen of Am., Inc., 457 F.3d 1062, 1072 (9th 16

Court in turn. 18

20 functional "when it is essential to the use or purpose of the device or when it affects the cost or 21 quality of the device." TrafFix, 532 U.S. at 33. In applying this test, the Ninth Circuit assesses 22 four factors: "(1) whether advertising touts the utilitarian advantages of the design, (2) whether the 23 particular design results from a comparatively simple or inexpensive method of manufacture, (3) 24 whether the design yields a utilitarian advantage and (4) whether alternative designs are available." 25 Talking Rain Beverage Co. v. S. Beach Beverage Co., 349 F.3d 601, 603 (9th Cir. 2003) (citing 26 (acknowledging the four factor test applied by the Ninth Circuit). While the existence of 28 alternative designs does not alone prevent a finding of functionality, alternative designs may Trade dress protection "must subsist with the recognition that in many instances there is no U.S. 159, 164 (1995). 9

Cir. 2006). The Court will address each of the types of functionality recognized by the Supreme 17 A.Utilitarian Functionality As explained above, under the traditional, utilitarian functionality test, a trade dress is Disc Golf, 158 F.3d at 1006); see also Au-Tomotive Gold, Inc., 457 F.3d at 1072 n.8 27 provide evidence as to whether the trademark "embodies functional or merely ornamental aspects 2 of the product." Id. (citations and quotation marks omitted). 3

4 utilitarian functions, and that the combination of utilitarian features is functional. MSJ at 3-5. 5 Samsung first argues that each feature of the trade dress Apple seeks to claim serves Samsung's argument, however, is in tension with Ninth Circuit precedent, which requires that in 6 evaluating functionality, the trade dress should be considered as a whole rather than as a collection 7 of individual elements. Clicks Billiards, 251 F.3d at 1259. "The fact that individual elements of 8 the trade dress may be functional does not necessarily mean that the trade dress as a whole is 9 functional; rather, functional elements that are separately unprotectable can be protected together as 10 part of a trade dress." Adidas-Solomon AG v. Target Corp., 228 F. Supp. 2d 1192, 1195 (D. Or. 11 Samsung finds some support for its position in Leatherman Tool Grp., Inc. v. Cooper Indus., Inc., 199 F.3d 1009, 1013 (9th Cir. 1999). In Leatherman Tool, the Ninth Circuit 14 concluded that "where the whole is nothing other than assemblage of functional parts, and where 15 even the arrangement and combination of the parts is designed to result in superior performance," 16 there is no basis to conclude the trade dress as a whole is non-functional. Id. Although Samsung 17 offers evidence regarding the functional and useful qualities of many of the design features of 18

Apple's trade dresses, Samsung does not offer any support for its assertion that the arrangement of 19 features in the overall trade dress is strictly functional, as was the case in Leatherman. 20 Apple, on the other hand, applying the four Disc Golf factors, has raised a triable issue of 21 fact as to the functionality of the Apple trade dresses. Specifically, each of the factors is addressed 22 below: 23

Clicks Billiards 2002) (citing , 251 F.3d at 1259). 12


Advertising that touts the utility of the product design provides evidence of functionality.

See Talking Rain, 349 F.3d at 603-604 (noting that advertising focused on the ease of holding the 26 beverage bottle at issue demonstrates functionality). Apple points to evidence of its advertising, 27 which focuses on the aesthetic beauty rather than utilitarian features. Opp'n at 3. The print 28 advertisements identified by Apple highlight the product, without necessarily indicating anything 68. Samsung also presents evidence on the existence of alternative designs but offers no support 2 for the contention that each of these designs would be more expensive or difficult to manufacture 3 or would otherwise be less useful to consumers. See MSJ at 3 n.5; Arnold Decl. Exs. 66-67. Thus, 4

Apple has a raised a material issue of fact regarding the availability and existence of alternative 5 designs.

7 juror could find that Apple's asserted trade dress is not functional under the Ninth Circuit's 8 definition of utilitarian functionality.

465 U.S. 844, 853 (1982) (noting the functionality of the color of a medical pill which serves to 14 distinguish the type of medicine)). Trademark does not protect designs if protection would place 15 competitors at a "significant non-reputation-related disadvantage." TrafFix, 532 U.S. at 33 16

Some have suggested the Ninth Circuit has rejected the aesthetic functionality doctrine. See Clicks Billiards, 251 F.3d at 1260 ("Nor has this circuit adopted the 'aesthetic functionality' 19 theory, that is, the notion that a purely aesthetic feature can be functional."); First Brands Corp. v. 20 Fred Meyer, Inc., 809 F.2d 1378, 1382 n.3 (9th Cir. 1987) ("In this circuit, the 'aesthetic' 21 functionality test has been limited, if not rejected, in favor of the 'utilitarian' functionality test.") 22 (internal citations and quotation marks omitted). However, recent case law suggests the "doctrine, 23 albeit restricted over the years, retains some limited vitality." Au-Tomotive Gold, 457 F.3d at 1070. 24 25 does not alone make that feature functional as a matter of law. Id. at 1072 (quotation marks and 26 citation omitted). Instead, aesthetic functionality is a limited doctrine that applies "[w]hen goods 27 are bought largely for their aesthetic value." Id. at 1068 (citing Restatement of Torts § 742). In 28 that case a product's features "may be functional because they definitely contribute to that value

In short, Apple has pointed to sufficient evidence in the record from which a reasonable

B.Aesthetic Functionality

Samsung also argues that Apple's product designs are not protectable under the doctrine of aesthetic functionality. In some cases, the appearance of the product contributes to the overall usefulness of the product. Qualitex, 514 U.S. at 169 (citing Inwood Lab., Inc. v. Ives Lab., Inc., 13 (quotation marks omitted). 17

The fact that a feature "contributes to the consumer appeal and salability of the product" and thus aid the performance of an object for which the goods are intended." Id. Where the feature 2 or design "is a mere arbitrary embellishment, a form of dress for the goods primarily adopted for 3 purposes of identification and individuality" and "unrelated to basic consumer demands in 4 connection with the product" aesthetic functionality is not shown. Id. A few examples of products 5 that meet the "aesthetic functionality" doctrine have been given over the years: a heart-shaped 6 candy box, a distinctive printing typeface, or a distinctive blossom pattern on a set of china are all 7 considered "aesthetically functional." Id. 8

Samsung argues that Apple's product design contributes to its market success rendering the 9 design aesthetically functional. MSJ at 7. Apple argues that a product's design that contributes to 10 sales does not alone determine aesthetic functionality. Opp'n at 4 (citing Au-Tomotive Gold, 457 F.3d at 1072). In any event, the parties' contradi 12 whether the trade dresses are aesthetically functional precludes summary judgment. See Bartlett 13 Decl. Ex. 16 ¶ 8; Ex. 7. Especially in light of the Ninth Circuit's admonition that the aesthetic 14 functionality concept is a limited doctrine, the Court finds that summary judgment on the factual 15 issue of functionality is not appropriate given the factual record. Accordingly, Samsung's motion 16 for summary judgment on Apple's trade dress claims based on functionality is DENIED. 17

19 distinctiveness" or "harms the reputation" of a famous mark. 15 U.S.C. §1125(c). "Dilution refers 20 to the whittling away of the value of a trademark when it's used to identify different products." 21 Mattel, Inc. v. MCA Records, Inc., 296 F.3d 894, 903 (9th Cir. 2002) (citation and quotation marks 22 omitted). While many dilution claims refer to trade names, the current statute explicitly applies 23 dilution protection to trade dress. 15 U.S.C. §1125(c)(4). To establish a claim of trade dress 24 dilution, a plaintiff must show that (1) the trade dress is "famous and distinctive," (2) the defendant 25 is "making use of the [trade dress] in commerce," (3) the defendant's "use began after the [trade 26 dress] became famous," and (4) the defendant's use of the trade dress is "likely to cause dilution by 27 blurring" or by "tarnishment." See Jade Toys, Inc. v. Mattel, Inc., 518 F.3d 628, 634 (9th Cir. 28 ction illustrates that a factual dispute regarding


Trademark dilution is caused by the use in commerce of a mark that "impairs the 2008). Samsung only disputes, for the purposes of its motion for summary judgment, that Apple is 2 able to establish that its asserted trade dress is "famous." 3 A trademark dilution claim is limited to "famous marks," which are marks that are "widely 4 recognized by the general consuming public of the United States as a designation of source of the 5 goods or services of the mark's owner." 15 U.S.C. §1125(c)(2)(A). The party asserting protection 6 bears the burden of showing the "claimed trade dress, taken as a whole, is not functional and is 7 famous." 15 U.S.C. §1125(c)(4)(A). Moreover, if a product design includes registered marks, the 8 party must prove that the "unregistered matter, taken as a whole, is famous separate and apart 9 from" the registered marks. 15 U.S.C. §1125(c)(4)(B). 10

It is important to note that fame must already be established at the time the junior user begins to use the mark; dilution can only occur "at any time after the owner's mark has become famous." 15 U.S.C. §1125(c)(1). Furthermore, the initial use of the mark by the junior user 13 demarcates the time at which both fame and consumer use must be established. Nissan Motor Co. 14 v. Nissan Computer Corp., 378 F.3d 1002, 1013 (9th Cir. 2004). Thus, the relevant dates for each 15 of the asserted trade dresses are as follows. In order to establish dilution of the iPhone trade dress, 16 which was announced in January 2007 and released in June 2007, Apple must show that its product 17 was "famous" as of November 2007, when Samsung released the Samsung F700, the accused 18 product. FAC ¶ 80. In order to establish dilution of the iPad trade dress, which was announced in 19 November 2010, when Samsung released the Galaxy Tab, the accused product. FAC ¶¶ 22, 82. 21 2008, Apple must show that its product was "famous" as of March 2010, when Samsung released 23 the Samsung Galaxy i9000, the accused product. FAC ¶¶ 60, 81. 24

The Ninth Circuit has recognized that fame requires a high standard of consumer awareness 25 beyond the trademark owner's specific market-the mark should be a "household name" or "part 26 of the collective national consciousness." Thane Int., Inc., v. Trek Bicycle Corp., 305 F.3d 894, 27 Act provides four non-exclusive factors courts may consider to determine whether the mark has January 2010 and released in April 2010, Apple must show that its product was "famous" as of 20 Finally, in order to establish dilution of the iPhone 3G trade dress, which was released in July 22 911-12 (9th Cir. 2002) (overturned by statute on other grounds). The Federal Trademark Dilution 28 2 fame at the time of the release of the junior user's demarcation, Apple has pointed to other 3 evidence in the record suggesting "fame" in the relevant time period. Specifically, Apple points to 4 several news stories in mainstream news outlets touting the iPhone, iPhone 3G, and iPad products. 5

For example, Time named the iPhone invention of the year in a November 1, 2007 publication, 6 before the release of the Samsung F700. Winer Decl. Ex. 1 at nn.115. Other unsolicited media 7 reports with photographs of the iPhone 3G and the iPad appeared in newspapers such as The New 8 Decl. Ex. 1 at nn.119, 137. Finally, Apple has provided some evidence suggesting that it has 10 consistently spent significant sums on the advertising of the iPhone and the iPad, even before the release of the accused Samsung devices. See Bartlett Decl. Exs. 14-15. Although Samsung argues that Apple's survey precludes a finding of fame as a matter of 13 law -- because it shows that less than 60% of respondents were aware of the trade dress in the 14 iPhone and iPad product designs claimed -- such a conclusion is not necessarily warranted. The 15 factors to be established for fame are non-exhaustive, so survey results are not required. 16

Although some of the evidence cited by Apple does not relate specifically to evidence of York Times, The Washington Post, San Jose Mercury News, and San Francisco Chronicle. Winer 9 It is a close question as to whether a reasonable juror could find on the record before the Court that the designs of Apple's products (exclusive of the Apple name, logo, or home button) 18 were famous at the time Samsung released its products. Nonetheless, viewing the evidence in the 19 light most favorable to Apple, there appears to be enough evidence from which a reasonable jury 20 could conclude that the iPhone, iPhone 3G, and iPad trade dresses were "famous" for establishing 21 the dilution claim. Accordingly, Samsung's motion for summary judgment is DENIED.

24 following patents-in-suit: (1) claim 19 of U.S. Patent No. 7,469,381 ("'381 Patent"); (2) claim 8 of 25 Patent"); (4) claim 50 of U.S. Patent No. 7,864,163 ("'163 Patent"). 27


Apple asserts that Samsung's accused devices infringe on the asserted claims of the U.S. Patent No. 7,844,915 ("'915 Patent"); (3) claim 8 of U.S. Patent No. 7,663,607 ("'607 26 A.The '381 Patent

The '381 Patent, entitled "List Scrolling And Document Translation, Scaling, And Rotation

On A Touch-Screen Display," discloses a method for displaying when a user has gone beyond the 3 edge of an electronic document. '381 Patent Abstract. The application for the '381 Patent was 4 filed on December 14, 2007, and the patent issued on December 23, 2008. The '381 Patent has 5 been discussed at length in the Court's December 2, 2011 preliminary injunction order and in the 6

Court's April 4, 2012 claim construction order. Therefore, the claimed invention of the snap-back 7 feature will not be discussed at length here. 8

Apple has narrowed its trial claims and currently only asserts that the accused devices

9 infringe claim 19 of the '381 Patent. Claim 19 of the '381 patent recites: 10

19. A device, comprising: a touch screen display; one or more processors; memory; and one or more programs, wherein the one or more programs are stored in the memory and configured to be executed by the one or more processors, the programs including:

instructions for displaying a first portion of an electronic document; instructions for detecting a movement of an object on or near the touch screen display; instructions for translating the electronic document displayed on the touch screen display in a first direction to display a second portion of the electronic document, wherein the second portion is different from the first portion, in response to detecting the movement;

instructions for displaying an area beyond an edge of the electronic document and displaying a third portion of the electronic document, wherein 22 the third portion is smaller than the first portion, in response to the edge of the electronic document being reached while translating the electronic 23 document in the first direction while the object is still detected on or near the touch screen display; and 24 25 instructions for translating the electronic document in a second direction until the area beyond the edge of the electronic document is no longer 26 displayed to display a fourth portion of the electronic document, wherein the fourth portion is different from the first portion, in response to detecting that the object is no longer on or near the touch screen display.

'381 Patent 36:58-37:22. Samsung argues in its motion for summary judgment that claim 19 of the 2

'381 Patent is invalid because it is anticipated by a program called Tablecloth. Samsung argues 3 that Tablecloth discloses each limitation in claim 19 of the '381 Patent. MSJ at 20-21. Tablecloth 4 ran on a device called DiamondTouch. The DiamondTouch table is "a touch-sensitive display that 5 was originally developed at the Mitsubishi Electric Research Laboratories ("MERL") in 2001. The 6

Tablecloth application was created in January 2005, and left on display in the MERL lobby around 7 the same time. Bogue Decl. ¶¶ 8-9. The Tablecloth demo was available and accessible to visitors 8 of the MERL lobby. Id. Additionally, the Tablecloth application was demonstrated to customers 9 in 2006. Id. ¶ 12. 10

1.Prior Art

First, Apple disputes whether Tablecloth may serve as a prior art reference. Whether a

United States District Court

For the Northern District of California

reference may be considered prior art under § 102 is a question of law, based upon underlying 13 factual determinations. See Shatterproof Glass Corp. v. Libbey-Owens Ford Co., 758 F.2d 613, 14

Cir. 1995). Samsung contends that Tablecloth is prior art under 102(a), (b), and (g)(2). 16

Mitsubishi Electronic Research Laboratory (MERL) in Cambridge, MA, by Adam Bogue, a former 18

622 (Fed. Cir. 1985); Allied Colloids Inc. v. American Cyanamid Co., 64 ...

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