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U.S. appeals court revives Apple bid for Samsung injunction

An employee of South Korean mobile carrier KT holds an Apple Inc's iPhone 4 (L) smartphone and a Samsung Electronics' Galaxy S II smartphone
An employee of South Korean mobile carrier KT holds an Apple Inc's iPhone 4 (L) smartphone and a Samsung Electronics' Galaxy S II smartphone

By Diane Bartz

WASHINGTON (Reuters) - A U.S. appeals court on Monday breathed new life into Apple's long-running attempt to secure an injunction banning the sale of some devices made by Samsung Electronics Co Ltd, ordering a California judge to reconsider imposing a permanent sales ban on some Samsung products.

Apple, which makes iPhones and iPads, has been incensed by what it considers knockoffs of its devices by Android, many of which are made by Samsung. The two companies have been in a long-running and global battle over patent infringement.

The U.S. Court of Appeals for the Federal Circuit said on Monday that the lower court abused its discretion in denying Apple's request for an injunction of Samsung devices for infringing utility patents and asked it to reconsider.

The U.S. District Court for the Northern District of California had refused the injunction in December 2012. Apple Inc had requested it because of a ruling that Samsung products infringed on three design and three utility patents related to mobile devices.

The appeals court upheld the lower court's refusal to order an injunction on the design patents.

Last year, Apple was awarded over $1 billion after it convinced a jury that Samsung copied various iPhone features.

In March U.S. District Judge Lucy Koh in San Jose ruled that the jury had made errors in some calculations, impacting about $400 million of the verdict.

Koh ordered a retrial of that portion of the original award, which is now wrapping up in San Jose. Closing arguments are scheduled for Tuesday.

Koh also rejected Apple's request for a permanent ban on the sale of several Samsung products in the lucrative U.S. market.

Court-ordered injunctions are much more threatening to companies than monetary verdicts, and tend to increase the likelihood of a settlement. But in this case, it could be months before Apple ultimately secures an injunction against Samsung, which undercuts Apple's leverage, said Brian Love, a professor at Santa Clara Law in Silicon Valley.

Still, the ruling bodes well for Apple's future court battles, Love said. The iPhone maker is scheduled for another trial against Samsung in April 2014, which involves newer Samsung products.

The Federal Circuit's ruling on Monday will give Apple firmer precedent to get an injunction in that case, he said.

"Certainly this is not an across-board win for Apple," Love said, "but I think Apple is happy with this outcome."

Samsung said it was pleased that the Federal Circuit upheld a ruling denying a permanent injunction for infringing Apple's design patents.

"The remand concerns a very narrow scope of evidence presented by Apple. Therefore, we are confident that an injunction will be avoided," spokesman Adam Yates said in an emailed statement.

The three utility patents are for a "bounce-back" feature, which allows users scrolling through text to reach the end and then bounce back; a "multi-touch display" that allows the device to distinguish between a user who uses one finger to scroll and two to "pinch to zoom"; and "double tap to zoom," which allows a user to tap a device twice so it will zoom in.

The appeals court said the district court erred in requiring Apple to show that the features in the infringed patents were the sole reason consumers bought Samsung devices.

"Rather than show that a patent feature is the exclusive reason for consumer demand, Apple must show some connection between the patented feature and demand for Samsung products," the court said in its ruling.

The appeals court also said that the lower court relied too much on evidence that Apple licensed the patents to others as a reason to order financial damages rather than an injunction, saying that Samsung was different because it was Apple's primary competitor.

Samsung has the top spot in the global smartphone market, with a 32.1 percent market share while Apple was second with 12.1 percent, the research firm Gartner said last week.

Of the smartphones sold, 81.9 percent run Google's mobile platform Android, while 12.1 percent used Apple's iOS, Gartner said.

"The district court abused its discretion by failing to properly analyze whether damages would adequately compensate Apple for Samsung's (court emphasis) infringement of these patents (court emphasis)," the three judge panel said in its ruling.

Representatives for Apple did not respond to requests for comment.

The case at the U.S. Court of Appeals for the Federal Circuit is Apple Inc v Samsung Electronics Co., Inc. The case number is 2013-1129.

(Reporting by Diane Bartz and Dan Levine; Editing by Ros Krasny, Gerald E. McCormick, Andrew Hay, Andrea Ricci and David Gregorio)

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