Apple, Inc. v. Samsung Elecs. Co.

920 F.Supp.2d 1116

APPLE, INC., a California corporation, Plaintiff,

v.SAMSUNG ELECTRONICS CO., LTD., A Korean corporation; Samsung Electronics America, Inc., a New York corporation; Samsung Telecommunications America, LLC, a Delaware limited liability company, Defendants.

Case No. 11–CV–01846–LHK.

United States District Court,

N.D. California,

San Jose Division.

Jan. 29, 2013.

Michael A. Jacobs, Alison Margaret Tucher, Andrew Ellis Monach, Deok Keun Matthew Ahn, Esther Kim, Francis Chung–Hoi Ho, Grant L. Kim, Harold J. McElhinny, Jason R. Bartlett, Jennifer Lee Taylor, Nathaniel Bryan Sabri, Patrick J. Zhang, Rachel Krevans, Richard S.J. Hung, Taryn Spelliscy Rawson, Morrison Foerster LLP, Stephen McGeorge Bundy, Stephen E. Taylor, Joshua Ryan Benson, Taylor and Co Law Offices, San Francisco, CA, Samuel Calvin Walden, David B. Bassett, Jeremy S. Winer, Robert J. Gunther, Jr., Victor F. Souto, Wilmer Cutler Pickering Hale and Dorr LLP, New York, NY, James C. Burling, Brian Seeve, Timonthy D. Syrett, Brian Larivee, Derek Lam, Emily R. Whelan, Michael R. Heyison, Michael Saji, Robert Donald Cultice, William F. Lee, Joseph J. Mueller, Michael A. Diener, Peter James Kolovos, Wilmer Cutler Pickering Hale and Dorr LLP, Richard Goldenberg, Hale & Dorr, LLP, Boston, MA, Andrew L. Liao, Christine E. Duh, Liv Leila Herriot, Mark D. Flanagan, Mark Daniel Selwyn, Wilmer Cutler Pickering Hale and Dorr LLP, Benjamin George Damstedt, Jesse L. Dyer, Timothy S. Teter, Cooley Godward Kronish LLP, Christopher Leonard Robinson, Erik J. Olson, Marc J. Pernick, Ruchika Agrawal, Morrison Foerster LLP, Palo Alto, CA, Charles S. Barquist, Morrison & Foerster LLP, Los Angeles, CA, for Plaintiff.

Susan Rachel Estrich, The Law Center/USC, Daryl M. Crone, Crone Hawxhurst LLP, David Raymond Garcia, Sheppard Mullin Richter & Hampton LLP, Huan–Yi Lin, Dylan Ruga, Michael Richard Heimbold, Steptoe & Johnson LLP, Scott B. Kidman, Anthony Paul Alden, Brett Dylan Proctor, Curran M. Walker, Diane Hutnyan, John Mark Pierce, John B. Quinn, Jon C. Cederberg, Robert Jason Becher, Ryan Seth Goldstein, Scott Liscom Watson, William Charlie Price, Kara Michelle Borden, Quinn Emanuel Urquhart and Sullivan, LLP, Los Angeles, CA, John M. Caracappa, Paul A. Gennari, Steptoe and Johnson LLP, Alan Lee Whitehurst, Quinn Emanuel Urquhart & Sullivan, LLP, Kfir B. Levy, Kellogg, Huber, Hansen, Todd, Evans & Figel, P.L.L.C. Washington, DC, Kathleen Marie Sullivan, Joseph Milowic, Robert Wilson, Quinn Emanuel Urquhart & Sullivan, LLP, Carey R. Ramos, Paul, Weiss, Rifkind, Wharton & Garrison LLP, New York, NY, Thomas G. Pasternak, DLA Piper US LLP, Edward H. Rice, Marina N. Saito, Hopenfeld Singer Rice & Saito LLP, Chicago, IL, Benjamin Laban Singer, James E. Hopenfeld, Hopenfeld Singer Rice & Saito, Brian E. Mack, Albert P. Bedecarre, Christopher Edward Stretch, Quinn Emanuel Urquhart Oliver & Hedges, LLP, Gary L. Halling, Mona Solouki, Sheppard Mullin Richter & Hampton LLP, San Francisco, CA, Kevin P.B. Johnson, Mark Yeh–Kai Tung, Melissa Chan O'Sullivan, Rachel H. Kassabian, Todd Michael Briggs, Victoria F. Maroulis, Quinn Emanuel Urquhart Oliver & Hedges LLP, Margret Mary Caruso, Attorney at Law, Redwood Shores, CA, for Defendants.

ORDER GRANTING IN PART AND DENYING IN PART MOTION FOR JUDGMENT AS A MATTER OF LAW

LUCY H. KOH, District Judge.

On August 24, 2012, after a thirteen day trial and approximately three full days of deliberation, a jury in this patent case reached a verdict. See ECF No. 1931. Apple now seeks judgment as a matter of law to overturn certain of the jury's findings, and judgment as a matter of law as to other issues that the jury did not reach. See ECF No. 2002 (“Mot.”). In the alternative, Apple moves for a new trial on most of the issues on which Apple seeks judgment as a matter of law. For the reasons discussed below, the Court GRANTS Apple's motion for judgment as a matter of law that claims 10 and 15 of Samsung's U.S. Patent No. 7,675,941 are invalid; DENIES Apple's motion for judgment as a matter of law in all other respects; and DENIES Apple's motion for a new trial.¹

I. LEGAL STANDARD.

Rule 50 permits a district court to grant judgment as a matter of law “when the evidence permits only one reasonable conclusion and the conclusion is contrary to that reached by the jury.” Ostad v. Oregon Health Sciences Univ., 327 F.3d 876, 881 (9th Cir.2003). A party seeking judgment as a matter of law after a jury verdict must show that the verdict is not supported by “substantial evidence,” meaning “relevant evidence that a reasonable mind would accept as adequate to support a conclusion.” Callicrate v. Wadsworth Mfg., 427 F.3d 1361, 1366 (Fed.Cir.2005) (citing Gillette v. Delmore, 979 F.2d 1342, 1346 (9th Cir.1992)).

A new trial is appropriate under Rule 59 “only if the jury verdict is contrary to the clear weight of the evidence.” DSPT Int'l, Inc. v. Nahum, 624 F.3d 1213, 1218 (9th Cir.2010). A court should grant a new trial where necessary “to prevent a miscarriage of justice.” Molski v. M.J. Cable, Inc., 481 F.3d 724, 729 (9th Cir.2007).

II. DISCUSSIONA. The Unregistered iPad/iPad 2 Trade Dress

Apple moves for judgment as a matter of law that the unregistered iPad/iPad 2 Trade Dress is (1) protectable; (2) infringed; and (3) famous and diluted. In the alternative, Apple moves for a new trial on the unregistered iPad/iPad 2 Trade Dress. The jury found that the unregistered iPad/iPad 2 Trade Dress was not protectable and not famous. Therefore, the jury did not reach the questions of whether Samsung infringed or diluted Apple's unregistered iPad/iPad 2 Trade Dress.

1. Protectability

At trial, Apple had the burden of proving protectability by a preponderance of the evidence. See15 U.S.C.A. § 1125; Final Jury Instruction No. 63. “The physical details and design of a product may be protected under the trademark laws only if they are nonfunctional and have acquired a secondary meaning.” Clamp Mfg. Co., Inc. v. Enco Mfg. Co., Inc., 870 F.2d 512, 515 (9th Cir.1989). In finding the trade dress not protectable, the jury might have found that either requirement was not met, or that neither was met. Thus, to establish that its unregistered trade dresses are protectable as a matter of law despite the jury's contrary verdict, Apple would have to show that a reasonable jury would necessarily have found both non-functionality and secondary meaning.

There are two types of functionality: utilitarian functionality and aesthetic functionality. See TrafFix Devices, Inc. v. Mktg. Displays, Inc., 532 U.S. 23, 33, 121 S.Ct. 1255, 149 L.Ed.2d 164 (2001). Under the traditional, utilitarian functionality test, a trade dress is functional “when it is essential to the use or purpose of the device or when it affects the cost or quality of the device.” Id. In applying this test, the Ninth Circuit assesses four factors: “(1) whether advertising touts the utilitarian advantages of the design, (2) whether the particular design results from a comparatively simple or inexpensive method of manufacture, (3) whether the design yields a utilitarian advantage and (4) whether alternative designs are available.” Talking Rain Beverage Co. v. South Beach Beverage Co., 349 F.3d 601, 603 (9th Cir.2003) (citing Disc Golf Ass'n, Inc. v. Champion Discs, Inc., 158 F.3d 1002, 1006 (9th Cir.1998)); see also Au–Tomotive Gold, Inc. v. Volkswagen of America, Inc., 457 F.3d 1062, 1072 n. 8 (9th Cir.2006) (acknowledging the four factor test applied by the Ninth Circuit). Apple argues that the evidence of non-functionality and secondary meaning presented at trial established protectability as a matter of law.

Apple cites evidence attempting to establish utilitarian functionality under all four Disc Golf factors. As to the first factor, “whether advertising touts the utilitarian advantages of the design,” Apple points to iPad advertising that presents the iPad design without touting any utilitarian design advantages. See Mot. at 3 (citing PX11; PX128). As to the second factor, “whether design results from a comparatively simple or inexpensive method of manufacture,” Apple cites the testimony of Apple design executive Christopher Stringer that the iPad was not designed to make manufacture cheaper or easier. See Mot. at 3 (citing Tr. 505:18–21). As to the third factor, whether the design yields utilitarian advantage, Apple cites Mr. Stringer's testimony that the iPad design was chosen for beauty rather than function. See Mot. at 3 (citing Tr. 499:5–6; 504:1–3). As to the fourth factor, Apple cites expert testimony of Apple's experts Peter Bressler and Susan Kare that competitor products with alternative designs can perform the same functions as the iPad. See Mot. at 3 (citing Tr. 1095:10–1096:22 (Bressler); Tr. 1399:24–1401:1 (Kare); Tr. 1403:16–1405:12 (Kare). See also PX10 (depicting alternative designs)).

Although Apple has presented some favorable evidence on each factor, judgment as a matter of law overturning the jury's verdict of nonprotectability is not appropriate here. It was Apple's burden to prove protectibility of the unregistered iPad trade dress, and Apple has not established that protectability was the only reasonable conclusion. See Ostad, 327 F.3d at 881. Indeed, in its opposition, Samsung cites substantial evidence in the record supporting the jury's finding. See Samsung's Opposition to Apple's Motion for Judgment as a Matter of Law (“Opp'n”), ECF No. 2053, at 1–3. As to evidence suggesting functionality, Samsung first cites testimony of Samsung's design expert Dr. Itay Sherman that the iPad trade dress is functional. Specifically, Samsung cites Dr. Sherman's testimony that the rectangular shape, rounded corners, and flat front face had “significant benefits” for “usability and economics.” Opp'n at 1 (citing Tr. 2603:11–2609:9). Samsung also cites the testimony of Apple witnesses Dr. Bressler and Dr. Kare that the iPad's clear surface covering the display and familiar...