By Dan Levine  

It isn't hard to read Thursday's ruling by the Federal U.S. Circuit Court of Appeals as an important victory for Samsung in its continuing smartphone war with Apple. After all, the appeals court in Washington didn't just reverse U.S. District Judge Lucy Koh's pretrial injunction against Samsung's Galaxy Nexus phone, an aging model that runs on Google's Android operating system. It also substantially raised the bar for injunctions based on minor features in complex devices, which IP experts think will make it much harder for Apple to secure a permanent injunction against the separate batch of phones it took to trial in August, much less extend any sales ban to Samsung's high-flying Galaxy S III, the most direct market threat to the iPhone.

But Samsung wasn't the only party succored by the ruling. Without saying so directly, the court's reasoning clearly bolsters Judge Richard Posner's view of the smartphone patent wars -- a stance that hasn't been altogether helpful for Apple.

Posner is the outspoken 7th U.S. Court of Appeals judge who volunteered to oversee Apple's battle against Google's Motorola Mobility unit in a Chicago trial court. In January, soon after he landed the case, Posner expressed extreme skepticism over Apple's argument that it should be entitled to windfall damages based on a patent that covers "little gimmicks" that aren't core functions of the phones. If the Federal Circuit disagrees, Posner said at a hearing, "they can reverse me if they want."

The judge was as good as his word. Five months later, he threw out both Apple's and Motorola's claims against each other just days before trial, ruling that neither side could prove damages. In denying Apple's request for an injunction, Posner wrote, "an injunction could force Motorola to remove lucrative products from the market for as long as it took to remove the infringing features -- minor features in complex devices most features of which are not alleged to infringe."

Meanwhile, that same month in San Jose, California, Koh granted Apple's request for an injunction against the Nexus phone based on Apple's patent for unified search capability. This patent, Koh said, lets a user quickly retrieve different types of information located on any of a computer's storage media, like a hard drive and the Internet, using a single, unified search interface.

In her 101-page ruling, Koh cited consumer surveys and industry praise as evidence of consumer demand for this capability, which underlies Apple's Siri voice feature. That "circumstantial" evidence, Koh wrote, buttresses Apple's case of a causal link between the patented feature and market demand necessary to grant a pretrial injunction against the Nexus.

This was a marked difference from Posner, who lambasted customer survey evidence in the Motorola case. Koh acknowledged that direct evidence of Nexus customers' feature preferences "would certainly be even more compelling," but nonetheless said Apple's survey evidence of its own customers is still relevant. She also cited Google documents saying "search is a core user feature on Android."

Fast forward to the Federal Circuit's opinion on Thursday, which acknowledged it hadn't given Koh much previous guidance on the proper standard for causality. Still, Federal Circuit Judge Sharon Prost wrote that Koh abused her discretion in granting the injunction, calling Apple's evidence of a causal link "limited."

"At best, the district court's findings indicate that some consumers who buy the iPhone 4S like Siri because, among other things, its search results are comprehensive," Prost wrote. "That does not sufficiently suggest, however, that consumers would buy the Galaxy Nexus because of its improved comprehensiveness in search."

Prost then got to the nub.

"More specifically, that an application may sell in part because it incorporates a feature does not necessarily mean that the feature would drive sales if sold by itself," she wrote. "To the contrary, here, the only pertinent evidence -- Apple's own survey evidence -- shows that unified search is not one of the top five reasons consumers select Android smartphones. In this light, the causal link between the alleged infringement and consumer demand for the Galaxy Nexus is too tenuous to support a finding of irreparable harm."

This standard -- that a feature must be one of the top five drivers of demand -- is sure to be embraced by skeptics of software patents (including Google) who say complex devices with thousands of functions should not be banned over minor patented features. In an interview with us in July, Posner himself echoed those points and questioned whether patents should cover software at all.

As for Apple, the Federal Circuit's new injunction standard is a "palpable blow" to the company's smartphone legal strategy, said Nick Rodelli, a lawyer and adviser to institutional investors for CFRA Research in Maryland. While the ruling isn't controlling in the International Trade Commission -- and Apple could seek en banc review -- it makes it much harder for Apple to gain critical leverage and make Samsung contemplate a ban on its hottest selling devices.

"When you weigh the relative importance between this decision and that ($1.05 billion) jury verdict, I think there is a case to be made that in the fullness of time, it is more important," said Rodelli, who had previously been bullish about Apple's litigation strategy.

An Apple representative did not respond to a request for comment.

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