Case 4:20-cv-05640-YGR Document 830 Filed 11/09/21 Page 1 of 4
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`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
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`EPIC GAMES, INC.,
`Plaintiff, Counter-defendant
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`v.
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`APPLE INC.,
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`Defendant, Counterclaimant.
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`Case No. 4:20-cv-05640-YGR
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`ORDER DENYING APPLE’S MOTION TO
`STAY INJUNCTION PENDING APPEAL
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`Dkt. No. 821
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`The Court is in receipt of Apple Inc.’s Motion to Stay part of the Court’s injunction
`pending resolution of all appeals, specifically that portion prohibiting developers from including
`“in their apps and their metabuttons, external links, or other calls to action that direct customers to
`purchasing mechanisms, in addition to In-App Purchasing [“IAP”].” (See Dkt. No. 821.)
`Having considered all the filings, and oral argument, the Court finds Apple has failed to
`satisfy its burden, and the request as framed is DENIED. In short, Apple’s motion is based on a
`selective reading of this Court’s findings and ignores all of the findings which supported the
`injunction, namely incipient antitrust conduct including supercompetitive commission rates
`resulting in extraordinarily high operating margins and which have not been correlated to the value
`of its intellectual property. This incipient antitrust conduct is the result, in part, of the antisteering
`policies which Apple has enforced to harm competition. As a consequence, the motion is
`fundamentally flawed. Further, even if additional time was warranted to comply with the limited
`injunction, Apple did not request additional time other than ten days to appeal this ruling. Thus,
`the Court does not consider the option of additional time, other than the requested ten days.
`The Court analyzes the motion using a four-factor test to determine whether a stay is
`appropriate, namely whether (i) the movant demonstrates a strong showing of likelihood of
`success on the merits; (ii) the movant would be irreparably injured absent a stay; (iii) issuance of
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`Northern District of California
`United States District Court
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`Case 4:20-cv-05640-YGR Document 830 Filed 11/09/21 Page 2 of 4
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`the stay will substantially injure the other parties interested in the proceeding; and (iv) an
`evaluation of where the public interest lies. Nken v. Holder, 556 U.S. 418, 426 (2009). Apple
`bears the burden of demonstrating that the Court should exercise its discretion to stay the
`injunction. Id. at 433-34.
`In considering Apple’s likelihood of success on the merits, Apple notes that it will argue
`on appeal that the Court applied the wrong test in its analysis of California’s Unfair Competition
`Law (“UCL”), plaintiff lacked standing, and the injunction was not within the Court’s authority.
`Contrary to Apple’s assertions, the Court evaluated the UCL claims using two tests, not one. See
`Order at Law Sections VI.C.1 and 2. Furthermore, the Court’s Order analyzed the basis for Epic
`Game’s standing under the UCL. See Order at Law Section Law, VI. A. Moreover, Apple’s
`citations to Epic Games’ alleged loss of standing does not persuade.1
`Here, as noted, the antisteering provisions are one of the key provisions upon which Apple
`has been able to successfully charge supracompetitive commissions untethered to its intellectual
`property. See Order at Fact Sections IV and V. Evidence admitted at trial demonstrate that Epic
`Games and its related companies receive royalties from numerous companies who use the Unreal
`Engine for apps. See e.g. DX-4022. Apple’s commission rates depress those royalties and
`suppress competition in the industry generally, and in which Epic Games operates. This is
`sufficient to establish Article III standing. See Franchise Tax. Bd. of California v. Alcan
`Aluminum Ltd., 493 U.S. 331, 336 (1990) (finding that parent company had Article III standing to
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`1 Indeed, Apple relies on a handful of distinguishable cases that deal with whether the
`party initially had standing, not the loss of standing (mootness), in support of its proposition that
`Epic Games lacks standing to enforce the injunction. See Lujuan v. Defenders of Wildlife, 504
`U.S. 555, 564 (1992) (finding that environmental groups did not have standing to challenge
`regulation of the Secretary of the Interior which interpretated Section 7 of the Endangered Species
`Act, finding that plaintiff did not meet the imminent injury requirement for Article III because
`plaintiffs intent to “return to the places they had visited before” was not actual or imminent);
`Davis v. FEC, 554 U.S. 734-35 (2008) (finding that self-financed candidate had standing to
`challenge the constitutionality of the Millionaires’ Amendment of the Bipartisan Campaign
`Reform Act, noting that “the standing inquiry remains focused on whether the party invoking
`jurisdiction had the requisite stake in the outcome when the suit was filed”); Hangarter v.
`Provident Life & Accident Ins. Co., 373 F.3d 998, 1021 (9th Cir. 2004) (finding that plaintiff did
`not have standing to seek injunction where plaintiff no longer had contractual relationship with
`defendant at the time of lawsuit).
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`Northern District of California
`United States District Court
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`Case 4:20-cv-05640-YGR Document 830 Filed 11/09/21 Page 3 of 4
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`challenge the taxes that their wholly owned subsidiaries were required to pay). Thus, this
`argument fails.
`Next, the Court addresses Apple’s claim of irreparable injury. Again, the evidence does
`not support Apple’s position. Apple focuses part of its irreparable harm argument on harm that
`could occur in the form of loss of trust and integrity in the iOS ecosystem by way of allowing
`developers to include their links and metabuttons in their apps. Apple’s arguments are
`exaggerated. The reader rule, cross-play, and cross-wallet all reflect trial examples that
`alternatives outside the app can be accommodated. Mr. Kosmynka’s declaration does not change
`the result. In most ways, he merely repeats arguments that the Court considered as part of its
`Order. That the injunction may require additional engineering or guidelines is not evidence of
`irreparable injury. Rather, at best, it only suggests that more time is needed to comply. Apple,
`though, did not request additional time to comply. It wants an open-ended stay with no
`requirement that it make any effort to comply. Time is not irreparable injury.
`The third and fourth elements overlap so the Court addresses them collectively: injury to
`other parties and public interest. The evidence from the trial revealed that the party who would
`benefit primarily from a stay pending all resolution of all appeals is Apple. The Court can
`envision numerous avenues for Apple to comply with the injunction and yet take steps to protect
`users, to the extent that Apple genuinely believes that external links would create issues. The
`Court is not convinced, but nor is it here to micromanage. Consumers are quite used to linking
`from an app to a web browser. Other than, perhaps, needing time to establish Guidelines, Apple
`has provided no credible reason for the Court to believe that the injunction would cause the
`professed devastation. Links can be tested by App Review. Users can open browsers and retype
`links to the same effect; it is merely inconvenient, which then, only works to the advantage of
`Apple.2
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`2 The Court also notes that while Mr. Kosmynka claims that Apple verifies purchases.
`Apple’s Head of Pricing, Mr. Grey, testified at trial that Apple simply asks the developer to
`confirm delivery and then it issues a receipt. Order, p. 117.
`3
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`Northern District of California
`United States District Court
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`Case 4:20-cv-05640-YGR Document 830 Filed 11/09/21 Page 4 of 4
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`With respect to the alleged need for clarification because, anecdotally, some developers
`may not understand the scope of the injunction, the parties themselves have not indicated any
`confusion. The Developer Agreement prohibits third party in-app purchasing systems other than
`Apple’s IAP. The Court did not enjoin that provision but rather enjoined the prohibition to
`communicate external alternatives and to allow links to those external sites. Apple still maintains
`the convenience of IAP and, if it can compete on pricing, developers may opt to capitalize on that
`convenience, including any reassure that Apple provides to consumers that it may provide a safer
`or better choice. The fact remains: it should be their choice. Consumer information, transparency,
`and consumer choice is in the interest of the public.
`The request for a ten-day extension to file an appeal to the Ninth Circuit is DENIED. Given
`the promptness of this decision, more time remains before the injunction takes place than at least
`two of those authorities upon which Apple relies for requesting such relief. See Campbell v.
`National Passenger Railroad Corp., No. 05-CV-5434, 2009 WL 4546673, at *2 (N.D. Cal. Nov.
`30, 2009) (ordering that defendant comply with the injunction within 10 days from the date of the
`Court’s order on the motion to stay pending appeal); see also Conservation Cong. v. U.S. Forest
`Serv., No. CIV. S-11-2605 LKK, 2012 WL 3150307, at *2 (E.D. Cal. Aug. 1, 2012) (providing
`twenty-one day extension to seek appeal). Here, the Court afforded Apple 90 days to comply and
`it still has approximately 30 days before the injunction goes into effect. Thus, the Court sees no
`need for an additional 10 days for Apple to file its appeal of this ruling. Granting this extension
`would extend the deadline to the end of December just before the December holidays which itself
`is inconvenient.
`For the foregoing reasons, the Court DENIES Apple’s motion to stay the injunction pending
`appeal. The Court also DENIES Apple’s request for a temporary stay of an additional 10 days.
`This order terminates docket No. 821.
`IT IS SO ORDERED.
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`November 9, 2021
`Dated:
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`YVONNE GONZALEZ ROGERS
`UNITED STATES DISTRICT JUDGE
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`Northern District of California
`United States District Court
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