25 October 2011

Apple Pursues Australian Online Retailers Over Galaxy Tab Sales

Online Shopping Cart News Limited’s national daily paper, The Australian, is reporting this morning that Apple has written to Queensland-based e-commerce provider eTail Solutions – which is associated with online retailer mobicity.com.au – requesting that it cease sales of Samsung’s Galaxy Tab 10.1 to Australian customers.  (Unfortunately the full article, Apple ups the ante on Galaxy, is behind the newspaper’s new paywall, and requires a subscription for viewing in its entirety.)

Despite its ‘.com.au’ domain, Mobicity is based in Hong Kong, where the Galaxy Tab 10.1 is widely available.  While it is an infringement to import patented products into the country, putting a stop to the imports would most likely require Apple to obtain a further injunction against Mobicity.  The Federal Court of Australia could – and indeed probably would – issue such an injunction, however it would be necessary then to apply to a Hong Kong court in order to enforce it against Mobicity.  As we have previously noted, there are no provisions in the Australian patent law which would enable Apple to have goods seized by customs upon entry to the country.

We are not at all surprised by Apple’s action (see Samsung’s ‘Eyes Wide Open’ Sinks Australian Galaxy Tab 10.1 and Samsung Appeals, Retaliates, in Patent War With Apple for previous discussion on this topic), although it remains to be seen how far it is willing to go in pursuing individual retailers.

So far it appears that eTail Solutions may be the only online retailing company to have received any complaint from Apple since the Federal Court granted a preliminary injunction against Samsung.  At least, if there are others then they are not telling.  While outspoken online retailer Ruslan Kogan agreed to stop selling the Galaxy Tab 10.1 tablet after Apple threatened legal action, this occurred prior to the issue of the injunction (see Fairfax Media report Kogan buckles to Apple legal threats).  According to the Australian report, Australian online retailer dmavo.com.au has denied receiving any correspondence from Apple, so far, while the Galaxy tablet continues to be sold to Australian consumers by a range of online stores and ‘micro-retailers’ on eBay.

Although the existing injunction is effective against Samsung only, and cannot be enforced against individuals and retailers in Australia or overseas, one option that Apple might consider is to ask the Federal Court to extend the terms of the injunction.  For example, in addition to restraining Samsung from distributing the Galaxy Tab 10.1 in Australia, the injunction could include a restraint on supplying the product to any other distributor which may cause it to be imported into Australia. 

However, the practicalities of such an injunction are significant.  While Samsung could presumably require distributors to whom it supplies products directly to provide undertakings not to ship to Australia, it is unlikely that it could successfully enforce similar restraints further downstream in the distribution chain, and particularly against smaller retailers.

Despite Apple’s aggressive approach to litigation against competing manufacturers, such as Samsung, HTC and Motorola, to date it has not sought to enforce its IP rights directly against downstream distributors, retailers or individuals in any of its international disputes.  The numbers of products involved are no doubt well below the many tens – or hundreds – of thousands of units that would be sold if Samsung were able to distribute directly into Australia, and the sources of those products are too widespread and fragmented to be effectively policed.  Apple can no doubt find better ways to direct its time and energy.

At the time of writing, the Galaxy Tab 10.1 remains on-sale and available in stock from Mobicity.


Patentology (Mark Summerfield) said...

Well, in actual physical dimensions it remains a broadsheet, and it probably runs fewer Kardashian stories than the Herald Sun or the Tele.  But I have to say that The Australian is not a paper I choose to read on a regular basis, and I will probably read even less of its content now that the online version is disappearing behind a paywall.  I think the phrase is 'brave and courageous business decision'!

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