30 November 2011

Breaking: Galaxy Tab Injunction Lifted, Orders Stayed Until Friday

[Updated: 3:05pm with initial views on the court's reasons]

At 12.30 today, the Full Bench of the Federal Court (Foster, Dowsett and Yates JJ) handed down a decision in Samsung's appeal against the interim injunction issued by Justice Annabelle Bennett barring sale of the Galaxy Tab 10.1 tablet computer in Australia.

The court has unanimously overturned Justice Bennett, opening the way for Samsung to get its products into stores just in time for Christmas (for those who have not yet done their shopping).

Apple requested a stay of the order lifting the injunction, so that it can appeal to the High Court, which Samsung said would only serve to prolong the injustice that had already been visited upon it.  Justice Foster has granted a stay until 4pm on Friday AEST. 

The original proposed launch date for the Galaxy Tab 10.1, before Apple commenced its action for patent infringement, was in mid-August.  Initially, Samsung voluntarily delayed the launch, pending a preliminary hearing before Justice Bennett in relation to Apple's application for an interim injunction.  In the end, that hearing lasted for over three days, and resulted in the injunction being issued.  Samsung had no doubt anticipated that the initial matters would be more rapidly resolved, and that Apple would not succeed in its application for interim relief. 

It has been, historically, difficult to obtain preliminary injunction in patent cases, because the complexity of infringement and validity issues generally requires the evidence and time only available at a full trial, and damages will typically be an adequate remedy if the patentee is ultimately successful.  Justice Bennett's decision in favour of Apple was therefore somewhat surprising.  The reasons of the Full Court, which will no doubt be published shortly, will hopefully provide greater clarity and certainty for future patentees and accused infringers.

This does not seem to us, on its face, to be the kind of case likely to interest the High Court, which generally only accepts appeals in patent cases where there are significant contested issues of law that need to be settled.  Of course, without seeing the Full Federal Court’s reasons for its decision, it is difficult to know whether any sufficiently important questions of law arise, however unanimous agreement by three judges of the Full Court is likely to provide stability in the law for the foreseeable future, such that in the absence of some glaring error there is no justification for High Court intervention.

We will write further once we have had the opportunity to read and digest the court’s written decision.

UPDATE: INITIAL THOUGHTS ON DECISION

The court's full decision is now available, as Samsung Electronics Co. Limited v Apple Inc. [2011] FCAFC 156..

On first reading, the decision appears to be a comprehensive victory for Samsung.  It looks as though Justice Bennett has been overturned on almost every count.

Firstly, in law, the Full Court has found that she applied the wrong test for the prima facie case.  To put it simply, Bennett J treated the question as if it were 'binary', i.e. either Apple has 'a probability' of success, or it does not.  The Full Court has found that the proper evaluation requires an assessment of the strength of the case, before reaching an appropriate decision in the circumstances.

Because of this error, the Full Court has revisited the facts of the case, so that it can perform its own, correct, evaluation.

In doing so, it has found that Justice Bennett erred in some fact-based findings also.  The Full Court considers, contrary to the primary judge, that Apple has not established a prima facie case of infringement of either patent. (Also, and somewhat irrelevantly considering the finding on infringement, Samsung did not establish a prima facie case on invalidity of the touch screen patent.)

Additionally, Justice Bennett did not weigh up the 'balance of convenience' correctly.  In actual fact, the Full Court has found, the balance does not favour Apple.  Particualr attention was given to the question of Samsung's willingness to agree to an early date for the full trial.  The Full Court is of the view that Justice Bennett was in no position to properly assess whether or not Samsung was able to prepare for trial in the timeframe proposed by Apple.

The 'eyes wide open' argument also received some attention.  The Full Court found that Justice Bennett had accepted that Samsung could not have been expected to cease preparations for launch of the Galaxy Tab 10.1 in Australia after it was Sued in the US by Apple in April, and that as a result she should have found that knowledge of the Australian patents was irrelevant.

PROSPECTS FOR HIGH COURT APPEAL

A stay has been granted to enable Apple to consider an appeal to the High Court.  It is necessary to understand that the High Court is not obliged to hear an appeal, 'Special Leave' must be granted.  Many appeal, but few are chosen...

The Full Court has interpreted a number of High Court decisions in reaching its conclusions.  If the High Court thinks it has been misinterpreted, it may be disposed to hear an appeal.

However, on the basis of the factual findings it does not seem that it would make much difference even if the High Court wants to correct the Full Federal Court's legal reasoning.  Three out of four Federal Court judges who have looked at the case have found no prima facie case of infringement.  The High Court would almost certainly not overturn this factual finding, so by any legal reasoning (even Justice Bennett's) an injunction is not appropriate.

We therefore think it possible that once Apple's lawyers have read and digested the decision, they may decide, after all, not to spend more of their client's money on a most-likely doomed application for Special Leave.

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