It’s Apple vs Samsung Down-Under as Smartphone War Escalates

As has been reported by various media outlets, Justice Bennett in the Federal Court of Australia has heard claims by Apple, Inc that Samsung should be prevented from offering its Galaxy Tab 10.1 tablet (which is based on the Android operating system) to customers in Australia.  (See, e.g., articles at the Sydney Morning Herald, and itnews.com.au.)

An interlocutory injunction was sought by Apple, to put a stop to Samsung’s plans to launch the Galaxy Tab 10.1 in Australia on 11 August 2011.  Apple’s claim is based primarily on allegations that the Samsung tablet infringes Apple’s Australian standard patent nos. 2008201540, 2005246219, 2007283771, 2009200366 and 2007286532, along with innovation patent nos. 2008100283, 2008100372, 2009100820, 2008100419 and 2008101171.  The patents relate to various touch-screen user interface features.

In the event, there was no need for the court to issue an injunction.  Instead, Samsung made the following undertakings – noted in the court’s orders, available from the Commonwealth Courts Portal – after discussions between the legal teams representing the parties:

1. without admission of liability, Samsung will not, without permission from Apple, ‘import, promote, offer to supply, supply, offer for sale or sell in Australia the Galaxy Tab 10.1 device’;
2. Samsung will, under appropriate confidentiality agreements, provide Apple’s solicitors with three samples of the version of the Galaxy Tab 10.1 device intended for launch in Australia, at least seven days prior to the date of intended distribution to sales channels, for the purpose of review and analysis;
3. again without any admission of liability, Samsung will not, until the seven day review period has expired, do any of the following:
       (a) advertise;
       (b) seek expressions of interest from consumers in relation to;
       (c) sell;
       (d) authorise or facilitate the advertisement by third parties of; or
       (e) otherwise supply to consumers,
   the Galaxy Tab 10.1 device.

It seems highly unlikely that Apple would have got its injunction.  Interlocutory injunctions are notoriously difficult to obtain in patent cases of this type, since the patentee needs to establish not only that they have a strong case, but also that an alternative remedy at a later date – such as damages or an account of profits – would not provide adequate compensation for any infringement that occurs pending a decision in the matter. 

It is not credible that Apple could establish a strong enough case to justify an injunction based upon alleged patent infringement by a product that has not even hit the market yet.  Counsel for Samsung has been reported as saying that Apple’s action is founded on the assumption that the Australian version of the Galaxy Tab 10.1 is the same as the US version.  Samsung says that the Australian version will be different.

Furthermore, an award of damages after the fact would clearly be an adequate remedy if Samsung is found to infringe Apple’s patents.  The presence of the Galaxy Tab 10.1 on the Australian market is not going to drive Apple out of business before the case can be decided!  The court will not restrain a party from trading in a product prior to a full trial unless there is an extremely good reason to do so.

So what is going on here?

This Australian action by Apple must be seen the the context of the global dispute currently underway between itself and Samsung.  As has been widely reported, the companies are engaged in litigation in at least nine countries including the US, Germany, Britain, France, Italy, the Netherlands, Japan and South Korea.  With those markets at stake, this action in Australia is at best a strategic move by Apple, and at worst a mere sideshow, nothing more than a brief storm in a teacup.  Patent litigation in Australia is much cheaper than in, say, the US.  However, when considered relative to the size of the market it is actually very expensive.  It therefore does not make much sense for Apple to expend resources in this country when they can obtain better value elsewhere.

Here is what we predict will happen:

1. Samsung will shortly comply with its undertaking, and supply Apple’s solicitors with three samples of the Australian Galaxy Tab 10.1;
2. seven days later, or shortly thereafter, it will launch the product on the Australian market, as it is entitled to do under the agreement;
3. Apple may, or may not, once again seek an interlocutory injunction – if it does apply, it will not get one;
4. Apple may, or may not, continue with its proceedings against Samsung – if so, the case will run for at least two years, with Galaxy Tabs and iPads in various revisions continuing to sell like hotcakes; and
5. long before any resolution in the Australian case, Samsung and Apple will settle all of their suits on a worldwide basis.

So do not worry, Aussie folks – you will shortly be able to acquire that Galaxy Tab 10.1 that you have been admiring from afar!

Tags: Apple-v-Samsung, Australia, Computer programs, Infringement, Interlocutory injunction, Litigation, Smartphone wars