As the fierce global battle between Apple Inc. (Apple) and Samsung Electronics Co. Limited (Samsung) continues, the Federal Court of Australia has granted Apple an interlocutory injunction restraining Samsung from releasing the Galaxy Tab 10.1 tablet (the closest competitor to Apple's iPad 2) in Australia. As a result of the injunction, Samsung would miss out on the significant pre-Christmas sales market. Samsung therefore (successfully) applied for an expedited appeal hearing which will be heard by the Full Bench of the Federal Court (comprising Justices Keane, Dowsett and Yates) on Friday, 25 November 2011.
Background to the dispute
Samsung had intended to launch the US version of the Galaxy Tab 10.1 in Australia, however Apple caught on and threatened to take action for patent infringement. Samsung agreed to modify the US version and provide Apple with a sample prior to releasing it. Despite the modifications, Apple commenced proceedings alleging that the modified Galaxy Tab 10.1 infringed 2 of Apple's patents (the Patents), breached provisions of the Australian Consumer Law and constituted passing-off of Apple's iPad 2.
The Patents alleged to have been infringed are the 'Touch Screen Patent' (which covers multipoint touch screens) and the 'Heuristics Patent' (which covers the touch screen method and graphical user interface for determining user commands by heuristics).
The Court's finding
In determining whether to grant Apple the interlocutory injunction, Justice Bennett considered whether Apple had established two elements, namely (i) a sufficient likelihood of success at the final hearing (ie. a prima facie case); and (ii) that the inconvenience or injury Apple would be likely to suffer if an injunction were refused outweighs the inconvenience or injury Samsung will suffer if the injunction were granted (Australian Broadcasting Corporation v O'Neill (2006) HCA 46).
Justice Bennett was of the view that Apple would be successful in proving that the Galaxy Tab 10.1 infringed at least one of its Patents, and therefore found that Apple had established a 'prima facie case'. In doing so, she acknowledged the presumption that the Patent Office has properly examined the patent application and that the granted patent is to be presumed valid unless there is strong evidence to the contrary.
She considered that the 'balance of convenience' was evenly weighted, that is, one party would suffer significant harm whether the injunction was granted or refused.
Ultimately, Justice Bennett appears to have been heavily influenced by Samsung's decision to launch in Australia with its 'eyes wide open' (it knew that Apple would likely commence proceedings because there were equivalent actions pending in the United States). She also criticised Samsung's failure to move expeditiously. Not only was Samsung unable to prepare for a final hearing in November 2011 (albeit on limited grounds), Samsung maintained that it could not be ready for a trial before March 2012 (nearly 5 times the proposed timetable). Accordingly, Justice Bennett found in favour of Apple and granted interlocutory relief restraining the importation, promotion, sale and supply of the Galaxy Tab 10.1 in Australia.
Impact of the decision
The decision was solely concerned with whether to grant the interim injunction (both parties requested that the final decision be reserved in order for them to gather further evidence). As noted above, Samsung has successfully applied for an expedited hearing, which will deal with both Samsung's application for leave to 'appeal', and its substantive case against the injunction. The outcome of this hearing will be crucial as to whether the Galaxy Tab 10.1 can take advantage of the peak holiday shopping period. Interestingly, a number of online retailers have sought to circumvent the injunction by directly importing the Galaxy Tab 10.1 product from outside Australia. It remains to be seen whether Apple will also pursue such retailers and, if so, how.
On a broader level, the decision demonstrates the importance of moving quickly and remaining flexible in the context of interlocutory injunctions. Where a party enters the market with its 'eyes wide open' to the risk of patent infringement (having decided not to revoke the patent first), it would be wise to take steps to prepare defensive evidence as soon as possible.
Partner: Charles Alexander
0 comments:
Post a Comment