Friday, October 21, 2011

Apple Inc. v Samsung Electronics Co. Limited [2011] FCA 1164

The patent battle between Apple and Samsung over their respective tablet products was won (at least for now) by Apple. On 13 October 2011, Bennett J of the Federal Court of Australia granted an injunction in favour of Apple concerning Samsung's Galaxy Tab 10.1 product.

Once again the Federal Court of Australia has done a great job in providing a summary of the matter at the beginning of the judgment. An extract of the summary follows, which avoids the need for me to provide a summary of the decision!
1 In accordance with the practice of the Federal Court in some cases of public interest, importance or complexity, the following summary has been prepared to accompany the publication of the Court’s reasons for judgment. This summary is intended to assist in understanding the outcome of this proceeding and is by no means a complete statement of the conclusions reached by the Court. The only authoritative statement of the Court’s reasons is that contained in the published reasons for judgment which will be available on the internet at together with this summary. 
2 The respondents (Samsung) intend to launch in Australia a version of a tablet device known as the Galaxy Tab 10.1 (the Australian Galaxy Tab 10.1). The applicants (Apple) have brought proceedings alleging that the Australian Galaxy Tab 10.1 infringes certain claims in 13 of Apple’s patents, will contravene certain provisions of the Australian Consumer Law and will involve passing off of Apple’s iPad 2. Samsung denies these allegations. It has filed a cross-claim seeking to revoke certain of the patent claims relied upon by Apple and alleging that Apple has infringed certain patents held by Samsung. 
3 When the matter is heard on a final basis, the decision to grant or refuse to grant a permanent injunction restraining the sale of the Australian Galaxy Tab 10.1 will depend on a determination of Apple and Samsung’s competing claims. 
4 Apple seeks an interlocutory injunction restraining Samsung from releasing the Australian Galaxy Tab 10.1 until Apple’s claims and Samsung’s cross-claim are heard on a final basis (the interim injunction). Samsung argues that the interim injunction should not be granted. 
5 The primary issue with which this judgment is concerned is whether to grant the interim injunction. Both parties expressly asked me not to come to a final decision in this judgment, in part because of a desire to file further evidence. I have not done so. 
6 As is commonly the case in applications for an interlocutory injunction, Apple did not seek to rely on all of the claims it has made against Samsung. This does not prejudice Apple’s right to rely on these claims at a final hearing. 

7 In support of its claim for the interim injunction, Apple initially sought to rely on the alleged infringement of five patents. Apple no longer seeks to rely on one of these patents. Samsung has undertaken not to include the features of two of these patents in the Australian Galaxy Tab 10.1 until a final judgment is delivered or a further order of the Court is made. Accordingly, Apple’s claim for the interim injunction relates to the alleged infringement of three claims of two patents:
• Claim 6 of Australian Standard Patent No 2005246219, entitled “Multipoint touchscreen” (the Touch Screen Patent); and
• Claims 1 and 55 of Australian Standard Patent No 2007286532, entitled “Touch screen device, method, and graphical user interface for determining commands by applying heuristics” (the Heuristics Patent). 
8 As set out by the High Court in Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57, there are two main inquiries to undertake in determining whether to grant an interim injunction. 

9 The first inquiry is whether Apple has made out a “prima facie case” in the sense that there is a probability that at a final hearing it will be entitled to relief. The requirement of a “prima facie case” does not require Apple to show that it is more probable than not that it will succeed at trial. Apple needs to show that it has a sufficient likelihood of success. 
10 The second inquiry, often referred to as the “balance of convenience”, involves a consideration of whether the inconvenience or injury that Apple would be likely to suffer if an injunction were refused outweighs or is outweighed by the inconvenience or injury which Samsung will suffer if the injunction were granted. 

11 The Court is required to determine whether to grant the interim injunction within this legal framework. 
12 As to the “prima facie case” inquiry, Apple has explained why it contends that Samsung has infringed claims of each of the two patents. Samsung has explained why it denies that the invention of those claims is present in the Australian Galaxy Tab 10.1. It has also submitted that the claims of the Touch Screen Patent are revocable for want of novelty by reason of two prior publications, which is relevant to Apple’s “prima facie case” for infringement of that patent. 

13 Despite the force of Samsung’s submissions, I have found that Apple has established a “prima facie case” for the infringement of claims of both the Touch Screen Patent and the Heuristics Patent within the O’Neill test. That is, it has established a probability, not necessarily in a mathematical sense, that it will, on the present evidence, succeed at trial. That evidence may be supplemented and further submissions advanced, which may explain why neither party asked me to determine the questions finally. 
14 As to the “balance of convenience” inquiry, the parties addressed me on many different factors. In summary:
• I have found that the detriment to Apple from a refusal to grant the interim injunction would be significant. So too would be the detriment to Samsung from a grant of the interim injunction. I have weighed this factor evenly.
• I have found that damages would not be an adequate remedy for either party for the detriment that they will experience from an adverse outcome. I have weighed this factor evenly.
• Given that both parties agree that the Australian Galaxy Tab 10.1 would, like other tablet devices, have a short life cycle, an adverse outcome for either party on the application for the interim injunction would be equivalent to denying that party some form of final relief to which it may be found, at the final hearing, to be entitled. In Apple’s case, I have found that, if I were to refuse the interim injunction but Apple were to prevail at a final hearing, by that time a final injunction would be of little practical effect to Apple as the Australian Galaxy Tab 10.1 would be likely to have been superseded by other Samsung products. This will effectively have deprived Apple of its statutory rights to prevent the exploitation of a product that infringes the claims of valid patents. In Samsung’s case, I have found that, if I were to grant the interim injunction but Samsung were to prevail at a final hearing, by that time the product would, as the evidence suggests, be “obsolete” and Samsung’s success in being able to sell the Australian Galaxy Tab 10.1 would be of little practical effect. However, I have found that Samsung’s unwillingness to be available for a limited early final hearing in November 2011 contributed to this factor. Accordingly, I have weighed this factor in Apple’s favour.
• I have given no weight to Apple’s argument that I should preserve what it describes as the status quo in the Australian tablet market.
• I have found that Samsung’s allegations of delay by Apple in commencing proceedings were not made out. I have given this factor no weight.
• I have found that from 15 April 2011, when Apple commenced proceedings involving the Galaxy Tab 10.1 in the United States, Samsung proceeded with its “eyes wide open” in respect of the launch of the Australian Galaxy Tab 10.1. I have weighed this factor in favour of Apple, but I have given it slight weight.
• I have found that the existence of a “prima facie case” in respect of two separate, registered patents strengthens Apple’s overall prima facie case for relief. I have weighed this factor in favour of Apple. 
15 Although I have found that the “balance of convenience” was almost evenly weighted, there were several factors which favour Apple. Accordingly, I have concluded that the “balance of convenience” falls in Apple’s favour. 
16 Overall, considering that Apple has established a “prima facie case” with respect to two separate patents and that the “balance of convenience” is marginally in its favour, I am satisfied that it is appropriate to grant the interim injunction. I propose, again, to give the parties the opportunity of an early final hearing this year on the issues presented in this application, without prejudice to their rights to a later final hearing on all other issues.
The summary shows how close the balance of convenience argument was. At this stage it appears that Apple is going to have a merry Christmas.

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