Bloomberg News

Samsung Tablet Ban in Europe Scaled Back to Within Germany

August 17, 2011

(Adds HTC’s complaint in seventh paragraph.)

Aug. 17 (Bloomberg) -- The ban on a Samsung Electronics Co. tablet computer across Europe was lifted after the German court that granted Apple Inc. an injunction last week scaled back the ruling to within national borders.

The iPad maker isn’t allowed to enforce its Aug. 9 injunction outside of Germany against the Suwon, South Korea- based company, the Dusseldorf Regional Court decided yesterday. The ban on Samsung’s Galaxy Tab 10.1 in Germany stands, court spokesman Peter Schuetz said in an interview.

“The judges decided to limit the enforceability for now because there are doubts whether a German court has so a wide a jurisdiction over a company based in Korea,” Schuetz said.

The tablet ban is part of a broader legal battle between Apple and rival smartphone makers as competition intensifies in a market that researcher HIS Inc. projects will reach $206.6 billion this year. Apple, the world’s top smartphone seller, has filed patent cases against handset makers using Google Inc.’s Android operating system, including Samsung Electronics Co., Motorola Mobility Holdings Inc. and HTC.

Kristin Huguet, a spokeswoman for Apple, declined to comment on the German court order, and reiterated earlier comments on the overall dispute with Samsung.

‘Blatant Copying’

“It’s no coincidence that Samsung’s latest products look a lot like the iPhone and iPad, from the shape of the hardware to the user interface and even the packaging,” Huguet said. “This kind of blatant copying is wrong, and we need to protect Apple’s intellectual property when companies steal our ideas.”

HTC Corp., Asia’s second-biggest maker of smartphones, filed a patent-related complaint yesterday with the International Trade Commission in the U.S. seeking to block imports of Apple Inc.’s iPhone, iPad and Mac computers.

HTC claims Apple is infringing three patents related to wireless technology. The move follows a case lodged last year at the ITC that made similar claims. Taoyuan, Taiwan-based HTC also sued Apple this week in federal court in Wilmington, Delaware, over the three patents.

Samsung welcomes the German court’s decision and is “fully committed” to providing mobile devices to the market without disruption, the company said in an e-mailed statement.

Yesterday’s decision is temporary, as is the Aug. 9 injunction. The court has scheduled a hearing for Aug. 25 in the case, after which it may change either ruling.

Ruling Forthcoming

The Dusseldorf Regional Court will likely issue a ruling within three weeks of the hearing, according to Schuetz. Either party can appeal the decision.

The hearing comes days after Samsung agreed not to introduce the U.S. version of the Galaxy Tab 10.1 in Australia. Samsung’s product infringes 10 Apple patents, including the “look and feel” of the iPad, Steven Burley, a lawyer for Apple, told a Federal Court in Sydney on Aug. 1.

A European sales ban for the Tab 10.1 would be a blow to Samsung’s target of boosting its annual tablet sales more than fivefold this year. The company, which doesn’t disclose shipment figures, probably sold about 1.6 million Galaxy Tabs in 2010, according to an estimate by NH Investment & Securities Co. in March.

Samsung’s tablet sales this year will probably reach 5 million, and the company would lose as much as 10 percent of that if the ban stays in place for the rest of the year, according to Neil Mawston, an analyst in London at researcher Strategy Analytics.

Europe Market Share

Western Europe will account for 30 percent of global tablet sales this year, according to estimates at IDC.

The Galaxy Tab dispute isn’t isolated to Europe and Australia. Apple filed a complaint with the U.S. International Trade Commission in Washington in July, seeking to block imports of Samsung’s Galaxy phones and tablet computers, days after asking a federal court to halt sales of the devices.

Samsung and Apple have sued each other in the U.S., Germany, Japan and South Korea since Apple claimed in an April lawsuit that the Galaxy smartphones and tablets “slavishly” copied the iPhone and iPad. In March, Chief Executive Officer Steve Jobs gave Samsung the top billing in a chart proclaiming 2011 the “Year of the Copycats.”

The two companies rely on each other as Apple buys components from Samsung, including memory chips, displays and the processors that run the iPhone and iPad. Sales to Apple accounted for 5.8 percent of Samsung’s revenue in the first quarter, according to Samsung.

The German case against Samsung is: LG Dusseldorf, 14c O 194/11.

--With assistance from Susan Decker in Washington, Phil Milford in Wilmington, Delaware. Editors: Peter Chapman, Young-Sam Cho

To contact the reporter on this story: Karin Matussek in Berlin at kmatussek@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@Bloomberg.net.


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