Bloomberg News

Samsung Wins Australia Round of Apple Fight Over Tablet Sales

December 06, 2011

Nov. 30 (Bloomberg) -- Samsung Electronics Co., the world’s biggest smartphone maker, won a battle in its global patent war with Apple Inc. as an Australian appeals court overturned a ban on the sale of its tablet rivaling the iPad.

Samsung can begin sales of its Galaxy Tab 10.1 in the country starting Dec. 2, a federal appeals judge ruled today. A three-member appeal panel unanimously said that a lower-court judge earlier made a mistake in granting Cupertino, California- based Apple’s request for a ban.

Apple must file an emergency appeal against this verdict in the Canberra-based High Court, the nation’s apex legal body, to extend the ban. The Australian dispute is part of a battle between the companies on at least four continents that began in April, when Apple sued Samsung in the U.S. and accused it of “slavishly” copying the designs of iPhones and iPads.

“The removal of the injunction is a win for consumer choice in the Australian tablet market,” Tim Renowden, an analyst at researcher Ovum Plc, said in an e-mailed statement. “Samsung is not out of the Australian scrub yet” because the removal of the ban still hinges on the High Court’s decision.

The High Court must decide before the end of business on Dec. 2 whether to grant Apple’s request to keep the ban in place beyond that date. If it grants the request, Apple will have 28 days from today to file a request to appeal the ruling.

‘Blatant Copying’

“The ruling clearly affirms that Apple’s legal claims lack merit,” said Nam Ki Yung, a spokesman for Samsung. He added that the Suwon, South Korea-based company will make an announcement on the Galaxy’s availability in Australia “shortly.”

Samsung shares fell 0.1 percent to close at 1 million won ($878) in Seoul trading today, erasing earlier losses of as much as 0.9 percent. The stock has gained 5.8 percent this year compared with the 16 percent advance for Apple.

Apple said “it’s no coincidence that Samsung’s latest products look a lot like the iPhone and iPad.”

“This kind of blatant copying is wrong and, as we’ve said many times before, we need to protect Apple’s intellectual property when companies steal our ideas,” the company said in an e-mail after today’s ruling.

Samsung is the second-largest component supplier for Apple. The Korean company gets about 7.6 percent of its total revenue from selling memory chips, displays and other components for the iPhone and iPad, according to Bloomberg data.

Steve Jobs

The patent disputes began when Samsung released its Android-based Galaxy smartphones in 2010. Steve Jobs, the co- founder of Apple who died Oct. 5, initiated contact with Samsung in July 2010 over his concerns that the Galaxy phones copied the iPhone, according to Richard Lutton, Apple’s patent attorney, who testified in Sydney on Sept. 29.

Jobs wasn’t involved in the talks, which failed to resolve the dispute, Lutton said.

Apple sued Samsung in federal court in Oakland, California, on April 15, claiming the Samsung phones and tablets infringed its patents and the trademarked look of the iPhone and iPad.

Samsung was the world’s biggest maker of smartphones in the last quarter, with Apple being second. The maker of Mac computers dominates the tablet market.

The look of the iPad isn’t original, Samsung’s lawyers argued in the U.S., citing Stanley Kubrick’s “2001: A Space Odyssey.” The Apple tablets look like those used by astronauts in the 1968 film, Samsung said.

Seoul, Tokyo

Samsung countered a week after the Apple lawsuit, filing complaints in Seoul, Tokyo and Mannheim, Germany, alleging Apple infringed its patents. Samsung then followed with lawsuits in California, the U.K., Italy and Australia, claiming Apple was using Samsung’s inventions related to mobile phones without paying for them.

In Australia, Apple had won an injunction Oct. 13 barring the sale of the Galaxy until the companies resolve a patent dispute at trial. Apple claims Samsung’s tablet infringes at least two of its patents relating to the operation and interface of a touch screen. Samsung had agreed in August to delay the sale until a judge ruled on the injunction request.

The appeals court today criticized the lower court’s decision to grant the injunction, which cited Samsung’s refusal to accept an early trial on the patent claims.

Judge Erred

“We cannot see how Samsung’s conduct in refusing the offer of an early trial could properly be weighed,” the three-judge appeal panel said in today’s decision. The lower court “erred in principle by taking into account that irrelevant consideration,” it said.

Samsung had planned to scrap Australian sales of the newest Galaxy tablet if it couldn’t meet the Christmas shopping season because missing that would render the device “dead,” the company’s lawyer Neil Young said at an Oct. 4 hearing.

Young today reiterated the company’s desire to get the tablet on store shelves before Christmas and said extending the ban would “extend the injustice.”

Apple won a ban on the sale of the Galaxy Tab 10.1 in most of the European Union in August, when a German court granted an injunction. The order was scaled back to be enforceable only in Germany because there were doubts whether the court had the jurisdiction to issue a broader ban, court spokesman Peter Schuetz said.

Australian Federal Court Justice Annabelle Bennett ordered on Nov. 15 that a trial on Samsung’s claims in the country be held in March, against objections from Apple, which had sought a later date.

The case is Samsung Electronics Co. v. Apple Inc. NSD1792/2011. Full Court of the Federal Court of Australia (Sydney).

--With assistance from Saeromi Shin in Seoul and Tim Smith in Sydney. Editors: Anand Krishnamoorthy, Douglas Wong.

To contact the reporter on this story: Joe Schneider in Sydney at jschneider5@bloomberg.net

To contact the editors responsible for this story: Michael Tighe at mtighe4@bloomberg.net; Douglas Wong at dwong19@bloomberg.net


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