Bloomberg News

Apple Wins Preliminary Injunction Against Samsung Tablet

June 27, 2012

Galaxy Tab 10.1 Tablet

A model poses with a Galaxy Tab 10.1 tablet computer at the Samsung headquarters in Seoul. Photographer: Jean Chung/Bloomberg

Apple Inc. (AAPL:US) won a court order immediately blocking U.S. sales of Samsung Electronics Co. (005930)’s Galaxy Tab 10.1 tablet computer as the companies continue their global patent dispute.

U.S. District Judge Lucy Koh in San Jose, California, issued the order yesterday after rejecting a similar request in December. Apple’s request, part of a broader patent dispute over smartphones and tablets, was based on an appeals court finding that it will probably win its patent-infringement claim relating to the Tab 10.1 tablet.

The world’s two biggest makers of high-end phones have accused each other of copying designs and technology for mobile devices and are fighting patent battles on four continents to retain their dominance in the $219 billion global smartphone market. Suwon, South Korea-based Samsung will take necessary legal steps in response to yesterday’s ruling on the year-old model, the company said in a statement today.

“This is an extension of their fight in the smartphone space,” Kim Young Chan, a Seoul-based analyst at Shinhan Investment Corp., said by phone. “If you look at precedents, different cases yielded different rulings. As long as smartphones aren’t blocked, Samsung’s fundamentals will stay intact.”

Quarterly sales of the Tab 10.1 in the U.S. may total about 300,000 units on average, Kim said. Samsung, which doesn’t disclose shipment figures for smartphones and tablets, sold 44.5 million smartphones globally in the first quarter, according to market researcher Strategy Analytics. Apple is also the biggest buyer of Samsung chips and displays.

Hague Ruling

Samsung shares gained 2.5 percent to 1,167,000 won at the close of trading in Seoul, while the benchmark Kospi index was little changed.

The U.S. sales ban follows last week’s ruling in The Hague that Apple has to compensate Samsung for damages caused by a breach of patents since August 2010. Apple also sought a U.S. ban on the latest model of the Galaxy S smartphone, which went on sale in the market this month.

“In this case, although Samsung will necessarily be harmed by being forced to withdraw its product from the market before the merits can be determined after a full trial, the harm faced by Apple absent an injunction on the Galaxy Tab 10.1 is greater,” Koh said in yesterday’s ruling.

She said a June 29 hearing to address Apple’s third request to block Samsung’s tablet computer wasn’t needed. A trial is set for July 30.

The public interest “favors the enforcement of patent rights,” Koh wrote. “Although Samsung has a right to compete, it does not have a right to compete unfairly, by flooding the market with infringing products.”

Samsung Products

Samsung said in a statement that it was disappointed in the ruling, while it won’t have significant impact on its business. Other Tab products will continue to be available to U.S. consumers, the South Korean company said.

The ruling “will ultimately reduce the availability of superior technological features to consumers in the U.S.,” Samsung said in the statement. If Apple continues to sue based on “generic design” patent claims “innovation and progress in the industry could be restricted.”

Koh yesterday rejected Samsung’s arguments that the injunction was overbroad because the infringement claim was based on one aspect of the overall product, and that it would hurt Samsung’s relationships with wireless carriers that provide the Galaxy Tab to their customers.

‘Important Driver’

Koh wrote in December that “design is an important driver in the demand for tablet sales.” “Samsung cannot be heard to complain about broken business relationships that it has established on infringing products.”

On June 4, Koh rejected Apple’s second request to ban the tablet sales while the U.S. Court of Appeals for the Federal Circuit in Washington was considering her first such denial in December. Koh said then she didn’t have jurisdiction to issue a preliminary injunction because the appeals court hadn’t issued a mandate.

On June 19, the appeals court reaffirmed its May determination that Apple’s patent on a design of the tablet is likely to withstand challenges to its validity. That decision allowed the Cupertino, California-based company to renew its request to block sales of Samsung’s tablet in the U.S.

Kristin Huget, an Apple spokeswoman, reiterated an earlier company statement saying it must “protect Apple’s intellectual property when companies steal our ideas.”

Koh required Apple to post a $2.6 million bond to cover a potential damages payment to Samsung if Apple loses the case.

The case is Apple Inc. v. Samsung Electronics Co. Ltd., 11- cv-01846, U.S. District Court, Northern District of California (San Jose).

To contact the reporters on this story: Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net; Edvard Pettersson in Los Angeles at epettersson@bloomberg.net; Jun Yang in Seoul at jyang180@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

A model poses with a Galaxy Tab 10.1 tablet computer at the Samsung headquarters in Seoul. Photographer: Jean Chung/Bloomberg The world’s two biggest makers of high-end phones have accused each other of copying designs and technology for mobile devices and are fighting patent battles on four continents to retain their dominance in the $219 billion global smartphone market. Photographer: Jean Chung/Bloomberg May 30 (Bloomberg) -- Lee Simpson, an analyst at Jefferies International, talks about Samsung Electronics Co.'s Galaxy S III smartphone and the company's patent disputes with Apple Inc. He speaks with Linzie Janis and Mark Barton on Bloomberg Television's "Countdown." (Source: Bloomberg) May 30 (Bloomberg) -- Sandy Shen, an analyst at Gartner Inc. in Shanghai, talks about Samsung Electronics Co.'s new Galaxy S III smartphone and how it compares to Apple Inc.'s iPhone 4S. Shen speaks with Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg) May 2 (Bloomberg) -- Ron Laurie, managing director of Inflexion Point Strategy LLC, talks about the patent dispute between Apple Inc. and Samsung Electronics Co. He speaks from San Francisco with Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg)

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