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Battle of the tablets

06/06/2012

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Battle of the tablets

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Tablet wars reach the UK 

Samsung Electronics (UK) Ltd and another v Apple Inc [2012] EWHC 889 (Ch)

Technology giants Apple and Samsung are locked in a tense and widely reported web of global intellectual property litigation. The parties are battling it out in a number of jurisdictions both in and outside Europe. At the heart of the dispute between the parties in the UK and Europe is whether Samsung has infringed registered design rights owned by Apple in respect of its popular iPad tablet device. This is the first skirmish in the UK between the parties and follows hot on the heels of proceedings in the Netherlands and Germany.

The Story so far in Europe…

In Germany and the Netherlands, Apple issued proceedings against Samsung claiming that Samsung's Galaxy device (of which there are various models, although the Judge in the UK proceedings does not distinguish between them) infringed Apple's registered community design rights (RCDR) and sought injunctive relief on a pan-European basis.  

In the Netherlands, at first instance and on appeal, Samsung's Galaxy tablet was held not to infringe the Community registered design of the Apple tablet so no injunction was granted. In Germany, Apple was initially successful in obtaining a pan-European preliminary injunction, but the scope of the injunction was later limited to Germany only and the basis for the injunction was changed from RCDR to German unfair competition (equivalent to UK passing off).

Round 1 in the UK

The UK action sees the parties switched the other way around; in the UK, Samsung sued Apple, seeking a declaration of non-infringement and an injunction restraining Apple from making threats to sue for infringement.  The first judgment in these proceedings emerged from Mr Justice Mann on 4 April 2012.  However, it is not a substantive judgment and is limited to various procedural issues.

The ruling

Jurisdiction in relation to declaration of non-infringement

The first issue Mr Justice Mann considered was whether the UK High Court had jurisdiction to hear the case brought by Samsung's Korean parent company for a declaration of non-infringement.  Samsung argued that since Apple had sought a pan-European injunction in Germany against both Samsung Germany and its Korean parent (because Samsung Germany was an establishment of its Korean parent), by the same token, it could not now object to the jurisdiction of the UK courts in respect of Samsung UK and its Korean parent.  Mr Justice Mann rejected this argument entirely. He held that the High Court had no jurisdiction since neither Samsung's Korean parent nor Apple were domiciled in the UK.  In reaching this decision, Mr Justice Mann applied a strict interpretation of Article 82 of the Community Design Regulation which deals with jurisdiction in cases involving, amongst other things, applications for declarations of non-infringement. The case was allowed to proceed, however, in respect of Samsung UK's application for a declaration of non-infringement.

Stay of proceedings?

The next issue he considered was whether the application for the declaration of non-infringement by Samsung UK should be stayed pending the outcome of existing invalidity proceedings before OHIM (Samsung sought to invalidate Apple's registered design right at OHIM before these proceedings commenced).   The judge held that OHIM did not have exclusive jurisdiction on validity and noted that validity could be raised in a national court if infringement proceedings were started, but if a claimant wished to take a validity point without being sued first, that had to be done through the OHIM.  The proceedings for the declaration of non-infringement by the UK entity were ordered to proceed on an expedited basis (the hearing is expected to be in June 2012).

Threats action

The last issue the judge considered was whether a groundless threat to bring infringement proceedings had been made by Apple. Samsung relied on a number of factors in support of this claim: (i) Apple's assertions in German proceedings that it was asserting its design rights throughout the EU; (ii) Apple's failure to respond to an invitation to consent to a declaration of non-infringement; (iii) various statements made by Apple about Samsung copying its products and stealing ideas so it needed to protect its IP; and (iv) the relative importance of the UK in the overall European market for tablet devices.

The groundless threats action was subject to English law on service – in order to bring a threats action, English law relating to service outside of the jurisdiction had to be applied, which requires there to be a good arguable case in relation to the threats action. Apple argued that it had not made a threat of bringing proceedings against Samsung for infringement and that there was no good arguable case. Mr Justice Mann agreed and held that no threat had been made and that there was no good arguable case.  Service outside the jurisdiction was held to be invalid.

Expedition

Samsung had sought expedition of the claims on the grounds that there was a need to remove uncertainty as to whether its products infringed.  Samsung was concerned about losing its market share, especially given the importance of the UK market for their products. The Judge did not allow immediate expedition as Samsung has not initiated the claim with the same urgency it was now indicating existed. Mr Justice Mann noted however that "the dispute needs resolution while the designs of the product are still current, and in the context of a Europe-wide dispute about these tablet computers, it is necessary to start to get some (or some more) final decisions in place to produce certainty and remove public and litigation posturing". The Judge therefore allowed some degree of expedition and set a hearing for June 2012.

Comments

There was no analysis in this judgment as to the substantive design law in the case. The outcome of the Samsung UK application for a declaration of non-infringement is therefore keenly awaited since it will be the first time that a UK court has considered substantively the merits of the case. It will also be interesting to see if the UK decision differs from the previous European decisions and if so, how and why, and what impact the decision will have in the UK on the sale of either party's popular tablet devices.

Michael Sweeney, Solicitor, IP Protection and IP Enforcement and Litigation at Fieldfisher.


Samsung v Apple Electronics (UK) Ltd v Apple, Inc [2012] EWCA Civ 729, 30 May 2012

Since writing the above, a further Court of Appeal (CA) decision was published on 30 May 2012 in part 2 of the UK battle. This decision relates to Apple's appeal against the order of Mr Justice Mann made on the 4 April 2012. Apple appealed the refusal by the High Court to stay Samsung's claim for a declaration of non-infringement. Apple's view was that the English proceedings should be stayed unless Samsung withdrew its OHIM proceedings for a declaration of invalidity as regard's Apple's registered design. The CA dismissed Apple's appeal and the case now proceeds to trial in accordance with the judge's original directions. The trial is listed for 18 June 2012 for 2 days.

Rebecca Pakenham-Walsh, Senior Associate (PSL), IP Protection and IP Enforcement and Litigation at Fieldfisher.

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