Samsung allowed to sell its iPad-competitor in Australia, just in time for Christmas

Samsung allowed to sell its iPad-competitor in Australia, just in time for Christmas

Samsung allowed to sell its iPad-competitor in Australia, just in time for Christmas

The Full Court of the Federal Court of Australia has today allowed Samsung’s appeal from the decision of Justice Bennett handed down on 13 October 2011. The effect of Justices Dowsett, Foster and Yates’ decision is to allow Samsung to market and sell the Galaxy Tab 10.1 iPad-competitor in Australia pending a final decision by the Court, and subject to any intervening order of the High Court. The Full Court’s decision represents a significant win for Samsung in its ongoing worldwide litigation against Apple.

The case was important enough for the Full Court to hear the appeal

The Full Court gave Samsung leave to appeal the primary judge’s decision on the basis that a decision on granting an interlocutory application would finally determine the rights of the parties, and so the consequences of the decision were sufficiently great to have the Full Court hear the appeal.

The strength of the arguments made by Apple and Samsung should have been assessed

In her decision granting an injunction to Apple restraining the sale in Australia of the Galaxy Tab 10.1, Justice Bennett determined that on many issues both Samsung and Apple had arguments that were “open”, and that this meant that Apple had a prima facie case for infringement of its patents. However the Full Court has now made it clear that an assessment of the strength of Apple’s case, in comparison with Samsung’s case, needed to have been made. This is particularly the case where the balance of convenience factor is nearly evenly weighted (as it was in this case). In other words, Apple was required to show that it had good prospects of success.

Apple did not have a sufficiently strong case

Although Apple asked that the matter be sent back to Justice Bennett for a further decision (not only further delaying an outcome in this case to its advantage, but also so that a judge already favourable to it would be making the decision), the Full Court took matters into its own hands, and assessed both Apple’s and Samsung’s arguments. It found that Apple did not have prima facie case for infringement for both of the patents it asserted against Samsung, and that Samsung did not have a prima facie case of invalidity in relation to one of the patents. (Samsung had only alleged that one of the Apple’s patents was invalid). The net result is that Apple is not entitled to an interlocutory injunction.

Samsung was justified in refusing an early hearing

In assessing the balance of convenience factor, Justice Bennett gave some weight to Samsung’s unwillingness to agree to an early trial. The Full Court carefully considered the history of the matter, and determined that not only was Samsung’s refusal to agree to an early hearing, on terms that were prejudicial to it, completely reasonable, it was not a factor to be taken into account in assessing the balance of convenience.

Apple’s response

Within hours of the decision, Apple obtained a stay of the Full Court’s orders until 4pm this Friday, to enable it to seek leave of the High Court of Australia to appeal from the decision. The High Court generally only gives leave to appeals concerning a significant principle of law that it considers requires clarification or correction. The effect of the stay is that, despite the Full Court’s decision, Samsung must wait until 4pm Friday before it can market and sell the Galaxy Tab 10.1. An intervening order by the High Court of Australia could delay sales of the Galaxy Tab 10.1 even further.

Impact of the decision

In case Apple is successful at the final hearing, Samsung must keep careful track of the numbers of Galaxy Tab 10.1 tablets sold in Australia, and the apps downloaded from the Samsung Applications Store to Australian Galaxy Tab 10.1 devices, so that any damages awarded to Apple may be easily calculated.

A final decision in this case is some months away, although the outcome of Apple’s application to the High Court is likely to be known much sooner. Subject to any orders made by the High Court, this decision paves the way for Samsung to establish a beachhead in Australia for its larger tablets, and the strong reasons given by the Full Court may signify a turning of the tide away from Apple. The impact of this decision on the worldwide litigation taking place between the parties is yet to be seen.