Samsung v Apple: a cautionary note on multi-jurisdictional IP actions

19 October 2012

Rebecca O'Kelly

Yesterday the English Court of Appeal upheld the High Court’s finding that Apple Inc’s registered Community design for handheld computers is not infringed by Samsung’s Galaxy 7.7, 8.9 or 10.0 tablets and, to clarify any confusion that exists in the market, upheld a “publicity order” imposed on Apple requiring Apple to advertise that fact.

Despite the High Court’s finding on 9 July 2012 that Apple’s Community Design No. 000181607-0001 had not been infringed, on 24 July 2012, the German Court of Appeal, the Oberlandesgericht, issued a Europe-wide interim injunction against Samsung Electronics Co. Ltd (SEC), the parent company of Samsung UK, prohibiting SEC from selling its Galaxy 7.7 tablet in Europe.

Yesterday’s judgment highlighted the consequences of parties seeking, and obtaining, inconsistent orders in different jurisdictions within the EU.

Timeline of UK proceedings

In October 2011, Apple obtained a pan-European injunction in the Landgericht Düsseldorf prohibiting the sale of the Galaxy 7.7 tablet by Samsung’s German subsidiary. Apple failed to obtain an injunction against SEC itself in relation to the Galaxy 7.7 tablet and appealed that decision.

Prior to this, Samsung’s UK subsidiary had applied for a declaration of non-infringement of Apple’s Community Design and that application was decided in their favour by HH Judge Birss on 9 July 2012.

Subsequently, the appeal from the Landgericht Düsseldorf was heard by the Oberlandesgericht and decided in Apple’s favour on 24 July 2012, granting Apple the pan-European injunction against SEC. In giving its decision the Oberlandesgericht dismissed the decision of Judge Birss and suggested that he had applied an incorrect test in determining who an informed user is by applying a test set out by the General Court, rather than that of the Court of Justice.

Apple also appealed the decision of Judge Birss and it was that judgment that was handed down yesterday. Ultimately the Court upheld Judge Birss’s finding of non-infringement, but perhaps the more notable part of the judgment was the Court’s comments in relation to the German Oberlandesgericht.

In his decision Sir Robin Jacob took serious issue with why the Oberlandesgericht thought it had any basis on which to grant the injunction on 24 July. He found this hard to understand for two reasons in particular:


1. No German court was “first seized” with any claim for infringement for design right infringement (Samsung’s applications for declarations of non-infringement having been applied for in Spain, England and the Netherlands more than two months in advance of Apple’s infringement proceedings being brought in Germany). Furthermore, at the time the appeal was heard by the Oberlandesgericht, no German court was seized of any claim of infringement of design rights given that in February 2012 Apple had withdrawn those arguments from its main action.

2. More importantly, by the time the “interim” injunction had been granted by the Oberlandesgericht, a final determination on the issue of infringement had been made by Judge Birss. Sir Robin Jacob accepted that the Brussels Regulation EC/44/2001 granted the Oberlandesgericht the right to grant “provisional, including protective measures”, however the time for provisional measures had clearly passed given that there had been a final decision of non-infringement by a Community design court (which was binding throughout the Community).


Sir Robin Jacob reiterated his own earlier decision in the Court of Appeal’s Grimme v Scott [2010] EWCA Civ 1110 in which he stated that unless a court of one state is convinced that the reasoning of a court in another member state is incorrect, it should not depart from a point authoritatively decided in that member state. He found that the bare reasons that the Oberlandesgericht had provided for rejecting Judge Birss’s decision were not sufficient to overcome that hurdle.

He drove the point home by saying that where the courts of Europe reject decisions of other member state courts and give inconsistent decisions, Europe will ultimately suffer as a whole.

Consequences

Dealing with Apple’s appeal from the publicity order granted by Judge Birss, Sir Robin Jacob said that had matters not subsequently changed, he would have been inclined to allow the appeal. However, in light of the subsequent decision of the Oberlandesgericht and the large media focus which it had received, he felt compelled to uphold the order (albeit in amended terms).

Sir Robin Jacob accepted that the Enforcement Directive 2004/48/EC only covered the granting of a publicity order in circumstances where a claimant was successful in a finding of infringement against an infringer, the aim being to publicise the rightsholder’s win and to act as a deterrent against other potential infringers. That was not the case here as Apple had not been successful in its infringement counterclaim. However, Sir Robin Jacob found that the court had jurisdiction to grant such an order given that a declaration of non-infringement is a discretionary, equitable remedy and the publicity order is therefore an adjunct to it. Therefore a publicity order may be appropriate where it is proportionate and where it is necessary to “dispel commercial uncertainty”.

Sir Robin Jacob was critical of the fact that, despite the decision of Judge Birss, Apple had maintained its appeal in Germany and obtained and was keeping in force the pan-European injunction against Samsung. In addition, in light of the high level of media attention that each decision in these various proceedings was garnering (on the one hand saying Samsung had not infringed Apple’s rights, on the other saying that Apple had obtained an injunction restraining Samsung from selling its Galaxy 7.7 tablet in Europe), a real commercial uncertainty had been created in the eyes of the consumer. Having created the confusion, it was Apple’s duty to resolve it: “the acknowledgement must come from the horse’s mouth.”

Conclusion

In times when multi-jurisdictional IP litigation is becoming increasingly common, it is imperative that companies take a holistic view of the decisions they obtain in various jurisdictions. The consequences of a company maintaining a line of defence/attack in one jurisdiction which ignores the conclusions of another jurisdiction, can not only result in wasted cost implications, but may also lead to that company having to take steps to broadcast the result of its actions to the public.