Thursday, August 25, 2011

German Galaxy Tab 10.1 injunction: upheld for the time being, ruling on September 9

I changed plans a few days ago and didn't travel to today's court hearing in Düsseldorf on the Apple v. Samsung Galaxy Tab 10.1 Community design inringement case. After the suspension of the enforcement of the injunction with respect to Samsung's (Korean parent company's) activities outside of Germany, I thought it was unlikely that the court would uphold the ruling with respect to its ex-Germany part.'s Andreas Udo de Haes reported via Twitter from the courtroom that the hearing just ended (shortly before 4 PM local time). The injunction will remain in force and effect for the time being. A post-hearing ruling will be issued on September 9.

The suspension regarding other markets than Germany also doesn't change, for now.

[Update] I have produced an English translation of the Düsseldorf Regional Court's official statement issued after the hearing. [/Update]

First reports already surfaced after the judge's introductory statement -- but prior to any statement by the parties' counsel -- that the court upholds the preliminary injunction (with respect to Germany). That, however, is an oversimplification of where things stood at the time. The judge only indicated that she wasn't swayed by Samsung's pleading to lift the injunction. Samsung had submitted a brief before today's court session. However, after that statement by the judge, counsel for the parties still had the opportunity to make presentations, and a post-hearing decision is scheduled for September 9.

According to Bloomberg, the judge said that "[t]here are a lot of alternative ways to design a tablet device, as the market amply shows", and added that the Düsseldorf court thinks "Apple's EU design rights grant a medium range of protection, if not a broad one." Based on what I've heard so far about the hearing, it looks like a long shot for Samsung to turn that judge around.

It also seems that the court isn't impressed by claims of Apple having misled the court with the photos it presented in its complaint. At some point she told both parties' lawyers to discuss that kind of matter outside but the court doesn't seem interested in it. If the judge really had been interested in a face-saving exit strategy, she might have claimed that she felt she was misled. But that judge appears to be firmly on Apple's side and considers the Galaxy Tab 10.1 an iPad rip-off.

Samsung's lawyers passed around German translations of yesterday's Dutch court ruling. On a preliminary basis, the Dutch ruling didn't recognize Apple's asserted Community design as valid. While courts in one EU member state are required to take into consideration a decision taken in another EU member state with respect to the same EU law (in this case, the Community Design Regulation), this isn't comparable to the binding effect of case law on courts in, for example, one circuit (group of federal districts) in the United States. Basically, the judge in Düsseldorf only needs to somehow mention the Dutch ruling in her decision but is free to disagree, such as by saying that she didn't find any new arguments in the Dutch ruling that persuaded her to change mind.

I'd like to explain another difference between U.S. and German law that's important for the further development of this case. There are two questions of fact here that could be outcome-determinative in different ways, but it's key to consider that there's no such thing as US-style discovery in German civil procedure. These are the two questions of fact, their potential implications, and the related burden of proof:

  • For the question of whether a German can bar Samsung's Korean parent company from selling in other EU member states, the judge said that this would depend on the nature of the relationship between Samsung's Korean parent company and the German operation. Those are complicated questions of control and governance. Since there's no discovery in Germany, I doubt that Apple will be able to disprove Samsung's counsel's claim that the German entity is legally independent. So I believe it's unlikely that the injunction will again be put in force for markets outside of Germany.

  • The judge said that the preliminary injunction was granted based on Apple's representations concerning a sense of urgency. I explained in a recent post that German courts grant preliminary injunctions (as opposed to final ones at the end of a full-blown main proceeding) only in urgent cases, which means that the period between when a right holder becomes aware of an infringement and when he files a motion for a preliminary injunction must not be too long -- generally, German lawyers are cautious about moving for preliminary injunctions if more than a month has passed since the acquisition of "positive knowledge". The judge indicated that Apple's motion would be considered untimely (which would do away with the preliminary injunction) if Samsung could prove that Apple knew of the first pictures of the German Galaxy Tab 10.1 that showed up somewhere in early June. But again, there's no discovery and this means Samsung would have the burden of proof. No Apple executive is realistically going to concede "positive knowledge" in early June.

While things aren't looking good for Samsung, it's not completely impossible that the judge may lift the injunction in the September 9 decision. It's not too likely to happen, however.

Unfortunately for Samsung, the Düsseldorf court has a reputation of being very right holder-friendly...

Assuming the Düsseldorf regional court affirms the decision as indicated today, there are different ways in which Samsung can appeal:

  • On the one hand, regardless of whether the preliminary injunction remains in force, there will be a full-blown main proceeding now in the Düsseldorf regional court. That one will probably take about a year. Samsung could also appeal that one, possibly all the way to the German Federal Court of Justice, and questions relevant under EU law could be referred to the Court of Justice of the European Union. But all of that takes too long for the Galaxy Tab 10.1.

  • In addition, and still on the fast track, Samsung can try to appeal to the Oberlandesgericht (Higher Regional Court), also in Düsseldorf. That one is also part of the Düsseldorf school of thought but sometimes reserves the lower court's decisions. However, if that one affirms the preliminary injunction, it's game over on the fast track.

Very interestingly, Neelie Kroes, vice president of the European Commission and commissioner for the EU's Digital Agenda (previously in charge of competition and known particularly for the fines she imposed on Microsoft and Intel and an in-depth review of Oracle's acquisition of Sun Microsystems), just said on Twitter that Brussels is following the Apple v. Samsung cases in the Netherlands and Germany closely:

It's important not to overrate such a tweet. The courts are independent, and Mrs. Kroes is no longer in charge of antitrust enforcement. She now has a policymaking focus, and since the intellectual property right asserted in this particular part of the Apple v. Samsung dispute is an EU instrument, I interpret that tweet as an interest in the proceedings from a longer-term policymaking point of view more than anything else, at least for the time being.

[Update] Asked by an open source journalist about the nature of her interest in this, she replied: "I follow any developments related to the Digital Agenda" [/Update]

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