Tuesday, January 31, 2012

German appeals court upholds Galaxy Tab 10.1 injunction -- but on different legal basis than Apple's design right

This morning, the Düsseldorf Higher Regional Court (an appeals court) announced that it has upheld a preliminary injunction against the Samsung Galaxy Tab 10.1 and has confirmed that the smaller Galaxy Tab 8.9 falls within the scope of that injunction. But this doesn't mean that Samsung lost all the way: the appeals court based its decision on a violation of German unfair competition law (Gesetz gegen den unlauteren Wettbewerb, UWG), while the lower court's ruling was based on a finding of a violation of a Community design, the European equivalent of a U.S. design patent.

The preliminary injunction was originally ordered in early August 2011 and, following a hearing by the same court, upheld in early September 2011. Subsequently, Samsung appealed the case to the Düsseldorf Higher Regional Court.

Today's ruling validates Apple's decision to bring claims against the Galaxy Tab 10.1. Apple's actions may have been aggressive, but they weren't unreasonably overreaching. At the very least, there can be a genuine dispute over this issue. But the strength of Apple's Community design is increasingly questionable. Just last week, a Dutch appeals court narrowed the scope of that design-related right and did not find Samsung in infringement. I didn't see a reference to unfair competition law in the Dutch ruling. Apple brought such claims only in Germany, a jurisdiction in which unfair competition law is almost a "catch-all" kind of law that is applicable to a wide variety of commercial issues.

Let's put today's decision into perspective:

  1. Apple can't replicate the German decision in other countries since German unfair competition law is pretty unique. A win based on an EU-wide design right would have been strategically more valuable to Apple. Even though Samsung formally lost its appeal because the preliminary injunction remains in force, it succeeded in defeating Apple's design right.

  2. A couple of months ago, Samsung launched a modified version of the Galaxy Tab 10.1, named 10.1N, in Germany. In late November 2011, Apple requested a preliminary injunction against the 10.1N. For now, the 10.1N is still on sale. The Düsseldorf Regional Court held a hearing the week before Christmas and will announce a decision on February 9, 2012. The fact that Apple won today doesn't necessarily mean that it will succeed against the 10.1N. If Samsung is allowed to continue to sell the 10.1N, the commercial relevance of today's appellate decision is next to nil.

  3. While today's decision was made by an appeals court, we are still talking about fast-track proceedings triggered by a request for a preliminary injunction (and an appeal against one). All those decisions are preliminary, and what matters most is the full-blown main proceeding in which Apple's design-related claims against a total of 15 Samsung products are at issue. It's too early to tell what the outcome of that case will be.

  4. In my opinion, the strategic value of those design-related lawsuits is relatively low. Preliminary injunctions based on such claims can have a temporary disruptive effect, but the world-spanning dispute between Apple and Samsung primarily hinges on the outcome of the parties' technical patent infringement claims against each other. The first two patent infringement lawsuits Samsung brought against Apple in Germany have been dismissed. Decisions on Apple's related claims will come down in the coming months.

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