Inside the Galaxy Tab 10.1 injunction ruling

The news rang out around the world yesterday that the full bench of the Federal Court of Australia overturned the preliminary injunction levelled against Samsung and its Galaxy Tab 10.1, but what happened next and what does it mean? Will you see the Tab 10.1 any time soon?
Written by Luke Hopewell, Contributor

analysis The news rang out around the world yesterday that the full bench of the Federal Court of Australia overturned the preliminary injunction levelled against Samsung's Galaxy Tab 10.1, but what happened next and what does it mean?

The decision to overturn the injunction, originally handed down by Justice Annabelle Bennett, was read in the Federal Court of NSW yesterday by Justice Lindsay Foster on behalf of the full bench. The decision to overturn the ban was unanimous, with all three appeal justices agreeing to overturn the ban.

The Federal Court's orders are as follows:

The court orders that:

  1. The applicants have leave to appeal from the decision of Bennett J made on 13 October 2011 and the orders made by Bennett J on 14 October 2011.
  2. The draft Notice of Appeal filed on 17 October 2011 at the same time as the applicants' Application for Leave to Appeal herein stand as the appellants' Notice of Appeal.
  3. The appeal be allowed.
  4. The interlocutory injunctions granted by Bennett J at paragraphs 4 and 5 of the orders made by her Honour on 14 October 2011 be immediately discharged.
  5. In lieu of those orders, and upon the respondents to the appeal (the Apple parties) continuing the undertakings which they gave to the Court on 14 October 2011, until further or other order, the appellants keep accounts with respect to the Australian Galaxy Tab 10.1 referred to in the respondents' Statement of Facts and Contentions for Interlocutory Relief dated 5 September 2011 (the Galaxy Tab 10.1), in which are recorded comprehensive details of:
    • each Galaxy Tab 10.1 imported into Australia by the appellants or either of them for the purpose of promotion, sale or other supply;
    • each Galaxy Tab 10.1 kept in Australia by or for the appellants or either of them for the purpose of promotion, sale or supply;
    • each Galaxy Tab 10.1 sold or otherwise supplied in Australia or from Australia by the appellants or either of them; and
    • all sales or other supply in Australia of associated material called "Apps" that are downloaded from the Samsung Applications Store to Galaxy Tab 10.1 devices in Australia or to Galaxy Tab 10.1 devices sold from Australia, such accounts to be kept in such form as to distinguish between each of the dealings referred to in sub-paragraphs (a) to (d).
  6. The respondents' claim for interlocutory relief set out in Section B of the respondents' Amended Application dated 5 September 2011 otherwise be dismissed.
  7. The respondents pay the appellants' costs of and incidental to the application for leave to appeal and the appeal.
  8. As soon as practicable, the proceeding be listed for directions before the docket judge by arrangement with the docket judge.

After Justice Foster handed down the stunning judgement, Apple leaped up to protest, seeking a stay of the orders handed down until it could adequately consider whether or not it would appeal the full bench's decision to the High Court of Australia.

The court ordered that orders three, four, five and six be held over until tomorrow at 4pm AEDST.

It is for this reason that Samsung's Galaxy Tab 10.1 tablet won't hit the shelves immediately. In fact, pending the High Court appeal, the tablet may still be held back from Australian shelves, despite how keen the market is to see it arrive.

Intellectual property lawyer and patent expert Dr Mark Summerfield notes, however, that it is unlikely the case will make it to the High Court, so there is still hope for those hanging out for one of Samsung's controversial devices.

"If the High Court thinks [the full bench decision] has been misinterpreted, it may be disposed to hear an appeal. However, on the basis of the factual findings it does not seem that it would make much difference even if the High Court wants to correct the Full Federal Court's legal reasoning. Three out of four Federal Court judges who have looked at the case have found no prima facie case of infringement.

"The High Court would almost certainly not overturn this factual finding, so by any legal reasoning (even Justice Bennett's) an injunction is not appropriate. We therefore think it possible that once Apple's lawyers have read and digested the decision, they may decide, after all, not to spend more of their client's money on a most-likely doomed application for Special Leave," he said.

At the same time that the judgement overturned the ban, it also ordered that Samsung keep a record of every Galaxy Tab 10.1 it imports, sells and ships, as well as detailed records of all apps sold to Australian users via Samsung's own Application Store on the Tab 10.1.

Summerfield told ZDNet Australia that noting the amount of apps and tablets sold by Samsung is designed to aid the courts if the ruling is ever overturned in another court of appeal.

"If Apple wins at trial, it will be necessary to determine the appropriate remedy. As well as a permanent injunction, Apple would have a choice of damages (ie, an amount based on how much income it has lost as a result of sales by Samsung in the meantime) or an account of profits (ie, an amount based on how much Samsung has made from its own sales)," Summerfield said.

Summerfield and others weighed in on the judgement yesterday, stating that the full bench's reasons for discharging the injunction largely stemmed back to a failure in Justice Bennett's original application of the law.

Summerfield wrote in his blog that the decision indicated that Justice Bennett applied the wrong test for a prima facie case — that is, a case in which enough evidence has been submitted to allow a final ruling.

"Firstly, in law, the Full Court has found that she applied the wrong test for the prima facie case. To put it simply, Bennett J treated the question as if it were 'binary', ie, either Apple has 'a probability' of success, or it does not. The Full Court has found that the proper evaluation requires an assessment of the strength of the case, before reaching an appropriate decision in the circumstances.

"Because of this error, the Full Court has revisited the facts of the case, so that it can perform its own, correct, evaluation," Summerfield said.

Patent commentator Florian Mueller said on his blog that the judgement handed down by the Full Bench judges was a harsh blow at Justice Bennett.

"The appellate decision is very harsh on the primary judge. Even though I believe that it was imperative, from a policy point of view, to raise the bar for patent-based preliminary injunctions well above the standard applied by the first-instance judge, I think she didn't do quite as bad a job as today's ruling suggests. The appellate decision says that "[a]ll that her Honour did was to set out the competing contentions of the parties on infringement and invalidity without assessing those contentions as she was required to do'", he wrote.

The case is set to go back before the Federal Court tomorrow.

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