Samsung Electronics Co. Limited v Apple Inc.  FCAFC 156 (30 November 2011)
The Full Federal Court (Justices Dowsett, Foster and Yates) has today allowed Samsung’s appeal against Justice Bennett’s decision to grant an interlocutory injunction to prevent Samsung from importing, selling, etc. its Galaxy Tab 10.1 tablet computer. This will come as a relief to Samsung which was expecting healthy sales in the lead up to Christmas.
The Full Federal Court decision gives guidance on the grant of interlocutory injunctions.
An applicant for an interlocutory injunction must satisfy the Court firstly that it has a prima facie case in the sense that if the evidence remains as it is at the interlocutory stage, there is a probability that at the trial of the action the applicant will be entitled to a final injunction, and secondly that the balance of convenience favours the grant of the interlocutory injunction. This test was previously referred to as a “serious question to be tried” but ultimately, the Full Federal Court held that there was little difference.
Apple had been granted an interlocutory injunction in a Federal Court proceeding alleging infringement of its Touch Screen Patent (Australian Standard Patent No 2005246219) and its Heuristics Patent (Australian Standard Patent No 2007286532 for a graphical user interface for determining commands by applying heuristics).
Justice Bennett, having found that Apple had established a prima facie case, considered that many relevant factors as to the balance of convenience and justice were evenly balanced, but that three factors favoured Apple, being Samsung’s unwillingness to accept an early hearing date; Samsung’s proceeding with the launch of the Galaxy Tab 10.1 with its “eyes wide open”, and the fact that Apple’s case was based upon two separate, granted patents.
Samsung appealed and, in place of injunctions, the Full Federal Court substituted an order that Samsung keep accounts including regarding Australian sales of Galaxy Tab 10.1 tablet computers (which Samsung had previously offered in any event).
In allowing the Appeal, the Full Court stated (at ) that in addition to deciding whether Apple had made out a sufficient prima facie case for the grant of an injunction at the final trial, Justice Bennett was also required to assess the strength of that case so that she could take into account her views on that matter in her assessment of the balance of convenience and justice.
The Full Court stated (at ) that Justice Bennett did not undertake either of these evaluative tasks and went on to say that “Her Honour’s failure to do so constituted important errors which led her to grant interlocutory injunctive relief in circumstances where … she should not have done so. In our view, her decision was clearly wrong and should be set aside.”
The Full Court went on to exercise the Court’s discretion and determined that Samsung’s unwillingness to accept an early hearing date was reasonable in the circumstances and the fact that Apple’s case was based upon two separate, registered patents should, in this case, be given no weight.
With regard to Samsung’s proceeding with the launch of the Galaxy Tab 10.1 with its “eyes wide open”, the Full Court stated (at ) that “in the present case, the most compelling features are the assessments of the strengths and weaknesses of the respective cases and the equality of likely detriment. Other considerations pale into insignificance beside those matters.”
On the issue of equality of likely detriment, the Full Court took into account that Samsung’s product had a (sales) life expectancy of around a year and that granting an interlocutory injunction would have prevented the product from ever being sold here, making the interlocutory orders effectively final orders. Factors of public interest were therefore also of relevance.
The Court commented (at [49-50]) that rather than take an “all or nothing” approach, an arrangement which shared the risk of loss was the best that could be done to avoid frustration of the Court’s process.
Apple will have seven days to seek special leave to appeal to the High Court if it wishes to do so.