Federal Court overturns Samsung Galaxy Tab injunction

Appeal heads to High Court.

The Federal Court of Australia has unanimously overturned an interlocutory injunction against Samsung's Galaxy Tab 10.1 tablet, with Apple ordered to pay costs of the appeal.

But Justice Lindsay Foster, who handed down the 66-page judgment today on behalf of the Full Bench, today granted Apple an extension on the judgment until 4pm Friday this week, by which time the iPad maker intends to apply for leave to appeal before the High Court.

The Full Bench ordered the initial injunction against the sale of the tablet to be "immediately discharged".

Apple would still be liable for Samsung's costs in the appeal.

The successful appeal will allow Samsung to launch the Australian version of the tablet within seven days.

However, the stay granted by Justice Foster will prevent Samsung from officially launching the product before Friday, when Apple intends to apply for special leave to appeal to the High Court.

Legal experts remain uncertain whether the court would hear the appeal.

Samsung welcomed the decision which it claimed "clearly affirms that Apple’s legal claims lack merit".

It would not confirm, however, whether it will ultimately launch the device. The manufacturer has previously claimed any injunctions past mid-October would significantly reduce the tablet's commercial life.

As part of the judgment, Samsung will be required to take account of each Galaxy Tab 10.1 imported, kept, and sold, as well of associated material including applications sold by Samsung until further notice, in order to keep a track of potential damages owed to Apple before a final hearing.

An Apple spokeswoman refused to comment on the case.

Apple's lead barrister Stephen Burley SC sought to make a stay of orders until Monday, allowing Apple to speak with US headquarters and formulate an appeal to the High Court.

"As I understand it the High Court has no fixed procedure to deal with an urgent application such as this," Burley said. "By Friday we'd be in a position to make that application."

Samsung lead barrister Peter Chalk opposed the short stay of orders, claiming it would "simply prolong the injustice that has already been held against Samsung".

"Any stay no matter, how short, given the pendency of the Christmas trading period would continue to cause substantial injustice and hardship to Samsung," he said.

Justice Foster agreed to the extension until Friday, providing Apple some hope that the injunction could continue against the Galaxy tablet.

"Mr Burley I think you should understand what's open for your clients to come back to us on that stay," Justice Foster said.

"If you wish to extend that stay you'll have to do that in the High Court."

Early hearing "unfortunate"

The lengthy judgment sided with Samsung on most of the legal issues brought up during the appeal, including Apple’s argument that the South Korean manufacturer had proceed to infringe its copyright with its “eyes wide open”.

The full bench also vindicated Samsung in its refusal to accept an early final hearing under limited terms from Apple during the interlocutory hearings, which it claimed had disadvantaged it in Justice Bennett’s judgment.

As the opportunity for an early final hearing was only ever an informal suggestion, the full bench found it should not have played a significant aspect in the interlocutory judgment.

“It is unfortunate that one party’s refusal to adopt that suggestion was to become a significant feature in her Honour’s reasons for resolving the dispute in a way which was very unfavourable to that party,” the judgment notes.

“We fear that the disinterested bystander may well have suspected that Samsung was punished for failing to adopt the approach recommended by the primary judge.”

Mark Summerfield, patent expert and senior associate at legal firm Watermark, told iTnews that the judgment overturned many of the reasons given by Justice Bennett in the interlocutory case.

These included Apple’s initial success in establishing a prima facie case for the probability of success in the final hearings as well as the balance of convenience falling to the iPad maker in banning sales of the Galaxy Tab 10.1.

Both were effectively overturned in the appeal judgment.

“The decision is a comprehensive victory for Samsung,” he said.

But Summerfield remained uncertain about Apple’s potential for success in the High Court.

“The Full Court has interpreted a number of High Court decisions in reaching its conclusions,” he said. ”If the High Court thinks it has been misinterpreted, it may be disposed to hear an appeal.

“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.

“My guess is 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.”

No final hearings have yet been set for the patent infringement case against the Galaxy Tab 10.1. However, it is likely Apple will use the case to bring forward significantly more than the two patents applied during the interlocutory hearings, potentially dragging out any litigation.