The recent legal wrangling between Apple and Samsung in relation to Apple's application for an interlocutory injunction barring the import and sale of Samsung's Galaxy Tab 10.1 into Australia demonstrates the difficulties that can arise in assessing whether an applicant for an interlocutory injunction has made out a prima facie case and whether the balance of convenience and justice favour the granting of the injunction.
An injunction is a "coercive" remedy granted by the Court to an applicant ordering another party to do or not to do a particular action. In patent litigation, the granting of a final injunction preventing a party from continuing or commencing infringing conduct is usually the primary concern of the patentee. A secondary concern is then compensation for any infringing conduct that may have already occurred. While a final injunction can only take effect once there has been a final determination of the case on its merits there is also the question of remedies that might be available to the patentee in the intervening time. In these circumstances, the patentee may make an application for an interlocutory injunction to prevent on an interim basis the conduct that is being alleged to infringe.
Under Australian law, the Court looks to whether an applicant for an interlocutory injunction has first made out a prima facie case and then further assesses whether the balance of convenience and justice favour the granting of the injunction. Notably, the strength of the prima facie case may also be a factor when assessing the balance of convenience. In the recent battle between Apple and Samsung, the Australian Federal Court at first instance1 and the Full Court on appeal2 differed as to the approach to be taken.
Background
The Australian proceedings are only one "skirmish" in the current "war" between Apple and Samsung which commenced in April 2011 with Apple filing suit against Samsung in the US. The central theme of this complaint and indeed proceedings brought by Apple in other jurisdictions is that Samsung has "slavishly copied" Apple products such as the iPhone and iPad. This worldwide dispute has the curious aspect that Apple and Samsung are allies at the hardware level with Samsung supplying essential components to Apple such as the A5 processor that powers both Apple's new iPhone 4S and the iPad2 tablet products.
In Australia, Apple commenced proceedings on 28 July 2011 seeking permanent and interlocutory injunctive relief alleging infringement of a collection of patents and innovation patents by Samsung's importation, offering for sale or supply of the Galaxy Tab 10.1. Samsung then advised that they intended to sell a modified version of the product but provided an undertaking that they would not launch this revised Galaxy Tab 10.1 until Apple's interlocutory injunction application had been decided.
Perhaps the defining feature of the circumstances surrounding the interlocutory application was that any decision would effectively finally determine the matter. As agreed between the parties, this aspect was due to the rapid life cycle of electronic tablet based products which was said to be of the order of one year. If the injunction was granted and Samsung was prevented from launching the Galaxy Tab 10.1 this would effectively kill the product in Australia as it would not be available for the 2011 Christmas buying season.
The Approaches of the Court and the Full Court
The Prima Facie Case
The Court at first instance held that Apple was able to meet the threshold question of having a prima facie case of infringement against Samsung in respect of both patents (i.e. the "Touch Screen Patent" and the "Heuristics Patent"). This was on the basis that the claim construction contended for by Apple would include within its scope features of the Galaxy 10.1 product. In this assessment it was not necessary that Apple could show that it was more probable than not that they would succeed at trial. In respect of the Touch Screen Patent, Samsung was able to establish a prima facie case of invalidity but this was not strong enough to counter the finding of a prima facie case of infringement for Apple.
The Full Court rejected this approach on the basis that the Court at first instance had not taken into account the "organising" principle that the required strength of the prima facie case must be dependent upon the nature of the rights and the practical consequences if an injunction was granted. In this case, if an injunction was granted then Samsung would effectively be prevented from releasing the Galaxy Tab 10.1 in Australia even if they were to eventually succeed at trial. These serious consequences then called for a proper assessment of each party's case to determine its merits.
Following this approach, the Full Court took a very hard look at Apple's patent claim construction and found that Apple's case on infringement was not sufficiently strong to justify interlocutory relief in respect of both patents. Interestingly, this was in spite of a finding by the Full Court that Samsung had failed to make out its own prima facie case of invalidity in respect of the Touch Screen Patent
The Balance of Convenience of Factors
In the decision at first instance, the Court had found that the balance of convenience was almost evenly weighted finding that both parties could suffer significant detriment depending on the decision and further that damages would be an inadequate remedy. Eventually, the Court found for Apple giving weight to the factors that Samsung was unwilling to accept an early trial date and that it had prepared to launch the Galaxy Tab 10.1 in Australia with its "eyes wide open" of the likelihood of Apple commencing proceedings. An additional factor said to be in Apple's favour was that the prima facie case of infringement was in respect of two registered patents.
The Full Court was critical of how the Court at first instance had taken into account that Samsung was not prepared to accept an early trial date seeing this as an irrelevant consideration as there was no deliberation by the Court as to how reasonable Apple's proposal was in the first instance and secondly that there had never been a formal motion by Apple for an early final hearing. The Full Court also placed very little weight on the "eyes wide open" consideration and no weight on the consideration that Apple had relied on two registered patents given that the Full Court had found that there were insufficient prospects of Apple establishing infringement based on either of the patents.
Special Leave Application
Samsung having won the appeal could still not launch the Galaxy Tab 10.1 as the orders overturning the initial injunction were stayed until the Australian High Court was able to hear Apple's special leave application. On 9 December 2011, the High Court denied Apple's special leave application3 and Samsung was finally able to enter the Australian market a matter of weeks before Christmas.
Footnotes
1 Apple Inc. v Samsung Electronics Co. Limited
[2011] FCA 1164
2 Samsung Electronics Co. Limited v Apple Inc. [2011]
FCAFC 156
3 Apple Inc. v Samsung Electronics Co. Limited [2011]
HCATrans 341
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