A federal court in California has ordered Samsung Electronics Co. Ltd. (Korea: SEC) to stop selling one version of its Galaxy Tab 10.1, because the continued sale of the device could cause "irreparable harm" to Apple Inc. (Nasdaq: AAPL). The decision handed down Tuesday followed an appellate court's ruling that the lower court had erred in denying Apple's request for an injunction banning the sale of the Samsung device.
A string of patent suits have consumed the electronics industry, particularly the wireless handset and tablet PC sectors, over the last three years. Many of the industry's leading players, including Apple, Google, HTC, Motorola Mobility Inc. (NYSE: MMI), and Nokia, are battling in courts worldwide over alleged patent violations. Though Apple scored a definite win with the latest ruling, it is still locked in battles over similar issues in Europe and Asia. This month, another US court tossed out a patent suit Apple had filed against Motorola Mobility.
In the ruling issued Tuesday (which you can read at the bottom of this post), the US District Court for the Northern District of California cited a ruling it had made in December "that Apple had established that the Samsung Galaxy Tab 10.1 likely infringed upon the D'889 Patent, and that Apple was likely to suffer irreparable harm as a result of Samsung's infringing conduct." In December, the court did not order a ban, because it believed the patent filed by Apple "was likely invalid based on several prior art references." The appellate court reversed that decision.
However, Apple doesn't have much to celebrate with this win. Samsung has already modified the Galaxy Tab 10.1 and has introduced an update called the Galaxy Tab 2 10.1. The latest ruling does not affect the new device. Also, according to reports, the ruling does not expressly call for a recall of the Galaxy Tab 10.1, so retailers could continue selling their inventory. Furthermore, the ban would go into effect only after Apple posts a bond worth $2.6 million, which would "secure payment of any damages sustained by defendant if it is later found to have been wrongfully enjoined."
The presiding judge, Lucy H. Koh, disagreed with Samsung's contention that it could suffer as a result of the ban. She had previously ruled that the Galaxy Tab 10.1 was "substantially similar" to the iPad and therefore infringed upon it. She also wrote in the latest ruling:
Although Samsung will necessarily be harmed by being forced to withdraw its product from the market before the merits can be determined after a full trial, the harm faced by Apple absent an injunction on the Galaxy Tab 10.1 is greater...
Galaxy Tab Injunction Ruling
Samsung's argument that its business relationships would be damaged by an injunction rings hollow. As explained above, "one who elects to build a business on a product found to infringe cannot be heard to complain if an injunction against a continuing infringement destroys the business so elected."... Samsung cannot be heard to complain about broken business relationships that it has established on infringing products.