Apple v Samsung - the Appeal

On 9 July 2012 HH Judge Birss QC, sitting as a judge of the High Court, held in Samsung Electronics (UK) Ltd v Apple Inc. [2012] EWHC 1882 (Pat) that Samsung's Galaxy 10.1, 8.9 and 7.7 tablet computers did not infringe Apple Inc.'s Community design number 000181607-0001. I discussed that judgment in this blog in "Apple v Samsung - Compare and Contrast" on 28 Aug 2012. A few days afterwards in Samsung Electronics (UK) Ltd v Apple Inc (No. 2) [2012] EWHC 2049 (Pat) (18 July 2012) Judge Birss ordered Apple to display the following notice on the home page of their website and in advertisements in the national press:

"On 9th July 2012 the High Court of Justice of England and Wales ruled that Samsung Electronics (UK) Limited's Galaxy Tablet computers, namely the Galaxy Tab 10.1, Tab 8.9 and Tab 7.7 do not infringe Apple's registered design 000181607-0001. A copy of the full judgment of the High Court is available via the following link [insert hyperlink]."

I also commented about that judgment on 28 Aug 2012 in "Samsung v Apple - The Aftermath."

At the end of that second case note I observed:

"The notice was supposed to have been inserted within 7 days of the date of the Order but I could find no trace of it when I checked Apple's website just now. That could be because the judge or Court of Appeal have agreed to vary, suspend or vacate the order pending appeal or because the parties have agreed something. If that is the case we shall no doubt learn in time."

Apple was not best pleased with His Honour's order because it would have been forced it to grovel and ruin its home page so (as I had surmised in my case note) it applied to the Court of Appeal to suspend the order.   In  Samsung Electronics (UK) Ltd v Apple Inc [2012] EWCA Civ 1223 (26 July 2012), Lord Justice Kitchin and Sir Robert Jacob acceded to Apple's application.  That was fair enough but Apple incredibly persisted in an appeal to the Oberlandesgericht (regional court of appeal) against the refusal of the Landgericht (district court) for Düsseldorf to grant an interim injunction to restrain Samsung Electronics Co. Ltd. of South Korea from selling the 7.7 Galaxy tablet throughout Europe even though Judge Birss QC sitting as a Community design court had already declared that the 7.7 did not infringe Apple' s registered Community design. Even more incredibly the Oberlandesgericht allowed the appeal notwithstanding that there were no proceedings in Germany or indeed anywhere else in Europe outside England on the substantive issue.

The decision of the Oberlandesgericht appears to have done enormous damage to Samsung.   As Sir Robin Jacob put it: 

"The decision of the Oberlandesgericht received much publicity. What was the ordinary consumer, or the marketing department of a potential Samsung customer to make of it? On the one hand the media said Samsung had won, on the other the media were saying that Apple had a German Europe-wide injunction. Real commercial uncertainty was thereby created. A consumer might well think "I had better not buy a Samsung - maybe it's illegal and if I buy one it may not be supported". A customer (and I include its legal department) might well wonder whether, if it bought Samsung's 7.7 it might be in trouble before the German courts. Safest thing to do either way is not to buy."

And so they didn't.  Again, in Sir Robin's words:

"Even though these injunctions as regards design infringement were later first limited to Germany and even later discharged altogether as regards the 8.9 and 10.1 Samsung says that its market share of tablets in the UK plummeted from 10% to 1% and has only recovered to 3%."

Sir Robin's words that I have quoted above were extracted from paragraphs [83] and [78] of his judgment in Samsung Electronics (UK) Ltd v Apple Inc [2012] EWCA Civ 1339 (18 Oct 2012) which was the substantive appeal against both of Judge Birss's judgments.   In that appeal the Court of Appeal (Lord Justice Kitchin and Longmore and Sir Robin Jacob) upheld Judge Birss's declaration of non-infringement and ordered Apple to publicize their lordships' judgment though in somewhat less humiliating terms than His Honour had ordered. Though they varied his order, their lordships went out of their way to avoid criticism of His Honour. In so far as their order differed from that of the trial judge, they made clear that it was because they were dealing with different facts in different circumstances that required a different exercise of discretion.

Apple made a number of minor complaints about Judge Birss's judgment.   It argued first that an "informed user, noting that the design was from 2004, would know and expect that advances in technology would make thinner tablets possible" and that he or she would give little significance to the thickness of the design as registered. Sir Robin rejected that criticism for two reasons:

"First is that the scope of protection is for the design as registered, not some future, even if foreseeable, variant. Second is that Apple's point cuts both ways: if the informed user could foresee thinner tablets ere long so could Apple whom the informed user would take to have the same prevision. Thus the informed user would take the thickness to be a deliberate design choice by Apple."

Secondly, Apple complained that the judge took account of the fact that the Samsung products had the trade mark Samsung on both their fronts and backs. It submitted that the informed user would disregard the trade mark altogether as being a mere conventional addition to the design of the accused product. The Court of Appeal found no error there:

"If an important feature of a design is no ornamentation, as Apple contended and was undisputed, the Judge was right to say that a departure from no ornamentation would be taken into account by the informed user. Where you put a trade mark can influence the aesthetics of a design, particularly one whose virtue in part rests on simplicity and lack of ornamentation. The Judge was right to say that an informed user would give it appropriate weight - which in the overall assessment was slight."

Apple's main argument, however, was that the judge was wrong in his assessment of a different overall assessment to an informed user. It complained that His Honour had made a feature by feature comparison of the registered Community design and the Samsung tablets and failed to have regard to the overall design as compared with the items of prior art contained in the design corpus. The Court of Appeal found that the trial judge had done no such thing.  He did address the individual features that Apple had drawn to his attention - an exercise that Apple could hardly complain about since it had invited him to do just that - but the judge did "pull it all together and consider the overall impression of the Apple design on an informed user" as Sir Robin noted at paragraph [28].  The Court endorsed Judge Birss's assessment of design freedom which Sir Robin summarized as follows at paragraph [39]:

"In overall terms for a hand-held tablet (1) you need a flat transparent screen, (2) rounded corners are unremarkable (and have some obvious functional value in a hand-held device), and (3) you need a border of some sort for functional reasons. There is some design freedom as regards ornamentation, the rim, the overall shape (rectangular or with some curved sides) but not a lot. And the main thing, the screen itself was something with which the informed user would be familiar ......"

It also endorsed his approach to the design corpus and in particular to the Flatron handheld computer which appears below.

Overall the Court could find no material error by Judge Birss and added at paragraph [54] 

"if I were forming my own view of the matter, I would have come to the same conclusion and for the same reasons. If the registered design has a scope as wide as Apple contends it would foreclose much of the market for tablet computers. Alterations in thickness, curvature of the sides, embellishment and so on would not escape its grasp. Legitimate competition by different designs would be stifled."

Because the Oberlandesgericht had entertained Apple's appeal against the Düsseldorf's court's refusal to grant a European wide injunction in respect of the 7.7 tablet notwithstanding a final decision of a Community design court, Sir Robin Jacob was scathing - and rightly so in my respectful submission:

"[56] Firstly I cannot understand on what basis the Court thought it had jurisdiction to grant interim relief. I do not think it did for several reasons.
[57] Firstly it is common ground that no German court was "first seized" of the claim for a declaration of non-infringement. Indeed given that Apple withdrew its claim for infringement in Germany, no German court appears even now to be seized of a claim for infringement. It is true that Samsung applied for declarations of non-infringement on the same day, 8th September 2011 in Spain, the Netherlands and England and Wales and there could be (but I think rather overtaken by events given that the trial and appeal are over here) a dispute about which case started first in point of time. After all there is now a Community-wide decision on the point, now affirmed on appeal. One would think that ought to put an end to all other litigation about it.
58. Secondly I cannot see any basis for an interim injunction. The UK court had already granted a final declaration. Moreover it was sitting not just as a UK court but as a Community Court. Interim injunctions are what you grant in urgent cases where there is not enough time to have a full trial on the merits. That was not this case. Lord Grabiner told us that the Oberlandesgericht had jurisdiction pursuant to Art. 31 of the Brussels Regulation EC/44/2001. But that relates to "provisional, including protective measures." There was no room for "provisional" measures once Judge Birss, sitting as a Community Court had granted a final declaration of non-infringement.
[59] Further Judge Birss was not sitting as a purely national court. He was sitting as a Community design court, see Arts. 80 and 81 of the Designs Regulation 44/2001. So his declaration of non-infringement was binding throughout the Community. It was not for a national court - particularly one not first seized - to interfere with this Community wide jurisdiction and declaration.
[60] The Oberlandesgericht apparently also thought it had jurisdiction because the party before it was SEC whereas the party before the English court was SEC's UK subsidiary. With great respect that is quite unrealistic commercially - especially as I shall recount below, Apple at least took the view that SEC would be liable for the subsidiary's actions. They were all one "undertaking". I use the word of EU law for this sort of situation.
[61] Finally I regret to say that I find the Oberlandesgericht's reasoning on the merits sparse in the extreme. Firstly, for the reasons I have given, I think it was wrong to say that the General Court decision in Grupo Promer/Pepsico was "outdated" when the decision on appeal affirmed the General Court. Secondly the Court wrongly assumed that the trade mark point was critical to Judge Birss's decision when it was not. And for the reasons I have given I think it was wrong in law to say that the positioning of a trade mark was irrelevant where it interfered with one of the key features of the design (simplicity and plainness).
[62] What the Oberlandesgericht did not do was to consider Judge Birss's decision in detail. It gave only meagre reasons for saying "The Court cannot concur with the interpretation of the High Court". I regret that. In Grimme v Scott [2010] EWCA Civ 1110, this Court said:

'[63] The Judges of the patent courts of the various countries of Europe have thereby been able to create some degree of uniformity even though the European Commission and the politicians continue to struggle on the long, long road which one day will give Europe a common patent court'.
[64] That principle was not followed by the Oberlandesgericht. If courts around Europe simply say they do not agree with each other and give inconsistent decisions, Europe will be the poorer.'

[63] Broadly we think the principle in our courts - and indeed that in the courts of other member states - should be to try to follow the reasoning of an important decision in another country. Only if the court of one state is convinced that the reasoning of a court in another member state is erroneous should it depart from a point that has been authoritatively decided there. Increasingly that has become the practice in a number of countries, particularly in the important patent countries of France, Germany, Holland and England and Wales. Nowadays we refer to each other's decisions with a frequency which would have been hardly imaginable even twenty years ago. And we do try to be consistent where possible."

Not surprisingly, Apple agreed to ask the Oberlandesgericht to discharge its injunction.

The difficulties that had been caused by the German court's intervention that I have mentioned above. were one of the reasons why the Court of Appeal was moved to make a publicity order. It ordered Apple to insert a hypertext link on its home page under the words "Samsung/Apple UK judgment" linking to the notice

"On 9th July 2012 the High Court of Justice of England and Wales ruled that Samsung Electronic (UK) Limited's Galaxy Tablet Computers, namely the Galaxy Tab 10.1, Tab 8.9 and Tab 7.7 do not infringe Apple's registered design No. 0000181607-0001. A copy of the full judgment of the High court is available on the following link [link given].

That Judgment has effect throughout the European Union and was upheld by the Court of Appeal on ….. A copy of the Court of Appeal's judgment is available on the following link […]. There is no injunction in respect of the registered design in force anywhere in Europe."

I have just had a look at the Apple home page and found a link to the Samsung clicked the link "Samsing/Apple UK judgment".  Sure enough, the words prescribed by the Court of Appeal are there but between the first and second sentences Apple has inserted the following text:

"In the ruling, the judge made several important points comparing the designs of the Apple and Samsung products:

'The extreme simplicity of the Apple design is striking. Overall it has undecorated flat surfaces with a plate of glass on the front all the way out to a very thin rim and a blank back. There is a crisp edge around the rim and a combination of curves, both at the corners and the sides. The design looks like an object the informed user would want to pick up and hold. It is an understated, smooth and simple product. It is a cool design.'
'The informed user's overall impression of each of the Samsung Galaxy Tablets is the following. From the front they belong to the family which includes the Apple design; but the Samsung products are very thin, almost insubstantial members of that family with unusual details on the back. They do not have the same understated and extreme simplicity which is possessed by the Apple design. They are not as cool.'"

Apple also added the following  paragraph at the end of its notice:

"However, in a case tried in Germany regarding the same patent, the court found that Samsung engaged in unfair competition by copying the iPad design. A U.S. jury also found Samsung guilty of infringing on Apple's design and utility patents, awarding over one billion U.S. dollars in damages to Apple Inc. So while the U.K. court did not find Samsung guilty of infringement, other courts have recognized that in the course of creating its Galaxy tablet, Samsung willfully (sic) copied Apple's far more popular iPad."

Those words have been inserted after the Court of Appeal had gone out of its way in paragraph [3] to dispel any notion that Samsung was accused of copying in this country at any rate, that the case was to be determined as though the iPad had never existed and to stress that this case was only about the registered Community design and not about the other intellectual property disputes between the same parties that were being litigated overseas.

Long after the iPad and Galaxy will have been forgotten, this case will be remembered for two points.   First, Sir Robin Jacob's definition of the informed user at paragraphs [34] and [35] which I have already cut and pasted into my registered design skelly template ready for my next scrap in the Designs Registry, Patents County Court or even OHIM whenever it should come:

"He (or she) is a user of the product in which the design is intended to be incorporated, not a designer, technical expert, manufacturer or seller (PepsiCo paragraph 54 referring to Grupo Promer paragraph 62; Shenzen paragraph 46).
However, unlike the average consumer of trade mark law, he is particularly observant (PepsiCo paragraph 53);
He has knowledge of the design corpus and of the design features normally included in the designs existing in the sector concerned (PepsiCo paragraph 59 and also paragraph 54 referring to Grupo Promer paragraph 62);
He is interested in the products concerned and shows a relatively high degree of attention when he uses them (PepsiCo paragraph 59);
He conducts a direct comparison of the designs in issue unless there are specific circumstances or the devices have certain characteristics which make it impractical or uncommon to do so (PepsiCo paragraph 55).

[35] I would add that the informed user neither (a) merely perceives the designs as a whole and does not analyse details, nor (b) observes in detail minimal differences which may exist (PepsiCo paragraph 59)."

The other point for which this case is likely to be remembered is that the Court held at paragraph [75] that it had jurisdiction to make a publicity order not by virtue of the Enforcement Directive 2004/48/EC which enables the court to make them in favour of successful claimants but as an adjunct to the power to make a declaration. Sir Robin made clear that this jurisdiction is to be used sparingly and proportionately.

There is a lot of strong meat in this judgment and should anyone want me to cut it up into digestible chunks he or she should call me on 0800 862 0055 or contact me through Facebook, Linkedin, twitter or Xing, or through my contact page.