“Apple’s anti-Samsung cases in the Netherlands and Germany hint that European operators could soon find themselves faced with actual bans.”
By David Meyer
Europe’s mobile industry experienced an unusual hiccup last week. Apple got a district court in Germany to ban Samsung from selling its Galaxy Tab 10.1 tablet across the EU, with the exception of the Netherlands where Apple has a separate anti-Samsung suit on the boil.
The court’s injunction, which was itself only preliminary ahead of a full hearing of Apple’s case, has since been temporarily lifted, after Samsung questioned the power of a local court in Düsseldorf to ban a foreign company from selling its product across Europe.
Although the ban has been stayed for now, the days in which it was in force saw Vodafone cancel UK pre-orders for the Galaxy Tab 10.1, which is one of the most high-profile Android tablets on the market and a direct competitor to Apple’s iPad 2. Apple’s Dutch case, it turns out, is also aimed at stopping Europe-wide sales by seeking a ban in the Netherlands, through which Samsung imports its goods.
Although the temporary injunction is still in force in Germany, Vodafone continues to sell a special variant of the device called the Galaxy Tab 10.1v there. That version is not named in the German case.
Operators are not willing to discuss the case in any depth, issuing only ‘wait-and-see’ statements. Vodafone says it “will review [its position] following the outcome of the legal proceedings between Apple and Samsung”, while O2 says it is “watching developments with interest”.
However, Apple’s attacks on Samsung in the EU have already proven that the frenzy of intellectual property litigation that has been in full swing over in the United States for the last couple of years has made it over to Europe in force.
“The industry has becomes more litigious than we have seen over past years,” Gartner mobile analyst Carolina Milanesi says. “Patent disputes have always been part of the mobile industry, but more so today because you have so many different players that are part of this industry now that have a different background, that haven’t been around in the cellular industry for long enough to have their own patents and to make their own [cross-licensing] agreements.”
The mobile market has become crucial for the likes of Microsoft, Google and Apple, as well as more traditional players. According to Milanesi, the rabid nature of mobile competition has led some to conclude that patent litigation is sometimes used as “a bit of a stalling mechanism”.
“You’re putting doubts in the heads of [retail and operator] customers around a particular product — ‘Is this the right time to get behind it?’ and so forth,” Milanesi said. “It has traditionally been more of a US phenomenon, but maybe the Galaxy Tab 10.1 instance has hit Europe a bit more.”
Apple’s case against Samsung in Düsseldorf is quite different from the patent-related tactics the two companies have been using in the US for more than a year. Compared to the US, the EU grants very few software patents, so Apple turned to a peculiarly European kind of intellectual property: the Community design.
Community designs are entirely to do with the look of an item, and are enforceable across the EU even when decided on by a single district court. Apple said the Galaxy Tab 10.1 looked like the iPad 2, and Düsseldorf’s local judges agreed enough to grant a temporary ban.
The only reason that ban was lifted everywhere except Germany was because Apple had gained injunctions against both Samsung Germany and Samsung Korea – it was this latter injunction that has been lifted, while the Düsseldorf judiciary reconsiders whether it really does have the power to exact a ban across the continent when the defendant is not even based in the EU.
If Europe allowed software patents to the same degree as the US does, we might be seeing even more excitement. In the US, technology companies have often used the courts for patent cases, but are increasingly fighting their battles in US International Trade Commission (ITC) hearings.
The ITC is a quasi-judicial federal agency tasked with advising the US government on major international trade issues. As it has the ability to bar a company from importing a product into the US, many companies are seeing the tactical advantage in using it to attack their competitors.
Just within the mobile space during the last couple of years, HTC complained to the ITC about Apple; Apple did it to Samsung, HTC and S3 graphics (since bought by HTC); Nokia did it to Apple; Motorola did it to Nokia, Apple and RIM; InterDigital did it to Nokia and Huawei; and Sony did it to LG.
Yet, not a single ITC dispute between major mobile companies has actually resulted in a smartphone being banned from import into the US, despite every litigant calling for just that. Almost all the cases have been settled with licensing or cross-licensing deals, and operators have never seen device supplies significantly disrupted.
This is largely because, with sufficiently fundamental patents, not licensing such patents would stop the industry, so companies have to license them to comply with competition law, Milanesi says.
The analyst points out that fighting a rival’s offensive patent strategy is not necessarily about owning your own patents in that precise field. “It’s not like you have to have patents around UI to fight back against UI patents,” she says, suggesting that just having a weapon of equivalent or greater importance to the competitor can be enough to resolve a dispute.
This may be why Google, the company behind Android, just said it would pay $12.5bn for Motorola and its 24,000 patents and patents pending, many of which are fundamental.
Operators have to follow what the courts say but there has “never been an immediate danger that someone would be forced to stop selling immediately”, Milanesi says of the US situation. However, Apple’s anti-Samsung cases in the Netherlands and Germany hint that European operators could soon find themselves faced with actual bans.
“The Galaxy Tab 10.1 is the first time that we’ve seen that happening so quickly, but it was reversed quickly too,” Milanesi says. “Operators will follow this very closely. It is something they will have to keep an eye on.”
David Meyer is a freelance journalist specialising in communications and other aspects of technology. He can be found on Twitter using the handle @superglaze.