Stay Wars: Apple Strikes Back (UPDATED)

Stay Wars: Apple Strikes Back (UPDATED)

Having won the patent infringement battle in the High Court of Justice of England & Wales, Samsung is determined to win the war. Apple, however, is attempting to stave off the offensive by fighting to have a controversial court order stayed.

In addition to the conventional orders that Samsung was entitled to as the winning litigant, the tech giant has sought additional remedies. Specifically, Samsung applied for an order requiring Apple to publish a series of notices in major publications and on its website acknowledging that Samsung did not infringe Apple’s registered design. The judge sided with Samsung and instructed that the notice should be posted on Apple’s UK website and remain there for six months. Naturally, Apple requested the order to be stayed pending the appeal of the main action. The request was turned down, prompting Apple to make an appeal against the refusal to stay.

The publicity order has become a new point of contention in the seemingly never-ending litigation previously covered by IPilogue here, here, here, here, here, and here. The order to publish the notice was justified on the grounds that Apple’s repeated allegations that Samsung engaged in “blatant copying” have resulted in commercial harm and contributed to commercial uncertainty. Samsung argued that because these allegations continued even after the judgment was rendered, an injunction was necessary to “prevent the court’s declaratory order being frustrated” (para 13). In a further show of confidence, Samsung offered to compensate its rival for any losses suffered as a result of the order if it is overturned on the main appeal.

Apple’s counter-argument is that the main appeal will be rendered irrelevant unless the order is stayed. In other words, even if it were to succeed, significant and irreparable harm would have already been sustained. In addition, the purpose of the order has largely been fulfilled because the outcome of the main action has been widely publicized in the media to the detriment of Apple’s reputation.

The court was ultimately persuaded that refusing to stay the order would “render the appeal wholly or largely nugatory” (para 35) and that any harm flowing from Apple’s allegations is greatly reduced by extensive media coverage of the judgment.

The approach taken by Samsung in this case raises interesting questions regarding the appropriateness of granting a publicity order in the context of an on-going global dispute.

First of all, all but the most sophisticated observers are unlikely to differentiate between judgments in different jurisdictions. Therefore, any notice posted on Apple’s UK website publicizing the UK judgment will likely have a significant effect beyond the jurisdiction where the court has authority to issue a publicity order. It could be argued that any collateral damage is justified, since statements made by Apple have a similar far-reaching impact. Nonetheless, there is a significant difference that militates against this argument: Apple’s statements are about their global dispute; the order issued by the court, on the other hand, is supposed to be confined to publicizing matters under its limited jurisdiction. To add to that, if global ramifications are considered, it becomes exceedingly difficult to assess the relative (in)justice to either party.

Furthermore, it should be noted that when the court initially granted the publicity order it also denied Samsung’s request to restrain Apple from expressing its opinion that the judgment was incorrect. The judge found that it would amount to “an unjustified interference with Apple’s right to express that opinion publicly” (para 14). It is far from clear what the net effect of these remedies would have been. One could argue that compelling Apple to promote notices that directly contradict its repeated assertions to the contrary would have limited value when it comes to setting the record straight. In fact, it could further contribute to “commercial uncertainty” that Samsung was concerned with.

At the end of the day, the decision to stay the order for the time being appears to be based on sound considerations. If Samsung prevails on appeal, the court will have a chance to reconsider the appropriateness of granting a publicity order. Having dodged the bullet this time, it remains to be seen if Apple will restrain itself from making remarks in order to avoid giving Samsung more ammunition.


UPDATE October 18, 2012:

The UK Court of Appeal has rendered their judgment and upheld the ruling of the High Court that Samsung did not infringe Apple’s registered designs. As a result, the Court once again considered the publicity order issued by HHJ Briss.

The Court concluded that the proper test to determine whether the order is necessary is “whether there is a need to dispel commercial uncertainty” (para 81). The Court went on to say that massive publicity generated by the earlier decision proclaiming that Samsung tablets are “not as cool” (para 190) could have rendered the order unnecessary. Nonetheless, the Court concluded that Apple’s subsequent actions have generated considerable commercial uncertainty and, therefore, the order is justified.

It was specifically pointed out that Apple has obtained and attempted to enforce an injunction in Germany despite the fact that HHJ Briss’s judgment was binding throughout the European Union. The German order banning the sale of Samsung 7.7 tablet was highly publicized. As a result, the Court reasoned, commercial uncertainty was generated. Faced with uncertainty as to the legal status of Samsung devices consumers would think that the “safest thing to do either way is not to buy one” (para 83).

Therefore, since Apple was responsible for creating the confusion, and widely publicized and seemingly inconsistent media reports are not enough to dispel the uncertainty, the publicity order is justified: “The acknowledgement must come from the horse’s mouth. Nothing short of that will do the job completely” (para 84).

In considering the form of the order, the Court was concerned with ensuring that it is proportional. Acknowledging the importance of Apple’s webpage as its key marketing tool, the order only requires a link (“in a font size no smaller than Arial 11pt” (para 64) entitled “Samsumg/Apple UK Judgment.” Further, the required period during which the link must appear has been reduced from six months to one month.


Anatoly Zhitnik is a JD Candidate at Osgoode Hall Law School.