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To read comments to this article, go here
The UK Court Sanctions Apple, Hopes "Lack of Integrity" In Notice Incident Is Not "Typical" ~ pj
Friday, November 09 2012 @ 01:28 PM EST

The latest order has been published now by the UK court that ordered Apple to place a notice on its website and in newspapers and magazines stating that the court had found that Samsung had not copied Apple's design patent. Since Apple did not comply with the order in its estimation, adding materials that were not ordered and in addition were "false", the judges ordered Apple to pay Samsung's lawyers' fees on an indemnity basis, and they add some public humiliation:
31. As to the costs (lawyers' fees) to be awarded against Apple, we concluded that they should be on an indemnity basis. Such a basis (which is higher than the normal, "standard" basis) can be awarded as a mark of the court's disapproval of a party's conduct, particularly in relation to its respect for an order of the court. Apple's conduct warranted such an order.

31. Finally I should mention the time for compliance. Mr Beloff, on instructions (presumably given with the authority of Apple) told us that "for technical reasons" Apple needed fourteen days to comply. I found that very disturbing: that it was beyond the technical abilities of Apple to make the minor changes required to own website in less time beggared belief. In end we gave it 48 hours which in itself I consider generous. We said the time could be extended by an application supported by an affidavit from a senior executive explaining the reasons why more was needed. In the event no such application was made. I hope that the lack of integrity involved in this incident is entirely atypical of Apple.

Apple. Your brand is being ruined by misplaced trust in a losing super-aggressive legal strategy.

Here's what the judges thought was false, essentially that what Apple added to the notice conflated issues that are not the same:
20. Even if that were not so, it cannot be legitimate to break up the ordered notice with false material. And the matter added was indeed false. Before introducing the quotes from HHJ Birss it begins:
In the ruling, the judge made several important points comparing the designs of the Apple and Samsung products.
But the Judge was not comparing "the Apple and Samsung products." There is not and has never been any Apple product in accordance with the registered design. Apple's statement would clearly be taken by ordinary readers and journalists to be a reference to a real Apple product, the iPad. By this statement Apple was fostering the false notion that the case was about the iPad. And that the Samsung product was "not as cool" as the iPad.

21. I turn to the last paragraph. I do not think the order as made precluded any addition to the required notice if that addition had been true and did not undermine the effect of the required notice. But I do consider that adding false and misleading material was illegitimate. For by adding such material the context of the required notice is altered so that it will be understood differently.

22. Here what Apple added was false and misleading. I turn to analyse it. The first sentence reads:

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.
That is false in the following ways:

(a) "Regarding the same patent." No patent of any kind has been involved in Germany or here, still less "the same patent."

(b) As regards the Community Registered Design, the German Courts held that neither the Galaxy 10.1 nor the 8.9 infringed it. As to the 7.7 there was for a short while a German provisional order holding that it infringed. Whether there was a jurisdiction to make that order is very doubtful for the reasons given in my earlier judgment but in any event the order had been (or should have been) discharged by the time the Contested Notice was published.

(c) There is a finding and injunction, limited to Germany alone, that the 10.1 and 8.9 infringe German unfair competition law. But the statement is likely to be read as of more general application.

23. The second sentence reads:

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.
That is misleading by omission. For the US jury specifically rejected Apple's claim that the US design patent corresponding to the Community Design in issue here was infringed. The average reader would think that the UK decision was at odds with that in the US. Far from that being so, it was in accordance with it.

24. The third sentence reads:

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 wilfully copied Apple's far more popular iPad.
This is calculated to produce huge confusion. The false innuendo is that the UK court came to a different conclusion about copying, which is not true for the UK court did not form any view about copying. There is a further false innuendo that the UK court's decision is at odds with decisions in other countries whereas that is simply not true.

25. The reality is that wherever Apple has sued on this registered design or its counterpart, it has ultimately failed. It may or may not have other intellectual property rights which are infringed. Indeed the same may be true the other way round for in some countries Samsung are suing Apple. But none of that has got anything to do with the registered design asserted by Apple in Europe. Apple's additions to the ordered notice clearly muddied the water and the message obviously intended to be conveyed by it.

The court also found Apple's compliance with the order regarding newspapers and magazines "lackadaisical at best":
7. Although it is a lesser matter than the dispute about what Apple did on its website, I have to record that Apple's compliance with the newspaper advertisement order was lackadaisical at best. The order required publication "in the earliest available issue" of the specified newspapers and magazines. I would have thought that self-evidently meant what it said get the advertisements into each publication as soon as possible.

8. What Apple chose to do as regards the newspapers and magazines was less than that. Its Vice President Worldwide Marketing Communications said he understood the approach to be adopted was "to co-ordinate adverts across those publications in order to ensure the widest readership possible is exposed to the advert on the same day." That apparently meant to Apple so far as the newspapers were concerned the same day, but not the magazines which had longer lead times. Apple accordingly arranged for November 16th for all the newspapers. I note in passing that it is not said that November 16th was the earliest possible date even for just all the newspapers. I would be surprised if it were, given that our order was made on 18th October.

9. So there was self-evident non-compliance with the newspaper/magazine aspect of the publicity order. Apple did not contend otherwise. Its breach of that part of the order is clearly an additional factor justifying the indemnity costs order we made against Apple.

The court probably doesn't even know about the scrolling issue. But really, do you need more? Anyway, I gather Apple has fixed it now. To a degree, anyway.

I'm told by a reader in the UK that this sanction is the highest there is in the "loser pays" category, that Apple will have to pay for everything the lawyers cost Samsung, not just fees but parking, phone calls, and from day one. Indemnity in the sense that Samsung is to be made whole for being put through all this, I guess.

As for how long the new notice should be in place and why they felt it had to be done:

29. Given our finding that the Contested Notice did not comply with our order and did not achieve what was intended there was no dispute but that we should order it be removed. There was dispute as to what should go up in its place. Apple contended that no more was needed on its home page. We thought otherwise. The Contested Notice had had over a million hits. It was necessary that the fact it was misleading be brought home. Only a notice on Apple's homepage could be sure to do that. We were of course conscious that a notice on the homepage was highly undesirable from Apple's point of view, but its own actions had made it necessary. We also thought that a rather longer period was needed than the one month period of the original order. We ordered that the notice and link should stay up until 15th December. The notice on the homepage had to make it clear that the Contested Notice was inaccurate and did not comply with the first order.

30. We also thought it appropriate that the correct statement the notice required by the original notice should appear without modification or addition. Apple's previous modifications and additions made it clear that it should not be allowed to do the same or something similar again. Of course that did not preclude it from making statements elsewhere even untrue ones which might amount to a libel or malicious falsehood. That would amount to a prior restraint which would obviously be inappropriate. All we required is that the notice we ordered should appear unvarnished or unembellished in any way.


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