On 30 January 2013, a US Federal Court ruled that Samsung Electronics Co Ltd had not willfully infringed some of Apple Inc (Apple’s) patents. This is of relevance to the proceedings between Apple and Samsung in the UK Courts where Apple failed to comply with a specific Court Order made initially by the High Court then later varied and endorsed by the Court of Appeal.
Apple’s breach of a Court Order and the subsequent penalty imposed by the UK Courts highlights the seriousness of non-compliance with a Court Order.
Facts of the case
First Judgment in the High Court (July 2012) – Making of the Court Order
Samsung Electronics UK Ltd (Samsung) sought a declaration that 3 of its Galaxy tablet computers did not infringe Apple’s EU Community registered design. Apple subsequently counterclaimed for infringement.
In the High Court Judgment on 18 July 2012, HHJ Birss QC made a Judgment dealing with the remedies to be awarded to Samsung following Apple’s unsuccessful claim.
As part of the remedies, Samsung had sought an Injunction requiring Apple to place statements on its websites and certain UK newspapers to the effect that Samsung’s Galaxy tablet had been found not to infringe Apple’s EU Community registered design. The Judge agreed to the placement of the statement in the newspapers but noted that Apple were pursuing proceedings in Courts outside the UK, and had some success with its claims in the US and Germany. The Judge therefore decided that the statements were to be limited to the UK websites on Samsung’s list. He also reduced the length of time for placing the statements from the requested 12 months to 6 months stating the fast-moving nature of the electronics industry increased the risk of prejudice to Apple. A Publicity Order was therefore granted by the Court for the non-infringer (Samsung).
Apple appealed and the case subsequently went to the Court of Appeal.
Second Judgment in the Court of Appeal (October 2012) – Reinforcing the Court Order
In the Court of Appeal Judgement dated 18 October 2012, the Court dismissed Apple’s appeal against the High Court ruling. Sir Robin Jacob ruled that the Trial Judge, HHJ Birss QC, had made no material error in his assessment of the overall impression created by the designs. He considered that if Apple’s design registration had a scope as wide as Apple contended, it would foreclose much of the market for tablet computers.
However the Court of Appeal varied the Order requiring Apple to give publicity to the Court’s decision on its UK homepage and through advertisements in newspapers and magazines. The Court was satisfied by Apple’s request for the notice to be provided via a link from the main webpage and for the placement period to be reduced to one month. The notice was also ordered to include a hyperlink to the full Judgment. Any further variation was to be allowed through written submissions from both parties for settlement.
Up to this point, costs were not dealt with in the main Judgments.
Third Judgment in the Court of Appeal (November 2012) – Breach of the Court Order
On 9 November 2012, the Court of Appeal issued a further Judgment following complaints by Samsung of non-compliance by Apple to the Publicity Order which was made on 18 October 2012.
Firstly, the Court noted that the Order required posting of the notices on the Apple webpage within 7 days of the date of the Order and for the publishing of the notice in all newspapers at the earliest available issue. The cost of doing so was to be at Apple’s own expense. Apple did not post the notices in all the newspapers until 16 November 2012. The Court found this action as a ‘self evident non-compliance with the newspaper/magazine aspect of the Publicity Order’.
Secondly, the Court found that rather than simply publishing the text of the notice as ordered, Apple had broken it up, interspersing it with text of its own devising. The material it had added was false and misleading and, as a result, the notice would have been understood differently. In particular the concluding paragraph was of particular concern as it effectively undermined the UK Court Judgements.
The paragraph of the contested notice read as follows:
‘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 US jury also found Samsung guilty of infringing on Apple’s design and utility patents, awarding over one billion US dollars in damages to Apple Inc. So while the UK 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.’
Sir Robin Jacob highlighted in the Judgment that the reality was that wherever Apple has sued in relation to its registered designs, they have ultimately failed. The Court subsequently ordered for the contested notice be removed and a new notice be published, making it clear that the previous notice on its homepage was inaccurate. It Ordered that the notice remain on Apple’s website until 15 December 2012.
This time the Court chose to deal with costs of the case and concluded that they should be awarded against Apple on an indemnity basis. The decision for the higher than normal award was made as a mark of the Court’s disapproval of Apple’s conduct. Emphasis was made to the non-compliance of the Publicity Order.
The Court was very disturbed that Apple had requested 14 days to comply for ‘technical reasons’. The Court duly ordered compliance within 48 hours which they found to be more than sufficient and generous time.
In conclusion, Apple were found by the Court of Appeal to have breached a Publicity Order and were subsequently punished by the Court ordering costs on an indemnity basis which effectively required Apple to pay for all costs Samsung incurred during the course of the legal proceedings in the UK. It is unusual for the Court of Appeal to specifically deal with costs in this manner and it is clear that they did so as punishment for Apple’s actions.
It is also important to note that the UK Courts have extensive powers to penalise parties who fail to comply with a Court Order. Such powers include awarding costs on an indemnity basis and in more severe circumstances, holding relevant parties in civil contempt of Court which is punishable by monetary fines and/or imprisonment.