Samsung’s Potential Preemptive Strike to Avoid iPad Infringement

Apple’s litigious business strategy has been the source of discussion in the past, and the company seems to be continuing that trend in the iPad context. Android-based devices appear to be the biggest threat to Apple’s market share dominance, and new competitors are coming to market at increasing rates. The multiple suits against Samsung, Apple’s single biggest tablet competitor, are particularly interesting for framing a discussion about the implications of these cases.

Apple has sued Samsung abroad, with mixed results. In Germany, the court found in favor of Apple, while in the Netherlands, Apple did not succeed on its design patent claim. As a result, Samsung recently released a newly designed Galaxy for the German market, likely because of the adverse judgment in Germany and attempts to avoid the points of infringement found in that case. The U.S analogue, Apple Inc. v. Samsung Electronics Co., Ltd., 11-CV-01846-LHK, 2011 WL 1938154 (N.D. Cal. May 18, 2011), is currently pending. Apple has been granted discovery, which includes access to Samsung’s forthcoming designs. It will be interesting to see whether Samsung also plans to release the redesigned tablets slated for Germany here and whether they sufficiently avoid infringement.

Here are links to both the U.S. design patent and the European Community design patent. Since prior art is often at issue, it is also important to consider the state of the tablet market pre-iPad. Take a look at this article from January 2010, which includes images of tablets set to be released before Steve Jobs announced the iPadHP’s model in particular looks strikingly similar to the iPad in terms of its design. As manufacturers simultaneously respond to consumer demands for thinner, more accessible, computer-like devices, it seems counter-intuitive to give one of those companies a design patent for something as simple and streamlined as a tablet, especially where the same company holds a substantial majority market share.

Assuming the case proceeds, how should the judge rule on the claim of design patent infringement? In the U.S., courts apply an ordinary observer test to determine whether a plaintiff has proven design patent infringement. Although the Federal Circuit noted that “a test that asks how an ordinary observer with knowledge of the prior art designs would view the differences between the claimed and accused designs is likely to produce results more in line with the purposes of design patent protection,” Egyptian Goddess, Inc. v. Swisa, Inc., 543 F.3d 665, 677 (Fed. Cir. 2008), prior art is an affirmative defense. This may prove problematic for Samsung, as the court recently denied Samsung’s motion to “compel Apple to produce, as reciprocal expedited discovery, samples of Apple’s next generation iPhone and iPad and the associated packaging and inserts.” Apple Inc. v. Samsung Electronics Co., Ltd., 768 F. Supp. 2d 1040, 1043-44 (N.D. Cal. 2011).

Apple is also bringing trade dress infringement claims. These claims seem to be more appropriate, but both analyses require the court to take into account the realities of the market and the likelihood of consumer deception or confusion. Within this framework, the court should not find infringement under either theory. First, confusion is unlikely because of Apple’s overwhelming brand power (recently ranked number 1 of the most valuable brands) and market realities. Consumers are able to tell the difference between an Apple tablet and a Samsung tablet, based first and foremost on their respective logos and brand names that appear on the devices themselves.  The differences in the operating systems, packaging, and in store displays further reduces any likelihood of confusion. Next, these devices are not impulse products; instead, as is the case with laptops and other electronics, consumers are likely to research the product that they want before encountering it at the store, taking into account a variety of factors and comparing different brands in sufficient detail to avoid confusion.

There are also policy concerns that should be taken into account here. For instance, enforcing the patent would prevent price competition, stifle further innovation, and reduce the speed at which producers can bring new technology to market. Apple in particular has created a patent litigation business strategy in order to foster monopolization and maintain price inflation, which is something intellectual property law should not promote.

The fact that Apple has already had some success enforcing its iPad design patent makes the outcome of this case something to keep an eye on and illustrates a few reasons why the current patent system is likely in need of reform. (See Eric B. Cheng, Alternatives to District Court Patent Litigation: Reform by Enhancing the Existing Administrative Options, 83 S. Cal. L. Rev. 1135 (2010) for one recent attempt at crystallizing why reform would be valuable). It also presents an opportunity for rethinking what the proper allocation of intellectual property rights should be, as well as in what forum and to what extent we should be willing to give them legal force. But at the end of the day, I think the best question to ask is simply, do we really need patent law here?

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