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Is all publicity good publicity?

10 December 12

The ongoing battle between Apple and Samsung has produced useful guidance from the Court of Appeal on when a company may be ordered to publicise an IP judgment against it

by Susan Snedden, Gemma Ogilvie

Technology heavyweights Apple and Samsung have been embroiled in highly publicised litigations around the world relating to Samsung’s Galaxy tablet, which Apple claims infringes its rights. Apple has a Community registered design (“CRD”) for a tablet computer. Significantly, the CRD differs from the design of Apple’s iPad tablet.

Samsung brought proceedings against Apple in the English High Court, seeking a declaration that its Galaxy tablet did not infringe the CRD. In response, Apple counterclaimed for infringement. This article considers how the court’s decision, in Samsung’s favour, led to further litigation over the court’s powers to ensure that the effect of the decision became sufficiently widely known.

Crucial victory

On 9 July 2012, the High Court held that the CRD was not infringed by Samsung’s Galaxy tablet: [2012] EWHC 1882 (Pat). The judgment attracted global attention, as it was the first substantive decision on the CRD infringement issue. Also, because the High Court was sitting as a Community Design Court, its declaration of non-infringement in favour of Samsung was binding throughout the European Community.

Apple appealed the High Court’s decision. The Court of Appeal upheld the original decision, in a judgment issued on 18 October: [2012] EWCA Civ 1339.

Samsung and Apple were also embroiled in similar proceedings in respect of the CRD in the Netherlands, Spain and Germany. Apple obtained various preliminary injunctions in Germany both before and after the High Court’s decision. These were stated to be of pan-European effect.

However, in the Court of Appeal proceedings, Apple acknowledged that the High Court’s decision superseded the preliminary decisions of the German court, and undertook to have the one remaining German pan-European injunction withdrawn. By the date of the Court of Appeal judgment, there were no injunctions in place anywhere based on the CRD or its equivalent.

Publicity orders – the law

Following the High Court’s non-infringement decision, Samsung applied to the High Court for two orders:

  1. an injunction to prevent Apple representing to any third party that the three versions of the Galaxy tablet infringe the CRD; and
  2. an order for further dissemination of the judgment, by way of (i) a statement on Apple’s website; and (ii) an advertisement in UK newspapers and IT magazines: [2012] EWHC 2049 (Pat) (18 July 2012).

Article 15 of the Directive on the Enforcement of Intellectual Property Rights (2004/48/EC) requires member states to ensure that publicity orders are available to successful rights-holders in intellectual property actions.

The reasoning behind this requirement is set out in recital 27 of the directive: “To act as a supplementary deterrent to future infringers and to contribute to the awareness of the public at large”.

Article 15 has been enacted by the Intellectual Property (Enforcement etc) Regulations 2006 (SI 2006/1028). As respects Scotland, reg 5 states: “In Scotland, where the court finds that an intellectual property right has been infringed, the court may, at the request of the pursuer, order appropriate measures for the dissemination and publication of the judgment to be taken at the defender’s expense.”

In England, a similar provision is contained in Practice Direction 26.2 to Part 63 of the Civil Procedure Rules (CPR).

Supporting the successful defendant

Both parties accepted that the court did not have jurisdiction to make an order in terms of the Enforcement Directive. The directive’s terms apply only to publicity orders against infringers. Apple were the unsuccessful rights-holder rather than the infringer.

However, the English courts have a general discretionary power to grant injunctions where it is just and convenient to do so, in terms of

s 37(1) of the Senior Courts Act 1981. The court considered this could extend to both orders sought by Samsung.

The court refused the first order, on the grounds that granting it would interfere with Apple’s freedom of speech. However, it granted the publicity order against Apple. Apple appealed this.

The Court of Appeal confirmed that Apple should publicise the decision. In doing so it affirmed the High Court’s reasoning on whether the English courts had jurisdiction to grant such orders.

The court highlighted that publicity orders should not be granted as a matter of course. Rather, they should only be granted in certain circumstances: including:

  • Where the successful IP owner seeks a publicity order, it should be granted only if it serves one of the two purposes set out in recital 27, i.e. (i) to act as a supplementary deterrent to future infringers; and/or (ii) to contribute to the awareness of the public.
  • Where the successful non-infringer seeks a publicity order, it should be granted only where there is a real need to dispel commercial uncertainty in the marketplace.

In this case, a number of factors suggested such an order was necessary to dispel commercial uncertainty, including:

  • the enormous publicity which the first German injunction received;
  • Samsung’s evidence of the ongoing negative effect of this publicity on sales of its Galaxy product; and
  • Samsung’s evidence of the uncertainty caused by the contradictory publicity around Samsung’s victory in the High Court, and the German injunction subsequently obtained by Apple against Samsung.

The Court of Appeal provided prescribed wording for a notice to appear on Apple’s website, and confirmed various other conditions which had to be met.

Open to comment?

Although Apple did publish on its website a statement incorporating the prescribed wording, it also inserted additional wording between the two paragraphs of the court-ordered notice. Apple’s statement also referenced the fact that other cases had been decided in its favour. It concluded its statement as follows:

“So while the UK court did not find Samsung guilty of infringement, other courts have recognised that in the course of creating its Galaxy tablet, Samsung wilfully copied Apple’s far more popular iPad.”

Samsung objected to this, and the matter came back before the court on 1 November: [2012] EWCA Civ 1430. Samsung alleged that Apple had failed to comply with the publicity order and requested that the court grant a further, clearer and more specific order. It provided press and web reports to support its contention that Apple’s additions to the notice had caused yet further commercial uncertainty.

Apple argued that the original order had not prohibited it from making additional comments over and above the prescribed wording. The court, however, decided it was not open to Apple to intersperse wording into the prescribed notice. In addition, the wording added was misleading because it fostered the false notion that the case related to the iPad, rather than Apple’s CRD. This would confuse the public. Further, the notice said that: “In a case tried in Germany regarding the same patent, the court found that Samsung engaged in unfair competition by copying the iPad design.” The court took exception to the use of the words “the same patent”, since the action in the UK did not involve patents: it was solely concerned with the CRD.

In the event, the Court of Appeal decided that Apple should publish a corrective statement on the homepage of its UK website and it was given 48 hours to do just that. The court was somewhat unimpressed by Apple’s assertion that it would take 14 days to publish the corrective notice on its website. The notice must stay up until 15 December.

Precedent for Scotland

The Scottish courts have not yet issued any reported decisions relating to publicity orders, whether orders granted in favour of successful rights-holders under reg 5/ article 15, or orders granted in favour of successful defenders such as Samsung. As such, the criteria the courts would apply to such applications are yet to be determined. In view of the fact that substantive IP law is harmonised throughout the UK, it is likely that the Scottish courts would follow the approach adopted by the Court of Appeal in Apple v Samsung. This case is therefore likely to provide useful guidance on publicity orders to IP litigation practitioners both north and south of the border. 

Susan Snedden is a director, and Gemma Ogilvie a senior solicitor, in the IP & Technology Department at Maclay Murray & Spens LLP

Scottish rules revamp

The procedural rules which govern intellectual property actions in the Court of Session changed with effect from Monday 19 November 2012. The Act of Sederunt (Rules of the Court of Session Amendment No 5) (Miscellaneous) 2012 (SSI 2012/275) makes some fairly significant changes to Chapter 55 of the Rules of the Court of Session 1994.

The key changes are as follows:

  • There will now be a compulsory preliminary hearing two weeks after defences have been lodged. The judge will have discretion to make a wide array of procedural orders at such hearings (new rule 55.2E).
  • Passing-off cases are now included in the list of cases defined as IP actions (rule 55.1).
  • If the defender wishes to bring a counterclaim, it will have to apply to the court by motion before a counterclaim can proceed so the court can make appropriate procedural orders in respect of it. Other changes to the format of pleadings have been made (new rule 55.2D).
  • The procedure in the case shall be such as the judge will direct, thus allowing for greater procedural flexibility (new rule 55.2C).
  • The rules governing procedural hearings, and the scope of orders which can be made at such hearings, have been revised (rule 55.3). Notably, the court can order that parties exchange witness statements in lieu of leading evidence in chief (rule 55.3(2)(f) and (g)). In addition, if a party wishes to have the cause appointed to proof, the party must lodge any reports of skilled witnesses prior to the procedural hearing (rule 55.3(1)(c)). Previously, the date for lodging such reports was fixed at the procedural hearing, and the reports were not lodged until a later date.

The changes bring the procedure for IP actions more into line with the procedure for commercial actions. The common theme of all of the changes is to ensure that there is more hands-on case management of IP actions from the very outset of the case, and more procedural flexibility thereafter. The introduction of early-stage case management should help to bring quickly into focus the key issues in dispute between the parties. In addition, the fixing of an expedited and focused case management timetable early in the case should result in IP cases being decided more quickly and cost-effectively in future.

Susan Snedden and Gemma Ogilvie

 

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