Retailer sells Samsung Galaxy Tab 10.1 despite Apple injunction

An Australian judge has given Apple a temporary injunction against Samsung last October. The Samsung Galaxy Tab 10 was banned from being sold in Australia but the court order wasn’t able to stop some defiant Australian companies.

Australian retailers have done so by selling the Samsung Galaxy 10.1 Tablet online. The tablets were not in Australia, they were in some other country and the products were then just shipped to Australian consumers after they were bought online.

The Australian retailer dMavo did just this. They made a company in Europe and shipped the Samsung tablets from Asia. An interview published in the Sydney Morning Herald has Wojtek Czarnocki; dMavo’s managing director, saying, “We have a new entity established and a separate server – just to deal with the tablet orders – that is undergoing testing as of last Saturday.”

dMavo has used the loophole to their advantage. With regards to Apple suing them Czarnocki just said, “Was Apple just bluffing or do they really want to play the cat and mouse game? We’re up for it.”

Apple has been filing lawsuits against other companies like Samsung and Motorola. Google, the company behind Android has also been helping companies who have been using their operating systems. Google’s lawyers have their defense prepared arguing that patent protection granted were too broad and vague, that some ideas were unoriginal and just passed off as inventions.

Apple’s temporary injunction on the Samsung Galaxy Tab 10.1 is in full effect unless a full hearing is conducted which would tell if ever Samsung did “slavishly copied” the iPad. Samsung’s appeal is to be heard on November 25 in the Federal Court by Justices John Doswett, Lindsay Foster and David Yates.

The cost Czarnocki paid for the new entity was “next to nothing” in contrast to the profits they’re earning from the continuous sale of Samsung’s tablets. dMavo has sold a lot since doing so. With regards to their sales Czarnocki just said, “To be honest with you, we’ve stopped counting … our servers were almost collapsing on a number of occasions.”

Mark Summerfield, a senior associate and patent specialist at Melbourne law firm Watermark, thinks that what dMavo did was risky saying that all Apple has to do was extend the temporary injunctions to online sellers who are selling the Samsung Galaxy tablet in Australia even if they were based overseas.

The enforcement of Apple’s injunction however could be hard since they have to also file the injunction to the country where the tablets were shipped from. Summerfield commented, “I am curious to know whether they [dMavo] have actually obtained any advice from an experienced patent lawyer, because their strategy strikes me as risky. Moving the business unit, and the servers, offshore does not absolve them of liability for patent infringement in Australia. The acts of selling to Australian purchasers, and importing infringing products into the country, remain actionable as infringements.”

Summerfield sees any off shore company which is still owned and being profited by an Australian company is still “potentially problematic”. Summerfield added, “In this case, the Australian connections (corporate and individual) could be held liable for infringement, costs and damages. In my view, dMavo have significantly increased their risk by the very public stand they have taken.”

Summerfield thinks that Apple is now obligated to act against the Australian retailer to avoid looking weak. The Australian judges will also be obligated to find ways to punish dMavo and set an example “that the courts retain their authority”.

Summerfield also cited an example about companies who failed to follow orders or come to answer allegations regarding the offense. “In June last year three people were jailed (one of them for three years) for contempt, after ignoring Federal Court injunctions relating to copyright and trademark infringement. Company directors are not immune from personal liability for decisions made on behalf of a company.”

Czarnocki however is confident having received legal advice. He believes his company in Australia would not be held liable with the operations of his new company overseas. He trusts that he can still sell until Samsung’s appeal. “Now that the appeal to the full bench is listed for November 25, Apple would have to convince the court that a hearing against us is needed before that date. We’d be amazed, though not unprepared, should that occur.”

Another retail company Harvey Norman has told The Australian of doing just what dMavo did. Norman wants to tap into the sales monopolized by online sellers not paying GST.

As to how far Apple will go to stop sellers from selling the Galaxy Tab; this will just have to wait on the coming days.

Software companies have long been using patent as a means to prevent other competitors from selling. Tim Porter, Google’s patent lawyer commented about the progress of inventions due to distracting litigations. In an interview with the San Francisco Chronicle this week he shared, “You can look at the development of the software industry and see a point when [software wasn't being patented] and it was a period of intense innovation.”

“You didn’t see Microsoft’s first software patent until 1988. By that time it had come out with Word, not to mention DOS. So there’s just no question you can look back and see that innovation happens without patents. It’s also true that since there weren’t patents, there wasn’t software patent litigation.”

Porter also commented on Microsoft against Linux in the past, saying, “When their products stop succeeding in the marketplace, when they get marginalised, as is happening now with Android, they use the large patent portfolio they’ve built up to get revenue from the success of other companies’ products.”

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