Apple Gets Injunction Against Samsung as Tablet Market Heats Up
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In the latest battle between Samsung (SSNLF) and Apple (NASDAQ: AAPL), Apple claims victory, as a judge ruled Tuesday that Samsung must stop selling its Galaxy Tab 10.1 tablet in the U.S. – at least for the moment.
The temporary suspension is to allow the court time to evaluate Apple’s claim that Samsung infringed on its iPad patents when it developed its Galaxy Tab 10.1. Based on the wording in the judge’s ruling, Apple may have a strong case. The case is being handled in the U.S. District Court, Northern District of California, and is Apple Inc. v. Samsung Electronics Co. Ltd et al, 11-1846.
Apple insists that Samsung blatantly copied its iPad when it developed its Galaxy Tab 10.1. However, Samsung is adamant that it did no such thing. Given Apple’s all out determination through a multitude of lawsuits to keep Samsung from encroaching further on its turf, it’s clear that Samsung is a viable threat to Apple. It must also be pointed out that the Galaxy tablet is popular because it is powered by Google’s (NASDAQ: GOOG) Android operating system. Suffice it to say there is no love lost between Google and Apple either.
Google unveiled its Nexus 7 tablet on Wednesday, and it is expected to compete with the iPad, as well as Amazon’s (NASDAQ: AMZN) Kindle Fire.
Techies can quickly identify and argue to death the differences and similarities between the two devices. Personally, I see them as just about the same: flat, rectangular and a wonderful way to handle most of my computer needs without whipping out my laptop. Consumers trying to figure out which one to choose may have their hands full. And the market is expected to continue to grow as Microsoft (NASDAQ: MSFT) and Google have joined the craze. Microsoft introduced a tablet called Surface last week that will run on its Windows 8 operating system.
Now, investors would be wise to pay attention to the developments in the patent wars over these tablets. This ruling is particularly significant because it forces Samsung to stop selling its popular tablet. The loss of revenues may not strongly impact the Korea-based company’s earnings because of the many other products it offers, including its recently released Samsung Galaxy S III smartphone. However, clearly this ruling is a blow for Samsung.
On that same note, it is a coup for Apple. It is extremely rare that a company be granted this kind of leeway in a patent war. For a company to request preliminary injunctions and be granted the action has given many observers, including me, pause.
Suing over patent infringement can be lucrative in the long run because it allows the owner to keep its competitors out of the market.
A main concern to Apple investors may be that of public opinion. Could the continuous lawsuits from Apple against any threat from competitors leave a sour taste in the mouths of consumers? May this fuel any sentiment to buy anything but Apple?
At the market’s close on Wednesday, Apple’s shares were up .43% to $574.50. Shares in Samsung were up 2.5% at midday trading on Wednesday.
Samsung sold 1.6 million tablets during the first quarter of 2012, compared to Apple’s sale of 13.6 million iPads, according to Display Search.
In this latest victory for Apple, a district court judge in San Jose, California ruled in favor of the injunction Apple sought on Samsung’s tablet because it looked and felt too much like the iPad and possibly infringed on the design patent. Apple has long accused Samsung of “slavishly copying” its patents for its mobile devices, including its iPhone.
This same judge had turned down Apple’s demand for an injunction, but had to reconsider the request on the Galaxy tablet after being told to do so by a federal appeals court in May.
The injunction takes effect as soon as Apple posts a $2.6 million bond that is supposed to protect it from damages that Samsung can claim if a court later rules the injunction should not have been granted in the first place. A trial date has been set for July 30.
TwillyD has no positions in the stocks mentioned above. The Motley Fool owns shares of Apple, Amazon.com, Google, and Microsoft. Motley Fool newsletter services recommend Amazon.com, Apple, Google, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.
