Samsung Electronics (UK) Ltd & Anor v Apple Inc [2012] EWHC 889 (Ch)

Case No HC11C03010[2012] EWHC 889 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 04/04/2012
Before
MR JUSTICE MANN
Between
(1) Samsung Electronics (UK) LtdClaimants(2) Samsung Electronics Co LtdClaimantApple IncDefendant
Henry Carr QC and Anna Edwards-Stuart (instructed by Simmons & Simmons LLP) for ClaimantsSimon Thorley QC and Joe Delaney (instructed by Freshfields Bruckhaus Deringer) for DefendantHearing Hearing dates: 21 st& 24 th February
JudgmentMr Justice Mann :Introduction
[1]These are applications within proceedings brought in this jurisdiction by part of the Samsung Electronics empire against Apple Inc (“Apple”), the parent company for the well-known computer concern. This action itself is part of an extensive web of worldwide litigation between these parties concerning a tablet computer produced by Samsung and named Galaxy. There are various models of Galaxy, but in the main it is unnecessary on this application to distinguish between them and I can treat them as if they are one. This action relates to a Registered Community Design no. 181,607-0001, registered by Apple. At the heart of the dispute between the parties in this and other jurisdictions is whether or not Galaxy infringes that design.[2]In various proceedings on the continent, and particularly in Germany and the Netherlands, Apple is complaining that Samsung’s Galaxy infringes that design and is seeking injunctive relief on a pan-European basis. For a time they obtained such an injunction, but the current state of affairs is that the only injunctions outstanding are in Germany, covering Germany alone, and they have been granted on a competition law basis, not on the basis of the registered design. Of particular significance are proceedings commenced by the claimants, and other Samsung companies, in OHIM claiming that the registered design is invalid. These were started on 9th August 2011 – that is to say, a month before the commencement of these proceedings on 8th September.[3]The present proceedings have the parties the other way round. The two claimants (the UK arm which I shall call “Samsung UK”, and the Korean parent which I shall call “SEC”) seek declarations of non-infringement against Apple and also seek an injunction restraining Apple from making threats to sue for infringement. Apple seeks to challenge the right of the claimants to bring their proceedings on various bases which are the subject of this application and to which I will come. For their part the claimants seek an order for an expedited hearing of the trial in this action (so far as the claims survive the attacks of Apple).[4]It will be convenient to deal with the challenges first before turning to expedition.

SEC’s claim for a declaration of non-infringement

[5]This is a jurisdictional point. Apple say that SEC cannot fulfil the jurisdictional requirements for suing in this jurisdiction because no relevant party has a domicile or establishment in this jurisdiction. SEC adopts a slightly odd position which involves a sort of estoppel which it does not really wish to run, as will appear below.[6]Under Article 81 of the Community Designs Regulation, Community design courts (of which the High Court is one) have exclusive jurisdiction over, inter alia, actions for declarations of non-infringement of Community designs:
“Article 81 Jurisdiction over infringement and validity The Community design courts shall have exclusive jurisdiction: … (b) for actions for declaration of non-infringement of Community designs, if they are permitted under national law …”

The Community design courts shall have exclusive jurisdiction:

[7]Article 82(1) provides over whom such jurisdiction can be exercised:
“1. Subject to the provisions of this Regulation and to any provisions of the Convention on Jurisdiction and Enforcement applicable by virtue of Article 79, proceedings in respect of the actions and claims referred to in Article 81 shall be brought in the courts of the Member State in which the defendant is domiciled or, if he is not domiciled in any of the Member States, in any Member State in which he has an establishment. 2. If the defendant is neither domiciled nor has an establishment in any of the Member States, such proceedings shall be brought in the courts of the Member State in which the plaintiff is domiciled or, if he is not domiciled in any of the Member States, in any Member State in which he has an establishment. 3. If neither the defendant nor the plaintiff is so domiciled or has such an establishment, such proceedings shall be brought in the courts of the Member State where the Office has its seat …”
Apple’s case is that it is not domiciled in this jurisdiction, and it does not have an establishment here. That rules out jurisdiction under paragraph 1. Furthermore SEC is not domiciled, nor does it have an establishment, here, which rules out the use of paragraph 2 here. That means that SEC is not entitled to maintain its non-infringement case here. It can only be brought, if anywhere, in Spain, under paragraph 3.[8]SEC’s answer to this is a little odd. It does not positively claim that Apple has a domicile or establishment here, and does not say that SEC is domiciled in this jurisdiction either. It does, however, run a case on what has been established against it (in the face of its opposition) in German proceedings. In proceedings in Düsseldorf Apple, as claimant, sued SEC and its German subsidiary (which I will call “SGmbH”). SGmbH is a German company, and was sued in its place of domicile. However, Apple also alleged that SGmbH was an establishment of SEC, and sought to join SEC accordingly. SEC opposed that stance, but the Düsseldorf Court of Appeal decided the point against SEC and therefore made orders against it. There is no further appeal from that order, according to a witness statement of SEC on this application. As it was put in the skeleton argument of Mr Carr QC, who appeared for the claimants:
“SEC and Samsung GmbH contend vigorously that this is incorrect. However, assuming that it is correct (and, given its stance in Germany, Apple cannot be heard to deny this) then SEC has an establishment in the United Kingdom, namely SEUK. On this basis Apple cannot assert that SEC’s claim falls outside Article 82(1). Therefore the challenge to jurisdiction of [this claim] falls away.”
This is a somewhat equivocal stance, and its equivocation was reinforced in submissions when Mr Carr said that he could not aver that that SEC had an establishment in this jurisdiction, but Apple was estopped from denying it.[9]Apple’s own stance can be simply stated - there was no pleading, and no factual basis, put forward for saying that SEC had an establishment in this jurisdiction, so there was no jurisdiction over the claim on an establishment basis. It does, of course, uphold the finding in relation to Germany.[10]The position moved slightly, but only slightly, in the course of the hearing. In response to a challenge that the jurisdictional basis of the claim was not pleaded, Mr Carr produced a draft pleading. It set out the matters which the Düsseldorf court relied on as making SGmbH an establishment of SEC and pleaded that the relationship between SEC and UK was the same as that between SEC and SGmbH, and then went on:
“In the premises if, which is denied, [SGmbH] is an establishment of [SEC] in the Federal Republic of Germany within the meaning of Article 82 … then [Samsung UK] is an establishment of SEC in England and Wales. Further, given the submissions made by the Defendant in the German Application and the acceptance of those submissions by the Court of Appeal in Düsseldorf, the Defendant is estopped from asserting that [Samsung UK] is not an establishment of the [SEC] in England and Wales.”
There remains, however, a degree of equivocation, arising out of the words “if, which is denied”.[11]As things stand it seems to me, and I find, that SEC has not met the jurisdictional point. If it is to have the right to bring its claim then it must establish the jurisdiction. No attempt has been made to establish a domicile or establishment of Apple in this country; nor has any attempt been made to establish its own domicile here. The only basis put forward is a case on establishment which it disclaims in Germany and does not seem to want to run unequivocally in this jurisdiction. It either puts forward a claim to jurisdiction on the facts, or it does not. It cannot adopt the stance which it seems to want to adopt, which is not to assert the establishment point here because it does not like its result in Germany, but say that Apple is estopped from denying establishment. An estoppel makes sense only in relation to something that the other party wishes to assert (or deny). If SEC wishes to assert establishment here, then it may or may not be that on the facts Apple is estopped from denying it. But it has to be estopped in relation to an assertion, not in relation to a non-assertion. So if it does not wish to assert establishment, there is nothing for Apple to be estopped from.[12]At the moment SEC has not made an assertion of any facts which found jurisdiction via establishment, and it appears that it does not wish to make such a case. Its proposed pleading that “if which is denied” there is establishment in Germany is not a clear enough assertion. It seems to suggest a non-acceptance of an establishment in Germany. If it is not accepted in Germany, then it cannot be treated as accepted by SEC here. The estoppel does not fill the gap, for the reasons just mentioned.[13]Mr Carr sought to pray in aid problems that have been faced in Spain, where SEC and its Spanish subsidiary have commenced proceedings seeking a declaration of non-infringement. Apple has mounted a procedural attack on those proceedings, and it is said that if those proceedings are indeed struck out then a declaration cannot be sought in the fall-back jurisdiction in paragraph (3). That does not seem to me to assist Mr Carr. If the proceedings are procedurally bad in Spain, then they are bad. That does not mean that there has to be jurisdiction in some other jurisdiction to entertain the claim.[14]Accordingly, on the present state of the claimants’ case, SEC cannot establish that the English court has jurisdiction, and seems reluctant even to try. It is going to have to make a decision. The German decision is apparently not subject to further appeals. If that is right then SEC is stuck with that decision. If it does not want it applied elsewhere, then it cannot, consistently with that view, claim jurisdiction based on parallel facts here (assuming those parallel facts to be true). If it wishes to extract some benefit from Apple having succeeded on the point in Germany, then it can do so (if the facts permit) by using parity of reasoning here. But it must adopt a positive course if it wishes to sue here. It has not done so, or at least not yet. Therefore, its claim cannot proceed.[15]I should make clear that I am not making positive findings about the following particular aspects of this case. I am not making any finding that the factual case that SEC is half-heartedly relying on is accurate or sufficient to create an establishment, or that Apple is indeed estopped in any particular way from denying an establishment. It would not follow that, because SEC has an establishment in Germany, it has one here. The facts might be different. I am merely determining that since SEC is not advancing a positive case on establishment, it has no case on jurisdiction.[16]I need to deal with one last point advanced by Mr Carr. He says that this whole debate is likely to be pointless because it is likely that Apple will counterclaim for infringement against both SEC and Samsung UK, at which point SEC could mount a counterclaim for its declaration after all. He may or may not be right about that (and the procedural games that are being played across Europe would make it not surprising were that to occur) but the possibility of a future counterclaim to a counterclaim is not a basis for finding jurisdiction to entertain a claim where that jurisdiction does not exist. There is no such thing as jurisdiction on the footing of likely future litigation.[17]In the circumstances I find that as matters presently stand, this court has no jurisdiction to entertain SEC’s claim for a declaration of non-infringement.

Samung UK’s claim for a declaration of non-infringement

[18]Mr Thorley QC, for Apple, did not dispute this claim on jurisdictional grounds such as those he deployed against SEC. In fact, Apple has counterclaimed against Samsung UK for infringement of the registered design. It is accepted that Samsung UK is domiciled here, and can make its claim accordingly within Article 82. However, he did say that the claim and counterclaim ought to be stayed because the matters raised were not suitable for declaratory proceedings of this nature, because it would lead to the possibility of conflicting judgments in OHIM and this jurisdiction, and because the declaration would serve no useful purpose, and because at the heart of the claim is a challenge to validity which is not permitted to be brought in this court.[19]It will be remembered that the claimants have already started their own invalidity proceedings in OHIM. Against that background Mr Thorley’s starting point is Article 91 of the Regulation:
“Article 91 – Specific rules on related actions A Community design court hearing an action referred to in Article 81, other than an action for a declaration of non-infringement, shall, unless there are special grounds for continuing the hearing, of its own motion after hearing the parties, or at the request of one of the parties and after hearing the other parties, stay the proceedings where the validity of the Community design is already in issue before another Community design court on account of a counterclaim or, in the case of a registered Community design, where an application for a declaration of invalidity has already been filed at the Office.”
[20]Mr Thorley says that the present action should be stayed accordingly. At first sight the exception “other than an action for a declaration of non-infringement” is not a promising start for Mr Thorley, because that is precisely what Samsung UK has claimed here. However, he says that the structure of the Regulation clearly anticipates that challenges which go to the validity of the design (which he says Samsung UK’s does) should await a determination by OHIM however they are brought. He says that the claim in this case involves validity questions because they involve what he describes as “scope of protection” points which are common to this action and to challenges to validity. This analysis of the claim turns on the use in the particulars of claim of the following averments: “The design of the Samsung Tablets (and each of them) produce a different overall impression on the informed user from that produced by the Registered Design… The design corpus contains numerous designs which are very similar to the Registered Design…in the premises the scope of protection (if any) conferred by the Registered Design is very narrow. …The design field in this case is that of handheld computers… Bearing in mind the design constraints which apply in designing handheld computers, there are significant differences in the design of these Samsung Tablets… Those features of design where similarities exist are features where the degree of freedom of the designer in developing his design is limited and/or features which are solely dictated by technical function.”

…The design field in this case is that of handheld computers…

[21]These are concepts which, according to Mr Thorley, go to the question of validity. This is said to be apparent from various of the Articles in the Regulation:
“ Article 4 – Requirements for protection A design shall be protected by a Community design to the extent that it is new and has individual character… Article 6 – Individual character A design shall be considered to have an individual character if the overall impression it produces on the informed user differs from the overall impression produced on such a user by any design which has been made available to the public… Article 8 – Designs dictated by their technical function and designs of interconnections A Community design shall not subsist in features of appearance of a product which are solely dictated by its technical function… Article 10 – Scope of protection The scope of the protection conferred by a Community design shall include any design which does not produce on the informed user a different overall impression.”
Article 6 – Individual character Article 8 – Designs dictated by their technical function and designs of interconnections

Article 10 – Scope of protection

[22]Mr Thorley progresses his argument by pointing to the Regulation at Article 84(4):
“84(4). The validity of a Community design may not be put in issue in an action for a declaration of non-infringement.”
Mr Thorley submits that this inevitably introduces some limitation on the issues that can be taken in an action for a declaration of non-infringement, even if formally the validity is not put in issue. Certain potential aspects of a declaration of non-infringement do not pose a problem in this respect. For example, if the issue is whether or not a given act was an act of infringement or not; or whether a party carried out those acts; or whether the exceptions in Article 20 apply. However, the sort of points relied on by the claimants in this case are said to go beyond that and to trespass into the realms of validity. The Particulars of Claim set out reasons why the claimants’ product does not infringe (see above). These sort of considerations require the court to consider the “scope of protection” of the Registered Design. As such, and in order not to trespass into the jurisdiction of OHIM, they are not the sort of matters that should be determined in an application for a declaration of non-infringement, notwithstanding the ostensibly broad words of the exception in Article 91. Mr Thorley draws attention to the decision of Arnold J in Datacard v Eagle [2011] EWHC 244 (Pat) at paragraph 230, where it is said that in the context of patents, Arnold J accepted that “extent of protection” was purely a question of the scope of the claims under Article 69(1) of the EPC, and that was a different concept to “the rights conferred” under national UK law.[23]Mr Thorley further points to Article 4 and the need for a design to have “individual character”, together with the elaboration of that concept in Article 6; to the questions that must be asked when assessing “scope of protection”, with its similarity to the test for validity under Articles 4 and 6; and says it follows that a national court that has to consider these areas in a claim for a declaration of non-infringement such as that in the present case would inevitably be trespassing into areas of validity which are reserved for OHIM. Validity and scope of protection are different sides of the same coin, and in the present case the English court would inevitably have to consider scope of protection.[24]It is said to follow that the sort of claim for a declaration of non-infringement which is made in this case is not within the carve-out in Article 91. Since validity has already been raised in OHIM, it follows that the present proceedings must be stayed unless there are special circumstances pointing the other way. Mr Thorley submits that there are no special circumstances on the facts of this case.[25]This analysis involves a serious limitation on the plain words of Article 91. In my view it is not required by the Regulation.[26]First, if it were right, it would amount to a serious emasculation of actions for declarations of non-infringement. It would confine them largely to the sort of limited issues identified above. Mr Thorley acknowledged the limitation (though he would not accept the word “emasculation”), but said it was a consequence of reserving validity matters for OHIM. In my view it is so striking that it would require clear words to achieve it. The most likely purpose of an action for a declaration is where a trader wishes to market a product and wants to clear the path; or where he has started to market and is subjected to complaints from the design owner but does not accept that his product is infringing. In those typical cases there is seldom an issue as to who precisely is doing what, or whether the acts would be an infringement if the product infringes. The issue is likely to be whether the product does itself infringe. If Mr Thorley were right then the declaration would become unavailable in precisely the situation where it would be most useful, because most such cases would involve “trespassing” into validity issues which Mr Thorley says is not allowed. That is unlikely to have been the draftsman’s intention.[27]Second, it is not right to say that OHIM has exclusive jurisdiction over validity questions. National courts may consider validity in a counterclaim in an infringement action - see Article 24(1).[28]There is no real support for Mr Thorley’s submissions within the rest of the Regulations either. Article 81(a) gives Community design courts exclusive jurisdiction over actions for infringement. OHIM has no jurisdiction in respect of infringement actions. But in an infringement action it will usually, or often, be necessary to consider the scope of the protection, which is the sort of issue that Mr Thorley says is reserved to OHIM via validity questions. If he is right, then logically infringement actions should not go into that area either. Since that would render enforcement impossible, it demonstrates why his arguments cannot be correct.[29]Again, infringement actions may involve a consideration of the design corpus - see recital 14 to the Regulation and Dyson v Vax [2012] FSR 4 at paragraph 11. But the design corpus is also relevant to validity. So the national Community design courts have to consider matters relevant to validity in that context as well. All this demonstrates that the demarcation lines that Mr Thorley seeks to set up within the Regulation cannot exist.[30]Nor does this conclusion throw up the spectre of irreconcilable judgments that Mr Thorley relies on, as between OHIM on the one hand and a Community design court on the other. As Mr Carr pointed out, they are considering different things. OHIM considers the validity of the design. The national court assumes the validity and considers the infringing design.[31]Article 84(4) does not help Mr Thorley either. That sets limits to an action for a declaration of non-infringement. Validity has to be assumed. It does not follow that what is properly in issue in relation to infringement should be constrained. Mr Carr is correct to point out how that Article relates to Article 24. Paragraph 1 of Article 24 provides:
“1. A registered Community design shall be declared invalid on application to the Office … or by a Community design court on the basis of a counterclaim in infringement proceedings.”
So validity can be raised in a national court if infringement proceedings are started, which is logical, but if a claimant wishes to take a validity point without being sued first, that has to be done in OHIM. Otherwise a claimant with a potentially infringing product has to assume validity and try to establish that his product does not infringe.[32]Accordingly, Mr Thorley’s analysis does not work. The exception in Article 91 means what it says. Actions for declaration for non-infringement can continue even if validity is already in issue in OHIM. There is no need to reduce that concept to something with little value in the real world. It follows that Apple’s attempt to have this part of this action stayed fails.

The threats action

[33]SEUK and SEC have both made a claim for groundless threats of infringement proceedings under the Community Design Regulations 2005 (SI 2005/2339) - the “2005 Regulation”. Service out of the jurisdiction in respect of this claim needs to be effected under the normal provisions of English law, and the special provisions in the Community Design Regulation do not apply to this claim. Accordingly, the claimants have to establish that they have a good arguable case and that one or more of the CPR grounds, and the other requirements of the CPR, apply. They obtained permission to serve out from the Master, but Apple seeks to have that permission set aside. It is accepted by Apple that all the requirements of the CPR other than “good arguable claim” are fulfilled, so no issue arises as to them. It does, however, say that the facts pleaded, even when taken with additional matters now relied on by the claimants, do not amount to actionable groundless threats within the 2005 Regulation. That is the question which now falls to be decided. If Apple is right then the service of this claim must be set aside. If it is wrong then service stands.

The law in relation to groundless threats

[34]Regulation 2 of the 2005 Regulation provides: “2(1) Where any person (whether entitled to or interested in a Community design or not) by circulars, advertisements or otherwise threatens any other person with proceedings for infringement of a Community design, any person aggrieved thereby may bring an action against him for any such relief as is mentioned in paragraph (2). (2) Subject to paragraphs (3) and (4), the claimant shall be entitled to the following relief –(a) a declaration to the effect that the threats are unjustifiable;(b) an injunction against the continuance of the threats; and(c) such damages, if any, as he has sustained by reason of the threats. (3) If the defendant proves that the acts in respect of which proceedings were threatened constitute or, if done, would constitute an infringement of a registered Community design the claimant shall be entitled to the relief claimed only if he shows that the registration is invalid. (4) If the defendant proves that the acts in respect of which proceedings were threatened constitute or, if done, would constitute an infringement of an unregistered Community design the claimant shall not be entitled to the relief claimed. (5) Proceedings may not be brought under this Regulation in respect of a threat to bring proceedings for an infringement alleged to consist of the making or importing of anything.

(b) protected as an unregistered Community design,

[35]The claimants do not rely on any expression which, in terms, threatens to bring infringement proceedings in this jurisdiction. Rather, they rely on a series of acts which, each taken in the context of the other, amounts to an actionable threat. I shall set out those acts in due course, and shall consider them in the light of the following principles which can be extracted from the authorities:(i) Each particular express utterance, or act relied on must be viewed as a it would be viewed by a reasonable recipient of the communication or perceiver of the act. In Best Buy v Worldwide Sales Corporation Espana SL [2011] FSR 30 the Court of Appeal had to consider whether a letter, described as “the September letter” was an actionable threat. At paragraph 18 Lord Neuberger MR said:” “In my view, insofar as such a question turns on the meaning of any particular passage in the September letter, it has to be answered by reference to what a reasonable person, in the position of the recipient of the letter, with its knowledge of all the relevant circumstances at the date the letter was written, would have understood the writer of the passage to have intended, when read in the context of the letter as a whole.” Best Buy was a trade mark case, but the same principles must obviously apply.(ii) A threat does not have to be made in terms. It is sufficient if words or acts convey an intention to enforce those rights by legal action – John Summers & Sons Limited v Cold Metal Process Co [1948] 65 RPC 75 at page 95.(iii) “The policy represented by the first statutory threats provision [the predecessors of the 2005 Regulations]…was clearly to stop patentees who were (in Pope’s words about Addison) ‘willing to wound but afraid to strike’ from holding the sword of Damocles above another’s head…in summary, the term ‘threat’ covers any information that would convey to a reasonable man that some person has trade mark rights and intends to enforce them against another. It matters not that the threat may be veiled or covert, conditional or future. Nor does it matter that the threat is made in response to an enquiry from the party threatened…” – per Lightman J in L’Oréal (UK) Limited v Johnson & Johnson [2000] FSR 686 at paragraph 12; approved by Lord Neuberger MR in Best Buy at paragraph 21.(iv) It was not disputed that the threat must be a threat to commence proceedings in this jurisdiction. That is the threat which it is sought to restrain. “In my view, insofar as such a question turns on the meaning of any particular passage in the September letter, it has to be answered by reference to what a reasonable person, in the position of the recipient of the letter, with its knowledge of all the relevant circumstances at the date the letter was written, would have understood the writer of the passage to have intended, when read in the context of the letter as a whole.”[36]Best Buy was relied on by the claimants as an example of generalised statements, not referring specifically to proceedings in the UK, being taken as threats to commence proceedings here. “26…It is clear from various passages in the letter…that thedefendant’s claims and concerns extended throughout the European Union, and were not limited to Spain…It seems to me, therefore, that at least and unless there is something in the surrounding circumstances to indicate the contrary, the threat was Europe-wide. 27. Having said that, I accept the notion that the defendant would have been understood to be intending to bring proceedings in the courts of all 27 EU member states would be fanciful… 28…While it may arguably be fanciful to interpret the September letter as threatening proceedings in, say, Slovenia or Bulgaria, it is far from fanciful to conclude that it was intended to extend to courts in this country. This is not so much because BBES’s solicitors, FFW, to whom the September letter was addressed, were based in London: it is more that the parties would both have known that the Best Buy group were intending to launch their European business in the United Kingdom… 30. In these circumstances, the Europe-wide assertion, claims and threats in the September letter would, in my view, clearly have been understood by a reasonable recipient in the position of BBES to have been a threat (not a promise) of infringement proceedings in the United Kingdom.”[37]Mr Carr relied on those passages, not because the facts in the present case are effectively the same as those in Best Buy, but as illustrating the way in which generalised statements can properly be seen to have a local focus in terms of threats of proceedings in a given jurisdiction. He claims to have factors in the present case which are similar to those operating in Best Buy and which have the same effect.

The facts relied on as threats

[38]The alleged threats to commence infringement proceedings (which Apple asserts are no such thing) appear in the original Particulars of Claim, in some amendments to those Particulars and in some additional material advanced at the hearing. Mr Thorley, with commendable realism, did not take any point on any of the material not being available to the court when the original permission to serve out was given. He accepted that it was appropriate to deal with the claimants’ case as it now is, but maintained that, even as expanded, it does not create a sufficiently clear or arguable case that actionable threats have been made. I shall therefore consider all the material advanced by Mr Carr.[39]That material appears, first, in the amended (or proposed amended) Particulars of Claim in paragraph 8. It was supplemented a little in supporting material. All that material (summarising or quoting verbatim where appropriate) is as follows: (i) Apple has asserted in proceedings commenced in Düsseldorf on 1st August 2011 as follows:
“By means of this application, [Apple] wishes to assert its design and equipment appearance rights against [GmbH and SEC]’s newest copy – the tablet computer Galaxy Tab 10.1, which is now being imported into the German market…With this application [Apple] is henceforth asserting its Community design for the territory of the European Union, however with the exception of The Netherlands in regards to [SEC].” (ii) On 9th August 2011 a Community-wide injunction was made against GmbH, and a Community-wide injunction was made against SEC (excluding The Netherlands). One week later the latter injunction was varied so as to restrict it to Germany. Those injunctions were confirmed by the German court on 9th September 2011. (iii) On 2nd September 2011 Apple sought injunctive relief in respect of further Samsung products in Germany, seeking Community-wide relief. Further injunctions were sought but with limited success. In that context Apple made statements to the effect that the claim to cease and desist covered the entire EU. Those particular statements are relied on as part of the pattern of conduct amounting to threats. (iv). The Particulars of Claim assert: “The statement quoted [in (i) above] amounts to an express assertion that the making and/or offering and/or putting on the market and/or importing and/or exporting and/or using the Galaxy Tab 10.1 tablet computer and/or stocking the Galaxy Tab 10.1 tablet computer for those purposes in the United Kingdom by [SEC] constitutes an infringement of the Registered Design.”
Mr Thorley accepts that. (v) An attempt in Germany to reinstate a Community-wide injunction against SEC in respect of the Galaxy Tab 10.1 and 8.9 tablet computers amounts to a threat to repeat that assertion in respect of the 10.1 tablet, and is a further express assertion in relation to the 8.9 tablet. (vi) Apple’s application to seek a pan-European injunction in Germany against SEC in respect of the 7.7 tablet computer amounts to an express assertion that making, offering, marketing, exporting, and/or importing the 7.7 tablet in the United Kingdom by SEC constitutes infringement of the Registered Design. (vii) The assertions referred to in the preceding sub-paragraphs amount to explicit assertions that the making etc of the Samsung tablets for those purposes in the UK by Samsung UK constitutes infringement of the Registered Design. Mr Thorley accepts that they do amount to such an assertion, and that they apply to anyone, and not just Samsung UK. (viii) In June 2011 Apple commenced proceedings in Holland claiming that the 10.1 tablet infringed the Registered Design and sought injunctive relief in Holland against SEC and various other companies in the Samsung group. The claim for infringement was dismissed, but Apple has appealed that dismissal. (ix) Claims for an injunction to restrain infringement in Holland amount to an implicit assertion that the making etc of Samsung tablets in the United Kingdom would be an infringement of the Registered Design. (x) Evidence filed on this application by Samsung records that in the Düsseldorf proceedings, in the context of a jurisdictional submission Apple said:
“[Samsung’s counsel] obviously have no doubts about the jurisdiction of the Düsseldorf Regional Court either. The protective brief submitted for [Samsung] was clearly directed at the Düsseldorf Regional Court and did not contain any objection concerning lack of jurisdiction. This could have been expected since [SEC] had been sued by [Apple] in the Netherlands at a Dutch court with regard to the Dutch territory; and it should have been clear from other non-European proceedings that [Apple] would seek relief based on their registered design models also outside the Netherlands.”
[40]Those pleaded allegations together form the starting point for the claim that there are threats. Paragraph 8 of the Particulars of Claim goes on to rely on the following further factors:(i) The appeal in Germany is relied on, and is said to give rise to an inference that if Apple is unsuccessful in its appeal against SEC in Germany, Apple will try to obtain relief elsewhere.(ii) In a letter dated 18th October 2011, the claimants’ solicitors wrote to Apple seeking confirmation that the claimant’s dealings in Samsung tablets in the UK did not infringe Apple’s rights. By then a claim form had been issued (on 8th September) seeking a declaration of non-infringement (not a claim based on threats), but it had not been served. The letter enclosed a copy of the claim form (expressly for information purposes only, and not by way of service) and asked:
“If you no longer consider that the Samsung Tablets infringe your rights in RCD 0001, please let us know and have your legal representatives sign and return to us a copy of the consent order enclosed with this letter.”
No reference was made in the letter to threats. Apple has not provided the confirmation requested. The consent order provided for a declaration of non-infringement, and no other relevant form of relief. Apple did not respond to that invitation at all. (iii) Paragraph 8.3(a) of the amended Particulars of Claim relies on various public statements made by Apple officials “in the knowledge that these statements would be or would be likely to be reproduced in the media including media located within and/or directed to the relevant trade and public in the United Kingdom.” The statements are as follows: (a) a statement attributed to a “spokesman” for [Apple] (identified as Adam Howorth by the Mail Online) that “It’s no coincidence that Samsung’s latest products look a lot like the iPhone and iPad, from the shape of the hardware to the user interface and even the packaging. This kind of blatant copying is wrong, and we need to protect Apple’s intellectual property when companies steal our ideas.” This statement was published in the Mail Online, the online version of the Daily Telegraph and the online version of the Financial Times on or around 10th August 2011, and republished in the Daily Telegraph on or around 17th August and 5th September. The last sentence was reproduced and published online in the Financial Times on or around 10th August 2011, and again (attributed to a different Apple spokesperson) on the BBC News website on 15th October 2011. (b) The claimants rely on Apple’s counterclaim in these proceedings, which alleges infringement against Samsung UK in relation to its acts of offering and/or putting on the market and/or exporting and/or using the Samsung tablet or stocking it for those purposes in the UK.[41]One other important fact was relied on by Mr Carr in this respect, and that is the relative importance of the UK market in the European market for tablet computers. The United Kingdom tablet computer market accounts for approximately 25% of the European tablet computer market as a whole (despite the UK’s having less than 10% of the European Union population). Apple hold a strong position in the UK market, having almost 75% of tablet computer sales in the UK. Samsung is Apple’s nearest competitor, with at least 6% of the UK tablet computer for its Galaxy Tab devices. It is said that market analysts expect brand competition in the tablet market to increase significantly in 2012. It follows that the UK market is an extremely important one, and is one in respect of which one can particularly expect Apple to seek to protect its interests.

Samsung’s case on threats

[42]Mr Carr’s case is that those facts, when each is taken in the appropriate context of the other, demonstrates a sufficient level of threat to amount to a threat to commence proceedings for infringement in this jurisdiction. Looking at it from the position of a reasonable recipient in the position of Samsung, that person would understand that European-wide claims for protection of the product were made; that legal rights have been sought to be enforced in Europe; that clear statements have been made as to Apple’s intention to enforce its rights; a pan-European injunction has not been obtained (or maintained) in Germany; that makes it more likely that proceedings will be commenced in other jurisdictions; proceedings have been commenced in other jurisdictions; that the UK is an important market in which one would expect those rights to be enforced; that when challenged in correspondence Apple did not express an intention not to seek to enforce here; and that the counterclaim for infringement against Samsung UK is what one would expect and demonstrates that it is likely that SEC will be sued here. Distilling matters further, Apple have demonstrated an intention to restrain infringement Europe-wide; they have failed to achieve that elsewhere; the UK is an important market; so they should be taken to have threatened to commence here. These matters are capable of amounting to an actionable threat to commence infringement proceedings in this jurisdiction.

Apple’s case on threats

[43]Apple’s case, in short, is that those acts do not amount to threats. Seeking Europe-wide relief in other jurisdictions does not amount to any indication that local proceedings would be brought in this jurisdiction (if anything it would tend to demonstrate the opposite). Statements supporting such a case, made in those other proceedings, cannot amount to threats to sue here, for the same reason. The out of court statements about protection of rights were all made when pan-Europe injunctions were in force, so cannot be taken as a threat to sue elsewhere; the non-response to the October letter was a non-response to the question asked, which had nothing to do with threats to sue here; and the counterclaim was a response to the existing claim and does not demonstrate a threat.

The determination of the threats point

[44]Since the threats in this case are said to arise out of an accumulation of events, it seems to me to be useful to consider the picture at each stage of the events concerned. This is not least because each event occurs in the context of what has gone before, and is capable of being affected by that context, and may even shed further light on those previous events. This does, however, have to be done against the overall background of the importance of the UK market to the sale of tablet computers. That is capable of colouring events so that matters which might just seem to be related to the enforcement of rights in one jurisdiction, or in no particular jurisdiction, could be taken to be relating to the enforcement of rights in this jurisdiction because that would be one of the logical, if not the most logical, place to enforce them so far as market impact is concerned.[45]The first events, chronologically, are the Dutch and German proceedings. The Dutch proceedings seem to have come first on 27th June 2011. They claimed a pan-European injunction against the Dutch Samsung company, and a local injunction against SEC. The infringement claim was dismissed on 24th August. A notice of appeal claims a similar injunction. Mr Carr submitted that it would have been apparent to the reasonable observer in Samsung’s position that Apple was seeking to prohibit the sale of Samsung tablet computers throughout the EU. I agree, but it does not follow that it would have perceived that there was a threat of proceedings in England and Wales. It might have been thought that Apple would content itself with pan-European relief in Holland alone (though such relief would have been against Samsung Holland only), but I do not consider that these claims amounted to a threat to start similar proceedings in this jurisdiction. Samsung might have wondered what would happen, but that is not a threat. One might be able to infer an intention to assert rights vigorously. One cannot infer, from these proceedings, and even given the statements relied on, that there would be proceedings in this jurisdiction. The same can be said of the German proceedings, which started on 4th August. There is no doubt that Apple was seeking pan-European relief (other than in the Netherlands), but this time apparently in Germany. There is no doubt that it was claiming infringement across Europe, but it was suing in Germany. The seriousness of Apple’s intent could not have been in doubt, but from those facts alone I do not think a threat to sue here would have been perceived.[46]Placing these events against the background of the importance of the UK market (see paragraph 28 of Best Buy) does not enhance any threatening characteristic. The fact is that all this litigation was taking place in countries other than this one, and pan-European relief was being sought there. Samsung in the UK might have guessed they may be sued in the future. It does not follow that there was an actionable threat.[47]The one element that might be thought to detract from that is the matter referred to in paragraph 39(x) above. That might be said to be an acknowledgment by Apple of what its own acts should be taken as indicating, or itself to amount to a threat. However, I think that would be vesting it with too much significance. It was dealing with some (unidentified) jurisdictional point, and reflects anticipation by Samsung more than threat by Apple. I do not consider that it alters the complexion of that which has gone before. I note that it is not pleaded as a threat, or indication of threat, which might be said to demonstrate what the claimants actually thought about it.[48]Into that context come the external pronouncements. It is not always clear to whom the remarks were made, but it is a reasonable inference that they were made for public consumption, and were targeted in part at competitors. They were recorded as made by different people, and the common wording suggests a party line that was being toed, and that a particular message was to be got over. The indications are that Apple was intending to assert its rights, but their immediate context has to be understood. Of the pleaded instances, all but one took place when proceedings were seemingly active in Europe, and when pan-European injunctions had been obtained. They were certainly obtained at a time when the apparent intention was to seek pan-European relief in Europe. They can probably more realistically be viewed as a justification of what was going on at the time rather than a stated intention to sue elsewhere. The one which came after the discharge of pan-European injunctions was in the same terms as the earlier ones, and no more than a repetition. It does not create a threat where none otherwise existed.[49]Last there is the letter of 18th October, or rather the non-response. I do not see how this can amount to a threat, even in its context. The 18th October letter is a letter which asked, and asked only, for signature of a consent order agreeing to a declaration that Samsung’s products did not infringe by way of confirmation that there was no infringement. The claim form provided with it sought the same relief. There was no reference to perceived threats, to uncertainty as to intentions, or anything like that. It was not an attempt to clear the position in relation to any uncertainty over threats. It was simply in invitation to agree that there was non-infringement. I do not see how a failure to respond to that question can be taken to be a threat to sue. Mr Carr’s skeleton argument sought to characterise Apple’s response (or non-response) to this letter as “a failure to provide an assurance not to bring proceedings”. It was, in my view, no such thing. If the question had been different, a failure to respond might have been fairly interpreted as a failure to give that assurance and, in the context of what had been gone before, a threat. Suppose, for example, there was some doubt as to whether expressions of intention were intended to connote a threat to sue. A question which invited the maker to make its intention clearer in that respect might, when combined with a non-answer, turn an equivocal act into an unequivocal one. But the right question has to be asked. The question in Samsung’s solicitors’ letter was not the right question.[50]I therefore find that the claims based on threats to sue are not sufficiently arguable to amount to a good arguable case for the purposes of service out of the jurisdiction. The fact that there has now been an infringement claim against Samsung UK (in the counterclaim) does not make any difference. It was not preceded by an actionable threat, and cannot turn something that was not a threat into a threat.

Expedition

[51]Samsung seeks expedition of such claims as are left to it. Its application was for a very large degree of expedition. Originally it had proposed a trial by mid-February. The jurisdictional challenge made that impractical and a later date of trial starting at the end of April was proposed. That is still a serious degree of expedition.[52]The claimants’ reasons for expedition can be summed up as a need to remove uncertainty as to whether Samsung’s products infringe. It is concerned about losing market share, especially in the very significant UK market. A degree of certainty needs to be created, both for this product and in relation to future development, and it does not exist while Apple picks and chooses where and how to proceed in the various territories within Europe. There was evidence (confidential in its nature) as to the effect on wholesale customers and how Samsung has approached that. The burden on court time was said to be not great - one day, perhaps two, for the trial.[53]Apple opposed the expedition. It disputed the need for certainty, or at least a need which required expedition, and pointed out that in the initial phases of this action Samsung had not demonstrated urgency, not least in issuing a claim form on 8th September and then doing nothing with it until a copy was sent with the October letter. No attempt was made here to clear the way before the product was launched earlier in the year. Since then the proceedings have not been pursued with urgency. The evidence of commercial damage was said to be not strong, and in any event any damage could be compensated by a monetary award. So far as the April date was concerned, that was unfair on Apple because it was too rushed and imposed unfair burdens, especially in the light of parallel litigation which was being conducted.[54]I agree that the claimants did not approach the initial phases of this claim with a degree of urgency which is consistent with the urgency that it now said to exist. However, I also agree with the claimants that in the commercial circumstances of this case there should be an appropriate degree of expedition. The dispute in this case needs resolution while the designs of the product are still current, and in the context of a Europe-wide dispute about these tablet computers it is necessary to start to get some (or some more) final decisions in place to produce certainty and remove public and litigation posturing. I think that the claimants have made out a case for expedition in this case, and that that overrides Apple’s objections (save as to timing) and is sufficient to justify the diversion of court resources for the period in question. However, I do not consider that an April date is realistic or fair. Apple claims to have other litigation to prepare for and conduct in that period, and it is neither necessary nor appropriate to inflict this extra burden on them in that period, particularly in the light of the initial non-urgent conduct of the claimants.[55]I shall therefore make an order for expedition, with a view to this case being heard in June of this year, not April (or May). Mr Thorley conceded that such a date did not present his client with practical difficulties. When the hearing ended, and in the light of the short time available before the end of April, Mr Carr asked if I could give a provisional indication of when any expedited date would be. I gave a preliminary indication that an April date was unlikely, and any expedition (on which I had not then decided) would be more likely to be June. The parties have therefore been able to work with that information since then.

Cited in 1 later judgment