Apple Loses U.S. Court Bid to Block Samsung Galaxy Nexus

Apple Inc. (AAPL) failed to persuade a U.S. appeals court to review its decision that allows Samsung Electronics Co. (005930) to continue selling the Galaxy Nexus smartphone while a patent-infringement case is pending.

An October decision, which said Apple needed to show that the patented search feature was a key reason consumers bought the Samsung phone, will stand, the U.S. Court of Appeals for the Federal Circuit said in an order posted yesterday on its electronic docket.

Apple sought to have the earlier decision by a three-judge panel considered by all active judges of the appeals court, which specializes in patent law. The case is one of dozens worldwide in which the two biggest makers of smartphones are using their patents in an effort to curb each other’s growth or force changes that would create greater differentiation between their products.

In a separate dispute before the Federal Circuit involving Samsung, Apple is trying to halt sales of Samsung products that were the subject of a trial Apple won in August. The judge in California declined that request, citing legal reasoning in the Federal Circuit’s October ruling.

The standard would make it “essentially impossible for a patentee to halt a direct competitor’s deliberate and successful copying of the patentee’s innovative designs and features for use in competing products,” Apple told the Washington-based court in a filing Jan. 16.

‘Slavishly’ Copied

Kristin Huguet, an Apple spokeswoman, and Adam Yates of Samsung said their companies had no comment on the decision.

Apple, which claims that Samsung “slavishly” copied the iPhone and iPad tablet computer, said that the October ruling is hindering its efforts to get court orders to force Samsung to change its products or remove certain models from the market. Samsung denies copying Apple’s devices.

In a Jan. 11 filing in the Galaxy Nexus case, Samsung said the October ruling, requiring a link between the patented feature and consumer demand, is “an inherent, well- established” part of legal analysis used to determine whether a patent owner would be harmed by sales of an infringing product.

A trial in the Galaxy Nexus cases is scheduled for next year, and the issue before the appeals court was whether to halt sales before any violation is found.

Jury Verdict

The second case, still before the Federal Circuit, involves what standard to use after a jury has found infringement. Apple won a $1 billion verdict against Samsung in August. U.S. District Judge Lucy Koh, who had declined to block sales of more than two dozen Samsung products that were the subject of the August trial in San Jose, California, on Jan. 29 denied Samsung’s request to throw out the verdict.

Only three of the 26 products that Apple sought to block are still being sold, according to Samsung. They are the Galaxy S II by T-Mobile, Galaxy S II Epic and Galaxy S II Skyrocket.

The companies, which together make about half of the world’s smartphones, are vying for market share in an industry that has transformed cultures around the world with a single device that can make calls, surf the Internet and take photographs. One in seven people worldwide has a smartphone, according to market researcher Strategy Analytics.

Samsung, also a major component supplier to Apple, is the world’s biggest maker of smartphones while Cupertino, California-based Apple dominates in the U.S.

Among tablet computers, Suwon, South Korea-based Samsung’s share of the market more than doubled in the fourth quarter, gaining on leader Apple as unit shipments jumped 75 percent, researcher IDC said yesterday. Apple’s iPad has about 44 percent of the worldwide tablet market, compared with Samsung’s 15 percent.

The Galaxy Nexus case is Apple Inc. v. Samsung Electronics Co., 12-1507, U.S. Court of Appeals for the Federal Circuit (Washington). The lower court case is Apple Inc. v. Samsung Electronics Co., 12-630, U.S. District Court for the District of California (San Jose).

To contact the reporter on this story: Susan Decker in Washington at sdecker1@bloomberg.net

To contact the editor responsible for this story: Bernard Kohn at bkohn2@bloomberg.net

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