FEDERAL COURT OF AUSTRALIA
Samsung Electronics Co. Limited v Apple Inc. [2013] FCAFC 138
Citation: Samsung Electronics Co. Limited v Apple Inc. [2013] FCAFC 138 Appeal from: Application for leave to appeal: Samsung Electronics Co. Limited v Apple Inc. [2013] FCA 1142 Parties: SAMSUNG ELECTRONICS CO. LIMITED and SAMSUNG ELECTRONICS AUSTRALIA PTY LTD (ACN 002 915 648) v APPLE INC. and APPLE PTY LTD TRADING AS APPLE INC. File number: NSD 2308 of 2013 Judges: JACOBSON, FLICK AND GRIFFITHS JJ Date of judgment: 22 November 2013 Catchwords: PRACTICE AND PROCEDURE – application for leave to appeal – interlocutory decision refusing permission to rely upon further evidence – application dismissed Legislation: Competition and Consumer Act 2010 (Cth) s 46(1)
Evidence Act 1995 (Cth) s 135
Federal Court of Australia Act 1976 (Cth) ss 24(1A), 37MCases cited: Aon Risk Services Australia Limited v Australian National University [2009] HCA 27, 239 CLR 175
Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170
Bomanite Pty Ltd v Slatex Corp Aust Pty Ltd (1991) 32 FCR 379
Cement Australia Pty Ltd v Australian Competition and Consumer Commission [2010] FCAFC 101, 187 FCR 261
Decor Corp Pty Ltd v Dart Industries Inc (1991) 33 FCR 397
Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Limited [2013] HCA 46
Food Channel Network Pty Ltd v Television Food Network GP [2009] FCA 1446
House v R (1936) 55 CLR 499
National Mutual Holdings Pty Ltd v Sentry Corp (1988) 19 FCR 155
Nowlan v Marson Transport Pty Ltd (No 2) [2001] NSWCA 346
Re the Will of F B Gilbert (dec) (1946) 46 SR (NSW) 318
United States Tobacco Co v Minister for Consumer Affairs (1988) 20 FCR 520
White v Overland [2001] FCA 1333Date of hearing: 21 November 2013 Date of last submissions: 21 November 2013 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 52 Counsel for the Applicants: Mr N Young QC with Mr I S Wylie, Mr J Barber and Mr S J Free Solicitor for the Applicants: Ashurst Australia Counsel for the Respondents: Mr S Burley SC with Mr C Dimitriadis and Ms F Roughley Solicitor for the Respondents: Herbert Smith Freehills
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 2308 of 2013
BETWEEN: SAMSUNG ELECTRONICS CO. LIMITED
First ApplicantSAMSUNG ELECTRONICS AUSTRALIA PTY LTD
(ACN 002 915 648)
Second ApplicantAND: APPLE INC.
First RespondentAPPLE PTY LTD TRADING AS APPLE INC.
Second Respondent
JUDGES:
JACOBSON, FLICK AND GRIFFITHS JJ
DATE OF ORDER:
22 NOVEMBER 2013
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1. The application for leave to appeal filed by Samsung Electronics Co. Limited on 11 November 2013 is dismissed.
2. Samsung Electronics Co. Limited is to pay the costs of the said application.
Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
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- AGLC
- Samsung Electronics Co. Limited v Apple Inc. [2013] FCAFC 138
- Case
- [2013] FCAFC 138
- Decision Date
CaseChat Overview and Summary
In the Federal Court of Australia, Samsung Electronics Co Ltd filed an application against Apple Inc, alleging infringement of three patents essential to the UMTS standard, also known as the "3G standard". These patents were declared by Samsung to the European Telecommunications Standards Institute (ETSI) to be essential to the UMTS standard and were subject to declarations by Samsung to grant a licence on fair, reasonable, and non-discriminatory terms. The dispute centered around the precise content of these obligations and whether Samsung had misused its market power. The case was divided into four broad phases: infringement of the three patents, validity of the patents, licensing issues relating to Samsung’s ETSI declarations, and competition law issues. Apple cross-claimed that Samsung had constructively refused to negotiate a licence on FRAND terms, relying on Samsung's electronic offer dated 25 July 2011.
The legal issues before the court included whether Samsung was entitled to rely on further witness statements from Messrs Kim and Korea, which Samsung argued were relevant to key issues in the case. These issues were whether injunctive relief should be granted, whether there had been a breach of the obligations under the ETSI IPR Policy and FRAND Declarations, and whether there had been an abuse of market power by Samsung. The primary judge dismissed Samsung's application for leave to rely on the further evidence, and Samsung sought leave to appeal this interlocutory decision. The court considered whether the primary judge had made an error of principle in denying the application for further evidence, balancing the importance of the evidence against the principles of case management and the potential for disrupting the litigation process.
The court concluded that the primary judge's decision did not constitute an error of principle warranting leave to appeal. The decision was within the primary judge's discretion, and the proposed evidence did not sufficiently justify a departure from the established case management principles. The application for leave to appeal was dismissed, and Samsung was ordered to pay the costs of the application. This outcome reflects the court's emphasis on resolving litigation efficiently and the importance of adhering to established procedural rules.
The legal issues before the court included whether Samsung was entitled to rely on further witness statements from Messrs Kim and Korea, which Samsung argued were relevant to key issues in the case. These issues were whether injunctive relief should be granted, whether there had been a breach of the obligations under the ETSI IPR Policy and FRAND Declarations, and whether there had been an abuse of market power by Samsung. The primary judge dismissed Samsung's application for leave to rely on the further evidence, and Samsung sought leave to appeal this interlocutory decision. The court considered whether the primary judge had made an error of principle in denying the application for further evidence, balancing the importance of the evidence against the principles of case management and the potential for disrupting the litigation process.
The court concluded that the primary judge's decision did not constitute an error of principle warranting leave to appeal. The decision was within the primary judge's discretion, and the proposed evidence did not sufficiently justify a departure from the established case management principles. The application for leave to appeal was dismissed, and Samsung was ordered to pay the costs of the application. This outcome reflects the court's emphasis on resolving litigation efficiently and the importance of adhering to established procedural rules.
Orders
Orders of the court
1. The application for leave to appeal filed by Samsung Electronics Co. Limited on 11 November 2013 is dismissed.
2. Samsung Electronics Co. Limited is to pay the costs of the said application.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
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Evidence
Evidence Before The Court
The reasons for so concluding may be briefly stated.The proceeding to-date & the importance of the proposed further evidence The proceeding before Bennett J was initially instituted by Samsung against Apple for infringement of three patents. These patents are known in the market as “standard essential patents”. The standard essential patents have been declared by Samsung to the European Telecommunications Standards Institute (“ETSI”) to be essential to the technical specification comprising the UMTS standard, informally known as the “3G standard”. The three patents are also the subject of declarations made by Samsung to ETSI to grant a licence on fair, reasonable and non-discriminatory (i.e., “FRAND”) terms to anyone wanting to practise the patents. It is the precise content of these obligations which is now in dispute between the parties. In addition to the claim by Samsung for infringement of its patent, Apple has filed a cross-claim alleging that Samsung has misused its market power in contravention of s 46(1) of the Competition and Consumer Act 2010 (Cth). At the heart of Apple’s case on s 46 is an allegation that Samsung has constructively refused to negotiate with Apple to grant a licence on FRAND terms of its portfolio of patents. To prove this Apple relies, essentially, on Samsung’s Electronic offer made by its letter to Apple dated 25 July 2011. The proceeding before her Honour has been divided into the following broad phases, namely:·infringement of the three patents;·validity of the three patents;·licensing issues relating to Samsung’s ETSI declarations; and·competition law issues. Leave to rely upon the further witness statements by Messrs Kim and Korea was sought by Samsung by way of an interlocutory application filed on 6 September 2013. It was this interlocutory application which was dismissed by her Honour on 4 November 2013. In very summary form, the further evidence was said on behalf of Samsung to be relevant to one or other of the three principal issues to be resolved, namely:·whether or not injunctive relief should be granted; ·whether or not there had been a breach by Samsung of what were said to be obligations imposed under the “ETSI IPR Policy” and the “FRAND Declarations” to negotiate a licence of Samsung’s patents upon terms that were “fair, reasonable and non-discriminatory”; and ·whether or not there had been an abuse of market power on the part of Samsung by constructively refusing to deal with Apple. The effect of the interlocutory judgment, Samsung maintains, is that it is unable to file significant evidence going to one or other of these three issues. Samsung maintains that if it is shut out from leading the further evidence, the hearing will proceed on a false basis. It is Samsung’s intention to tender the correspondence between Apple and Samsung concerning the negotiations between the parties that occurred after 25 July 2011 and to cross-examine Apple’s witnesses about these negotiations. Leave to appeal – the principles to be applied
Decision
Reasons for decision
None of the asserted errors relied upon by Samsung warrants a grant of leave to appeal.CONCLUSIONS Any assessment of case-management principles necessarily involves an assessment of many potentially competing considerations. Included in that assessment is a growing recognition of the necessity to resolve civil litigation as “quickly, inexpensively and efficiently as possible” (Federal Court of Australia Act1976 (Cth) s 37M) and a recognition of the fact that the “achievement of a just but timely and cost-effective resolution of a dispute has effects not only upon the parties to the dispute but upon the court and other litigants” (Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Limited [2013] HCA 46 at [51] per French CJ, Kiefel, Bell, Gageler and Keane JJ). In the present case it is not considered that the primary judge focussed to any inappropriate extent upon prejudice to Apple should the further witness statements be admitted or failed to give appropriate attention to the prejudice to Samsung if the further statements were excluded. Different judges may well have reached different conclusions. But that is not the yardstick to be applied. When considering exercises of discretionary judgment as to the admission of evidence, the yardstick remains that of an error of principle of the kind identified in House v R. The cautions expressed in Re the Will of F B Gilbert (dec) (1946) 46 SR (NSW) 318 at 323 are not to be lightly placed to one side. It is also of importance to recall that applications for leave to appeal should not be transformed without good reason into de facto appeals. An application for leave should thus not be conducted as though it is a preliminary hearing of the appeal itself: Food Channel Network Pty Ltd v Television Food Network GP [2009] FCA 1446 at [26]. The importance to Samsung of the present application for leave to appeal may readily be appreciated. Senior Counsel on behalf of Samsung quite properly repeatedly emphasised that the decision of her Honour “goes to the ability of a party … to put its case to the court…”: United States Tobacco Co v Minister for Consumer Affairs (1988) 20 FCR 520 at 532 . The yardstick, however, remains an application to the facts of the principles initially set forth in House v R. It is concluded that the reasons for decision of the primary judge fail to disclose any error of principle of the kind described in House v R. Although a contrary conclusion may have been reached in respect to the more confined evidence of Mr Kim, confined to his account of the 4 November 2011 meeting, no error in the exercise of her Honour’s discretion emerges. The decision was one for her Honour and the fact remains that no satisfactory explanation was advanced to either her Honour or this Court as to why the evidence of that meeting could not have been filed prior to August 2012. The proposed further evidence of Mr Korea unquestionably expanded the factual issues presented for resolution. Rather than any error of principle being exposed in respect to either witness statement, the application for leave to appeal is but an attempt to re-canvass the same issues as were canvassed before the primary judge with a view to obtaining a different outcome. To encourage such applications is only to encourage the disruption to litigation of the kind condemned by F B Gilbert.
Ratio Decidendi
Legal Principle Established
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