Australia court slaps ban on Samsung tablet

Sydney: A court slapped a temporary ban on the sale of Samsung Electronics' latest computer tablet in Australia yesterday, handing rival Apple another legal victory in the two firms' global patent war.

Resolution of the case could take months — unless Samsung takes the potentially risky option of an expedited hearing — which, in the fast-moving industry, could mean the new Galaxy tablet is never launched in Australia. The Galaxy is the hottest competitor to Apple's iPad, which dominates global tablet sales.

"The ruling could further extend Apple's dominance in the tablet market as it widens a sales ban of Samsung's latest product," said Lee Seung-woo, an analyst at Shinyoung Securities in Seoul.

Whilst the ruling is a blow for Samsung, the Australian market is not large. A more important legal battle started late Wednesday night when a California court began hearing Apple's bid to ban sales of Galaxy products in the US.

Acrimonious battle

The two technology firms have been locked in an acrimonious battle in 10 countries involving smartphones and tablets since April, with the Australian dispute centring on touch-screen technology used in Samsung's new tablet.

The Federal Court in Sydney, in granting the temporary ban, ruled Samsung had a case to answer on at least two of Apple's patents. The ban applies on sales of Samsung's Galaxy 10.1 tablet until the same court rules on the core patent issue. "I am satisfied that it is appropriate to grant an interim injunction, however I propose again the opportunity of an early final hearing on the issues presented in this application," judge Annabelle Bennett told the court.

Intellectual property expert Florian Mueller said one of the patents at issue, a touchscreen heuristics patent, listed the late Steve Jobs as its first inventor, making it "emotionally but also strategically important to Apple".

"None of the two patents will be at issue later today at a hearing in California on Apple's motion for a US-wide preliminary injunction," said Mueller.

"But the Australian ruling nevertheless adds to Apple's ‘copycat' story and increases the likelihood of an injunction in the US."

Samsung shares fell after the ruling, and closed down 0.9 per cent in Seoul, where the broader market finished up 0.8 per cent.

Appeal option

The Australian ruling follows Apple's successful legal move to block Samsung from selling its tablets in Germany and a case in the Netherlands that has forced Samsung to modify some smartphone models.

Samsung left open the option of appealing against the ruling and pointed out that it would continue to pursue its own patent claim against Apple involving Samsung's wireless technology.

iMessage service unveiled

With its latest operating system update, Apple is poised to strike a blow to wireless carriers by making free texting more ubiquitous. The iMessage service, part of the iOS 5 update released on Wednesday, lets iPhone users send messages with text, photos and video to other iPhone, iPad or iPod Touch users — for free. For wireless carriers, that spells trouble. "There's a big potential issue here," said Craig Moffett, an analyst at Sanford C. Bernstein.

"The wireless industry makes most of its money from high-priced but low-bandwidth services like voice and text." Texting is hugely lucrative for the industry. It generated about $21 billion in revenue last year and is estimated to grow to $23 billion this year, according to the Consumer Federation of America.

Moffett estimated that Verizon Wireless, for example, generates about $7 billion, or 12 per cent of its total annual revenue, from text messaging. Every year, more than 2 trillion text messages are sent over cellular networks in the US alone. A message costs carriers a fraction of a penny to send, but they usually charge consumers 10 to 20 cents per text or a flat monthly fee for unlimited usage. In contrast, iMessage uses the carrier's data network or the internet via a WiFi connection to transmit the text like e-mail.