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Apple seeks ban on all Galaxy smartphones, tablets in EU

It also wants a complete recall of stock by European distributors and resellers

By Andreas Udo de Haes
August 18, 2011 10:07 AM ET

COMPUTERWORLD NETHERLANDS In its case against Samsung Electronics in the Netherlands, Apple is demanding an extensive ban on all Galaxy series smartphones and tablets, including a complete recall of stock by European distributors and resellers.

Apple's complaint against Samsung in The Hague district court is much more comprehensive than previously thought. It's not only broader in its legal scope than a separate, ongoing Apple complaint against Samsung in Germany, but an injunction could have a "huge impact" on the entire European market for smartphones and tablets, according to Alastair Edwards, principal analyst at Canalys.

Apple's complaint, seen by Webwereld, a Dutch IDG publication, seeks an injunction for the entire Galaxy series. This includes smartphones -- the Galaxy Ace, Galaxy S and Galaxy SII -- and tablets: the Galaxy Tab 7 and Galaxy Tab 10.1. Other Galaxy devices, like the Gio, Nexus, 551, Europa, Apollo and Mini are also involved, albeit only in a footnote in which Apple states, "It is expected that these devices are also covered by one or more of the patent rights invoked."

Apple demands an extensive ban on these devices, covering manufacturing, stocking, importing, distributing, trading or selling by Samsung Korea and its Dutch subsidiaries, which include Samsung Logistics BV and Samsung Overseas BV. These companies play a crucial role in the distribution of Samsung products throughout Europe. According to Apple's complaint, "Samsung Logistics is responsible for 28 distribution channels throughout Europe."

Apple demands that Samsung and its subsidiaries send a "letter of request" to all their European clients to recall all infringing products from stock "within 14 days" and offer compensation of the purchase price as well as transportation costs.

Apple is also demanding that Samsung's letter include a statement saying that if clients don't comply, they themselves will be violating Apple's intellectual property rights.

"For the record we would like to mention the fact that by storing, offering and/or selling of the above mentioned Galaxy smartphones [and tablets], you commit infringement of the intellectual property rights of Apple Inc.," according to suggested wording in the complaint.

"If this injunction is granted it could have 'significant implications' for the European market for smartphones and tablet, said Canalys' Edwards. "This is a very big threat to Samsung, because basically their whole European supply chain will be broken," he said.

Edwards believes a possible injunction could have an enormous impact on the market. "This could mean it's almost game over for Samsung in Europe," he said, noting that Samsung in the last year has rapidly overtaken Apple in shipments in the smartphone market in Europe, Middle East and Africa, and is currently closing in on market leader Nokia.

Apple still reigns in the tablet market, with 69% of all shipments last quarter, while Samsung had 7%.

A number of European distributors and resellers could also be hit, as channels would have to be drained by Samsung, Edwards said. The Korean company would have to compensate these companies for the purchase price and returning costs of all infringing stock. But as there would be no trading in the products, profit could drop.

"Distributors and resellers now have to think hard whether to keep Galaxy products in stock," Edwards said.

The court in The Hague will rule on Sept. 15. At the hearing last week, Judge Edger Brinkman stated that if he grants any injunctions, they would take effect no sooner than Oct. 13.

Both Apple and Samsung declined to comment, citing ongoing litigation.

On Tuesday, in a separate case brought by Apple focusing on the Galaxy Tab 10.1, the Dusseldorf District Court changed its preliminary injunction enacted last week that prohibited Samsung from selling the device in all European Union countries except for The Netherlands. The Dusseldorf court, citing uncertainties about jurisdiction, decided to allow Samsung to sell the product in all E.U. countries except for Germany.

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