Available online at www.sciencedirect.com Procedia Economics and Finance 3 (2012) 908 – 913 Emerging Markets Queries in Finance and Business IP Protection and International Trade Mihaela Daciana Bolosa,* a - , Nicolae Iorga street, no. 1, 540 080, Romania Abstract The article explores how intellectual property IP manifests in international trade. The Trade Related Aspects of Intellectual Property TRIPS Agreement was adopted and signed by the WTO member states in need to avoid that intellectual property would become a barrier in international trade. But nowadays we can see IP battles that may affect the way international trade is developed. Such is the case of Samsung vs. Apple which is sprinkled with patents, trademarks or industrial designs case files and also with banning products on one or more markets. The paper studies the way this national litigations interfere with international trade, analyzing some of court decisions and their impact in a product presence on a certain market. © 2012 The© Authors. by by Elsevier Ltd. Ltd. Selection and peer-review under responsibility of the 2012 Published Published Elsevier Selection and peer review under responsibility Emerging Markets Queries in Finance and Business local organization. Markets Queries in Finance of and Business local organization Emerging Keywords: intellectual property, international trade, national and international litigations, Samsung, Apple 1. Introduction The World Trade Organization WTO is the international establishment that focuses on international trade matters, international rules in this fields and international disputes. Regarding the aspects of IP in international trade the member states adopted and the organization implements the TRIPS Agreement. In the preamble it is desiring to reduce distortions and impediments to international trade, and taking into account the * Corresponding author Tel.: +40744157551 E-mail address: bolos.mihaela@gmail.com. 2212-6716 © 2012 The Authors. Published by Elsevier Ltd. Selection and peer review under responsibility of Emerging Markets Queries in Finance and Business local organization. doi:10.1016/S2212-5671(12)00249-3 Mihaela Daciana Bolos / Procedia Economics and Finance 3 (2012) 908 – 913 need to promote effective and adequate protection of intellectual property rights, and to ensure that measures and procedures to enforce intellectual property rights do not themselves become barriers to legitimate trade WTO, TRIPS Agreement, 1994. So this agreement has as purpose the harmonization of IP rules with trade rules and practices in such a manner that the IP rights remain a property protected around the world but should not become a barrier in international trade. In the context of globalization international trade becomes an important aspect of the international economy because well-known trademarks and products but also other less known can be found in markets all over the word or on sale on internet. In this context excluding one product geographical indications especially in the case of the special protection system of the UE. The TRIPS Agreement has another dimension of protection which addresses the owners of IP rights against infringements such as counterfeiting or other forms of IP infringement. Because infringements are frequent in prevent the entry into the channels of commerce in their jurisdiction of imported goods that involve the infringement of an WTO, TRIPS Agreement, 1994. intellectual property right We will analyze the conflicts between Apple and Samsung regarding IP rights protection and we will follow haw courts implement the provisions regarding restrictions to imports regarding the products in this cases. We will conduct this analyze in the economic context of each manufacturer meaning turnover trademark value and other indicators that may give an explanation to the financial stake in these cases. 2. Apple vs. Samsung The legal battle between Apple and Samsung has as object patents, trademarks and industrial designs, registered internationally, regionally or nationally. The battle takes place in front of national and regional courts and the object is clearly the infringement of IP rights. Interesting in this battle strategy is that we have attacks and counter attacks by both parts in many jurisdictions such as USA, Germany, Netherlands, Australia, European Union Community Design and Patent Courts, concerning three aspects of IP, namely trademarks, patents and industrial designs. 2.1 Patent and design infringement claims The patents and industrial designs are clearly some of the main reasons for litigation in this case, because both parties accused the other of patent right infringement and design rights infringement. The quarrel started in 2011 when Apple filed a complaint to the US District Court for the Northern District of California Case No. 11-CV-1846 Apple vs. Samsung, 2012 claiming that Samsung infringed some of its utility and designs patents webpage Apple Application for summons, registered in the US. In the complaint, file available on 2011, Apple asks the cort to analise and decide over the infridgment of several utility partents and design patents, that Samsung elegedly used widouth right. After a description of the innovative character associated with Apple Company, the lawsuit scope is presented. The new products of Apple, iPhone, iPod touch and iPad, are protected trough utility patents and design patents which gives Apple the sole right to use these innovations. The utility patents cover functionality aspects such as Multi-touch user interface, individual features such as arrangement of text messages on the ement of the buttons and other features that can be found on the Apple products Apple Application for summons, 2011. The three design patents named by Apple refer to ornamental features that make the products unique Apple Application for summons, 2011. 909 910 Mihaela Daciana Bolos / Procedia Economics and Finance 3 (2012) 908 – 913 The three designs registration made in USA regarding the design of the iPhone, iPod touch and iPad are completed by trade dress registration regarding the overall image of the products. Samsung attacked claiming Apple infringement of its own patents and the non innovative character of The parties augmented their position and a final decision is still expected. But a request for a preliminary injunction needed to stop the IP rights infringement was requested by Apple. In 29.06.2012 the Court grants motion for a preliminary injunction banning the sales on Galaxy Tab 10.1 Apple vs. Samsung, Order Granting Preliminary Injunction, 2012. The trial starts on July 30 2012, according to the hearing schedule United States District Court Northern District Of California, 2012. Another application for summons was made by Samsung against Apple regarding the infringement of 3G patents. The lawsuit develops in front of the Federal Court of Australia, case no. NSD1243/2011 Federal Court of Australia, 2012. In the media the case judge declaration was cited who classifies the litigation as Schneider, 2012. In the European Union cases are pending or settled in front of Netherlands, German or England courts and in front of the regional courts of the European Union. The decision in Netherlands was different from the German one. The Dutch court gave a partial decision regarding one 3G patent ordering Apple to pay damages to Samsung for patent infringement BBC, 2012. In the German courts the situation is quite different because a partial ban on Samsung Tab 7.7 because it infringes Apples registered design. This decision is different from a British early decision regarding some Registered Community Designs Mallinson, Marshall, & Murphy, 2012. The quarrel regarding Registered Community designs reached also the European courts. The cases Case No: HC 11 C 03050, Case No: HC11C03010 and the appeal to the last decision Case No: A3/2012/0866 were settled by the European Patent Court. The case no: HC11C03010 regards the request for judgment made by Samsung against Apple regarding the Registered Community Design no. 181607-0001 registered by Apple. In question is the Samsung tablet computer named Galaxy who is allegedly infringing Apples rights. The judge Justice Man acknowledges the rather high number of disputes between the two companies in many jurisdictions regarding the IP rights in case. The judge mentions the conflicting decisions of the Netherlands and German courts and also the fact that Apple is seeking injunctive relief on a pan-European basis Samsung vs Apple, EU Court, 2012. Practically if we analyze the previous cases and other that are still pending in front of courts around the world Apple strategy is to gradually band the Samsung products that infringe its IP rights. In this specific case declarations of non-infringement against Apple and also seek an injunction restraining Apple from making threats to sue for infringement Samsung vs Apple, EU Court, 2012. Trough this case Samsung seeks an expedition because it claims that the uncertainty regarding whether its product rights causes financial losses. The judge decided in favor of Samsung setting hearings dates. Apple appealed this decision: Case No: A3/2012/0866. Court of Appeal Civil Division on appeal from the High Court of Justice Chancery Division Patents Court Mr Justice Mann, 2012 EWHC 889 Ch, 2012. In the case no. HC 11 C 03050/2012 EWHC 1882 Pat, the court analyses if the Registered Community Design no. 181607-0001 owned by Apple, mentioned above, is being infringed by Samsung . The decision relied on aspects of similarity of the products in question and similarities with other products such as Cannon So the conclusion is that Samsung vs Apple, EU Court, 2012. The connection with other similar products is extremely relevant due to the fact that lately Apple was sued by other IP owners for problems related to IP rights aspects. Mihaela Daciana Bolos / Procedia Economics and Finance 3 (2012) 908 – 913 Samsung Front Rear Fig. 1. Design in debate in front of the UE courts (photo source: case no. HC 11 C 03050/[2012] EWHC 1882 (Pat) ). Fig. 2 Design similar in some aspects to the one in debate in front of the UE courts (photo source: case no. HC 11 C 03050/[2012] EWHC 1882 (Pat) ). The problems for Apple are far from a solution as further litigations are expected in the future. For example Kodak sued Apple because it delays the payment of royalties for the Kodak patent it uses, fact that interfere whit the economic situation of Kodak who is subject of a bankruptcy procedure in front of US Courts Reuters, 2012. 2.2 Trademark infringement claims Apple also claims trademark infringement in the complaint addressed to the US courts. The trademarks in question refer to icons designed and registered specially for the iPhone, iPod touch and iPad. The claim regards the similarity of the Samsung icons with its own. Some examples are presented below: 911 912 Mihaela Daciana Bolos / Procedia Economics and Finance 3 (2012) 908 – 913 Apple Fig. US Courts, 2011, http://images.apple.com/pr/pdf/110415samsungcomplaint.pdf ) Samsung of 3. Conclusions From the data presented above a few things can be concluded. First the legal battle between the two companies presents interesting situations and interpretations in the field of IP rights in the IT business. The battle is not a singular one as the data shows because other players are entering this market and they will face similar lawsuits or they may sue the two actors of the present cases. Secondly, the fact that Apple and Samsung both won lawsuits against one and other proves that both companies tend to use IP rights in similar manner, infringing competitors rights at a certain point in time. This fact is maybe motivated by the value of this market and by the high number of sales that both Samsung and Apple are enjoying. Thirdly, aspects of the interaction of IP rights and international trade are obvious because the many lawsuits in many jurisdictions and the fact that requests to ban the products infringing IP rights on those markets proves exactly the fact that the scope of the actions is related to trading and selling products worldwide. The strategy of implementing IP rights in such disputes is not singular, the case between Anheuser-Busch Inc. U.S. producer, who owns the trademark American Bud, and Budjovicky Budwar, narodny podonick established in Eeske Budjovice, the Czech Republic who owns the geographical indications for the beer. The dispute developed in jurisdictions all over the world reaching a number of more than 100 legal disputes Bolos, 2011. The scope was to impose the geographical indication right over the trademark right and vice versa in as many jurisdictions as possible banning the access of the other party on that market. The Apple - Samsung dispute is similar and will probably mean more legal disputes in as many jurisdictions as possible. This implies national regional and international courts. The national and regional level was reached because we have cases in US, Germany, Australia, etc, and European Union. It is to be expected a WIPO dispute regarding IP rights. This situation as well as the previous one regarding the beer proves that improvements must be made in the system of dispute resolution regarding IP rights, because a big loss of time and money is generated by difficult cases resolution around the world. But one must also have in mind that with a single decision applicable worldwide little room for conflicting decisions. Mihaela Daciana Bolos / Procedia Economics and Finance 3 (2012) 908 – 913 Acknowledgements This paper is a result of the project `Transnational Network for Integrated Management of Postdoctoral Research in Communicating Sciences. Institutional building (postdoctoral school) and fellowships program CommScie" - POSDRU/89/1.5/S/63663, financed under the Sectoral Operational Program Human Resources Development 2007-2013. References WTO, TRIPS Agreement. (1994). WTO webpage. Retrieved July 30, 2012, from http://www.wto.org/english/docs_e/legal_e/27-trips.pdf Apple vs. Samsung, case no. 11-CV-1846, in fornt of the US District Court for the Northern District of California. Retrieved Juliy 30, 2012 from http://cand.uscourts.gov/lhk/applevsamsung Apple Application for summons filed in April 15, 2011 to the US District Court for the Northern District of California regarding Samsung IP infrogment. Retrieved Juliy 31, 2012, fon Apple webpage http://images.apple.com/pr/pdf/110415samsungcomplaint.pdf . US. Apple vs. Samsung, Order Granting Preliminary Injunction June 26, 2012, case No. 11-CV-01846-LHK, United States District Court Northern District Of California, Retrieved July 31, 2012 from the court webpage http://cand.uscourts.gov/applevsamsung/casedocs 06 26, 2012. United States District Court Northern District Of California (2012). Apple vs. Samsung hearing schedule. USA. Retrieved 07 31, 2012, from from the court webpage http://cand.uscourts.gov/lhk/applevsamsung Federal Court of Australia. Samsung vs Apple Case file No. NSD1243/2011. Sydney. Retrieved on July 31, 2012 from https://www.comcourts.gov.au/file/Federal/P/NSD1243/2011/actions Bloomberg, Retrieved on July 31, 2012 from http://www.bloomberg.com/news/2012-07-22/samsung-and-apple-global-patent-fight-moves-to-australia-trial.html. BBC, News Business, Retrieved on July 31, 2012 http://www.bbc.co.uk/news/business-18529756. -EU injunction in Samsung v Apple Tablet Wars: Conflict between Taylor Wessing. Retrieved on July 31, 2012 http://www.taylorwessing.com/news-insights/details/paneu-injunction-in-samsung-v-apple-tablet-wars-conflict-between-german-and-uk-decisions-2012-07-25.html. Samsung vs Apple, 2012, EU Court, Case No: HC11C03010/[2012] EWHC 889 (Ch), The High Court of Justice,Chancelary Division. Accesed on OHIM webpage and retrieved on July 31, 2012 http://oami.europa.eu/ows/rw/resource/documents/RCD/caselaw/apple_04042012.pdf Court of Appeal (Civil Division) on appeal from the High Court of Justice Chancery Division Patents Court Mr Justice Mann, [2012] EWHC 889 (Ch), A3/2012/0866/ [2012] EWCA Civ 729. Accesed on OHIM webpage and retrieved on July 31, 2012 http://oami.europa.eu/ows/rw/resource/documents/RCD/case-law/samsung_1_30-05-12.pdf Samsung vs Apple, 2012, EU Court, Case No: HC 11 C 03050/[2012] EWHC 1882 (Pat), The High Court of Justice,Chancelary Division. Accesed on OHIM webpage and retrieved on July 31, 2012 http://oami.europa.eu/ows/rw/resource/documents/RCD/caselaw/samsung_2_09-07-12.pdf . Retrieved 07 31, 2012, from http://www.reuters.com/article/2012/06/19/kodak-apple-idUSL1E8HJ3DQ20120619 Bolos, D. M. (2011). The Historical Argument in the Protection and Defense of Geographical Indications. Transylvanian Review, Vol. XX, Supplement No. 2:2 , p. 829. 913