A court slapped a temporary ban on the sale of Samsung Electronics' latest computer tablet in Australia on Thursday, 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 starts later on Thursday, when a Californian court begins hearing Apple's bid to ban sales of Galaxy products in the United States.
The two technology firms have been locked in an acrimonious battle in 10 countries involving smartphones and tablets since April, with the Australian dispute centering 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 U.S.-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 U.S.
Samsung shares fell after the ruling, and closed down 0.9 percent in Seoul, where the broader market finished up 0.8 percent.
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.
We are disappointed with this ruling and Samsung will take all necessary measures, including legal action, in order to ensure our innovative products are available to consumers, the company said in a statement.
The Australian court's hearing of the patent issue could force Samsung to miss the Christmas gift-giving season there.
It will take a long time to gather the expert evidence on how Samsung is or isn't in breach of Apple's patents, so without some sort of expedition, they are looking at a substantial time out of the market, said Nathan Mattock, a telecoms intellectual property lawyer at Marque Lawyers in Sydney.
In her ruling, judge Bennett offered Samsung the opportunity of a quick final ruling on the patent dispute.
But Samsung has so far been reluctant to agree to an expedited Australian hearing, despite the risk of missing out on Christmas sales, because it says it needs time to prepare a proper defense against Apple's case.
In short, Samsung has indicated that missing Christmas in Australia could be less of a problem for the company than rushing its defense and risking defeat on a key patent ruling.
Samsung can appeal against the decision on the temporary ban within 14 days of the release of the written judgment, due on Friday.
(Additional reporting by Miyoung Kim in SEOUL and Rachel Armstrong in SINGAPORE; Writing by Mark Bendeich and Alex Richardson)