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Apple Appeals vs. Judge Ruling

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As anticipated, Apple (AAPL - Free Report) appealed against Federal judge Lucy Koh’s ruling, which rejected a sales ban on Samsung smartphones. Apple also asked the US Court of Appeals for the Federal Court in Washington to review the case.

A week earlier, Apple’s plea for a permanent sales ban in the U.S. against some 20 old versions of Samsung smartphones was rejected by U.S. district judge. This turned out to be a major setback for Apple in its global patent war against Samsung.

Apple’s request was rejected after it failed to provide enough evidence, which proves that Samsung’s infringement had caused irreparable damage. In November, the U.S. Court of Appeals for the Federal Court had ordered Lucy Koh to reconsider evidence of market demand furnished by Apple.

The devices which were targeted by Apple for the ban are no longer sold in the U.S. but the company argued that the injunction was essential to combat future patent infringement by Samsung.

According to Apple, a sales ban will be much more effective than monetary compensations. Per the complaint filed by Apple, Samsung releases new generation of products at a much faster pace compared to the time taken by courts to issue patent-infringement rulings.

However, Samsung believes that Apple has been continuously trying to target its new smartphones in order to instill fear and uncertainty among retailers, which in turn would adversely affect its sales going forward.

Both the companies are now preparing for an upcoming trial, which involves some of the new phones. Judge Lucy Koh had urged both the companies to pursue settlement talks before the trial scheduled on Mar 31, 2014.

In their continuous endeavor to dominate the worldwide smartphone market, both Samsung and Apple have spent millions of dollars in legal fees since Apple initiated the fight in 2011, accusing each other of copying their respective products.

As per market research firm IDC, Samsung accounted for nearly 29% of global smartphone shipments in the just concluded quarter whereas Apple’s share fell from 20.9% to 17.9% on a sequential basis.

Apple’s loyal customer base, international expansion and a solid cash position are expected to aid long-term growth. However, increasing competition from the likes of Google , Hewlett-Packard (HPQ - Free Report) and Microsoft (MSFT - Free Report) in most of its major product segments, higher operating expenses and increasing legal complexities are headwinds.

Currently, Apple has a Zacks Rank #3 (Hold).

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