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March 9th, 2000

[8:00 AM] Apple Announces Settlement & Victory In Suits Against iMac Knockoffs
by Bryan Chaffin

Apple has announced victory in the battle against the iMac knockoffs. In a settlement likely to have far reaching ramifications long into the future of corporate law, Apple has successfully leveraged the design of the iMac in trade dress infringement cases against Daewoo and eMachines. The suits centered around PCs marketed by the defendants in the suit that borrowed heavily from the iMac's distinct design. Apple first brought a suit against Future Power and their parent company Daewoo for their knockoff called the E-Power in June of 1999. The company then added a suit against SOTEC and eMachines in August of the same year. According to Apple's press release:

Apple® today announced that it has successfully concluded its iMac™ trade dress infringement cases against Daewoo and eMachines by securing worldwide injunctions that prevent the two companies from manufacturing, distributing, selling or promoting their respective computers, E-Power and eOne. The case against Daewoo was settled after the U.S. Federal Court in San Jose entered a preliminary injunction barring the sale of Daewoo's E-Power computers that copied the design of Apple's award-winning iMac computer. The Court also granted an injunction against Future Power's distribution or sale of the E-Power computer.

In January, Apple settled its iMac trade dress litigation with K.K. Sotec in Japan. Under the terms of the settlement, Sotec is prohibited from manufacturing, selling or exporting the eOne personal computer. That settlement was reached after the Tokyo District Court issued a preliminary injunction against Sotec on September 20, 1999.

The following quotes come from C-Net's excellent coverage of this story:

"We did settle with Apple and agreed to stop manufacturing and selling the current eOne," said an Emachines spokesperson. "However, Apple agreed to a provision for us to sell a redesigned eOne."

An Apple spokesperson said: "The court sided with Apple with the preliminary injunctions, and then these companies agreed to the settlements. As far as we're concerned, this has ended it."

The Mac Observer Spin: In the lawsuit against these companies, Apple claimed that the designs of their products could cause confusion in the market place, a tact hailed as a novel one by analysts at the time. Apple could have pursued copyright lawsuits, but would likely have lost such a case. In the case of SOTEC's resellers in Japan, marketing materials for the eOne directly compared the machine to the iMac. Not a smart move as it turns out.

For a company that has reinvented itself by introducing innovative design to the computer market, this conclusion to this case could prove to be very important. Indeed, Apple has single-handedly made the very concept of fashion and style a factor in the consumer space. If Apple continues to introduce new and different design concepts, they can do so with some confidence that those unable to truly innovate themselves will think twice before trying to leach off their efforts.

Apple - SOTEC - Daewoo

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