Apple Inc. (AAPL) and Samsung’s court battles are nothing new. Both the companies have been filing patent infringement cases against each other in almost every continent in which they are present. In the latest development, two patent infringement cases brought on by Apple and Samsung against each other were dismissed by a regional court in Mannheim, Germany.

Apple’s claim that Samsung has infringed its mobile devices’ ‘slide-to-unlock technology’ was dismissed by the German court. Samsung, in its defense, argued that its slide to unlock technology was different from that of Apple’s in terms of "gestures of any path between start and target".

Separately, Samsung’s claim that Apple was violating a certain 3G wireless patent held by Samsung was also dismissed. However, Samsung is expected to appeal to a higher court in Karlsruhe, Germany, against the dismissal.

Interestingly, very recently the same court in Karlsruhe, Germany, ruled in favor of Apple in the patent infringement case lodged by Motorola Mobility Holdings Inc. (:MMI). The patent in question was related to 3G wireless networking standards that threatened to disrupt sales of Apple’s iconic iPhones and iPads in the country.

Apple has been pretty aggressive in protecting its intellectual property and has been using court rooms to counter competition in various countries. Notwithstanding a few failures, the company has received success in many of the patent litigation cases that it has filed against Samsung and other fellow competitors such as HTC, Motorola Mobility and Microsoft Corp. (MSFT).

We believe that Apple’s legal tussles will continue as competition heats up in the smartphone and tablet space. This will increase legal expenses and will hurt Apple’s operating profit going forward. Additionally, the impending lawsuits in different countries will remain an overhang on the stock going forward.

Despite these factors, we believe that Apple remains the biggest growth story based on its superior product pipeline, popular apps, the recently launched iCloud and iPhone 4S, and the upcoming update of iPad and Apple TV, and loyal customer base. With a solid balance sheet and robust revenues, we expect Apple to outperform its peers in the long run. Moreover, we also expect Apple to succeed in developing countries due to the growing affluence of the middle class in key markets.

We maintain our Neutral recommendation over the long term (6-12 months). Currently, Apple has a Zacks #1 Rank, which implies a Strong Buy rating in the near term.

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