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UPDATE 2-U.S. court clears Samsung phone, setback for Apple

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* Court considered a single patent

* Saga continues; Patents at center of war

(Adds details on history of the injunction)

By Diane Bartz

WASHINGTON, Oct 11 (Reuters) - A U.S. appeals courtoverturned a preliminary injunction on the sale of SamsungElectronics Co Ltd's Galaxy Nexus smartphone onThursday, dealing a setback to Apple Inc in its battle againstGoogle Inc's increasingly popular mobile software.

Apple is waging war on several fronts againstGoogle, whose Android software powers many of Samsung's devices.

In one of the more visible developments of that battle,Apple scored a sweeping legal victory over Samsung in Augustwhen a U.S. jury found Samsung had copied critical features ofthe hugely popular iPhone and iPad and awarded Apple $1.05billion in damages.

In this case, the U.S. Court of Appeals for the FederalCircuit was considering an injunction ordered before the trialbegan but which was quickly stayed. The appeals court reversedthe injunction entirely on Thursday, saying that the "districtcourt abused its discretion."

Apple failed to prove, the court said, that consumerspurchased the Samsung product because of the infringingtechnology. The court considered a single patent - one whichallows the smartphone to search multiple data storage locationsat once. For example, the smartphone could search the device'smemory as well as the Internet with a single query.

The appeals court has sent the case back to a lowerCalifornia court for reconsideration.

The Nexus is an aging product in Samsung's lineup, with acollection of new tablets and smartphones intended for launchbefore the holidays.

On Wednesday, Google executive chairman Eric Schmidt calledthe intensifying struggle between Apple and his company a"defining fight" for the future of the mobile industry.

"We've not seen ... competitive fights on this scale," hesaid during an interview with tech blog AllThingsDigital at NewYork's 92nd Street Y.

Apple declined comment. Samsung did not immediately respondto requests for comment.

(Reporting By Diane Bartz; Editing by Gerald E. McCormick,Bernard Orr)

((Diane.Bartz@thomsonreuters.com)(1 202 898 8313))

Keywords: APPLE SAMSUNG/PATENT