Apple Sales Preserved: White House Vetoes ITC’s Ban

The battle of the mobiles
continues

The United States Trade Representative (“USTR”) Michael Froman, on behalf of the White House, has intervened in the patent dispute between Samsung and Apple.  Back in June, the United States International Trade Commission (“ITC”) determined that some of Apple’s older generation of products, including iPad 2 and iPhone 4 models that operate on the networks of AT&T and T-Mobile, were in violation of Samsung patents that cover methods of transmitting data.  As a result, the ITC issued an exclusion order that would have banned the importation and sale of the infringing products. 

Taking into consideration that the Samsung patents are “standards-essential patents”, which the patent owner must offer under license to competitors on “terms that are fair, reasonable, and non-discriminatory (‘FRAND’)”, the USTR vetoed the ITC ban, explaining:

“After extensive consultations with the agencies of the Trade Policy Staff Committee and the Trade Policy Review Group, as well as other interested agencies and persons, I have decided to disapprove the [ITC’s] determination to issue an exclusion order and cease and desist order in this investigation.  This decision is based on my review of the various policy considerations … as they relate to the effect on competitive conditions in the U.S. economy and the effect on U.S. customers.”

The USTR also underscores that the decision to override the ITC findings is based purely on policy considerations and not on the merits of the ITC’s review:

“This policy decision is not an endorsement or a criticism of the Commission’s decision or analysis. My decision to disapprove this determination does not mean that the patent owner in this case is not entitled to a remedy.  On the contrary, the patent owner may continue to pursue its rights through the courts.”

Samsung and Apple were quick to weigh in on this decision. According to the L.A. Times, Samsung issued a statement expressing the following sentiment:

 “We are disappointed that the U.S. trade representative has decided to set aside the exclusion order issued by the U.S. International Trade Commission. The ITC’s decision correctly recognized that Samsung has been negotiating in good faith and that Apple remains unwilling to take a license.”

Apple, on the other hand, “applaud[ed] the administration for standing up for innovation in this landmark case. Samsung was wrong to abuse the patent system in this way."

The USTR has not similarly intervened in an ITC decision since 1987.

Full text of the USTR’s veto letter, issued on Saturday, August 3, here  [Update: This link works best by right-clicking to open it in a new window.]