Samsung lands Apple blow with US import ban

05-06-2013

The International Trade Commission (ITC) slapped a US import ban on five Apple products on Tuesday, after ruling that the company infringed one of rival Samsung’s patents.

Silicon Valley-based Apple will have to stop importing AT&T versions of the iPhone 4, iPhone 3GS, iPhone 3, iPad 3G and iPad 2 3G from 60 days after the ruling, unless US President Barack Obama vetoes it or an appeals court stays the order pending an appeal.

The decision, which also demands Apple stop selling any infringing goods in the US once the import ban begins, found that one of Samsung’s standard-essential patents (SEPs) covering 3G wireless technology had been violated.

Samsung complained to the ITC about five patents (and subsequently dropped one claim) in August 2011, prompting the commission, based in Washington, DC, to investigate.

In September of the following year, in a preliminary decision, the ITC found that Apple had not infringed any of the four asserted patents, and found one of them invalid.

The ITC decided to review the decision, and received further submissions from both parties; it has now decided that Apple did infringe one of the patents – which protects “Apparatus and method for encoding/decoding transport format combination indicator in CDMA mobile communication system”.

The ITC rejected Apple’s argument that Samsung had failed to license the patents on fair, reasonable and non-discriminatory grounds (FRAND), a standard requirement for SEP patents. Apple was cleared of violating the three other patents, one of which has (again) been invalidated.

It is highly unusual to issue blocking orders against patents that are part of FRAND deals, said Robert Stoll, partner at Drinker, Biddle & Reath LLP.

“I am surprised, as I thought the ITC would back a FRAND argument. It’s in the public interest to have FRAND agreements in place ... The benefit to society is that you have everyone using the standard interoperating and developing their own products, and this gives consumers more options.”

Indeed, ITC commissioner Pinkhart dissented from Tuesday’s decision on “public interest” grounds.

As is standard, there is a now a 60-window during which the president can object to the ruling. Stoll said an objection would usually be unlikely but he wouldn’t be surprised if President Obama chooses to block the order, as the ITC decision comes one day after the White House included the commission in proposed US patent reforms. One of the legislative recommendations announced yesterday was raising the bar for ITC exclusion orders.

If the decision does stand, Stoll said, the ruling may not have a negative impact on Apple’s business, because the banned phones are mostly older models.

“It may encourage the parties to settle,” he added.

Samsung’s record for asserting infringement claims – covering both SEP and non-SEP patents – against Apple has been largely poor, making Tuesday’s decision an anomaly.

Apple, which did not respond to a request for comment, is expected to appeal to the US Court of Appeals for the Federal Circuit, which can stay the decision.

Samsung did not respond to a request for comment.

apple, samsung, international trade commission, obama, standard essential, FRAND

WIPR