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Why Obama stopped the ITC from banning Apple’s iPhone 4 and iPad 2

Zach Epstein
August 5th, 2013 at 9:45 AM
Obama iPhone Ban Veto

News broke on Saturday that President Obama stepped in and stopped the U.S. International Trade Commission from enforcing a ban it had previously ordered on Apple’s iPhone 4 and iPad 2. Earlier this year, the Commission had found that Apple infringed a Samsung-owned patent in the two devices, and could therefore not sell them in the United States. But as FOSS Patents reported some time ago, and as Fortune reminded us on Monday, the strong dissent of one ITC judge that had previously been largely redacted explains exactly why the President decided to step in and reverse the ITC’s decision, thus allowing Apple to continue selling its previous-generation iPhone and iPad models.

An opinion filed by ITC commissioner Dean Pinkert that was initially redacted when ITC documents related to the case were released outlines several reasons that his colleagues were wrong to issue the ban. From Fortune:

  • The patent in question was part — and only a tiny part — of an international standard, and as such Samsung had agreed to make it available for licensing under terms that are fair, reasonable and nondiscriminatory (FRAND).
  • Samsung had made no effort to demonstrate that the licensing terms it offered Apple “satisfied an objective standard of reasonableness.”
  • That the only time Samsung made such an offer — in oral discussions in December 2012 — it came with strings attached to which Apple could not agree.
  • What those strings were are blacked out in the document, but Pinkert adds in the next sentence: “it is neither fair nor non-discriminatory for the holder of the FRAND-encumbered patent to require licenses to non-FRAND-encumberd patents as a condition for licensing its patent” (emphasis his).

In other words, Samsung used standard-essential patents in its claim against Apple. This, of course, is not how the system works. According to Pinkert, Samsung tried to force Apple to license the company’s non-essential patents in order to get a standards-essential patent license from Samsung. For that reason, President Obama stepped in and stopped the impending ban.

Apple obviously supported the President’s decision in a statement on Saturday. “We applaud the Administration for standing up for innovation in this landmark case. Samsung was wrong to abuse the patent system in this way,” an Apple spokesperson told the press.

Samsung, on the other hand, wasn’t as pleased.

“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 (ITC),” Samsung said in a statement. “The ITC’s decision correctly recognized that Samsung has been negotiating in good faith and that Apple remains unwilling to take a license.”

Zach Epstein

Zach Epstein has worked in and around ICT for more than 15 years, first in marketing and business development with two private telcos, then as a writer and editor covering business news, consumer electronics and telecommunications. Zach’s work has been quoted by countless top news publications in the US and around the world. He was also recently named one of the world's top-10 “power mobile influencers” by Forbes, as well as one of Inc. Magazine's top-30 Internet of Things experts.

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