“The Obama administration’s decision to overturn an international trade ruling against Apple Inc. — the first such veto in more than 25 years — promises to upend long-running battles over intellectual property in the smartphone market and change the strategies some of the world’s biggest technology companies use to defend their inventions,” Ian Sherr and Brent Kendall report for The Wall Street Journal.
“One of the industry’s starkest divides has been over the type of patent at issue in the ITC case, one of many covering basic kinds of functions that many companies’ products have to perform—in this case, connecting to a wireless network,” Sherr and Kendall report. “Such patents are deemed to be essential to creating products based on technical standards set by industry groups. Companies are expected to license these ‘standard essential’ patents on fair, reasonable and nondiscriminatory terms.”
Sherr and Kendall report, “In a letter explaining the veto, U.S. Trade Representative Michael Froman, who was charged with overseeing a presidential review of the ITC ruling, said he came to his decision after extensive consultations with government trade bodies ‘as well as other interested agencies and persons.’ Mr. Froman said he based the decision on the potential harm the sales ban would cause to consumers and the U.S. economy. He said he ‘strongly shares’ concerns raised in January by the Justice Department and the U.S. Patent and Trademark Office, which said ITC product bans should rarely be allowed in cases involving standard-essential patents.”
“The veto could discourage companies from taking patent disputes to the ITC, a strategy that had gained favor because the agency tends to issue orders in such cases faster and more easily than federal courts, patent experts said,” Sherr and Kendall report. “It also could reduce some patent holders’ leverage in licensing talks, cutting the commercial value of their patents… Samsung is scheduled to face a ruling by the ITC Friday on whether some of its products infringe Apple patents and should be barred from import as a result. One person familiar with ITC proceedings said the commission might choose to delay that decision in the wake of the Obama administration’s veto.”
Read more in the full article here.
Related articles:
Samsung sheds over $1 billion in market value after U.S. Trade Representative Froman vetoes Apple ban – August 5, 2013
How the ITC blew it, forcing a presidential veto in the Samsung-Apple patent case – August 5, 2013
Apple: ‘Samsung was wrong to abuse the patent system’ – August 5, 2013
South Korea concerned about U.S. decision to overrule Apple iPhone, iPad sales ban – August 5, 2013
Obama administration vetoes Apple iPhone sales ban in U.S. – August 3, 2013
Google ready to ditch Android over its intellectual property issues? – July 29, 2013
The ruling for and vetoed was SEP/FRAND abuse. It will likely affect companies seeking to strong arm advantages away from competitors. Samsung played dirty and now has made a high profile case that, I believe, will bite the Samsung corporation directly in its arse. The good part, lower cost SEP/FRAND with fewer strong armed to give up true patents by the using threats to go to the court/legal system.
What the veto did was greatly diminish the value of Motorola Mobility.
How could the value of Motorola mobility be any lower…
The situation is turning into a hopeless mess and much of the reason for that is because the ITC made a bad decision when they decided on an import ban over FRAND patents.
The ITC need to stop making irrational rulings and need to remember out why FRAND patents are there in the first place. The Europeans have much more of a clue about FRAND abuse and why abuse by FRAND patent holders cannot be tolerated.
Samsung are trying to stir up confusion between conventional patents and FRAND patents. It’s a shame that the ITC are being fooled by this. The difference is perfectly clear.
I have been involved with a few Standards being set in the IEEE. To name a couple, IEEE 802.11 and 802.17.
All major (and many minor) companies take part in establishing these standards over many years of development. During this process all patents concerning any particular part of the standard are evaluated…including whether the company holding the patent will AGREE to SEP/FRAND terms. If they agree then it becomes a part of the “Standard”. If they disagree an “alternative method” is found to work around it and their patent is no longer essential to comply with the standard.
Now somewhere along the line, Samsung went through this exact process when the UMTS standard was being developed. They would have had to agree to FRAND/SEP rules before it was incorporated into the standard.
So what’s their beef now? They simply want to abuse the FRAND/SEP agreement by ignoring all restrictions.
I have a concept for FRAND reform. All FRAND patents should be administered by the technology standards board or boards with which they are associated. The technology standards board would standardize the license for a given FRAND patent and the price would be the same, regardless of the end user. Patented technologies would only be considered for incorporation into a standard if the corporation would agree to this upfront.
This would take the FRAND licensing out of the hands of the individual corporations and guarantee the “fair, reasonable and nondiscriminatory” availability of standards-essential patents.
Isn’t it irritating that the first part of the article does a great job explaining what SEP & FRAND mean and then later generalizes back to mere patents when concluding that companies will be less likely to go the ITC? The message is, as it should be, don’t bring extortion claims involving SEP & FRAND before the USITC seeking bans. If, on the other hand, a company is simply infringing upon your valid patents that are not SEP then by all means bring the matter before the USITC.