“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.
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