Apple says ITC failed in decision to ban iPhone and iPad imports
New documents have been revealed detailing Apple's arguments against a U.S. International Trade Commission decision that granted Samsung a ban on the iPhone 4 and iPad 2, with the Cupertino company saying the repercussions of such an injunction extend far beyond America's borders.
A pair of submissions to the United States Trade Representative (USTR), the government body granted veto authority over ITC import ban decisions, outline both Apple and Samsung's arguments pertaining to the limited injunction against Apple's products issued earlier in June. The decision was based on infringement of a patent Samsung at one point declared standard essential, meaning it promised to license the property under fair, reasonable and non-discriminatory (FRAND) terms.
FOSS Patents' Florian Mueller was able to obtain copies of the two parties' filings, and reports Apple's submission indicates that "USTR has decided to conduct a full review," looking for a veto of the ITC order. Further, the company claims the "decision makes the ITC an outlier internationally and domestically," an opinion reached after the trade body made rulings contrary to its pro-Samsung ban.
Previously, the ITC was careful not to issue injunctions based on SEPs, making the Apple product ban somewhat surprising.
Samsung of course argued that the import ban be upheld, saying other ongoing ITC investigations involving the Korean company's SEPs will be "more appropriate opportunities for the ITC and/or the USTR to weigh in on the potential abuse of SEPs at the ITC."
Mueller noted that, while not complete, the redacted Apple submission shed light on the ITC's decision making process. The opinion claims the ITC's analysis focused "exclusively on its views regarding the immediate, short-term effects from excluding older Apple products from the U.S. market," but "wholly failed to engage with the policy dimensions of its decision." It is the duty of the ITC to take public interest into consideration, but Apple is saying the body may have weighed too heavily against possible policy ramifications.
Apple asserts that the decision will result in "the long-term, dynamic harm to competition and innovation in the United States that would come from subverting the standard-setting process and facilitating patent hold-up."
Mueller considers Apple's strongest argument is the fact that other companies could be affected internationally by the ITC's actions.
From Apple's submission:
As for Samsung, the company claims an import ban against the iPhone 4 and iPad 2 "raises no economic policy concerns sufficient to take the extraordinary and nearly unprecedented step" of overturning the ITC's decision. The company's submission goes on to say no material impact will be felt by the injunction, an argument Apple successfully used against HTC in its ban against certain phones infringing on data detector patents.
Further, the Korean company said Apple is an "unwilling licensee to Samsung's portfolio of declared essential patents, including the '348 patent at issue here." As pointed out by Mueller, the claim of unwillingness to negotiate on Apple's part is inconsistent with another statement in the document saying "[t]he Commission's Opinion sets forth the parties' license negotiations in great detail."
If the decision is not vetoed within the 60-day Presidential review period, the ban will go into effect and Apple will have to take up the issue with the United States Court of Appeals for the Federal Circuit.
A pair of submissions to the United States Trade Representative (USTR), the government body granted veto authority over ITC import ban decisions, outline both Apple and Samsung's arguments pertaining to the limited injunction against Apple's products issued earlier in June. The decision was based on infringement of a patent Samsung at one point declared standard essential, meaning it promised to license the property under fair, reasonable and non-discriminatory (FRAND) terms.
FOSS Patents' Florian Mueller was able to obtain copies of the two parties' filings, and reports Apple's submission indicates that "USTR has decided to conduct a full review," looking for a veto of the ITC order. Further, the company claims the "decision makes the ITC an outlier internationally and domestically," an opinion reached after the trade body made rulings contrary to its pro-Samsung ban.
Previously, the ITC was careful not to issue injunctions based on SEPs, making the Apple product ban somewhat surprising.
Samsung of course argued that the import ban be upheld, saying other ongoing ITC investigations involving the Korean company's SEPs will be "more appropriate opportunities for the ITC and/or the USTR to weigh in on the potential abuse of SEPs at the ITC."
Mueller noted that, while not complete, the redacted Apple submission shed light on the ITC's decision making process. The opinion claims the ITC's analysis focused "exclusively on its views regarding the immediate, short-term effects from excluding older Apple products from the U.S. market," but "wholly failed to engage with the policy dimensions of its decision." It is the duty of the ITC to take public interest into consideration, but Apple is saying the body may have weighed too heavily against possible policy ramifications.
Apple asserts that the decision will result in "the long-term, dynamic harm to competition and innovation in the United States that would come from subverting the standard-setting process and facilitating patent hold-up."
Mueller considers Apple's strongest argument is the fact that other companies could be affected internationally by the ITC's actions.
From Apple's submission:
In addition, the ITC didn't extend to Apple a grace period in which to make changes necessary to not infringe on Samsung's 3G patent. The body gave a 40-day grace period to HTC in a separate but related patent case."That could well cause other jurisdictions to reverse course and begin excluding American goods--including computers, mobile devices, and other consumer electronics--from their markets based on FRAND-committed patents. The United States would be unable to protest, given the actions of its own ITC."
As for Samsung, the company claims an import ban against the iPhone 4 and iPad 2 "raises no economic policy concerns sufficient to take the extraordinary and nearly unprecedented step" of overturning the ITC's decision. The company's submission goes on to say no material impact will be felt by the injunction, an argument Apple successfully used against HTC in its ban against certain phones infringing on data detector patents.
Further, the Korean company said Apple is an "unwilling licensee to Samsung's portfolio of declared essential patents, including the '348 patent at issue here." As pointed out by Mueller, the claim of unwillingness to negotiate on Apple's part is inconsistent with another statement in the document saying "[t]he Commission's Opinion sets forth the parties' license negotiations in great detail."
If the decision is not vetoed within the 60-day Presidential review period, the ban will go into effect and Apple will have to take up the issue with the United States Court of Appeals for the Federal Circuit.
Comments
Quote:
Originally Posted by AppleInsider
In addition, the ITC didn't extend to Apple a grace period in which to make changes necessary to not infringe on Samsung's 3G patent. The body gave a 40-day grace period to HTC in a separate but related patent case.
Did Apple express a desire to update their software so that they're not infringing on Samsung's 3G patent? If so, that's pretty lame that a grace period wasn't issued.
Something tells me that this wasn't the case though as they're currently appealing the decision.
As its an SEP, that might not be possible. But there is a principle in the matter. If they are going to grant one company time to fix, they should do it with all
Quote:
Originally Posted by charlituna
As its an SEP, that might not be possible. But there is a principle in the matter. If they are going to grant one company time to fix, they should do it with all
If a company has no desire to or is unable to correct the patent infringement then they shouldn't be given a 40-day grace period to fix something that they have no intention of fixing just so they can have 40 more days of sales.
To be clear, I'm not saying that the 40-day grace period is on Apple's radar at all. I don't know if it is or isn't. I just found the hinting at a double standard to be odd when the situations are different. HTC expressed a desire to change their software to avoid infringing on Apple patents. I would be surprised to hear that Apple has expressed the same desire at some point in the process.
As I stated earlier though, if Apple did want to change their software to not infringe on Samsung's 3G patent then they certainly should be given the 40-day grace period to do so. To not give them one at that point would be a double standard. I'd imagine most everyone here can agree on that one.
Quote:
Originally Posted by DroidFTW
Did Apple express a desire to update their software so that they're not infringing on Samsung's 3G patent? If so, that's pretty lame that a grace period wasn't issued.
Apple noted that they had asked for a five month (!) delay, but had not been given any grace period:
"How can a party design around a patent before it knows it is allegedly infringing and the new meaning of the patent has been decided? It cannot, and Apple and its baseband processor component supplier (Intel) should have been allowed a period of time to design around the ITC’s newly minted interpretation". - Apple
--
The upshot of the two appeal letters was that:
Samsung briefly argued that Apple had refused to negotiate after getting FRAND offer(s), and thus an injunction was justified.
Apple gave a long set of arguments that injunctions should not be allowed at all. (Although one of their major pieces of evidence, an anti-injunction paper by nineteen experts, ended with a caveat that an injunction is allowable if a FRAND offer is not accepted.)
So, since it could boil down to whether or not a FRAND offer was made and not accepted, someone should save the US a lot of time & money, by simply making both sides sit down, and either come to a fairly quick deal, or be forced to accept a rate figured out by a neutral third party.
Quote:
Originally Posted by KDarling
Apple noted that they had asked for a five month (!) delay, but had not been given any grace period:
"How can a party design around a patent before it knows it is allegedly infringing and the new meaning of the patent has been decided? It cannot, and Apple and its baseband processor component supplier (Intel) should have been allowed a period of time to design around the ITC’s newly minted interpretation". - Apple
--
The upshot of the two appeal letters was that:
Samsung briefly argued that Apple had refused to negotiate after getting FRAND offer(s), and thus an injunction was justified.
Apple gave a long set of arguments that injunctions should not be allowed at all. (Although one of their major pieces of evidence, an anti-injunction paper by nineteen experts, ended with a caveat that an injunction is allowable if a FRAND offer is not accepted.)
So, since it boils down to whether or not a FRAND offer was made and not accepted, someone should save the US a lot of time & money, by simply making both sides sit down, and either come to a fairly quick deal, or be forced to accept a rate figured out by a neutral third party.
While 5 months sounds like a long time, 40 days is probably not enough either. If I were a betting man I'd say that you have looked at the 3G patent in question. It made my head hurt! That was some seriously technical reading. I'd imagine a workaround would be rather challenging as well (assuming a version of the workaround isn't implemented in newer iPhones).
On the surface it would seem much more involved to work around that patent then rubber banding or clickable links in e-mails. A 40 day grace period for removing clickable links in e-mails is completely reasonable, generous even. 5 months may not be as crazy as it sounds on the surface. No grace period at all seems harsh and unfair though.
I'm left to wonder, if a company requests a grace period and doesn't come up with a solution within that time period, should they be fined? If not, what's to keep a company from receiving a grace period and doing nothing but enjoying that last extra bit of sales time? That doesn't seem fair either.
I agree on the third party thing though. If this truly is a SEP then other companies are also paying Samsung to use the patent. It would seem pretty easy for a neutral third party to determine a fair rate based on what others are paying.
Actually Samsung may be doing potential iPhone 4 / iPad 2 buyers a favor, those are old hardware. iOS7 supports these old models fully or are some features not usable, Siri doesn't even work on 4 right?