By Kim Tae-jong
The specter of U.S. protectionism is looming large after the Obama administration vetoed a ban on the sales of some of Apple's products ordered by the U.S. International Trade Commission (ITC), Saturday.
In a letter to ITC chief Irving Williamson, U.S. Trade Representative (USTR) Michael Froman said Saturday that it decided to overrule the ITC's June ruling that ordered sales and import bans of older models of the iPhone and iPad for patent infringement.
This is the first time that the U.S. government has vetoed a ruling by the ITC in 25 years. The ITC is an independent federal agency that determines the impact of imports on U.S. industries and directs actions against unfair trade practices.
"After extensive consultations with the agencies of the Trade Policy Staff Committee and the Trade Policy Review Group, as well as other interested agencies and persons, I have decided to disapprove the ITC's determination to issue an exclusion order and cease and desist order in the investigation," he said.
Immediately, Samsung expressed deep regret over the decision, although it refused to comment more on the impact on its ongoing patent dispute with Apple.
"We are disappointed that the USTR decided to set aside the exclusion order issued by the ITC, even though the decision correctly recognized that Apple had infringed upon our patents and been negotiating in a bad manner." Samsung said in a statement.
Apple, in contrast, has welcomed the decision.
"We applaud the administration for standing up for innovation in this landmark case. Samsung was wrong to abuse the patent system in this way," it said in a statement.
The decision was apparently based on the so-called Fair, Reasonable and Non-Discriminatory (FRAND) standard introduced to prevent patent owners from abusing their power. The FRAND license standard also prevents holders of patents from denying market access to latecomers.
Apple has been arguing that the patent in question was "standard essential," claiming that Samsung was trying to abuse the patent system.
However, the decision is reigniting a debate as it comes amid growing fears about the revival of U.S. protectionism that many argue is now protecting major U.S. enterprises from their global rivals.
Earlier in May ahead of the key ITC ruling, the U.S. Congress sent a letter calling for the ITC to take the public interest into consideration when making a final ruling over an allegation of Apple's willful infringement of some Samsung patents.
Despite the pressure, the ITC ruled in June that Apple infringed on some patents in making smartphones and tablet computers and issued the sales and import ban on older products.
In this regard, for many, the case was regarded as a litmus test as to whether the U.S. government can be fair in cross-border patent dispute cases. Critics argue that the veto is a protectionist move, saying the USTR failed to provide enough explanation behind the decision.
It only explained that the decision was made based on Froman's "review of the various policy considerations as they relate to the effect on competitive conditions in the U.S. economy and the effect on U.S. consumers," implying that it put more emphasis on the impact of the ITC decision rather than appropriateness of the ITC ruling itself.
Aftereffects
The veto is expected to have a negative effect on the ITC's final decision on Apple's patent claims against Samsung slated for Aug. 9.
The upcoming review will decide whether to uphold a preliminary ruling by the ITC that stated Samsung's older mobile devices, including Galaxy S2 models, infringed on four patents held by Apple. The final decision was originally scheduled for Aug. 1, but the ITC postponed it after the USTR decision.
Given the latest decision by the U.S. government, it is probable the ITC will decide in favor of Apple to order the import ban on Samsung's products including Samsung's Galaxy S2 smartphone, as well as the Galaxy Tab 10.1 tablet for patent infringement.
Experts have mixed opinions about the decision by the USTR but they share the view that it will benefit consumers.
"This is a victory for consumers and fair competition," German-based patent expert Florian Mueller wrote in his popular FossPatents blog.
"I'm sure that it wasn't an easy decision to veto the only significant win Samsung had scored against Apple in the earth-spanning patent dispute between the two companies, but this is not about taking sides with or against any particular company."
He added the decision was all about protecting the industry standard-setting system against the abusive pursuit of injunctive relief by certain players, as Fronman made it clear that Samsung "may continue to pursue its rights through the courts."
The specter of U.S. protectionism is looming large after the Obama administration vetoed a ban on the sales of some of Apple's products ordered by the U.S. International Trade Commission (ITC), Saturday.
In a letter to ITC chief Irving Williamson, U.S. Trade Representative (USTR) Michael Froman said Saturday that it decided to overrule the ITC's June ruling that ordered sales and import bans of older models of the iPhone and iPad for patent infringement.
This is the first time that the U.S. government has vetoed a ruling by the ITC in 25 years. The ITC is an independent federal agency that determines the impact of imports on U.S. industries and directs actions against unfair trade practices.
"After extensive consultations with the agencies of the Trade Policy Staff Committee and the Trade Policy Review Group, as well as other interested agencies and persons, I have decided to disapprove the ITC's determination to issue an exclusion order and cease and desist order in the investigation," he said.
Immediately, Samsung expressed deep regret over the decision, although it refused to comment more on the impact on its ongoing patent dispute with Apple.
"We are disappointed that the USTR decided to set aside the exclusion order issued by the ITC, even though the decision correctly recognized that Apple had infringed upon our patents and been negotiating in a bad manner." Samsung said in a statement.
Apple, in contrast, has welcomed the decision.
"We applaud the administration for standing up for innovation in this landmark case. Samsung was wrong to abuse the patent system in this way," it said in a statement.
The decision was apparently based on the so-called Fair, Reasonable and Non-Discriminatory (FRAND) standard introduced to prevent patent owners from abusing their power. The FRAND license standard also prevents holders of patents from denying market access to latecomers.
Apple has been arguing that the patent in question was "standard essential," claiming that Samsung was trying to abuse the patent system.
However, the decision is reigniting a debate as it comes amid growing fears about the revival of U.S. protectionism that many argue is now protecting major U.S. enterprises from their global rivals.
Earlier in May ahead of the key ITC ruling, the U.S. Congress sent a letter calling for the ITC to take the public interest into consideration when making a final ruling over an allegation of Apple's willful infringement of some Samsung patents.
Despite the pressure, the ITC ruled in June that Apple infringed on some patents in making smartphones and tablet computers and issued the sales and import ban on older products.
In this regard, for many, the case was regarded as a litmus test as to whether the U.S. government can be fair in cross-border patent dispute cases. Critics argue that the veto is a protectionist move, saying the USTR failed to provide enough explanation behind the decision.
It only explained that the decision was made based on Froman's "review of the various policy considerations as they relate to the effect on competitive conditions in the U.S. economy and the effect on U.S. consumers," implying that it put more emphasis on the impact of the ITC decision rather than appropriateness of the ITC ruling itself.
Aftereffects
The veto is expected to have a negative effect on the ITC's final decision on Apple's patent claims against Samsung slated for Aug. 9.
The upcoming review will decide whether to uphold a preliminary ruling by the ITC that stated Samsung's older mobile devices, including Galaxy S2 models, infringed on four patents held by Apple. The final decision was originally scheduled for Aug. 1, but the ITC postponed it after the USTR decision.
Given the latest decision by the U.S. government, it is probable the ITC will decide in favor of Apple to order the import ban on Samsung's products including Samsung's Galaxy S2 smartphone, as well as the Galaxy Tab 10.1 tablet for patent infringement.
Experts have mixed opinions about the decision by the USTR but they share the view that it will benefit consumers.
"This is a victory for consumers and fair competition," German-based patent expert Florian Mueller wrote in his popular FossPatents blog.
"I'm sure that it wasn't an easy decision to veto the only significant win Samsung had scored against Apple in the earth-spanning patent dispute between the two companies, but this is not about taking sides with or against any particular company."
He added the decision was all about protecting the industry standard-setting system against the abusive pursuit of injunctive relief by certain players, as Fronman made it clear that Samsung "may continue to pursue its rights through the courts."
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