updated 10:00 pm EDT, Fri June 8, 2012
Pen support for Apple, MS in trade bans
Motorolais seeking US import bans against the iPhone, iPad, and Xbox 360 based on H.264 playbackand wireless implementation patents. A large quantity of letters supporting Microsoft and Apple have rained down upon the International Trade Commission, asking that they refrain from exclusion orders based on standards-essential patents. Companies and agencies requesting the ITC not ban the products include HP, Nokia, Verizon, the Business Software Alliance (BSA), the Entertainment Software Association (ESA), Retail Industry Leaders Association, Association for Competitive Technology (ACT), and Cisco. No third-party public interest statements have been filed in support of Motorola's possible injunction.
Most companies supporting Microsoft and Apple have vested interest in not seeing an injunction based on a standard-essential patent. While all of the statements agree that intellectual property needs to be enforced, certain patents mandatory for industry advancement need to have fair, reasonable, and non-discriminatory (FRAND) licensing terms attached to them, rather than legal actions waiting for them upon release.
HP stated in their letter of support that "permitting the complainant now to use these patents as a weapon to block the importation of respondents’ products into the United States, merely because they implement the standards at issue, would thwart competition, stifle innovation, and result in higher prices for consumers."
In a similar statement, Nokia declared "where a manufacturer is a willing licensee under such essential patents, the patent holder is not entitled to other remedies -- such as an injunction or an exclusion order -- that would bar implementers from the market. This is the FRAND bargain and obligation." Nokia and Apple were embroiled in legal fights for two years until a settlement was reached in June 2011, making this support remarkable.
The Business Software Alliance (BSA) jumped in the fray by saying "when a patentee makes a commitment to license its technology for FRAND terms during a standard-setting process if that technology is made part of the standard, the patentee should be held to its promise." The BSA is known for a pro-IP stance, and its members hold hundreds of thousands of patents worldwide.
The most recent entrant, Cisco, has no direct involvement in the case. However, Cisco explains that "each standards-essential patent is, by definition, impossible to design around while maintaining compliance with the standard to which it is essential," and calls abuse of the FRAND process "unjust enrichment" for companies that have no interest in fair licensing.
ESA spokespeople point out that a ban on the Xbox would impose a harm on game publisher and consumers disproportionate to the harm that Motorola Mobility has incurred, and adds that "and any harm MMI would suffer can be remedied financially."
Tim Cook, speaking at the D10 conference before all the letters started arriving at the ITC said "This is an area where the patent system is broken today. No one should be able to get an injunction off a standards-essential patent." The CEO argues that Apple has never sued a competitor over a standards-essential patent, as it feels that such strategies are "fundamentally wrong."
The primary Motorola patent is related to H.264 video playback libraries in both Apple's iPhone and Microsoft's Xbox 360, as well as a wireless implementation patent versus Apple. The only course of action the ITC has to remedy a patent dispute is an injunction against sales, likely expediting a settlement between the two parties during the ban on sales.