updated 01:00 am EDT, Wed July 10, 2013
Says entry-level models, competition would be 'swept away' by injunction
Apple has filed a request with the US International Trade Commission (ITC) for a stay on an import ban against older models of iPhones and iPads pending an appeal pending in a federal court. The sales injunction, which affects GMS versions of the iPhone 4 and iPad 2 with cellular option, may go into effect in as little as a month if the 60-day Presidential Review on ITC sales bans lapses without action. The injunction was a surprising move on the part of the full commission, which had preliminarily found in Apple's favor in a case over 3G patents owned by Samsung.
The ruling would bar the sale of the two still-manufactured Apple products (earlier models of the iPhone and iPad were also affected by the ruling but aren't offered for sale any longer) which serve as the company's entry-level "budget' products for both iPhones and full-size iPads. In its filing, Apple said that the ban would "sweep away an entire segment of Apple's product offerings" and that GSM carriers will "cede a competitive advantage" if the products are removed.
The company has already appealed to the Obama administration for an intervention, but despite having the power to overturn ITC rulings, administrations are generally very reluctant to do so. Curiously, the White House has offered legislation to Congress that would have affected this case had it been implemented at the time, making it harder for the ITC to impose sales bans when the patents in dispute are standards-essential (SEPs).
Apple won a clear victory against Samsung in the initial ITC ruling, with Judge James Gildea finding Apple not guilty of infringing on any of the four disputed patents. He also ruled that Samsung did not have a "domestic industry" that utilized the patents, a point the full commission overturned in its final ruling and which would have shielded Apple from the sales ban.
The injunction is seen as mysteriously vindictive by the court, since the patents in question are SEPs and subject to "fair, reasonable and non-discriminatory" (FRAND) licensing requirements -- a factor that Congress, the federal courts and even the ITC itself has said shouldn't be subject to sales embargoes. Indeed, when Apple applied for similar bans on infringing Samsung products for copying non-SEP patents owned by Apple, the court denied the motion despite Apple having proven the claims in federal court and in several ITC cases.
Apple noted in its filing that it is appealing the ruling to the Federal Circuit, where it is likely to get the ban overturned. The federal courts have been much more consistent and adamant that SEPs cannot have injunctions brought against them except in the most extreme of circumstances. The surprise win for Samsung was the first time it had scored a sales ban in any of its cases against Apple outside Korea, and indeed only the second time it had proven any Apple infringement on any of its patents -- a ruling in the Netherlands found against Apple, but ruled the patent in question was an SEP and thus limited the damages to a modest monetary settlement.
The Korean rival to Apple has yet to win any victories at all on claims of non-SEP patent infringement despite dozens of attempts, whereas Apple has prevailed in every case on non-SEP patent infringement by Samsung. Apple has not sued any companies over SEP patent infringement.
Assuming the Obama administration does not veto the ruling, Apple is requesting that the ban be stayed until the federal appeal is heard and determined. The iPhone maker points out in its filing that even if it were to lose the federal appeal, Samsung will still be able to collect damages through another lawsuit that is still pending.