updated 06:31 pm EDT, Wed July 31, 2013
Tech companies, business mags, now politicians say SEP injunction unfair
As the deadline nears for the ITC's ban on some older models of iPhones and iPads to take effect, a growing chorus of companies and individuals have begun calling for an overturning of the ban by the Obama administration in the wake of a lack of action. Two Republican and two Democratic senators have signed a letter urging United States Trade Representative Michael Froman (who has been delegated the decision) to reverse the ITC ban, mostly on the grounds that sales injunctions over Standards-Essential Patent (SEP) disputes are unnecessary.
In a surprise move and contradicting its own preliminary judgement, the full panel of the US International Trade Commission found that Apple was infringing on an SEP held by Samsung, which has not licensed the technology on FRAND terms in violation of its international obligations. Despite the fact that this same panel has ruled previously that sales bans on products using SEPs should not be allowed to happen except in the most extreme cases, it contradicted itself and ordered an injunction against 3G-capable Apple devices found to be using the patents, including the iPhone 4 (which is still available) and the iPad 2 (which is no longer sold).
Apple may still win a stay of the injunction from the federal courts while an appeal of the case is considered, but President Obama has a 60-day window to overturn the ban outright if he finds that it conflicts with US interests or is otherwise unfair. The president delegated the authority for the decision to Ambassador Froman, who has not indicated whether he will overturn the ban or allow it to proceed -- and thus as the deadline nears, a number of companies have called for the administration to take action.
The letter from Senators Amy Klobuchar (D-Minn), Mike Lee (R-Utah), Barbara Boxer (D-California) and Jim Risch (R-Idaho) reflect Kloburchar and Lee's membership in the Senate Judiciary Committee's Subcommittee on Antitrust, Competition Policy and Consumer Rights -- which has been strongly pro-FRAND licensing (Fair, Reasonable and Non-Discriminatory) and has taken the position that FRAND licensing disputes should not be resolved by lawsuits at all, and additionally not through using sales injunctions as a bargaining chip. Boxer is of course a Senator from California, home to many high-tech companies that would be affected by the ruling, and Risch is a long-time opponent of injunctions over FRAND-pledged SEPs.
Three of the four senators on the letter also wrote to the ITC back in May to share the Senate's view on the then-upcoming Apple-Samsung trial and other cases that involved FRAND, SEPs and legal principles for action. In the new letter, the senators note that they take "no position on the merits of the case" but still "urge the USTR to carefully consider" the impact the decision would have on the economy and public interest. Though only the iPhone 4 among Apple's current lineup would be affected by the ban, by some reports it is the third best-selling smartphone in the US, surpassed only by the iPhone 4S and iPhone 5. Taken together, Apple's iPhone lineup equals or beats the sales of any other single brand of smartphone in the US, Canada and several other major countries such as the UK, Mexico, Spain and France.
In addition to the senators, executives from AT&T and Verizon have called for the ban to be overturned, unsurprisingly. The Software Alliance (BSA) which includes Microsoft, Oracle, Intel and other major tech companies have also called for the ban to be overturned, citing faulty judgements in the ITC's final ruling as well as the general principle that FRAND-eligible SEPs should not be under threat of sales injunctions, since companies would then use the threat as a legal weapon to force non-FRAND agreements.
A number of news outlets including CNN, the Korean Times and Fortune Magazine have editorialized against the ban, saying it would set a bad precedent, harm competition in the market and expressing concern that the ITC is essentially now saying in its current ruling that an SEP holder can condition a license for the technology on a license to the holder's non-SEP patents, reports Florian Mueller, a analyst of high-tech patent cases. Indeed, one of the six commissioner of the ITC itself dissented from the ruling against Apple, calling the judgement "not consistent with the public interest."