Obama administration overrules ITC ban on iPhone 4, iPad 2

Obama administration overrules ITC ban on iPhone 4, iPad 2

Earlier this year the International Trade Commission (ITC) issued a ban on the import of the iPhone 4 and cell-equipped iPad 2 models after ruling that the devices violated a patent held by Samsung. The Obama administration has overruled that decision at the eleventh hour, allowing the Apple devices to continue to be imported. U.S. Trade Representative Michael Froman, issued his ruling on Saturday, citing the best interest of consumers as his rationale for overturning the ban.

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 USITC's determination to issue an exclusion order and cease and desist order in this investigation. This decision is based on my reiew of the various policy considerations discussed above as they relate to the effect on competitive conditions in the U.S. economy and the effect on U.S. consumers.

Froman went on to say that his decision isn't an endorsement or criticism of the ITC, and that his decision to disapprove the ban doesn't mean Samsung isn't entitled to a remedy - just not this particular one, which they've been asking for since 2011.

One of the key issues sparking the veto seems to have been the FRAND-nature (fair, reasonable, and non-discriminatory) nature of the Samsung patents at issue. These types of patents are often pooled to allow standards to be implemented, and as a result are supposed to be licensed equally so everyone can support the standard. Recently, however, companies like Motorola and Samsung have been using - some would say abusing - FRAND patents as a way to counter-sue against proprietary patents. In the EU, FRAND-patent abuse has resulted in investigations. Here, it's resulted in a veto.

Better luck next time, Samsung.

Update: Apple provided the following comment to AllThingsD:

We applaud the Administration for standing up for innovation in this landmark case. Samsung was wrong to abuse the patent system in this way.

Samsung, predictably, is not happy with the ruling. In the same article, AllThingsD quotes them as saying:

We are disappointed that the U.S. Trade Representative has decided to set aside the exclusion order issued by the U.S. International Trade Commission (ITC). The ITC’s decision correctly recognized that Samsung has been negotiating in good faith and that Apple remains unwilling to take a license.

Source: Office of US Trade Representative

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Peter Cohen

Managing Editor of iMore, Mac and gaming specialist and all-around technologist. Follow him on Twitter @flargh

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Obama administration overrules ITC ban on iPhone 4, iPad 2

35 Comments

Rene you were singing a very different tune just some time ago in the Apple ebook price-fixing case stating Govt. should not interfere in private business. Didn't expect any better from you anyways.

What did you then expect from the priest of Appleism? Some people worship gods, some, like Rene, worship a corporation that exists for the sole purpose of making money, and hence uses child labour in China. Worship is kind of sad in both cases.

And then there's the people that worship nothing, and have sad, meaningless lives until they die alone in an empty house. Enjoy.

You sure about that?? Not trying to come off as a d*** or anything, but you sound awfully too optimistic (for lack of a better term) about that. I am believe there must be at least one human being out who has never worshipped anything and still must live sort of meaningful life. Just a thought! This isn't even about Apple v. Android terms, just in general.

Apple simply decides to not license the patented standards it exploits and can get away with it in the US due to being an US company. Classic American protectionism which kind of abuse the consumer, in the end, pays.

Well, technically, Apple is using a "public pool" too. UNIX is a "public pool" in this sense. But I find the implication that *only* Samsung was abusing the system insulting. What about Apple suing for non-similar devices. I don't know *anyone* who could confuse an S3 or S4 with an iDevice. An S1 or S2, yes, and they should be sued for that, but S3/S4 no.

What I want to know is why Apple is selectively suing Samsung, not Archos (who I really like) when their Titanium tablet looks almost identical to the iPad. Or the GooPhone i5 people. Or any of the knockoff Apple Stores in China.

I think Apple is abusing the system to "compete" with Samsung on two fronts. They're doing good (albeit not great) without having to result to the legal system, so why go after completely different devices? Wasn't there an Apple guy who said something like "People are buying Samsung products instead of iDevices" implying it's because they looked similar? You really buy an iDevice for the whole package, not just the looks.

And I still don't see how anyone could think that if they get the "Slide to Unlock" that could be extended to a tap because "a tap is a zero length swipe"...

re: "In the EU, FRAND-patent abuse has resulted in investigations. Here, it's resulted in a veto."

Don't think of it as "saving the iPhone 4 and iPad 2." The 4 only has about six weeks of life anyway before it's phased out. (Apple's lineup will either be iPhone "5S" / 5 / 4S or iPhone "5S" / "5C" 16GB / "5C" 8 GB, or something roughly like that.)

Think of it as sending a message against any further FRAND-patent abuse.

I think you'll find that Apple are the FRAND abusers as they wouldn't negotiate. Which was the reason the ITC judged against them.
But then it is the good ole US of A and international laws only apply to the rest of the world unless its beneficial to US companies.

This decision has more to do with the economy than it does patent protection. If the ban were to occur apple stock would loose value, in a way not seen before. If this were a more noble decision, it wouldn't have been made at the eleventh hour and on a Saturday. Just like bailing out the banks or the auto industry.

I voted for the guy but would like to see business work for itself without government bias.

On that note, they should battle it out with innovation and not litigation.

"If the ban were to occur apple stock would loose value, in a way not seen before."

On products that are no longer manufactured or marketed? Apple still makes new iPad 2s? What are you smoking? AAPL would tank because of this?

This decision won't matter by next month, when the iPhone 4 and iPad 2 are obsoleted by newer products, so I'm not really seeing how a ban on two year old products would cause Apple's stock to drop. If the iPhone 5S, iPhone C, iPad mini 2, and "The new iPad" aren't seen as "home runs", Apple's stock will drop anyway. This is probably more about the fact that there are still a lot of people buying the iPhone 4 instead of the iPhone 5, but with the new iPhone (s) coming in a month, it really just doesn't matter.

Good. What a stupid ruling. Samsung had to pay fines, but Apple has to completely stop selling certain devices? What a joke.

Samsung had several products banned from being imported into the United States, many of which were still in production but weren't top-tier (many were already obsolete just like the iPhone 4/iPad 2 ban). There was a call from Apple to ban future products by Samsung if they were able to view Samsung's product line-up designs during the original court case.

Sorry to point out your obvious bias.

Apple had Samsung products banned from the US? Which products would those be, care to back that up?

Also, the only 3 posts you've ever made on this site are anti-Apple, and all on this one article. Sorry to point out your obvious bias.

This is a bad presidencies just set by Obama. This is going to blow up later. He should of let it go threw. This was a very bad thing that just happen. Apple never even attempted to cut a deal and only negotiated in bad faith.

In the way you wrote the proper word would be 'through' not 'threw', English to hard hard for you. Samsung-boy? And how do YOU KNOW Apple never attempted to cut a deal? Were you there ? Or did your boss the Samsung-man tell you that?

"This is a bad presidencies just set by Obama. This is going to blow up later. He should of let it go threw. This was a very bad thing that just happen. Apple never even attempted to cut a deal and only negotiated in bad faith."

Sent from the iMore App

I think banning of any products regardless if it's frand or not should be disallowed.. As Obama said banning isn't in the interest of consumers.. I wonder though people who have frand patents and those who use it are reluctant to pay X amount.. Cause remember frand may be essential but they are not free.. So who's going to work out the price someone gets paid for there frand patents cause the courts don't seem to be doing it as every decision the court makes just gets appealed.. Just shoes how messed up the whole us patent system is.. One thing this veto does show is that frand patent is pretty much useless because it looks like with frand patent you are in the hand of who uses your patent so my guess is we just ain't going to see anymore frand patents therefore no more fluency in technology..think about imaging if 3g patents were not made frand, then maybe today every company may have created there own type of 3g so if you buy phone X with one 3g it wouldn't work with another companies 3g.my point is the future seems like technology working less together harmoniously with everyone and instead working within the confound of companies X world only.. Which I don't like.. I much prefer everything just working together..

Except, if you read the actual ITC reasoning [ http://essentialpatentblog.com/2013/07/itc-releases-public-version-of-th... ]

1) It is still under dispute that the patent in question is essential to any standard, so FRAND may not apply at all.

2) Even if FRAND applies, if Apple has not entered into a licensing agreement after all this time they have to demonstrate that the holder (Samsung in this case, obviously) has been negotiating in bad faith, typically by framing an unreasonably high initial offer or by placing undue cross-licensing restrictions. The commission found that Apple did not offer adequate evidence in either aspect, hence the ban.

For the Obama administration to overturn that ban while simultaneously conceding the commissions conclusions regarding the above is almost entirely unprecedented.

This is actually the problem. Apple hadn't paid any licensing fees and weren't in talks with Samsung to use them at all. FRAND applies /only/ if the patent holder is being unreasonable about the costs to use their license.

So in this case, it is quite simply a case of using without permission, which is what caused the initial overturn by the ITC.

Then Samsung can sue in court as it appears they have a very strong case. No sense in potentially harming the economy (via AAPL stock drop) over a dispute between two companies.

What do you think they did? Oh well, perhaps they haven't. It's hard to keep track of what they're suing each other for.

Minus the fact that WHEN apple loses in court their stock will drop big time. I would not be surprised if Apple gets slapped with the willful infringement.

Apple just lost in court against the federal government and their stock move very much. It's doubtful a loss to Samsung in court would register much in the market.

As expected from hypocritical America, strongly encourages foreign governments to respect the rulings of ITC that pertain to banning of non- US companies ~ but if it's a US company, US suddenly has the right to veto w/e the ITC rules b/c it "compromises the national welfare of the US"

If the interest of the consumer is paramount to the Administration, then should they not 'un-ban' all products that are banned by the ITC?

Froman says this decision is "not an endorsement or criticism of the Commission's decision or analysis" and adds that Samsung may "continue to pursue its rights through the courts."

Who's this dick-brained politician? The courts have already ruled! You've just got the court overruled!
Another great advertisement for money over brains to get you ahead in US politics!

Can we all just agree the patent system as a whole is broken? There's no winning, just losing for the consumer over the long-haul with the system as it exists now. Between patent trolls, FRAND use/abuse, and endless litigation against awards where the most basic concepts are allowed to be patented has created a situation where the only people who are winning are lawyers and stakeholders in companies who exist only to take advantage of the situation.

Apple fans aren't winning, Samsung fans aren't winning. Consumers as a while sure as heck aren't winning ...

I just wish the various trade commissions and governments around the world would look to fix the situation as a whole instead of judging thin slices of policy one piece at a time and tying up courts that could be put to better use.

I wonder how much campaign money Apple had given Obama for his re-election? This might just be returning a favor. ;) Federal Government should stay out of private business dispute.

But Seriously, does Apple really expect to sell a lot of old products like iPhone 4 and iPad 2 in the United States, in the year of 2013?!?!?! These old products might be great sellers in the 3rd world countries. But in the United States where the smart phone market is quite saturated, people are not going to buy a brand new iPhone 4 or brand new iPad 2 at this time. With the carriers' incentives, the U.S. consumers probably will opt for the latest greatest versions.

I think all of these sales ban on older products are really moot. All these legal proceedings are nothing but a big waste of taxpayers' money.