Wednesday, June 05, 2013

ITC issues ban on U.S. imports of iPhone 4s, iPad 2s

The Korean giant might inject the word "finally" into this news. Samsung has (finally) won a major victory in its patent war with Apple, with the ITC ruling on Tuesday that variants of the iPhone 4 and the iPad 2 violate a patent held by Samsung.

With that, the ITC issued an import ban on the iPhone 4. Considering that Apple has the majority of its products, including the iPhone 4 and iPad 2, manufactured overseas, this would heavily impact sales of the iPhone 4 in the U.S.

The ruling bars the importation of certain iPhones and iPads made to work on AT&T Inc.’s network, some of which are no longer sold by Apple, but can still be found on third-party sites and eBay. They include the iPhone 4, the iPhone 3GS, the iPad 3G, the iPad 2 3G and the iPad 3.

According to Foss Patents, the devices were:
... found to infringe a cellular standard-esential patent (SEP) asserted by Samsung, U.S. Patent No. 7,706,348 on an "apparatus and method for encoding/decoding transport format combination indicator in CDMA mobile communication system" (an allegedly 3G-essential patent).
Newer iPhones and iPads which use Qualcomm baseband chips are unaffected. Apple began producing those models with the iPhone 4S.

As the iPhone 4 and iPad 2 are Apple's loss leaders right now, if Apple were to decide to go along with the ruling, it could eliminate the iPhone 4 and make the iPhone 4S its entry level model. In terms of the iPad 2, it could simply discontinue sales of cellular-capable iPad 2s, since those are similarly unaffected by the ruling.

Apple could appeal. Also, U.S. President Barack Obama has 60 days in which he can simply overturn the ruling. The ITC's ruling came on the same day that the Obama administration announced a package of proposed patent reforms. Among them were moves to rein in so-called "patent trolls," as well as to reduce the growing use of the ITC to settle patent disputes.

Michael Carrier, a professor at Rutgers School of Law in New Jersey which specializes in intellectual property, said
Samsung has been on a bit of a losing streak. The importance of this case to Samsung cannot be understated.
There is no doubt that Samsung has been on the receiving end of most losses in its patent war against Apple. One prime example came late last year when a California jury found Samsung guilty of infringing the iPhone’s design and technology patents, awarding Apple $1 billion. That sum has since been reduced.

As far as Obama overturning the ruling -- it's a tough call for the president to make. Susan Kohn Ross, a partner specializing in trade disputes and intellectual property at law firm Mitchell Silberberg and Knupp said:
These are two electronics giants; he’s going to offend someone whichever way he goes.
Although some might think that Apple, which is based in Cupertino, Calif., would have the advantage of being the "home team," Samsung is the global leader in smartphone -- and overall smartphone -- shipments.

In addition, the firms Galaxy S line of handsets have proven they can stand toe-to-toe with Apple's iPhone.

Carrier added that there is not much precedent for presidential vetoes in an ITC ruling. He said:
It would be a pretty strong move for him to make. Vetoes are extremely rare in this situation; it has only been done five times (since the ITC was founded in 1916).

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