Thursday, July 11, 2013

Apple asks ITC to stay iPad, iPhone 4 ban while it takes case to Court of Appeals

There are less than four weeks before an International Trade Commission (ITC) importation ban on a number of Apple products goes into effect, and given that, on Monday Apple asked the ITC to stay the ban until a court has time to weigh an appeal.

In its filing with the ITC, Apple said the ban, set for Aug. 5, will “sweep away an entire segment of Apple’s product offerings,” and also harm its wireless carrier partners.
If the Orders go into effect, Apple will lose not only sales of its iPhone 4 (GSM) and iPad 2 3G (GSM) products but also the opportunity to gain new smartphone and tablet customers who otherwise would have purchased these entry- level Apple devices.
Despite being an older model of the iPhone, Apple said the iPhone 4 was the fourth most popular smartphone in the U.S. last year.

In early June, the ITC ruled that a number of older Apple products infringed on a Samsung patent. While some of the devices are no longer sold, the iPad 2 3G and iPhone 4 still are, and others can be found on eBay.

The models affected 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).
The ruling was handed down on June 4, and is subject to a customary 60-day review period during which the President could intervene (but most believe presidential intervention is highly unlikely).

As Apple noted in a filing in late June, unlike some other ITC patent infringement cases, the organization did not allow Apple extra time to workaround the issue.

CDMA devices are unaffected by the ban, and Apple noted in its Monday filing that a ban will place its GSM partners at a disadvantage.
The products subject to the Commission’s orders have been purchased by [REDACTED]. They remain very popular and are strong sellers for the GSM carriers. As noted above, the GSM carriers will be placed at a competitive disadvantage against their CDMA competitors because the Orders will prevent them from offering these popular, entry-level devices.
Apple's filing also argues that the Federal Circuit Court of Appeals, which is where Apple has challenged the ITC’s ruling, is likely to find the patent invalid (though that, of course, is Apple's opinion).

On the other hand, Apple said, if the Court of Appeals sides with the ITC, Samsung could always collect damages in a parallel court case taking place in Delaware.

It is unclear what the ITC will say in response.

The current ITC case is particularly contentious because it involves a so-called FRAND patent, which is one that is considered standard-essential. Owners of such patent are supposed to license them -- with fair, not outrageous compensation -- to others.

While Apple claims that Samsung is demanding too much for the license, Samsung says it has given a fair offer to Apple.

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