Wednesday, June 5, 2013

Old iPhones, banned in the US? Could happen, as Samsung strikes back US International Trade Commission ruled in Samsung's favor in a key case

Older iPhones may soon be subject to an import ban.
These are mostly older models that aren't a big profit driver for Apple at this point. Having said that, they do still sell. You can presently buy an unlocked iPhone 4 for $450 from Apple, or get one for free if you sign an AT&T service contract at the same time. There's also a vigorous resale market for old Apple equipment and it isn't clear how an import ban might affect that. A significant chapter has closed in the ongoing Smartphone patent war between Apple and Samsung. A case that Samsung opened at the International Trade Commission in 2011 concluded on Tuesday, with the ITC determining that a variety of older Apple products infringe the claims of a Samsung patent, US Patent No7,706,348. If the decision stands, a "limited exclusion order" would go into effect that would ban the AT&T models of the iPhone 4, the iPhone 3GS, iPhone 3, iPad 3G, and iPad 2 3G.
The patent relates to encoding and decoding information on a CDMA cell phone network and is part of a group of "standards-based" patents that Samsung used to counter-attack Apple after Apple accused Samsung's Android-based phones of being a rip-off of Apple's technology and designs.
This particular ITC case has become a significant element of the overall patent discussion, mainly because Samsung was using standards-based patents to go after Apple products. That's become a subject of controversy in other cases as well, including a recently resolved battle between Microsoft and Google-owned Motorola over what standards-based patents are worth. 
The commission asked for public comment on that issue, and received comments not just from Apple and Samsung but from Cisco, Hewlett-Packard, Micron, and other industry groups like the Business Software Alliance and the Association for Competitive Technology. 
Apple and Samsung have been waging a world-wide patent battle for a few years now, which temporarily culminated in last summer's blockbuster jury trial in San Jose. That trial resulted in Apple initially winning a $1.05 billion verdict, although part of the case is now scheduled to be re-tried. There's no reason to believe today's ITC decision will end that, even if Apple products ultimately do get banned.
"We are disappointed that the commission has overturned an earlier ruling and we plan to appeal," Apple spokeswoman Kristin Huguet told Reuters, and other news outlets. "Today's decision has no impact on the availability of Apple products in the United States." 
The decision can only be appealed to the US Court of Appeals for the Federal Circuit, the nation's top patent court. Theoretically, the President can also block an ITC-ordered import ban, but that hasn't happened since the 1980s.
Coincidentally, this decision comes the same day that the Obama Administration issued a patent report calling for reforms that would curb patent trolls. While most of the suggested reforms in that report are specifically aimed at not affecting dueling corporations, some of them do suggest that tighter limits could be placed on ITC import bans in the future. 
One commissioner dissented from the ruling today on "public interest" grounds.
Samsung used three other patents in this ITC investigation which fell entirely flat. Two of those patents were found invalid and a third was found valid but not infringed. Additionally, the ITC found that Samsung hadn't proved that a "domestic industry" even exists with regard to those patents. (In ITC proceedings, a patent-holder has to prove that someone in the US is actually using the patented technology in order to win a case; that requirement does not exist in federal court cases.)
Apple has been one of the nation's most aggressive patent enforcers in recent years and it came out on top after its lengthy court battle with Samsung, even though it didn't get everything it wanted. If this decision stands, it could push the companies towards a settlement, as Apple top brass realize that even if they had a big win in San Jose, they're sure to see setbacks as well in a legal battle this broad.

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