Apple Inc. (NASDAQ:AAPL) has been saved by the bell—or the Obama administration, to be more precise. Two months ago, the International Trade Commission ruled in favor of Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930), saying that certain models of the iPhone 4 and other older models violated one of the company’s patents. The ITC then banned the models from import into the U.S. Only the Obama administration could save them, and they did did—just in the nick of time.
President Obama vetoes Apple ban
The models that were affected by the ITC’s ban included several that worked on AT&T Inc. (NYSE:T)’s network. The iPhone 4—which was still selling fairly well in the last quarter—and the iPhone 3GS were included in that ban. The patent Apple Inc. (NASDAQ:AAPL) was said to have violated dealt with standards of transmitting data to the AT&T network.
The Obama administration had until today to prevent the ban of those Apple Inc. (NASDAQ:AAPL) products. The eleventh hour veto was the first one since 1987, according to international trade lawyer Susan Kohn Ross, who was interviewed by Brian X. Chen for The New York Times’ Bits blog.
Apple saved by competition
Michael Froman, who advises President Obama regarding international trade issues, said part of the decision was based on the “effect on competitive conditions in the U.S. economy and the effect on U.S. consumers.” Apple Inc. (NASDAQ:AAPL)’s argument was that Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) had made a commitment to license its wireless technology standards-related patents, but wouldn’t keep that promise. Samsung, however, said Apple wouldn’t pay the fees to use those patents.
Apple and Samsung react
Of course Samsung has said it was disappointed with the decision because it recognized that Samsung was trying to negotiate in good faith and that Apple Inc. (NASDAQ:AAPL) wouldn’t take the license on the patent. Apple applauded the Obama administration “for standing up for innovation.” The company’s spokesperson also said the Korean company wrongly abused the patent system.
In Froman’s statement, he that Samsung was still allow to pursue its rights in the court system. This part of the decision will undoubtedly prolong the patent wars that have gone on between Apple Inc. (NASDAQ:AAPL) and Samsung in courtrooms all over the world. Both companies have won some cases in various countries.
Patent battles between Apple and Samsung continue
This month the war between the two companies continues in the U.S. at the trade commission. Apple Inc. (NASDAQ:AAPL) claims that Samsung violated a design patent and three technical ones. The commission is expected to release its decision Friday.
Because the ban on Apple products has been vetoed by the Obama administration, Samsung will have one less bargaining chip in its attempt to cause a major disruption in Apple’s iPhone and iPad supply lines. Several analysts have said that the ban on the iPhone 4 and a few other older products would have little impact on Apple Inc. (NASDAQ:AAPL)’s sales because the new models are expected to be released soon.