It was a good weekend for Apple Inc. (NASDAQ:AAPL) as US trade representative Michael Froman acting on behalf of Obama administration, said that it would veto the ban on older iPhones and iPads put by the International Trade Commission (ITC). ITC banned the iPhone models, as well as older iPad items in June, which would have come into effect by Monday, says a report from The Wall Street Journal.
Why the ban was imposed on Apple
Apple Inc. (NASDAQ:AAPL) suffered the ban on GSM versions of its iPad 2 and iPhone 4 models, which was based on a patent claimed by Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930). The patent is a vital one in compatibility with the industry standard wireless networks.
The patent, owned by Samsung, is described as “Standard essential” and thus the Korean company has agreed upon licensing the patented technology under Fair, Reasonable and Non-discriminatory “FRAND” rates. Due to the patent being “Standard essential”, even then Samsung went ahead to ask a ban of Apple devices, rendering the ban highly controversial. ITC bans are relatively easier to obtain than those granted by the federal court.
Previously, Apple Inc. (NASDAQ:AAPL) also won an order against HTC phones on their sales relating to patent issues. However, those patents were not standard essential, which implies that HTC could have done without those technologies and the phones would have been compatible with the industry essentials.
Ban was widely opposed
Some of the US Senators along with Amy Klobuchar (D.-Minn.), Sen. Mike Lee (R.-Utah), Sen. Barbara Boxer (D.-Calif.), and Sen. Jim Risch (R.-Idaho) opposed this ban along with tech biggies including Microsoft Corporation (NASDAQ:MSFT), Intel Corporation (NASDAQ:INTC), Oracle Corporation (NYSE:ORCL), Verizon Communications Inc. (NYSE:VZ) and AT&T Inc. (NYSE:T), all of whom appealed to the administration to exercise a rare veto.
ITC was “out of step”
Florian Mueller of FOSS Patents noted “this is the first veto of an ITC ruling in decades, and I believe the ITC’s majority opinion was so out of step with basic antitrust rules (such as tying) and its effects would have been so very anti-competitive and anti-innovative that this veto was unfortunately necessary.”
He added that this ban would have affected Apple Inc. (NASDAQ:AAPL) only a little as the iPhone maker would have handled the situation, but it will give a chance to SEP strategic abusers who want to get away with infringement of non-SEPs as well as overly aggressive monetizers abusers to misuse ITC.
Mueller further criticized ITC and said that ITC has acted like a government agency, which has gone out of control, by giving Samsung and SEP import ban. He said that ITC should pay heed to Froman’s instruction where he said that the body should be cautious in giving rulings on other cases involving FRAND-pledge SEPs.
ITC was ordered by the administration to analyze the case carefully and deeply on its own the public interest issues that were laid in front during the proceedings and when the decision was taken in the public interest and to heed to “the standards-essential nature of the patent at issue.”