Apple Inc. (AAPL) Market Cap Boosted By Import Ban On Samsung

Apple Inc. (AAPL) Market Cap Boosted By Import Ban On Samsung
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Apple Inc. (NASDAQ:AAPL)’s stock price recently has received boosts from a couple of import bans—one directly affecting Apple and the other affecting its biggest competitor, Samsung. As a result, Apple Inc. (NASDAQ:AAPL)’s market capitalization has been climbing significantly even though the percentage of per-share gains haa been comparatively small.

Apple Inc. (AAPL) Market Cap Boosted By Import Ban On Samsung

ITC banned Apple, Samsung products

Daniel Eran Dilger of Apple Insider reports that the Obama administration’s decision to veto a ban on some of Apple Inc. (NASDAQ:AAPL)’s older iPhone models added $6.9 billion to the company’s market cap. That ban had been imposed by the International Trade Commission, which said Apple Inc. (NASDAQ:AAPL) infringed on some of Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930)’s patents. Unfortunately for Apple Inc. (NASDAQ:AAPL), by the end of last week, last Monday’s gains from the veto of that ban had been erased

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The same commission also imposed a ban on some of Samsung products, which pushed Apple Inc. (NASDAQ:AAPL)’s per-share price up by almost 3 percent on Monday. That added another $11.7 billion onto Apple Inc. (NASDAQ:AAPL)’s market cap—almost twice as much as was added by optimism surrounding the veto of ITC’s ban on Apple Inc. (NASDAQ:AAPL) products.

Samsung’s ban could be vetoed too, but unlikely

Shares of Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) were affected by the ITC’s ban over the weekend. It’s important to note though that the Obama administration could choose to veto the ban imposed on Samsung as well. Like the one imposed on Apple Inc. (NASDAQ:AAPL), there’s a 60-day review period during which the administration has time to review it and decide whether to veto it.

However, it’s rare that these bans are overturned, and as Apple Insider points out, the situations surrounding the two bans are very different even though they’re both related to patent infringement cases.

Apple already won other related cases against Samsung

In the case of the ITC’s ban on Apple products, a judge had already ruled before that Apple Inc. (NASDAQ:AAPL) didn’t infringe on Samsung’s patent. Also that patent only affected the iPhone 4, the iPad 3 and a few older products that aren’t in production any longer. The patent claim filed by Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) alleges that Apple Inc. (NASDAQ:AAPL) didn’t pay for the standard technology used in AT&T Inc. (NYSE:T)’s network. That technology is part of the Infineon processor made by Intel Corporation (NASDAQ:INTC).

Intel did pay Samsung a license for the technology, although Samsung claimed that when it sold the chips to Apple, that license was voided. There was a nearly identical case involving chips made by QUALCOMM, Inc. (NASDAQ:QCOM), which are in Apple Inc. (NASDAQ:AAPL)’s newer devices. The ITC was unconvinced that the license purchased by Qualcomm was voided simply by the sale of those chips to Apple Inc. (NASDAQ:AAPL).

Apple’s case involved essential technology

And then there are the issues involving standards patents. Standards Essential Patents are for technology that is deemed to be necessary in making products that are compatible with various networks. What this means is that it would be impossible for Apple Inc. (NASDAQ:AAPL) to make certain products without infringing upon these patents. Samsung is required to offer a licensing fee for the patent under the Fair, Reasonable and Non-Discriminatory rules.

This is one of the big reasons the Obama administration gave for vetoing the ITC’s ban. It didn’t want to give companies any leverage in cases involving Standards Essential Patents.

Samsung’s case involved design patents

The import ban handed down by the ITC against Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) late last week, however, involved new innovations in technology which were not essential. The company could have come up with its own design rather than using Apple Inc. (NASDAQ:AAPL)’s design. As such, it seems unlikely that Samsung will receive a veto as Apple Inc. (NASDAQ:AAPL) did.

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