Veto of Apple iProduct ban: Who else loses besides Samsung?

The Obama administration over the weekend overturned a ban that was scheduled to go into effect today on some Apple products, a rare move — it had been more than a quarter century since a similar veto — that raises questions about the future of patent battles.

First, a little background: The International Trade Commission in June ruled that Apple infringed on a Samsung patent — in case you missed it, the two companies are locked in a knock-down, drag-out fight — and imposed a ban on some older-model iPads and iPhones sold by AT&T.

As tech patent battles pile up, opponents of the ban were concerned about the possibility of future ones, perhaps even based on a patent fight over a single feature. In an op-ed in the Wall Street Journal, Verizon Communications general counsel Randal Milch urged the Obama administration to intervene. “Patent litigation at the ITC — where the only remedy is to keep products from the American public — is too high-stakes a game for patent disputes,” he wrote. Apple also had the support of tech friends (OK, we use the term loosely) such as Microsoft, Oracle and Intel, according to the New York Times.

Samsung, which of course is disappointed by the veto by U.S. Trade Representative Michael Froman and issued statements to that effect, is seeing immediate consequences: It lost $1 billion in market value after the U.S. move. (Speaking of $1 billion, that’s the amount, give or take, Samsung was ordered to pay in damages to Apple about a year ago, when a federal jury in San Jose found the South Korean company had infringed on patents held by the Cupertino company.) And the veto puts Samsung at a disadvantage in future patent talks with Apple, one trade attorney told Bloomberg.

The same could be true for other companies in patent negotiations. An industry group composed of companies such as Qualcomm and other patent holders say the move diminishes the value of a patent, saying that it brings about “perhaps the worst of all possible outcomes — a decision that overturns decades of settled understanding without clear guidance,” according to the Wall Street Journal.

Companies at patent war with one another sometimes do battle by filing lawsuits in court and submitting filings with the ITC. Jorge Contreras, an associate professor at American University in Washington, told Bloomberg completely redundantly, “it’s completely redundant. These are disputes that should be heard in the court.”

Apple shares are up about 1.2 percent as of this post, to $468.10.


Photo: A ban on the import of the Apple iPhone 4 was vetoed Saturday by the U.S. trade representative. (Associated Press archives)


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