Bloomberg News

Samsung Defends Apple Import Ban in U.S. Smartphone Battle

June 26, 2013

Samsung Defends Apple Import Ban in U.S. Smartphone Battle

Boxes containing Apple Inc. iPhone 5's are seen stacked on the genius bar at an Apple store. Photographer: Angel Navarrete/Bloomberg

Samsung Electronics Co. (005930), the world’s largest maker of smartphones, defended an import ban on some Apple Inc. (AAPL:US) products it won in a U.S. patent dispute and urged trade officials to let the block take effect.

The “limited effect” of halting certain iPhone 4 and iPad 2 models from entering the U.S. “raises no economic policy concerns sufficient to take the extraordinary and nearly unprecedented step” of overturning the ban issued June 4, Samsung told the U.S. Trade Representative’s office in a June 19 filing.

The U.S. International Trade Commission in Washington ordered the ban after finding Apple’s older devices infringe a Samsung patent for a widely used way phones transmit data. Apple is asking the USTR, which acts on behalf of the president in such matters, to overturn that order before it takes effect in early August.

Cupertino, California-based Apple submitted its own filing urging the USTR to decide Samsung hadn’t fulfilled requirements that it offer to license the patent on fair and reasonable terms, according to the blog Foss Patents, which first reported on the filings.

Apple and USTR officials didn’t immediately respond to requests for a copy of the Apple filing.

Samsung said it made an offer and Apple refused to pay anything.

“By any definition, Apple is an unwilling licensee of Samsung’s declared essential patents,” Samsung wrote in the filing.

Import Ban

Ronald Reagan was the last U.S. president to overturn an ITC-ordered import ban. Such decisions must be made on public-policy grounds. The president and USTR usually don’t take action, allowing the bans to take effect after the 60-day review period.

Apple would be precluded from importing or selling China-made models of the iPhone 4 and iPad 2 that are designed to work on the AT&T Inc. (T:US) and T-Mobile US Inc. (TMUS:US) networks. Newer models, including the iPhone 4S, iPhone 5, iPad mini and the iPad with retina display, aren’t part of the case.

Samsung, based in Suwon, South Korea, said it acted properly in its efforts to license patents that cover elements of standardized technology used throughout the industry. Companies that participate in establishing industry standards get the advantage of having their technology used, so they must pledge to license any relevant patents to anyone on fair terms.

Royalty Demands

Apple has accused Samsung of making unreasonable royalty demands. Samsung, which is under investigation by European regulators for its use of standard-essential patents in the Apple fights, has pledged not to use the patents to block sales of Apple products in Europe. That pledge wasn’t extended to the U.S., where Apple is the dominant maker of smartphones.

Apple, in letters to U.S. and European regulators, said it wouldn’t use any of its own standard-essential patents to block sales of rival products. It hasn’t asserted such patents in any of the global patent battles it has waged against Samsung and other handset manufacturers, which Apple claims copied the unique look and features of the iPhone.

The ITC is scheduled to announce Aug. 1 whether it will ban certain Samsung phones based on an Apple case.

The U.S. Justice Department and U.S. Patent and Trademark Office in January told the ITC that, in some instances, import bans shouldn’t be imposed in cases involving standard-essential patents. The U.S. Federal Trade Commission, which reached a consent decree with Google Inc. (GOOG:US) on the issue, has taken a similar position.

Samsung told the USTR that the case involving the iPhone 4 and iPad 2 case shouldn’t be used by President Barack Obama’s administration to address whether there’s misuse of standard-essential patents at the trade agency.

A better case, it said, might be an ITC case involving standard-essential patents asserted against Samsung by Ericsson AB.

To contact the reporter on this story: Susan Decker in Washington at sdecker1@bloomberg.net.

To contact the editor responsible for this story: Bernard Kohn at bkohn2@bloomberg.net.


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