One of the many remedies available to patent holders when a company is found to be infringing on a patent is to restrict trade by the infringer. The idea is that you shouldn’t allow a company to sell products illegally.
Samsung has been found to hold a number of valid patents covering communications technology used for products that use GSM and HSPA. When Apple didn’t buy licenses for those technologies, Samsung asked for, and got, a ban on Apple’s import of those products into the United States.
Apple contracts with manufacturers in China to produce most of its products. Those products are then imported to the United States for sale. In June the International Trade Commission found that Apple had infringed on Samsung’s patents and ordered that these Apple products be excluded by the U.S. It also issued a cease and desist order banning sales in the United States. The affected products included the iPad 2 and older iPhones that are still being sold in the United States.
Then on Saturday, Aug. 3, the U.S. Trade Representative sent a letter to the chairman of the International Trade Commission, which had ordered the ban, informing him that President Obama’s administration had rejected the ban. U.S. Trade Representative, Ambassador Michael Froman, said the administration’s disapproval is rooted in standards-essential patents, which are for technologies essential for an entire class of products to function. If this sounds familiar, it’s because this same issue was already determined by the European Union in 2012.
Then Samsung tried to get Apple banned from Europe for infringing on the same standards-essential patents. The EU said that Samsung was abusing its patents and engaging in anti-competitive behavior. The EU also refused to ban Apple from Europe under a situation that’s very similar to the decision by the USTR.
The USTR, meanwhile, simply overturned the import ban. He didn’t say that Samsung’s claims were invalid, but rather that the banning of imports was not the right remedy while the case was still working its way through the legal system. In his letter to the ITC, Froman said that public interest considerations outweigh the necessity of an exclusionary order. In the case of standards-essential patents such an exclusionary action could have a significant impact not only on the company, but on the public that uses the products, the USTR contends.
The issue here is in the nature of standards-essential patents. When a patent is considered to be standards-essential, that means it was incorporated into a standard that’s used to define how a technology works.