ITC Bans Apple 3G Phones and iPads, Ruling in Favor of Samsung
Several older Apple devices infringe on patents held by archrival Samsung, the U.S. International Trade Commission said in a June 4 ruling that bans Apple from importing the devices and from selling and distributing them in the United States.
"The Commission's determination is final, and the investigation is terminated," says the ITC notice.
Apple, in a statement, said it was "disappointed" by the ruling and plans to appeal it.
Samsung, in its statement, said the ITC's "final determination has confirmed Apple's history of free-riding on Samsung's technological innovations."
The affected devices are 3G-running (pre-iPhone 4S) iPhones and iPads that don't run Qualcomm's baseband chips, patent expert and industry consultant Florian Mueller said in a June 4 post on his Foss Patents blog.
"Basically, Apple would have to make the iPhone 4S its entry-level iPhone model and discontinue U.S. sales of older iPhones (and the 'new iPad 4G' ... WiFi iPads are not affected at all)," wrote Mueller.
"Formally the decision also relates only to the AT&T versions of those older products, but Samsung reserved the right to allege infringement by Apple products running on other networks (unless they come with Qualcomm baseband chips)."
Gartner Research Vice President Carolina Milanesi, in a June 4 Tweet, called the ruling a blow for Apple, but one that the tech giant can "take on the chin."
"I think it's bad timing, as we're going through the 'Apple bashing period,'" she later told eWEEK, referring to the Department of Justice suit accusing Apple of price-fixing ebooks, if not also longer-term reputation smears like its Maps failing and disasters at the factory of its manufacturing partners.
"I do think there will be minimal material impact, for two reasons," added Milanesi. "The decision might be overruled, and even if not, the iPhone 4 is coming to the end of its life, [with] the new model launch in the fall or even earlier, if iOS 7 features are not all supported. So, I think it affects stock and morale [more than] sales."
The ITC's ban doesn't go into effect instantly. There's a 60-day Presidential Review period during which the president can overturn the decision based on "public-policy grounds," according to a June 5 report from Bloomberg, which added, "That rarely happens."
Washington has been focusing on patents and specifically what are widely referred to as "patent trolls"—companies that sustain themselves on the profits of patent lawsuits.
On June 4, the White House, in what it said was in the interest of improving incentives for innovation in high-tech patents, issued five executive actions and seven legislative recommendations, "designed to protect patent innovators from frivolous litigation and ensure the highest quality patents in our system."
The fifth executive order states that once the ITC finds a violation of Section 337—as it did in the case of Apple and Samsung—the commission is responsible for determining whether the devices should be banned.
"Implementing these orders present unique challenges given these shared responsibilities and the complexity of making this determination, particularly in cases in which a technologically sophisticated product such as a smartphone has been successfully redesigned to not fall within the scope of the exclusion order," said the order.
To address such cases, it went on, the U.S. Intellectual Property Enforcement Coordinator will launch a review of the procedures used by the Customs and Border Protection and the ITC to evaluate the exclusion orders and make sure that the process and standards are "transparent, effective and efficient."