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Iphone Government Patents United States

Obama Administration Overrules iPhone Trade Ban 397

Posted by Soulskill
from the did-not-see-that-one-coming dept.
Back in June, the U.S. International Trade Commission issued an import ban on the iPhone 4 and iPad 2 3G due to patent violations. Now, the White House has exercised its privilege to overrule the ban. In his letter to the ITC (PDF), Ambassador Michael Froman said 'he was not making a decision about the merits of Samsung's case, or its right to seek compensation. Rather, he emphasized that because the patent in question was now a widely held technology standard, banning the products in question would be too disruptive to consumers and the economy.' This is the first time an ITC decision has been overruled since 1987.
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Obama Administration Overrules iPhone Trade Ban

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  • You know (Score:5, Informative)

    by oldhack (1037484) on Saturday August 03, 2013 @05:03PM (#44466893)
    Money buys a lot.
    • Sure (Score:3, Insightful)

      by Anonymous Coward

      Money buys a lot.

      Double standards if nothing else.

    • Re: (Score:2, Insightful)

      by skovnymfe (1671822)
      At least they're not keeping the buyoffs a secret anymore. With all their promises of transparency and all, this is a lovely sign.
    • Re:You know (Score:5, Informative)

      by Trepidity (597) <delirium-slashdot&hackish,org> on Saturday August 03, 2013 @05:35PM (#44467087)

      Apple doesn't actually donate much to politicians at all, and their lobbying budget is exceptionally small for a company of their size, so I doubt that's the reason.

      My guess is that this is actually for the stated reason. Whether it's a good reason or not is another question, but I don't think they're covering up a hidden motive here. Basically, the iPhone 2 and 4 sell a lot in the U.S., and banning them would disrupt the U.S. economy to some extent, so they chose not to.

      The statute authorizing the ITC pretty explicitly contemplated that possibility, which is why it has an opt-out clause for the president to cancel ITC orders if he determines they would be too disruptive to the economy.

      • Re:You know (Score:4, Informative)

        by Tough Love (215404) on Saturday August 03, 2013 @05:58PM (#44467221)

        Apple doesn't actually donate much to politicians at all...

        And yet judges and presidents seem to display a consistent bias. Funny that.

        • Maybe they don't have to pay for "patriotism." That is, seems like it's always the domestic firm which wins out in these cases (except this time, until the White House overruled).
          • Re: (Score:3, Informative)

            by runeghost (2509522)
            It's not patriotism, it's just that America's odd system of post-facto and indirect bribery confuses foreigners, who are used to more honest corruption.
      • Re:You know (Score:5, Insightful)

        by Anonymous Coward on Saturday August 03, 2013 @05:58PM (#44467223)

        It also probably doesn't hurt that Apple is a US based corporation, while Samsung is Korean. I'd bet if this was a Samsung vs Asus or Sony dispute, the Obama administration would not have stepped in.

        • Re:You know (Score:5, Insightful)

          by Dunbal (464142) * on Saturday August 03, 2013 @07:04PM (#44467457)
          US based corporation? You mean the one publicly traded on the stock exchange, with manufacturing facilities in China? The one that ships iPhones and iPads directly from China? Or is it because they have an office in Cupertino that you consider them US based?
          • Re:You know (Score:5, Funny)

            by am 2k (217885) on Saturday August 03, 2013 @07:20PM (#44467539) Homepage

            It's designed by Apple in California, it says so on back side of the case!

          • Re:You know (Score:5, Interesting)

            by samkass (174571) on Saturday August 03, 2013 @07:42PM (#44467657) Homepage Journal

            US based corporation? You mean the one publicly traded on the stock exchange, with manufacturing facilities in China? The one that ships iPhones and iPads directly from China? Or is it because they have an office in Cupertino that you consider them US based?

            But where is the value added? Every other phone maker in the world makes their phones in the exact same factories in China. Why aren't they all worth the same amount? Almost every dollar of value added over a simple sum of the cost of the parts (plus a couple dollars for assembly) is added in California. And even after the sale, Apple's call centers are all in the US to help get them their astronomical satisfaction numbers. Apple's about as US-based a corporation as you can get in that industry.

            • by Anonymous Coward on Sunday August 04, 2013 @02:11AM (#44468505)

              Almost every dollar of value added over a simple sum of the cost of the parts (plus a couple dollars for assembly) is added in California.

              Apple has filed legal documents that say that's untrue, and in May Tim Cook testified in front of The Senate Permanent Subcommittee on Investigations where he reiterated that a large percentage of the dollar value added by Apple is added in Ireland.

          • Re: You know (Score:5, Informative)

            by SvnLyrBrto (62138) on Saturday August 03, 2013 @08:45PM (#44467837)

            That "office in Cupertino" is a campus the size of a small college plus satellite offices throughout the rest of town. It employs well over ten thousand people. And those are the high-value, well-paying jobs that propel people into the upper-middle class and beyond.

            Really, what's with the obsession with the location that a widget is put together, when the design, programming, and engineering (The good, high-value jobs that I'd actually like to have.) are all done here?

            • Re: You know (Score:5, Interesting)

              by Anonymous Coward on Sunday August 04, 2013 @12:40AM (#44468337)

              Actually a lot of the engineering is done in Asia:

              * The screen is designed and built by Sharp in Japan.
              * The CPU and SoC is designed and built by Samsung and/or Exynos in Korea.
              * The Plastic tooling and dies are designed by a subcontractor to Hon Hai in Shen Zhen from designs for the part from Apple or a subcontractor in California (or possibly elsewhere)
              * The motion estimation parts are designed by Intersil in California
              * The production system is designed and managed by Hon Hai in Shen Zhen
              * The Flash is designed by Samsung or Micron in Korea or Taiwan

              It's safe to say it is an international collaboration, but they don't say that, they just say "Designed by Apple in California".

              The obsession with where the widget is made is because some people have some foresight and can see that once you give all your manufacturing capability (the hard bit) to another country, it won't take that long for that country to figure out the design (the easy bit), and cut you out of the loop. In fact this happened and now look at the Samsung Galaxy and all the Chinese Android devices (which are nearly as good and much, much cheaper). I can buy a near-equivalent to a Galaxy tablet for US$99 from Ali Express.

          • You missed one (Score:4, Informative)

            by SuperKendall (25149) on Saturday August 03, 2013 @10:41PM (#44467985)

            One of the few computer companies moving more manufacturing to the U.S. (the new Mac Pros are made in the U.S.).

            Or the one with many hundreds of retail stores in the U.S. bringing in billions of revenue each year to U.S. states?

            So yes, THAT U.S. based corporation. It's more U.S. based than just about any other at this point...

            • Re: (Score:3, Insightful)

              by AmiMoJo (196126) *

              The one that doesn't pay any corporation tax or tax on its vast cash stockpiles? I think you will find that for Apple Inc. is not a US company, at least as far as taxation goes.

      • Re:You know (Score:5, Insightful)

        by dmbasso (1052166) on Saturday August 03, 2013 @06:02PM (#44467237)
        Now when a 3rd-world country decides to ignore pharmaceutical patents to save its people from dying, that is crossing the line! Retaliation through economic restrictions must apply!
        • Re:You know (Score:5, Informative)

          by Trepidity (597) <delirium-slashdot&hackish,org> on Saturday August 03, 2013 @06:26PM (#44467339)

          I think there's definitely some bias towards a U.S. company here, but fwiw, this isn't actually setting aside the patents or authorizing ignoring them. It's purely an import-regulations decision, not a patent-law decision. U.S. customs will not stop iPhone imports as a result of this ruling, but that doesn't mean it's actually legal to sell them in the US. Samsung can still sue Apple in regular courts for patent infringement.

          • by symbolset (646467) *
            With no injunction capability, the patents can be safely ignored. Not that injunctions were going to do anything anyway. We're talking about the iPhone 4 and the iPad 2 here. By the time things get to this point we're already two or three generations ahead on products anyway.
            • by Trepidity (597)

              A regular court could still issue an injunction prohibiting sale, if Apple lost and the court determined that was the appropriate remedy. The import-regulations decisions really don't have anything to do with the regular patent-law system. In a way it's silly that they exist at all, since patent complaints should be adjudicated in a regular patent lawsuit, not via some backdoor administrative procedure.

      • Re:You know (Score:5, Informative)

        by MacDork (560499) on Saturday August 03, 2013 @07:43PM (#44467659) Journal

        Apple doesn't actually donate much to politicians at all, and their lobbying budget is exceptionally small for a company of their size, so I doubt that's the reason.

        They don't need money. They have connections. Apple has Al Gore on their board of directors. [apple.com]

        My guess is that this is actually for the stated reason. Whether it's a good reason or not is another question, but I don't think they're covering up a hidden motive here. Basically, the iPhone 2 and 4 sell a lot in the U.S., and banning them would disrupt the U.S. economy to some extent, so they chose not to.

        Moral of the story. Intellectual property can only be enforced in the USA if your company has connections. Samsung violates Apple patents? 1 Beeeeelion dollar fine. Apple violates Samsung patents? Presidential pardon.

        If I were Samsung, I'd stop selling components to Apple until they decided to pay their licensing fees. That would put a stop to iPhone4 and iPad2 just as fast as an injuction. That would put a dent in new Apple products too.

        The statute authorizing the ITC pretty explicitly contemplated that possibility, which is why it has an opt-out clause for the president to cancel ITC orders if he determines they would be too disruptive to the economy.

        'too disruptive to the economy'? Read: Enforce laws only on companies full of dirty slant eyes who we don't like here in 'murica.

        • Re: (Score:3, Interesting)

          by Trepidity (597)

          Samsung lost in an actual court, which Apple hasn't. This was just an administrative procedure, which explicitly gives the President the authority to consider policy preferences in making decisions.

          If Samsung wants to, they can file a proper patent lawsuit in a proper court, instead of trying for this backdoor ITC procedure. The president has no authority to set aside the judgment in a regular patent suit.

          • Re:You know (Score:4, Interesting)

            by MacDork (560499) on Sunday August 04, 2013 @01:40PM (#44470745) Journal

            There doesn't need to be a trial because there's no question that Apple is breaking the law. That is not in dispute. The Obama regime didn't say the judge was wrong and that laws were not broken. The Obama regime is specifically saying that Apple has the priviledge to break the law until Samsung decides to accept what Apple is willing to pay them.

            You know what this reminds me of? This reminds me of the time when AllOfMP3 decided to sell music they didn't have rights to sell in the US. AllOfMP3 actually offered to pay licensing fees to the RIAA, but only what AllOfMP3 thought was fair. That amounted to a few pennies per song, and the RIAA wasn't hearing any of that. Russia sided with AllOfMP3 and it was all perfectly legal there. The US music industry had to pursue other avenues to shut them down. In the end, they cut of the payment processing with Visa/Mastercard.

            So, I would expect to see new Korean law that allows Samsung to terminate Apple contracts for failure to pay licensing fees soon, if such a law does not already exist.

            I'm really beginning to think the Obama regime is destined to destroy the entire tech industry in the US. Between this and Snowden's revelations, they've driven a stake through the heart of the tech industry. Now they're just nailing the coffin shut for good measure. By the end of his second term, no one anywhere is going to want to do business with US tech companies anymore. He will have accomplished what no other US dictator has managed to do. Kill the goose that laid the golden egg over in silicon valley...

        • by Wingsy (761354)
          "Moral of the story. Intellectual property can only be enforced in the USA if your company has connections. Samsung violates Apple patents? 1 Beeeeelion dollar fine. Apple violates Samsung patents? Presidential pardon."

          Not yet have I heard anyone mention FRAND. The patents in question are those that Samsung got incorporated into standards (essential for interoperability of cell phones) and in exchange agreed to license those patents on fair and reasonable terms. And FRAND patents being offered to Apple a
      • Re: (Score:3, Insightful)

        by sycodon (149926)

        People will rue the day that they allowed the Executive Branch to so widely ignore laws on immigration, health care, spending and now finding of a duly authorized organization.

      • by Yvanhoe (564877)
        Oh yes, I do think that preserving US GDP is the main reason there. I find it highly ironical however that US declares that the IP laws (that are mainly a US invention in their current form) are valid, except when a large amount of money is involved and that this amount will be taken from US GDP.

        If the ban was active, this flow of money would still exist but would go in a non-US company's pocket. This event is the admission that IP laws are just seen as a US domination tool. Not as a fair rule of the game
    • Please actually read the source articles out there.

      Fosspatents:
      "Florian Mueller of Foss Patents, who has been following Apple and Samsung’s case before the ITC, called today’s veto “a victory for consumers and fair competition.”"

      Forbes:
      "To the surprise of almost no one the Obama Administration has overturned the looming ITC ban on the imports of certain of Apple's older products...The particular reason used was that the patent in question was a standards essential one... This seems r

  • Strangely... (Score:4, Insightful)

    by kervin (64171) on Saturday August 03, 2013 @05:03PM (#44466903) Homepage

    The same was not done for Samsung when their products were banned over flimsier design patents

    • Re:Strangely... (Score:4, Informative)

      by sessamoid (165542) on Saturday August 03, 2013 @05:08PM (#44466935)
      Because those patents were not submitted and accepted as FRAND. Samsung agreed to license these technologies in Fair, Reasonable, and Non-Discriminatory terms. Anybody can use their patented technologies, and the only question is how much they get paid for them. When any infringement can be resolved with monetary payment, injunctive relief is not an appropriate tool. Samsung can always be made whole at any point in time with a monetary judgment.

      Apple made no such promises to any industry group concerning the design patents in question. They did make such a promise over the mpeg4 container, which is just the .mov container that quicktime has used for ages, and they have never attempted to get an import injunction over that patent or any others that they submitted to standards bodies.
      • Re:Strangely... (Score:5, Informative)

        by sconeu (64226) on Saturday August 03, 2013 @05:25PM (#44467031) Homepage Journal

        And Apple has refused to license those patents. They have refused to negotiate to license them. They have even stated that they will not accept a court-ordered license fee unless they happen to think it's low enough.

        Tell me, oh wise one, what other recourse did Samsung have?

        • by am 2k (217885)

          Their reasoning was: As a newcomer in the phone area, they didn't have any patents to contribute to that FRAND package, so they would have been the only ones to actually pay licensing fees, giving them an unfair disadvantage in the market.

        • Re:Strangely... (Score:4, Informative)

          by Anonymous Coward on Saturday August 03, 2013 @08:36PM (#44467817)

          Samsung refused to reasonably license the patents. Most FRAND patents are licensed as a percentage of the product using them. However which part of the product is the biggest question. Typically it is the piece that implements the patent. However in this case Samsung wants a percentage of the phone, rather than the typically percentage of the baseband processor (which implements the patent). Notice it is only a few of the products that are unlicensed, most notably ones that don't use Qualcomm modems. Qualcomm licensed the patents for Apple at a percentage of the baseband cost (~3%-5% of ~$20), where the older product Apple was supposed to license them separately and Samsung is asking for ~3%-5% of $450 which is basically discriminatory compared to the other products that license it for 1/20 of the cost.

    • Re:Strangely... (Score:5, Insightful)

      by Rantank (635713) on Saturday August 03, 2013 @05:10PM (#44466953)
      Seems to me the Prez just gave permission for good wholesome American companies to take on anyone they like, and if they lose in any way, shape or form, he'll make sure there's no real harm done. I wonder how long before foreign companies start ring-fencing America as just too expensive and corrupt to operate in.
      • by couchslug (175151)

        " I wonder how long before foreign companies start ring-fencing America as just too expensive and corrupt to operate in."

        That's hilarious. The world has always been corrupt, so the competitve solution is more effective corruption.

      • by SmallFurryCreature (593017) on Sunday August 04, 2013 @03:39AM (#44468719) Journal

        Basically Obama just killed the patent system. The US is no longer the power it once was and it is just legitimized India's moves to take essential medicines out of the patent system. And while American voters can be easily swayed, the rest of the world has just seen that it is okay to ignore US laws when it doesn't suit you and they WILL follow.

        Obama seems determined to go down in history as the worst US president ever. This WILL end up biting the US in the ass. Samsung doesn't care about a billion dollar fine but the US NEEDS the patent system and for it to be respected. You can't win a trade war if you just made your only remaining product worthless.

    • Re:Strangely... (Score:4, Insightful)

      by MachineShedFred (621896) on Saturday August 03, 2013 @05:10PM (#44466957) Journal

      Strangely, design patents are not standard-essential, so the two incidents are not directly comparable.

      Nice try though.

      • by tepples (727027)

        Strangely, design patents are not standard-essential

        If someone had a design patent on brake on the left and accelerator on the right, would that be standard-essential? Or what about a design patent on red light means stop, green light means go?

    • by ATMAvatar (648864)
      True, though it is worth pointing out the self-interest angle: Apple is a US-based corporation, while Samsung is not.
      • Re:Strangely... (Score:5, Insightful)

        by Jeremy Erwin (2054) on Saturday August 03, 2013 @05:28PM (#44467045) Journal

        Of course, if Apple made its products in California, it wouldn't have to import them from its Chinese suppliers.

    • Re: (Score:2, Informative)

      by djupedal (584558)
      You do know how hard it is for some US manufs. to try to be allowed into the S.Korean markets, right? Korea practices protectionism as much as any other country or block. There are many technology and trade agreements in play, with more tapped for future release - actions like this amount to no more than card play in a high stakes give/take game that will take some time to end.
    • by samkass (174571)

      I can't actually find a reference to any case where the ITC has banned Samsung imports over a design patent case. Can you please provide a citation? There's definitely an ITC complaint filed from Apple, but the ITC has delayed ruling on it. Microsoft has a complaint against Motorola (Google), and won, but now the ITC appears to not actually be enforcing the ban... after some secret Google-US Customs meetings, customs decided to let them through anyway despite the ban. And Google is still using standards

  • by elwinc (663074) on Saturday August 03, 2013 @05:07PM (#44466921)
    It would be very wrong of the White House to give one US corporation carte-blanche to ignore a patent. Although the ITC ban may be too strong a response, there's still the fact that Apple has been ignoring a patent for years. They shouldn't be free to continue indefinitely.
    • by gl4ss (559668)

      well if they would just overturn all other patent shit.

      but sure smells like money. btw does this now mean video etc patents are also petionable through white house since they as well are widely used..? why these two irrelevant for today products, and not all phone bans?

    • by stenvar (2789879)

      That hasn't stopped the White House before.

    • by Trepidity (597)

      They can still be sued in regular court for damages. The import procedure is parallel to and separate from regular patent law. If Apple made all their products in the U.S., the ITC wouldn't even have entered into it at all, but they could still be held liable for patent violations.

    • It would be very wrong of the White House to give one US corporation carte-blanche to ignore a patent. Although the ITC ban may be too strong a response, there's still the fact that Apple has been ignoring a patent for years. They shouldn't be free to continue indefinitely.

      I don't think this is the end of the legal fight. The patent wasn't overturned, just the import ban. I doubt the lawyers on either side are surprised. Samsung can still have their day in court and, if they prevail, receive their royalty payments.

    • by 0123456 (636235)

      Good God, man, this isn't just "one US corporation".

      This is Apple.

    • by swillden (191260)

      Nah, they'll only be free to continue for the next year or two. By which time they won't have any reason to import iPhone 4s and iPad 2s anyway.

  • by OpenSourced (323149) on Saturday August 03, 2013 @05:12PM (#44466969) Journal

    Rather, he emphasized that because the patent in question was now a widely held technology standard, banning the products in question would be too disruptive to consumers and the economy

    That argument could be used to sooooo many other patent litigations, and somehow never is, except when the affected part is a big American company.

    • by sessamoid (165542) on Saturday August 03, 2013 @05:16PM (#44466985)

      Rather, he emphasized that because the patent in question was now a widely held technology standard, banning the products in question would be too disruptive to consumers and the economy

      That argument could be used to sooooo many other patent litigations, and somehow never is, except when the affected part is a big American company.

      Actually, only recently have big corporations started trying to use standards-essential patents as tools of corporate warfare. The EU is investigating Samsung [latimes.com] for just this kind of behavior.

      • by makomk (752139) on Saturday August 03, 2013 @05:45PM (#44467149) Journal

        That's probably because Apple was the first big corporation which refused to license those standards-essential patents under the same RAND terms as all of their competitors, again as a form of corporate warfare - they're trying to get all the R&D work required to make modern mobiles possible for free, whilst suing all their competitors who did do the R&D over crap like swipe-to-unlock, meaning those companies can't even make back their costs by selling their own phones!

      • Re: (Score:3, Insightful)

        by a_n_d_e_r_s (136412)

        And only recently have big corporations started to use standards-essential patents and refused to pay the license fee.

        It used to be that big corporation only stole small company patents. Now they steal big corporations patents too - when those big corporations gets angry and wants to get payed for their patents - the abusers run to the government and hide behind their tailcoat

        • It used to be that big corporation only stole small company patents. Now they steal big corporations patents too - when those big corporations gets angry and wants to get payed for their patents - the abusers run to the government and hide behind their tailcoat

          Note that Apple and Samsung (and others) have been on both the abusing and abuser side of this argument.

      • Actually, only recently have big corporations started trying to use standards-essential patents as tools of corporate warfare.

        Depends on how you defend big. Remember the Unisys LZW patent and the Rambus SDRAM patents?

  • by goruka (1721094) on Saturday August 03, 2013 @05:41PM (#44467127)
    And all the Asian companies comply. If this isnt protectionism, I don't know what it is.
  • Figures (Score:4, Informative)

    by Anonymous Coward on Saturday August 03, 2013 @05:48PM (#44467167)

    Apple Political Donations
    Top Candidate Recipients, 2011-2012
    Barack Obama (D) $308,081
    Mitt Romney (R) $28,910
    Ron Paul (R-TX) $16,004
    Nathan Shinagawa (D-NY) $5,000
    Mark W. Neumann (R-WI) $5,000
    http://www.opensecrets.org/orgs/summary.php?id=D000021754

  • by manu0601 (2221348) on Saturday August 03, 2013 @09:03PM (#44467881)
    If applying a court decision against Apple cannot be done because it hurts the economy, I guess there are strong grounds for an antitrust case that would split Apple.

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