ITC Rules in Favor of Apple, Orders Ban on Samsung Devices

We recently reported that the Obama administration had vetoed the International Trade Commission’s ban on the import of certain Apple iPhones and iPads, citing concerns of patent holders gaining “undue leverage.” The veto reversed an earlier legal victory for rival Samsung, which suffered another setback on Friday when the ITC ruled that the South Korean manufacturer had violated two of Apple’s patents — and issued an order banning the import of products using Apple’s multitouch features and headphone jack detection.

Apple also requested on Friday that a federal appeals court reverse a district court judge’s decision not to ban Samsung devices following last year’s jury verdict that determined Samsung had breached Apple’s patents.

“Specific Samsung products affected by the ITC order weren’t spelled out in the order Friday, though an earlier ruling by an agency judge pointed to older products that include the Galaxy S II smartphone and Galaxy Tab 10.1 tablet computer,” reports The Wall Street Journal. “The ITC found that Samsung infringed on parts of one Apple patent that covers elements of swiping a finger across the display of a device, a key feature of nearly all smartphones and tablets. It also cited parts of another patent related to headphone jacks.”

The ITC ruling generated mixed reactions. While Samsung claims it has modified devices to address Apple’s patent claims, some attorneys believe the ruling could provide Apple with leverage in negotiating settlements with Samsung.

However, President Obama’s administration could overturn the ITC’s import ban on public policy grounds, as it did earlier this month in an import ban against older iPhones.

“These results give Apple a bit of an edge in the settlement negotiations that are going on,” suggested Susan Kohn Ross, an attorney with Mitchell Silberberg & Knupp in Los Angeles. “Assuming this order becomes final, the question that arises is how important are these models of phones and other electronic gadgets to the overall portfolio of Samsung products.”

“Apple filed its first patent infringement case against Samsung in April 2011,” notes Businessweek. The two companies have reportedly spent hundreds of millions of dollars in legal fees in an effort to become the victor in a final, negotiated solution. “At stake is an increased share of a smartphone market that rose 34 percent to $293.9 billion last year, according to data compiled by Bloomberg.”

“Investors are turning away from legal issues because it hardly has any impact on their businesses any more,” said Marcello Ahn, analyst at Quad Investment Management. “What they really want to find out is where Samsung and Apple will make cash over the next two years or so.”

“Hopefully at some point, rational heads will prevail and they will sit down and discuss some mutually acceptable licensing scheme,” added Ronald Yu, who teaches patent law at Hong Kong University.

Related Stories:
Samsung Losses to Apple Give iPhone Maker Edge in Talks, Businessweek, 8/12/13
ITC Ban Deals Blow to Samsung in U.S.The Wall Street Journal, 8/10/13
U.S. Panel Orders Import Ban on Some Samsung Devices, The Wall Street Journal, 8/10/13
Apple Asks Court for Sales Injunction Against Samsung, Computerworld, 8/9/13
Obama Administration Vetoes ITC Ban on iPhones and iPadsETCentric, 8/8/13
Justice Department Seeks to Monitor Apple’s iTunes Store, ETCentric, 8/8/13