USTR Support Of USITC Ban On Samsung Imports Contrasts With Earlier Position

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The Office of the United States Trade Representative (USTR) yesterday approved the US International Trade Commission’s ban on imports of certain electronics from Samsung, based in part on the fact that the patents in the case do not involve standard essential patents (SEPs). By contrast, concern over SEPs was a big reason for the recent White House decision to overturn a USITC finding that Apple had violated Samsung’s patents.

Standard essential patents are those considered essential to an industry standard, for which the owner has promised to licence on fair, reasonable and non-discriminatory terms.

The White House disapproval of the earlier order against Apple was based on the assumption that Samsung’s patents were standard-essential and raised concern about the possible impact, but the USITC found that Apple had not made its case that the patents were SEPs (IPW, Inside Views, 26 August 2013).

“The most recent previous case in which the USTR issued a decision turned on the appropriate role of exclusion orders in circumstances involving standards-essential patents,” USTR said in an 8 October statement. “The patents at issue in this case are not standards-essential patents.”

The US government and courts have been struggling to clarify their position on standard-essential patents (IPW, US Perspectives, 29 July 2013).

In the 8 October press release (apparently not available on the USTR website due to the government shutdown), US Trade Representative Michael Froman announced his decision on the Obama administration’s review of the USITC determination. The USITC case is titled, Certain Electronic Digital Media Devices and Components Thereof, Investigation No. 337-TA-796 (unfortunately not available as the USITC website is down due to the US government shutdown).

USTR noted that on 9 August, “the USITC determined that Samsung had violated Section 337 of the Tariff Act of 1930, as amended, in the importation of certain devices (e.g. smartphones and tablet computers) that infringe claims of two patents owned by Apple.”

Based on this determination, USTR said, “the USITC issued a limited exclusion order prohibiting the unlicensed importation of infringing devices manufactured for or on behalf of Samsung. The Commission also issued a cease and desist order that prevents Samsung from engaging in certain activities, such as sale of these products in the United States.” USTR conducted a review of the determination, “to determine if it should be disapproved on policy grounds,” USTR said.

“After carefully weighing policy considerations, including the impact on consumers and competition, advice from agencies, and information from interested parties, I have decided to allow the Commission’s determination … to become final,” Froman said in the statement. This is in line with successive administrations policy of restraint, he said.

But it is in stark contrast to this administration’s action taken just a few weeks earlier.

Meanwhile, Froman said Samsung has raised concerns about the scope of the USITC determination and possible issues related to the US Customs and Border Protection interpretation and enforcement of the resulting exclusion order.

The Office of the Intellectual Property Enforcement Coordinator (IPEC) is conducting an interagency review “aimed at strengthening the procedures and practices used during the enforcement of USITC exclusion orders,” Froman said. Agencies such as USTR, the Department of Justice, the Department of Homeland Security, and several others are working on this. Froman added that since the exclusion order included a list of devices not found infringing, concerns about enforcement related to the scope of the order “do not provide a policy basis for disapproving it.”

“The USITC found that the exclusion order will have minimal effect on the availability of Samsung products, especially since Samsung has been able to make changes to its products so that they avoid infringing the two Apple patents at issue in this case,” the USTR statement said.

“The most recent previous case in which the USTR issued a decision turned on the appropriate role of exclusion orders in circumstances involving standards-essential patents. The patents at issue in this case are not standards-essential patents.”

USTR also insisted in the statement that, “The nationality of the companies involved played no role in the review process. Both Samsung and Apple are important contributors to the U.S. economy and help advance innovation and technological progress.”

William New may be reached at wnew@ip-watch.ch.

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