President Obama vetoes iPhone sales ban, Samsung disappointed

04 August, 2013

The administration of the US President Barack Obama has recently issued a veto on the pending sales ban of certain older Apple products (the iPad 2 or earlier and the iPhone 4 or earlier). Following a ruling of the US International Trade Commission (ITC) back in early June, the products were supposed to be banned from selling because of violation of a certain Samsung-owned standards-essential patent.

The Obama administration stepped up and disproved the ITC determination to issue an exclusion order and cease and desist order due to its effect on "competitive conditions in the U.S. economy and the effect on U.S. consumers." This action is entirely in the competence of the President's office although this block of the ITC ban is said to be the first of its kind since the Reagan administration in 1987.

Obama's office reminds of "the potential harms that can result" from using standards­-essential patents for "gaining undue leverage and engaging in “patent hold­up". It reminds that standards­-essential patents should be easily accessible for licensing under FRAND terms, which, they consider, was not the case with this Samsung's patent.

Back in June, the ITC ruled that Apple was violating one of Samsung’s smartphone and tablet-related patents. Due to that decision, Apple was about to face bans on the sales of certain AT&T iPhone and iPad models. Apple was highly disappointed because they claimed Samsung would readily license the said patent to anyone else interested, yet it insisted on a sales ban in Apple's case.

Companies holding standards­-essential patent such as the one in question, are obliged to license these to third parties on terms that are Fair, Reasonable, And Non­Discriminatory (hence FRAND). According to Apple, in this case Samsung was far from offering them FRAND licensing terms.

Up until now Apple was appealing the ITC's initial ruling and the Commission was supposed to come up with a final ruling on August 9.

Fortunately, the block does not mean the patent holder is not entitled to a compensation, just on the contrary.

Samsung has already responded to the decision of the president's office:

“We are disappointed that the U.S. Trade Representative has decided to set aside the exclusion order issued by the U.S. International Trade Commission (ITC). The ITC’s decision correctly recognized that Samsung has been negotiating in good faith and that Apple remains unwilling to take a license.”

Quite expectedly, Apple's stance on the President's office decision is just on the contrary:

We applaud the Administration for standing up for innovation in this landmark case. Samsung was wrong to abuse the patent system in this way.

We are yet to see which direction this thing takes. It's more than obvious that the Apple vs. Samsung patent brawls are already getting out of hand. It's getting increasingly harder to tell who's right and who's wrong.

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