In this morning’s Wall Street Journal, columnist Holman Jenkins reports how Verizon proposed that President Obama block the ITC enforcement of an import ban over any infringement finding in the cellphone patent wars. The occasion was Apple’s anticipated victory over Samsung, but Jenkins suggests this should also apply to Samsung’s recent victory over Apple in a separate case.
Although the tables are turned,
Verizon's call for Obama intervention still has merit. The ITC ruling against Apple is rightly surprising and rightly troubling, reflecting mostly the deformities of the agency's own peculiar place in the patent wars.Apple’s loss and the call to change how the ITC impacts patent cases comes the same week that the White House announced executive orders and proposed legislation (based on academic advisors) to make the patent system less arbitrary and more predictable.
The ITC is attracted to injunctions because injunctions are what the ITC is allowed to issue. Samsung would be very unlikely to win a ban on infringing products in the civil courts (where the parties are also fighting). For one thing, the Supreme Court has raised a considerable bar against such injunctions. For another, the patents in question are so-called standard-essential patents, which Samsung presumably is not entitled to exclude others from using, but only entitled to "fair and reasonable" compensation.
The pending ban only impacts the older model iPhones and iPads for the AT&T network. Jenkins notes that the problem is more urgent for Apple than many realize, because its cheaper obsolete model (the iPhone 4) is gaining market share on its latest but more expensive model (the iPhone 5).
Multilateral disarmament of all patent injunctions may be the best thing for the industry. However, from a legal and ethical standpoint, Jenkins minimizes how standards-essential patents are fundamentally different. Because of the way that 3G standardization works, Samsung has made promises for “Fair, Reasonable and Non-Discriminatory” licensing terms which means that it both promises to license the ’348 patent to Apple and to do so at a fair price.
In the US, Judge Richard Posner concluded that such patents should not be entitled to injunctive relief. The European Commission criticized Samsung for anti-competitive and abusive behavior for its efforts (eventually abandoned) to seek such injunctions.
Even more ironic, Florian Mueller reports that in February Samsung asked the ITC not to ban Samsung products from the US for violating Ericsson standards-essential patents. As Samsung argued before the ITC:
Like other SSOs, ETSI, IEEE, and 3GPP have developed IPR Policies designed to ensure that investment in standard-setting and standard-compliant equipment is not wasted as a result of essential IPR being unavailable or only available under unreasonable and/or discriminatory licensing terms.