President Obama’s administration has overturned a patent ruling that would effectively have banned some iPhone and iPad models in the US. A government official said the rare veto was necessary to protect competition and consumer interests, but it’s the issue of standards-essential patents that is really the key here.
The case is separate to the ongoing disputes in the US court system. Instead it involves a ruling by the International Trade Commission, a quasi-independent US government agency. The ITC’s main role is to advise the US government on trade issues, but it does have some powers to enforce intellectual property rights in a trade setting.
It was those powers the ITC used after a complaint by Samsung that Apple had violated a patent relating to 3G. The ITC responded by banning the importation of the iPhone 3, 3GS and 4, along with the 3G versions of the original iPad and iPad 2. The ban did not stop Apple selling the products, though with all production handled overseas that would have been the long-term effect — at least for those models Apple still sells.
Whenever the ITC makes such a ruling, its effect is delayed for 60 days pending a review by the White House. It’s reportedly rare that this is much more than a formality, and few analysts predicted the Obama administration would wade into this particular dispute.
However, Michael Froman, a US Trade Representative, has now written to the ITC on behalf of the President, formally “disapproving” the order. He said the decision was based on the import ban’s “effect on competitive conditions in the US economy and the effect on US consumers”, two of the five official reasons the President’s office can cite in overturning an import ban.
It was the accompanying explanation that was more important though. Froman specifically said the decision was influenced by the fact the case involves a standards-essential patent. Such patents must be offered to all rivals on a “fair, reasonable and non-discriminatory” basis. In this case Apple claims it made a reasonable offer to license the technology and was turned down.
Froman stressed that his decision made no judgment about whether or not Samsung or Apple were in the right here, and noted Samsung is perfectly entitled to pursue the alleged violation through traditional court routes.
However, Froman strongly hinted that he will overturn any proposed import ban in cases which involve standards-essential patents and in which there’s a dispute about whether the alleged violator has been given a reasonable opportunity to license a technology. That marks a major momentum shift away from patent holders in many tech cases.