Why Obama need not overturn ITC's Samsung ban after Apple veto

There's some who feel Samsung should receive a waiver on the Apple [AAPL] victory against it at the ITC, in the same way its case against Apple was waived. This puerile argument has no substance to it as the circumstances of both cases are very, very different.

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Samsung

Bloomberg reports Samsung wants a presidential pardon because Apple got one -- but the circumstances of these two cases are very different.

Here's why:

We all know the ITC found in favor of Samsung against Apple when the Korean firm beat up on Cupertino using industry-standard FRAND patents. The president, who warned firms not to undermine industry development by abusing the spirit of FRAND agreements, later vetoed the decision.

To use an analogy: if the technology Samsung's patents were part of were children's building bricks, the situation is one in which Samsung is attempting to apply a patent on all the red bricks in the box.

These bricks are part of a set -- hypothetically, if those bricks are removed the collection of bricks ceases to work. In order to build anything you must use these red bricks. Without them the system falls apart.

In this case, Samsung's patents are essential to an industry standard. That's why the firm agreed to license them in an open way to all in the industry who wanted to use them, and to do so at a fair and equable rate to all.

(It amuses me how some Android champions who cling to the word "open" as part of their religion seem so unwilling to respect the need for fair and open dealing in those industry standards their "open" is based on.)

Apple

In Apple's case the argument it has won pertains to functionality that differentiates the Apple products from other devices.

In this case you might imagine that all Apple's building bricks work together, but use a different connection system than those you get from anyone else.

  • They are not part of an industry standard.
  • No one else is forced to use Apple's bricks within their set.
  • No one has to license anything -- they simply have to develop their own product and other connection systems exist. Entire industries do not depend on this element of the product.

The company has no leverage other than offering a distinctive product.

That's quite a difference.

Protectionism? Not really

The difference between these cases doesn't stop Samsung from demanding the same treatment it claims Apple received. Unable or unwilling to concede the different meaning of the two findings, it states:

“The world is watching how Samsung is treated by the United States in this ‘smartphone war. The administration has a significant interest in avoiding the perception of favoritism and protectionism toward US companies.”

The world is indeed watching; not because it feels Samsung is an innocent victim of US protectionism, but because it is waiting to see what precisely the US will choose to protect.

Will it protect the unique product identity of a device from a US firm, or will it protect Samsung's right to undermine industry standards by using FRAND patents as a competitive tool?

Plot thickens

Samsung's initial ITC victory may also be in doubt. It emerged today that Samsung used information it learned against a court protection order in its case before the ITC.

FOSS Patents alludes to this in a report into Samsung's use of confidential data provided within the context of an unconnected case this morning, in which Florian Mueller writes:

"What's astonishing is that a lot of what's at issue here occurred months after the first California trial between these parties and when there really wasn't any reason specific to the first California case to use the relevant material. But there were reasons in other contexts. In particular, Apple says that Samsung made use of it before the ITC, and it then delayed Apple's access to information on the occurred violations so that Apple wasn't able to leverage this in its efforts to avoid an ITC import ban. Fortunately for Apple, the import ban was vetoed anyway."

This shows (I think) that Samsung made use of data to which it should not have been party in order to win the ITC victory that was vetoed. Not only did it do this but it also delayed Apple's access to information pertaining to this, thus undermining Apple's defense before the ITC, as I understand FOSS patents.

The repercussions of the scandal regarding Samsung's treatment of confidential data acquired in a separate case involving Nokia, Samsung and Apple are such that the Korean firm may face sanctions by the ITC.

What does this mean?

It suggests the ITC finding against Apple may not have been upheld had such full disclosure been made. If that's the case then Samsung's plea that the US administration overturns the finding against it sounds even less plausible. There's no quid pro quo here. The cases are different and Samsung's victory at the ITC is conceivably open to question.

Shut down, not show down

Samsung's appeal for clemency has one other hurdle to overcome. The shut down of the US government means the case is unlikely to be looked at by the president's people -- because there are no people around to look at the case.

Jung Dong Joon, a patent lawyer with SU Intellectual Property told Bloomberg: “There’s a little chance that the U.S. government will veto this time amid the government shutdown there now. Samsung may have to take comfort from the fact that those that will be banned are old products.”

Old products, perhaps, but as the litigation continues it seems clear that whatever the outcome, Samsung's no holds barred approach is doing serious -- and probably permanent -- damage to that firm's reputation.

Talk is always better than war. At some point it must surely make sense for the two firms to reach some form of settlement, if only to salvage Samsung's reputation.

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