Friday, December 30, 2011

High-ranking ITC official wants 'more searching inquiry' of impact of Android product bans

With a number of judicial decisions involving Android scheduled for next year, the debate over public interest factors relating to injunctions and import bans is not going to stop anytime soon. The latest contribution to it comes from International Trade Commissioner Dean A. Pinkert. At the top of the ITc, there's a six-member decision-making body briefly called "the Commission". It consists of six commissioners. One of them is chairman, another one is vice chair, and Mr. Pinkert is one of the other four members.

Yesterday, Mr. Pinkert filed a public version of his "additional views [...] on remedy and the public interest" in connection with the technically narrow exclusion order against HTC's Android products that the ITC handed on December 19, 2011.

The commissioner's four-page statement starts off stating that he concurs with his colleagues "regarding the remedy that is appropriate in this case", but he wrote separately in order to document inhowfar he differs from his colleagues' reasoning with respect to public interest factors. In his summary, he reiterates that he just "wish[es] to emphasize that the existence of substitutes for the infringing devices does not obviate consideration of the likely impact of exclusion on the range of choice available to consumers in the smartphone marketplace" and notes that "[s]uch impact may warrant more searching inquiry in other investigations".

Since the reasoning of the ITC's decision is not yet available (I believe a redacted version should enter the public record soon, but it hasn't yet), it's difficult to gather from the commissioner's brief statement which parts of the majority opinion he doesn't support.

He agrees with Apple on a number of points and argues that the decision apparently gives HTC enough time for adjustments. I think that's an understatement. In a way, HTC's immediate announcement after the ruling that a workaround is in place and its claim that the feature is rarely used (discussed in this recent post) calls into question that the ITC's decision to delay the impact of its decision by four months (two of which would be available for the presidential review anyway) made sense. By the time the import ban against devices implementing one particular patented feature takes effect, more than two years (!) will have passed since Apple's original complaint. HTC had all the time it needed to prepare for this kind of ruling, and it's now clear that the ITC was overly generous with the transitional period it granted.

In fact, the ITC was so generous, or lenient, in this case that this could be a case of an abuse of discretionary power. If Apple asked the Federal Circuit to review this particular aspect of the decision, HTC's own statements would prove that the ITC tolerated a proven case of patent infringement for a transitional period that was simply not needed. An appeal against the ruling may make sense for Apple with respect to the ITC's finding of no violation of a much broader patent-in-suit, but the delayed effect of the import ban may not appear worthwhile appealing from a practical point of view. I just wanted to point out that the ITC's related approach is more than debatable.

In his "additional views", Commissioner Pinkert notes that some of HTC's public interest arguments were based on the competitive relevance of all Android handsets as opposed to only HTC's own products. I would agree with him that in any future decisions on Android-based devices, the availability of Android-based products from multiple vendors must be considered carefully. Footnote 2 of Commissioner Pinkert's statement notes a "non-exhaustive list of non-HTC 4G Android handsets offered for sale on carriers' websites and websits of their resellers on November 24, 2011". That list is pretty impressive and shows, in my view, that HTC grossly overstated the impact of an import ban against HTC on choice in the market.

It's reasonable to argue, as Commissioner Pinkert does, that "the availability of substitutes does not necessarily mean the consumer's desire for quality and variety can be satisfied in the absence of the infringing devices", especially "in a rapidly changing, technologically driven, market like today's smartphone market".

But valid questions aren't necessarily the most pertinent ones in a given case. In my view, the most important question that the decision on Apple's first complaint against HTC raises is the following one: are any delays of import bans, or denials of cease-and-desist orders, justifiable in cases in which the respondent(s) had plenty of time, counting from the filing of the complaint or possibly even earlier infringement notices, to remove features without which the products concerned can still be sold?

If the ITC hands technically narrow rulings, as it did in this case, it's hard to see why it would be against the public interest to put an end to such infringement that can be easily avoided (and that could have been avoided for quite some time).

The US International Trade Commission will continue to receive invitations from various stakeholders to turn itself into the US Infringement Toleration Commission. It will have to be vigilant, and it will indeed have to conduct "more searching inquiry" in this context.

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