Today a "notice of new facts" that Apple's counsel filed on Friday in connection with the ITC investigation of Samsung's complaint entered the public record. On November 20 I already reported that FRAND issues are key to the ongoing review of an initial determination that didn't hold Apple to infringe any valid Samsung patents, given that Samsung is not completely unlikely to prevail on one of its standard-essential patents (SEPs).
Apple's notice informs the ITC of Samsung's "remarkable about-face [last] week" in the form of "withdrawing its requests for injunctive relief on allegedly standard-essential patents in its pending cases against Apple in courts throughout Europe", and of the issuance of a Statement of Objections (SO), which is a preliminary ruling and bears considerable weight.
Apple presents Samsung's entire statement on the withdrawal to the ITC, based on this report by CNET's Don Reisinger, which serves as Exhibit A to Apple's notice. This is what the corporate statement said:
"Samsung remains committed to licensing our technologies on fair, reasonable and non-discriminatory terms, and we strongly believe it is better when companies compete fairly in the marketplace, rather than in court. In this spirit, Samsung has decided to withdraw our injunction requests against Apple on the basis of our standard essential patents pending in European courts, in the interest of protecting consumer choice."
And this is how Apple highlights the striking contradiction between Samsung's statement on the European withdrawal and the position it takes vis-à-vis the ITC:
"Here, in the [337-TA-]794 [ITC] Investigation, Samsung recently argued that 'U.S. customers will not be harmed if an exclusion order is entered here,' and '[t]o the contrary, the interests of U.S. consumers favor the enforcement of standard-essential patents[.]' (Samsung's Initial Submission, Dec. 3, 2012, Public Version at 19.) Samsung's new admission in Europe that foregoing injunctive relief is 'in the interest of protecting consumer choice' fundamentally contradicts its position here in the ITC, and demonstrates that its pursuit of exclusionary remedies on declared-essential patents is in fact anticompetitive."
This is quite a "gotcha". I also wrote in my commentary on Samsung's withdrawal that "I would encourage Samsung to do so in other jurisdictions as well". Apple is now basically making the same suggestion. Rightly so. What's good for the goose is good for the gander. And what's good for European consumers (on that one I totally agree with Samsung) should not be withheld from consumers in the United States, Asia, Australia, or anywhere else. Are Americans second-class citizens compared to Europeans? I don't think so. And I don't believe Samsung thinks so either. But then its explanation doesn't make sense.
In retrospect it would have been a smarter choice for Samsung, on this global chess board, to provide a rationale for the European withdrawals that does not weaken its case elsewhere, especially at the ITC. For example, Samsung could have made a law-of-the-land argument: this is Europe, it's different from the rest of the world, and we've decided to respect the continent's special rules that have a certain tradition in the overall interoperability context. It could even have said that this was meant to be a conciliatory gesture toward the European Commission. All of this would have been more defensive than the consumer-friendliness claim, but it would not have adversely affected its ITC case, and two days after Samsung's withdrawal everyone could see why it happened: because Samsung had an SO coming from the European Commission.
Through its notice Apple also tries to get mileague out of the fact that an SO was issued. The SO itself is not publicly available (a future ruling by the European Commission would be published in a redacted form, but we're far from that point). But the EU regulator's press release and related Q&A document provide Apple with high-level preliminary findings that definitely have a bearing on some of the public interest issues surrounding the ITC investigation in which Samsung is seeking a U.S. import ban. It is a preliminary finding of anticompetitive behavior, the Commission describes Apple as a "potential licensee [that] has shown itself to be willing to negotiate a FRAND licence for the SEPs", and it furthermore explains that "recourse to injunctions harms competition" in such a case. An ITC import ban is also a form of injunctive relief. It furthermore makes Samsung look bad that its unilateral withdrawal "does not alter the [European] Commission's preliminary conclusions about the anti-competitive nature of Samsung's conduct thus far" (as the European Commission's Q&A states).
The U.S. and the EU are obviously different jurisdictions, and the ITC, a trade agency with IP-related quasi-jurisdictional competencies, is not the counterpart of a competition enforcer (that would be the FTC and the DoJ in the U.S., and the European Commission's Samsung Q&A notes close contact between those agencies). Also, an SO is just a preliminary ruling (though it does mean quite something after almost a year of formal in-depth investigations). That said, the ITC will understand that if it granted Samsung (or any other SEP abuser) a U.S. import ban while other decision-makers in the Western hemisphere -- U.S. federal courts as well as the European Commission and various European courts -- vigorously oppose the pursuit and the enforcement of injunctive relief against willing licensees, it would appear to disregard the interests of consumers and of a functioning standards system. And there are some influential lawmakers on Capitol Hill who would not view this favorably.
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