Friday, January 25, 2013

U.S. trade agency investigates Samsung's countercomplaint against Ericsson

Today the United States International Trade Commission (USITC, or just ITC), a government agency with quasijudicial powers to ban infringing products from importation into the U.S. market, announced its decision to investigate Samsung's December 21 complaint against Ericsson. I have yet to see a case involving such major players that the ITC would decline to investigate.

The ITC is already investigating Ericsson's earlier-filed complaint against Samsung. An Administrative Law Judge (ALJ) earlier this week set a target date for the final ruling on that matter: April 8, 2014, which would be 15 months after institution of the investigation and two months earlier than the ITC staff, which participates in certain investigations as a third party, recommended (Ericsson proposed 14 months, Samsung suggested 20 months due to the size and complexity of the case).

The two investigations will proceed separately from each other, with different schedules, just like Apple and Samsung's complaints against each other are being investigated independently. Unlike U.S. federal courts, the ITC does not allow defendants to raise counterclaims, and it does not consolidate investigations of cross-complaints (though it does consolidate investigations in which different defendants have to defend themselves against the same patents).

Either party is asserting standard-essential patents (SEPs) and non-SEPs in this dispute. The SEPs-in-suit here are related to 4G (LTE). In a filing recommending that the SEP-based parts of Samsung's complaint not be investigated, Apple said that "Samsung is now expanding its misconduct from the third-generation telecommunications standard, UMTS, into the emergent fourth generation Long-Term Evolution (LTE) standard".

Last weekend I discussed this mutual pursuit of injunctive relief over SEPs as an example of how the "defensive use" exception in the proposed FTC-Google deal threatens to harm U.S. consumers. If the logic of the envisioned antitrust settlement was applied to the dispute between Ericsson and Samsung, both parties would be free to seek and enforce U.S. import bans and injunctions in federal court not because such conduct is desirable but because it would be mutual. While I agree that none of two parties behaving in materially the same way should be disadvantaged in such a dispute, equal fighting chances can be ensured by prohibiting the pursuit of SEP-based injunctions altogether, without exceptions, as the FTC did in a recent agreement with Bosch.

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