Friday, May 31, 2013

ITC extends target date for Samsung-Apple FRAND patent case until Tuesday (June 4)

The United States International Trade Commission (USITC, or just ITC) has just given notice of its decision to extend (once again) the target date for its ruling on Samsung's complaint against Apple. The highly-anticipated ruling, which will most likely require the ITC to take a position on FRAND licensing issues for the first time in a final determination, is now scheduled to come down on Tuesday (June 4). In mid-March the ITC had previously postponed the resolution of this case, setting a target date for today (May 31) and raising questions specific to a FRAND-pledged standard-essential patent, Samsung's U.S. Patent No. 7,706,348 on an "apparatus and method for encoding/decoding transport format combination indicator in CDMA mobile communication system", which is allegedly UMTS-essential. The nature of the questions and the fact that they were asked at such a late procedural stage indicated that the ITC has most probably identified an infringement of the '348 patent.

The commercial impact of an exclusion order (i.e., import ban) on Apple would be rather limited. Samsung has already stated affirmatively that it's not accusing Apple products incorporating a Qualcomm baseband chip but only older iPhones and iPads. The iPhone 4S was Apple's first Qualcomm-based handset.

The most interesting question is what position the ITC will take on FRAND-pledged standard-essential patents (SEPs). In the build-up to the just-postponed decision, four U.S. Senators and four U.S. Representatives had written letters to the ITC to reiterate lawmakers' concern over the anticompetitive and anti-innovative implications of import bans over FRAND-pledged SEPs.

Apple claims that Samsung brought its ITC complaint prior to making any licensing offer, let alone one on FRAND terms. Samsung has responded to Apple's claim, but its denial is heavily-redacted.

There is clearly a trend in the U.S. toward resolving disputes over FRAND-pledged SEPs in district court, which (unlike the ITC) can determine FRAND licensing terms if the parties fail to reach an agreement. Last month the United States District Court for the Western District of Washington handed down a landmark rate-setting decision in a Microsoft v. Motorola Mobility contract case. Early last week the United States District Court for the Northern District of California barred a SEP owner from enforcing a potential ITC import ban pending the FRAND rate-setting action in that court.

While this ruling on Samsung's case has been postponed several times, Apple needs even more patience in its own ITC case against Samsung. Apple's complaint was filed only a couple of weeks after Samsung's, but the final Commission ruling is scheduled for August 1, 2013 -- almost two months after the new target date for Samsung's case against Apple.

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