Tuesday, June 11, 2013

Small carriers, minority activists, others write to ITC supporting Samsung against Apple patent case

Today a dozen public interest statements filed in connection with the ITC investigation of Apple's complaint against Samsung, in which a preliminary ruling is under thorough review by the U.S. trade agency's top-level decision-makers and a final ruling scheduled for August 1, entered the public record. Most of these letters bear today's date, and a couple of them were filed yesterday. An import ban (which Samsung will be able to work around) is very likely to issue at the conclusion of this investigation. In an earlier-filed case, Samsung has just won such an exclusion order against older iPhones and iPads (CNN Opinion op-ed, blog post on decision, blog post on preparations for enforcement).

Some of the letters generally discourage ITC import bans against smartphones and other wireless devices, while some focus on mitigating the impact of an exclusion order by means of transitional periods and measures to ensure that customs officers won't mistakenly hold shipments of Samsung products modified to work around the scope of the likely-forthcoming import ban. Most of the submissions specifically stress Samsung's market share.

A couple of submissions parrot Samsung's long-debunked "rectangle with rounded corners" propaganda, exposing the submitters as being clueless in patent matters (or, in the extremely unlikely alternative, deliberately untruthful against better knowledge).

With the kinds of concerns raised in most of the letters one would expect that these Samsung supporters would have to be even more concerned about ITC import bans over FRAND-pledged standard-essential patents (SEPs). Where were they when they had the opportunity to discourage the ITC from an SEP-based import ban against older Apple devices? As I stated in a contribution to CNN Opinion, SEPs are the patent equivalent of nuclear weapons. Apple's asserted non-SEPs, unlike cellular SEPs, can simply be worked around. As Chief Judge Rader of the Federal Circuit stated in a recent ruling, an infringer who has a designaround in place "should halt infringement and pursue a lawful course of market conduct".

I've uploaded all 12 submissions (I don't know if any additional ones will become available later or in the coming days) to Scribd. Here's a list of the letters containing a link to each of them:

  • Associated Carrier Group (ACG): The ACG describes itself as a "national coalition of 36 wireless carriers serving more than 4 million consumers in rural and traditionally-underserved markets". According to the letter "Samsung devices account for more than 60% of ACG members' total sales". The letter states concern that ACG's members could not reallocate purchases from Sarnsung to other manufacturers in the short term because of the volume and variety of Samsung’s devices and the lead time required for other suppliers to increase production", thus asking for a six-month transition period, a limited bonding requirement for Samsung's continuing imports before the exclusion order takes effect, and measures to ensure that U.S. customs won't seize non-infringing devices.

  • Some smaller carriers/resellers also made submissions taking similar positions as the ACG: Ting Wireless ("new, nationwide"); Revol Wireless (150,000 customers in Ohio, Indiana and Northwestern Pennsylvania); James Valley Telecommunications ("provides leading high-speed digital and wireless connectivity services to customers in South Dakota's Brown, Day, Spink, Marshall, and Clark counties").

  • Health care plays a key role in the ITC's public interest analysis. A couple of submissions focus on this angle: Health IT Now ("a diverse coalition of health care providers, patient advocates, consumers, employers and payers who support the adoption and use of health IT to lower costs while improving quality, safety, and clinical outcomes") and Homecare Homebase (maker of an Android app).

  • The Institute for Policy Innovation, which also campaigns against software patents, reminds the ITC that "it has an enforcement role in intellectual property matters, but not a role in shaping patent law" and complains about "overly broad design patents on such details as 'rounded corners' and 'beveled cases'", which are simply not at issue here. It would prefer the ITC not to issue exclusion orders in this mater, or at least to keep them "limited in scope and well thought out".

  • Americans for Job Security: on this organization I prefer to point to Wikipedia.

  • The Taxpayers Protection Alliance argues that "restricting smartphone devices in the U.S. will suppress innovation", "consumer costs will increase and economic impacts could be substantial", but recognizes in its closing comments that "[i]ntellectual property is exceptionally important". Here's a Wikipedia article on a Senior Fellow of the TPA.

  • The gist of the last group of submissions is that minorities will particularly suffer from an import ban against Samsung: Retired Congresswoman Eva Clayton has been misled to believe that one of Apple's patents-in-suit is "allegedly on a rectangle with rounded corners" and worries about a widening of the "digital divide" as a result of an exclusion order; the Hispanic Leadership Fund expresses concern about a scenario in which "Hispanic consumers do not have reasonable access to 4G-enabled smart phones"; and The LIBRE Initiative "is wary of this ruling for a number of reasons, including the negative impact on the health and welfare of the Latino community, decrease in marketplace competition, and increase[d] costs for consumers".

Realistically, all these companies, interest groups and advocates are more likely to see their concerns addressed by Samsung's designarounds/workarounds than by the ITC ruling, except that there might be a transitional period (though it would be unfair to grant one to Samsung, which already presented designarounds/workarounds to the ITC judge, and not to Apple, which simply can't work around a standard-essential patent, at least not singlehandedly).

UPDATE von June 12, 2013: additional submissions

Later on Tuesday five additional submissions in support of Samsung entered the public record, and four of them are more interesting than the ones discovered before:

  • CTIA - The Wireless Association clearly has a more impressive membership base than ACG. Its letter focuses on 4G/LTE. CTIA generally doesn't want a "remedy to exclude smartphones, particularly those that run on $G networks". In this context it stresses the Obama Administration's policy initiative to expand wireless broadband coverage and the related investments of its members.

  • Congressman Trent Franks (R-Ariz.) wants a potential exclusion order to be "sufficiently clear to all affected parties, particularly to the Customs and Border Protection that must administer an order", warning against "room for interpretation of exclusion orders that can ultimately impact billions fo dolars in trade of vital consumer products". In particular, Congressman Franks is concerned that non-infringing devices could be mistakenly held by customs comparing them to a "simple drawing of a rectangle with rounded corners, a speaker and a display, a shape common to all modern phones". I totally support his call for "clear Commission guidance".

  • Texas State Senator Kirk Watson (a Democrat) represents in the Texas legislature the district in which Samsung Austin Semiconductor is located and employs 5,000 workers. He hopes "the ITC will ensure that any exclusion order is crafted narrowly and in such a way that does not harm Texas workers, consumers, or families".

  • Texas State Senator Ken Paxton (a Republican) represents the district in which Samsung Telecommunications America is based. He notes that "[o]n April 16, 2013, the Texas House of Representatives and the Texas State Senate passed resolutions honoring Samsung for its many years of investment in economic growth and job creation in Texas". He's not categorically against an import ban, but warns against "an overly-broad or difficult-to-interpret exclusion order that could have unintended economic consequences for Texas workers, consumers and families".

  • A Washington DC lobbyist also made a submission. He believes that "[t]he long-term solution [...] is to reform patent laws to ensure that the Patent and Trademark Office only awards patents for genuine innovations". His closing sentence reiterates the "rounded rectangle" myth.

SECOND UPDATE on June 12, 2013: additional submissions by Members of Congress (all of them Democrats)

Later on Wednesday, additional submissions by Members of Congress (all of them Democrats), stressing the need for clarity in the event of an exclusion order, were published (one United States Representative, Hank Johnson, signed both of them):

Further above I've listed a letter by one Republican Member of Congress, Rep. Trent Franks from Arizona. But it appears Samsung's position has more friends on the Democratic side of the aisle.

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