Apple: Eat and Eat Again

South Korea is one unhappy country right now as the US administration has agreed to overrule a ban on the sale of Apple imports on old models of the iPhone and iPads. The ruling had been given in favor originally of Korea’s Samsung Electronics Co Ltd and is just another step in the lengthy battle raging between the two companies over patent regulations. Now, it seems that the Obama administration has allowed the US to eat as much of the Apple as they can get and then serve it up to them yet again, just in case.

Apple

Apple

The South Korean Ministry of Trade, Industry and Energy issued a statement in which the warned today: “We express concerns about the negative impact that such a decision would have on the protection of patent rights”. Combined both companies make more than 50% of all smartphones and tablets that are on the market today (since July 2012). As from 2011, Apple prosecuted Samsung and accused them of patent infringement. Both companies were by then already involved in about 19 cases around the world (9 countries) for patent infringement at the same time. By 2012, they were involved in 50 lawsuits.

Michael Froman overrules Samsung-Apple decision

Michael Froman overrules Samsung-Apple decision

Apple won a decision in its favor in the US, but Samsung won in the UK, Japan and South Korea. As a result, as from June 4th 2013, Samsung was granted a ban in its favor on the sale of Apple products that had infringed a Samsung patent (US International Trade Commission). Just two days ago this was vetoed by Michael Froman, US Trade Representative on behalf of the Obama administration. The ban should have entered into effect today.

The ban was overruled due to apparent SEPs (or ‘Standards Essential Patents’), meaning that Apple would not have been able to work around the patent owned by Samsung had the ban been upheld. Although the question arises as to why patents exist if we can overrule their application in the name of SEPs. If Apple infringed that patent, then it is hardly neither reasonable nor acceptable to allow them to maintain the use of that patent just because it has been incorporated into older models that are GSM-versions.

Apple announced: “we applaud the Administration for standing up for innovation in this landmark case. [Samsung was]"wrong to abuse [the] patent system this way."

There has not been a veto of the International Trade Commission and a decision taken by it since 1987.

Samsung issued a statement today saying “We are disappointed that the U.S. Trade Representative has decided to set aside the exclusion order issued by the U.S. International Trade Commission. The ITC's decision correctly recognized that Samsung has been negotiating in good faith and that Apple remains unwilling to take a license.”

Many believed that Obama would not intervene in the affair and that the ban would come into effect today. The administration had 60 days from the date of the ruling and went right down to the wire before taking a decision.

Samsung

Samsung

The ITC will also issue a statement on August 9th, but this time it will be to determine whether or not it is Samsung that has infringed on Apple patents in another lawsuit between the two companies. That case was lodged in July 2011 and might mean that older versions of Samsung get banned because they use Apple patented technology. Seems as if nobody has been playing by the rules.

Wonder if Mr. Obama or Mr. Froman will step in there to overrule a possible ban? 

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tothetick

Professional team of writers/analysts analyzing the financial markets.

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