White House intervention could spark patent upheaval

White House intervention could spark patent upheaval

Summary: Now that the Obama administration has intervened in a patent infringement ruling between Apple and Samsung, uncertainty lingers over how effective the courts have been over such disputes. Is the patience of politicians beginning to wear thin?

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Google Glass' patent application. More than just a pair of specs. (Image via CNET)

For the first time in more than twenty years, the White House squashed a verdict handed down by a top U.S. trade court, a result of an ongoing patent dispute between Samsung and Apple. 

The move came as a surprise to industry watchers, despite coming only a couple of months after the government set up a taskforce to "protect innovators from frivilous litigation." The Obama administration has long had professional and political links with Apple, the iPhone and iPad maker at the center of the dispute with Samsung over patents crucial to industry standards.

But the move itself was not a show of support to the Cupertino, Calif.-based technology giant. It was to send a signal that "enough was enough, already."

Samsung brought a single wireless networking patent, U.S. Patent No. 7,706,348, used in its range of wireless-enabled devices, against Apple in court. The patent is "standards-essential," an invention crucial for interoperability between devices across a spectrum of manufacturers. 

While companies must license these inventions crucial to industry support on fair, reasonable, and non-discriminatory terms, one of the biggest conflicts for the courts is determining where these standards-essential patents have been infringed. 

Numerous cases have led courts to rule in favor of an alleged patent infringer because while they attempted to secure a license for use in their products, the patent holder and direct competitor have set costs too high.

The Korean electronics maker called on the U.S. International Trade Commission (USITC) to determine if Apple infringed its patent. The Washington D.C.-based court agreed and handed down a limited import ban that would see a range of older Apple smartphones and tablets barred from Chinese import into the U.S. market.

But this patent kerfuffle is not unique. In fact there have been many that follow almost exactly this path month after month, year after year.

Apple and Samsung have long been seen as the main proponents in the ongoing patent war since April 2011, when Apple launched one after the other a range of patent suits against Samsung for allegedly infringing its design patents.

One by one, the courts sided with Apple in some cases, Samsung in others, and many other companies joined the lawsuit bandwagon in their own right, launching their own litigation against their rivals. It was a free-for-all. And in spite of an apparent final $1 billion verdict in the Apple-Samsung ding-dong, the case rages on with no sign of letting up. The headlines may have muted but Pandora's box of litigation remains wide open.

The role of the trade court has been heavily relied upon over the past year as the final arbiter on cases where allegedly infringing patents could be barred from import, effectively handing down a U.S. sales ban once stocks of imported devices would dry up from store shelves. 

But in invoking the role of the USITC, technology giants brought the patent war dangerously close to the White House, something the Obama administration was clearly willing to keep mostly at arms length during its time in office.

U.S. Trade Representative Michael Froman, who was tasked with a presidential review of the USITC's ruling, disapproved the court's ruling, citing likely hurt to the U.S. economy and its consumers.

Though Froman's decision was "not an endorsement or a criticism" of the Commission, he noted that he "strongly shares" views made by the U.S. Justice Department and the U.S. Patent and Trademark Office (USPTO), which said earlier this year that standard-essential patent cases should rarely lead to a de facto product ban on U.S. territory.

According to statements gathered by sister site CNET, Samsung said it was "disappointed" in Froman's decision. "The ITC's decision correctly recognized that Samsung has been negotiating in good faith and that Apple remains unwilling to take a license," a statement read. Apple said in a statement: "Samsung was wrong to abuse the patent system in this way."

South Korea's trade ministry said it expressed "concern" about the impact the decision would have on patent rights in the country.

"The patent owner [Samsung] may continue to pursue its rights through the courts," Froman added. It was a bounce-back to the regular courts system where it belongs, away from the USITC and away from the White House.

Unlike a USITC ruling, Froman's decision cannot be appealed. It could be a once-in-a-generation slapdown of a specific case that would indicate favoritism on some level — the South Korean government would not be wrong in such assertions.

Or, what is more likely, is that while the patent system remains (in the eyes of many) a broken and unfair system of loopholes and technicalities, the White House has realized the spirit of the system is no longer in good faith and is being systematically abused as a tool of modern competition.

Equally, a U.S. company barred by a U.S. trade court from selling products to its home base of consumers could be an image so economically egregious to the White House that it was force to intervene, and now in the aftermath it has to follow through with the full weight of government.

On Friday, it will be Samsung's turn to face the USITC in a case brought by Apple, which could see a similar line of import bans handed down by the court. Exactly what the USITC will do next is anyone's guess. A delay to the proceedings would not be unheard of considering its emasculation by the White House.

But in a case of "he said, she said," now the Obama administration has stepped into the fray, it only adds further speculation over what comes next. What is clear, however, is that the status quo may not be enough to satisfy the hunger of the patent fighters and the patience of the politicians.

Topics: Patents, Apple, Government US

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66 comments
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  • IT will end up that nobody pays for patents.

    Otherwise known as a "trade war". Higher and higher tariffs, barred imports/exports...

    And no one will be able to afford any electronic technology.

    Everyone looses... except the lawyers.
    jessepollard
    • Tariffs

      Tariffs are usually used to prevent unfair trade practices, but since laws have made it easy for companies to move manufacturing abroad, actually hurting wages here in this country. So not everyone has been losing, just the middle class and not because of tariffs.
      fldbryan@...
    • Wanna bet?

      Seriously, do you? Let's monitor prices for the next ten years and see if your prognostication turns out to be correct.
      Good luck with that.
      .DeusExMachina.
    • who will contribute to standards now?

      If companies like Apple and Microsoft can have favorable US courts to set the (very low) price for them and then Apple can start litigation to see if they can force a low price, without actually agreeing to accept the courts set price if they don't like it, who will contribute in future?

      It's going to get to the point that nobody will contribute to standards because their IP and research dollars will be almost total losses. Then the standards will suffer because they will have to work around all the Patents that haven't been made SEPs. The ITC ruled that Apple was guilty of reverse patent holdup, and the Whitehouse just reversed the punishment without addressing the crime. The ITC will probably not like having their judgments invalidated, so hopefully they will throw Apples case out in response.

      Well done Obama, you may well have just made the patent future worse by making SEPs almost completely indefensible. They could have swatted this down if they had in addition insisted that Apple pay the same license everyone else paid for use of the patent. They didn't do that and now it just looks like the US govt looking after their own. Apple, Good luck getting a fair go in Korea now, I'd be surprised if they don't retaliate in some way in what they are likely to view as US Govt favoritism.
      frankieh
      • Re: who will contribute to standards now?

        Most of the standards relevant to your daily life are already patent-free. The Internet is crucially dependent on patent-free protocols, for example.
        ldo17
  • Fair and equivalent application ?

    If it is going to spark a tear-down of similar stupid patent litigation and rulings, bring it on.

    Apple are a chief protagonist in this lawyer-fest.
    neil.postlethwaite
    • ...

      Don't count on it. Follow the money.
      fldbryan@...
    • yup

      Now Obama will have to strike down any Samsung bans as well, given that the related patent war is equally stupid.
      danixdefcon5
    • One can only hope.

      It's about time somebody stepped in and applied some common sense to the current patent nonsense. That entire system was created by big business to generate profits. Our current IP laws are moronic. The people at the patent office are ignorant puppets for hire. The courts have their hands tied by our moronic IP laws. Innovation is crippled. Progress is glacial.

      The entire system needs to be dismantled and redone by somebody who has the public's best interest at heart. It's about time companies competed on continuous innovation rather than milking one idea indefinitely. Patents should never be owned by companies who do not produce products with them. Also, patents should never be issued on the obvious - for example, a rectangular slab with rounded corners. Give me a break. That shape has been used forever in product designs all over the world. How can you patent basic geometry?
      BillDem
      • ibed and iBathtub

        are an example
        bophead
      • Oh, stop

        No offense, but your recommendations are pap. The system needs to be "redone by somebody who has the public's best interest at heart." Gosh that was easy to say. Where exactly do you intend to find this person who "has the public's interest at heart?" How did you determine what the public's interest is? How do you propose to have the selected person acquire the power to "redo the whole system"?

        We already have a system for selecting leaders, and it does not involve you choosing technocrats to issue edicts. You can aspire to that on ZDNet, but in the actual world, your suggestions are worthless.

        Note that I am not saying that you don't mean well, or that if you were somehow to acquire the power to rule by decree, your ideas might not work. I'm merely pointing out that offering up suggestions that require you to be able to rule by decree in order to implement them is not helpful.
        Robert Hahn
        • it's simiple as that

          no patenting mathematical algorithms, ergo no IT patenting. No rounded corner patents and the like.
          eulampius
          • Being that there were no "rounded corner" utility patents,...

            one wonders what you think you are talking about.
            .DeusExMachina.
          • Patent US D670286S Disagrees

            Apple was awarded patent D670, 286 S on November 6, 2012 for the shape of its portable display devices, i.e., the "rounded corners" patent.

            You can make the counterargument that it is not a utility patent, but that argument would be specious in relation to @eulampius's point.
            Charles Boyer
          • Specious how, exactly

            His point IS about utility patents!
            I don't have to "make the counterargument" since I made it in the original argument!
            The quoted patent is a trade dress patent, and is TOTALLY irrelevant to the current article. Comparing patenting look and feel, like Coke does with their bottles, MS does with their typefaces, and pretty much EVERY brand does with their products, with utility patents, is disingenuous at best, and monumentally misinformed.
            .DeusExMachina.
      • Here here (or is it hear hear?)

        Patent law is ridiculous and needs a complete overhaul. 1) Maybe 12-20 months instead of 20 years. 2) Disallow transfers of ownership. Protect the inventor, not the investor.

        Maybe once upon a time, the design of a tractor, crane, or printing press made sense to protect for 20 years. How much 20-year-old technology are you using?

        Back in the 80s I was working for a chip manufacturer and was asked to look at whether our CPU designs violated any IBM patents. What I read was shocking. Every computer ever made violated hundreds of IBM patents. Base registers, index registers, stacks, instruction decoding - everything was patented.

        "Public's best interest" - isn't that the mandate of the US Congress?... No wait, don't be stupid.
        cpc@...
        • Common sense, or the lack thereof

          The issue here has nothing to do with the length of the patent term. In fact, your assessment says exactly why, so why you make it in the context off the opposite point is hard to fathom. If most technology is much younger than 20 years old, no patents longer than that would even have any use, or effect. The fact that those patents ARE still being used makes it clear that your assessment has no validity.
          .DeusExMachina.
    • Nonsense

      Please provide citations showing that Apple is any more litigious than any other similarly-size company. You can't because they aren't. Just because you think its true, doesn't make it so. Just because you're misinformed does not mean your position should remain unchallenged.
      .DeusExMachina.
  • The gall

    "Samsung was wrong to abuse the patent system in this way." The unmitigated hypocrisy never ceases to amaze me.
    MajorlyCool
    • Hypocrisy?

      What hypocrisy? What patent does From an have and how is he abusing it?
      .DeusExMachina.