Samsung Hangs Hopes of White House Import Ban Veto on False Equivalence

| Analysis

Samsung seems intent on proving the company is incapable of learning lessons from...well, anything. Bloomberg reported that Samsung wants the White House to veto an import ban on some older Samsung devices the same way an import ban on a couple of Apple devices was recently vetoed, but Samsung is relying on a false equivalence to argue that this would be "fair."

 

LiesA Tale of Two Exclusion Orders

In August, U.S. Trade Representative Michael Froman overturned an exclusion order (import ban) against some versions of Apple's iPhone 4. Samsung had won the import ban from the U.S. International Trade Commission because the iPhone model in question infringed on a Samsung patent.

Mr. Froman overturned the ban because the Samsung patent was a standards-essential patent (SEP). There was also concern over how Samsung was negotiating terms for a license to the SEP, terms that run contrary to the fair, reasonable, and non-discriminatory (FRAND) commitments Samsung had in getting its patent accepted as a SEP.

The White House has expressed concern over the use of SEPs to win import bans, a position echoed by the Department of Justice and Federal Trade Commission. The veto of Samsung's exclusion order was seen as part of the White House effort to curb abuse of SEPs.

In comparison, the exclusion order Apple won was based on utility and design patents Apple uses to differentiate its products. Apple has no FRAND commitments tied to these patents, and Apple won't license them to anyone to begin with.

Creating a False Public Perception Under the Guise of Piety

Which is why Samsung's pious bleating about being treated fairly ring false. The company wrote U.S. Trade Representative Michael Froman on August 28th, saying "The world is watching how Samsung is treated by the United States in this 'smartphone war.' The administration has a significant interest in avoiding the perception of favoritism and protectionism toward U.S. companies."

If Apple had won an exclusion order based on SEPs, Samsung would have a great argument, but that's not the case, and Samsung's efforts to equate the two exclusion orders—to say that it must be given a pass for its infringement because Apple got a pass—is a false equivalence.

Remember that all Samsung has to do to get royalties for its SEP is to offer Apple FRAND terms. That's the case with all of the SEPs Samsung has ineffectively tried to use to defend itself against Apple non-SEP patent infringement claims.

Fighting With Only Weapons They Have

Samsung has refused to do so because its SEPs are all it has. The company has no portfolio of design and utility patents it can assert against Apple in defense because that's not how Samsung competes. Instead, the company copies its betters while draped in its own delusions of software relevance.

At every turn, Samsung has shown that it is unrepentant, that it will continue to copy where it can, that it will cheat where it can, and that it did nothing wrong by trying to extort non-FRAND terms from SEPs. That the company will publicly call for a veto on Apple's exclusion order in the name of fairness is merely the latest example.

Image courtesy of Shutterstock.

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16 Comments Leave Your Own

CudaBoy

A logical legal ploy…try to trade Apples for Oranges and the ITC agreed - for a nanosecond before reason and fairness won out. Samsung still has the right to sue for royalties if Apple reneges on the SEP Patent(s) Samsung holds.
Won’t most of this be moot in a few weeks when Lucy drops the hammer?

VaughnSC

Samsung certainly has been giving Bryan all sorts of ‘extreme’ warm and fuzzy feelings of late.  <grins>

Bryan Chaffin

You are correct, CudaBoy, Samsung still has the right to pursue it case in court. I have long assumed the courts will eventually impose FRAND terms on both companies.

I think the ITC import ban is largely moot one way or another. All of the devices affected are so old, sales are negligible. The case still in front of Judge Koh are related to damages. She’s overseeing the post-trial phase for some aspects of Apple’s award and retrying the damages for the $450 million that was overturned.

I don’t believe an exclusion order is still part of her case with Apple.

Terrin

Bryan:

Apple’s main argument is that Apple’s use of Samsung’s FRAND patents are covered by the license Apple’s broadband chip provider pays to Samsung. In patent law, that is called exhaustion.

In the first Judge Samsung case, it is worth noting the jury was persuaded by Apple’s argument and awarded Samsung zero dollars for the at issue FRAND patents.

Apple, however, to get Samsung off its back has been willing to pay Samsung a FRAND rate, although it does not think Samsung is entitled to the rate.

Bryan Chaffin

Hey Terrin,

Apple has argued exhaustion in some, but not all of its cases with Samsung. Apple has won several of its exhaustion arguments, too.

In the case where Samsung won the exclusion order, one of the issues was that Samsung demanded a license to some of Apple’s non-SEPs as a condition to license its SEPs. In others, Samsung has demanded 2.4% of the retail price of an iPhone for SEP licenses.

ibuck

A ban on products? Sure.

Why not ban all Samsung products from US markets? Perhaps that would cause everyone bringing goods into the US to behave better, both ethically & legally.

ishimoto_ken

Samsung isn’t copying only Apple.

Dyson :
http://www.bbc.co.uk/news/technology-24023430

and much more.

gnasher729

Terrin, the reason why FRAND patents should almost never lead to an import ban is that the patent holder has already agreed to let everyone use the patent - for a fair and reasonable payment, so a court should make sure that they get the fair and reasonable payment if necessary, but shouldn’t help them prevent anyone from using the patent.

For normal utility and design patents, the patent holder hasn’t agreed to let anyone use them for any amount of money, and has the right to prevent anyone from using them.

MuppetGate

@ishimoto_ken

Wow.

Looking at that picture of the all-new ‘Dysung’ vacuum cleaner is a real jaw-dropper. Looks like the only think that Samsung didn’t rip off was the colour.

ishimoto_ken

It’s not only Samsung the whole Country does that. This is S-Korea’s behavior, and even N-Korea does this. In Korea lying is a good think and everybody does this. also Hundai, Kia have cars, you can’t find a difference to a Honda, except the get broken very soon.

daemon

Bryan,

You post as if President Obama’s veto of the Apple import ban was supported by case law.  That is not the case.  The President’s power to veto import bans is not dependent on case law,  in fact it runs counter to case law.  All the laws said Apple should have been banned from importing their products to the US. The fact that it was based on FRAND patents is irrelevant.

President Obama simply commutted a sentence,there is nothing preventing him from doing it again.

ibuck

A new category of products: Cheap Korean Copies?

wab95

Bloomberg just announced that the POTUS just upheld the ban. Samusung lost, however they can, and most likely, will appeal.

gnasher729

daemon, the fact that Samsung’s patents are offered under an FRAND license is _exactly_ what makes the difference. Read Bryan’s fine article, and maybe you understand.

Since Samsung’s patents are offered under an FRAND license, the most they could win in a court case is that Apple would be ordered to pay a “fair and reasonable” amount of money for use of these patents. It should be clear that it is totally unreasonable to have an import ban if any damage can be fixed by handing over a few million dollars. Which is exactly what happened to Microsoft when Google/Motorola asked for several billion dollars for FRAND patents used in the Xbox.

jhorvatic

The decision has already been made. No VETO for Samsung!
Finally justice will be served to them and rightfully so.
Even as this has started they go on and open confidential documents from Apple and broadcast it all over the company and try and negotiate new contracts with competitors. That’s how unethical they are and how they are willing to try and make a dollar even if they steal it.

Paul Goodwin

The unfortunate part of all this is that this is how Samsung is successful. They know that by the time the legal issues are resolved, the devices are (as Bryan noted) obsolete and non-factors in sales. The import bans mean nothing. The only way to stop Samsung from copying is the damage awards, and we’ve seen how that is going. By the time it’s over, the issues will be tired ones, damages will be reduced, and Samsung will have made far more money selling the copies than the resulting legal fees and damage awards. They’ll keep doing it until the damages awarded exceed their profits. The only other way is to award a punitive damage by banning all their imports for some period of time. That’s probably never going to happen because we’re a “free and fair trade” society. They don’t play fair, and we don’t stop them in a way that hurts their bottom line.

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