Apple Inc. (NASDAQ:AAPL) representatives and attorneys are practically on a first-name basis with administrative law judges of the U.S. International Trade Commission, and the company’s lobbyists are likely pretty friendly with commissioners themselves. It would certainly make sense that Apple has contributed to a productive economy within the segment of patent law and import-export regulation, what with the large numbers of cases that have come before the ITC that involve Apple either claiming infringement of patents or being the accused in infringement cases.
Today we will focus on a couple of such cases that have garnered some new life in the headlines recently.
A Presidential Pardon
For the first time in more than a quarter century, a U.S. president has dabbled in the workings of the ITC. Last week, President Barack Obama surprised many when he vetoed a recent ITC ruling in a case involving Apple Inc. (NASDAQ:AAPL) and Samsung Electronics Co. Ltd. Richard Waters of Financial Times, reported that the case would have imposed a ban on older model iPhones and iPads due to the ITC finding infringement of Samsung patents in the devices.
But Obama stepped in and overruled the import ban, making the stance that Samsung’s patents were standard-essential patents and thus should not be subject to infringement claims as they are basic to the functionality of virtually all smartphones that use wireless networks.
It is hard to say what the effect of the president’s veto will have on the broader patent-law industry – and let’s face it, this is what it is, an industry – but it seems that this could lessen the licensing fees that companies like Apple Inc. (NASDAQ:AAPL) could charge to other companies for use of their standard-essential patents (SEPs), and it could also affect innovation.
CEO Tim Cook has been held up as the face of innovation by this administration; he was a guest of First Lady Michelle Obama at this year’s State of the Union address, and Steve Jobs’ widow was a guest of her’s last year.
The last time a president got involved in the ITC?
It was 1987, when Ronald Reagan stepped into a case that, interestingly, also involved Samsung.
Moto-ing Toward a New Apple Inc. (NASDAQ:AAPL) Hearing
In a related ITC case, Apple Inc. (NASDAQ:AAPL) will have a new opportunity to claim that Motorola Mobility and Google Inc (NASDAQ:GOOG) infringed on a couple of patents, after Cupertino appealed the original ITC ruling to the U.S. Court of Appeals of the Federal Circuit in Washington. The story was reported by Michael Gorman on the Engadget site through the FOSS Patents blog, run by patent-law analyst and expounder Florian Mueller.
The original ruling was handed down a year ago, saying that Motorola did not infringe on a series of Apple patents. That case would have resulted in a U.S. import ban on Motorola devices. Apple appealed the decision, and the appeals court sent two of the patent rulings back to the ITC for reconsideration.
One of the patent rulings was invalidated because of “obviousness” not being clearly determined, and the other ruling was vacated by the court because it said the ITC misunderstood the meaning of an important term in the patent description that would be important in an infringement ruling. There is no word yet on when the new hearing would take place.
In other words, Apple Inc. (NASDAQ:AAPL) still has an opportunity to stamp down competition and innovation in the U.S. by continuing its pursuit of these import bans. If you were an investor like fund managers David Einhorn or David Tepper, how would you respond to this campaign in the courts? Is this good or bad for business? While you ponder this, check out the video below that discusses possible features in the next iPhone model.