IMPLEMENTATION LEVEL

National

AFFECTED FLOW

Inflow

ANNOUNCED AS TEMPORARY

No

NON-TRADE-RELATED RATIONALE

No

ELIGIBLE FIRMS

all

JUMBO

No

TARIFF PEAK

No
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Inception date: No inception date

Import ban

US Trade Representative (USTR) Michael Froman informed the US International Trade Commission (USITC) on August 3, 2013 that, on behalf of President Obama, he is taking the very unusual step of disapproving the commission's determination against Apple Inc. in the matter of that company's unlicensed importation of certain smartphones and tablet computers using a patent owned by two Samsung companies. The USITC had been set to issue an exclusion order (i.e., an import ban) and a cease and desist order in the investigation under Section 337 of the Tariff Act of 1930 (unfair trade practices), but has been overruled by the White House, as explained in the USTR's letter to USITC Chairman Irving Williamson.
The investigation involves a complaint brought by Samsung against Apple regarding the use of Standards-Essential Patents (SEPs), which are patents for items used by different companies that allow the interoperability of devices under a voluntary commitment by the patent owner to offer to license SEPs on terms that are fair, reasonable, and non-discriminatory (FRAND). In the case at issue, the USITC determined that Apple had infringed on Samsung's SEP, which Apple incorporated in some of its older iPhones. The USITC sided with the complainant and was preparing to issue an exclusion order and a cease-and-desist order against Apple.
The USTR listed several reasons for the decision, including what he said would be an adverse impact on competitive conditions in the US economy and on US consumers. The USTR recognized that the case is part of continuing disputes that have arisen over the use by SEP owners who seek to gain undue leverage through the use of 'patent hold-up.' Conversely, SEP users can engage in 'reverse hold-up' or 'hold-out' by refusing to negotiate a FRAND license with the SEP owner or refusing to pay what has been determined to be a FRAND royalty.

AFFECTED COUNTRIES

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AFFECTED SECTORS AND PRODUCTS

452 Computing machinery & parts
8471 Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, not elsewhere specified or included.
847130 Portable automatic data processing machines, weighing not more than 10 kg, consisting of at least a central processing unit, a keyboard and a display
847141 Comprising in the same housing at least a central processing unit and an input and output unit, whether or not combined
847149 Other, presented in the form of systems
847150 Processing units other than those of subheading 8471.41 or 8471.49, whether or not containing in the same housing one or two of the following types of unit : storage units, input units, output units
847160 Input or output units, whether or not containing storage units in the same housing
847170 Storage units
847180 Other units of automatic data processing machines
847190 Other
8517 Telephone sets, including telephones for cellular networks or for other wireless networks; other apparatus for the transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a lo
851769 Other
472 Television & radio transmitters; cameras; telephone sets
8517 Telephone sets, including telephones for cellular networks or for other wireless networks; other apparatus for the transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a lo
851711 Line telephone sets with cordless handsets
851712 Telephones for cellular networks or for other wireless networks
851718 Other
851761 Base stations
851762 Machines for the reception, conversion and transmission or regeneration of voice, images or other data, including switching and routing apparatus
474 Parts for the goods of classes 4721 to 4733 & 4822
8517 Telephone sets, including telephones for cellular networks or for other wireless networks; other apparatus for the transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a lo
851770 Parts

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