ANNOUNCEMENT 03 Aug 2013In August 2013, the government of the United States of America announced an alteration to its export prohibitions.
NUMBER OF INTERVENTIONS
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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.