Obama veto in Apple’s Samsung dispute throws a new twist into patent cases

What will the White House do?

iphone4That’s the question that many big companies will be asking themselves after the Obama administration’s surprise move this weekend to overturn a U.S. International Trade Commission ruling that would have prevented Apple from importing some older iPhone and iPads into the United States as a result of a patent dispute with Samsung.

It’s the first time in 25 years that a president has exercised this authority.

The issue is the types of patents considered essential to implementing industry standards. In his letter to the ITC Chairman over the weekend, U.S. Trade Representative Michael Froman said he “strongly” shares the concerns of the Justice Department and the U.S. Patent and Trademark Office about the potential harm from owners of standards-essential patents unfairly leveraging those patents even after agreeing to license them on reasonable terms.

He wrote that the decision was based on policy considerations “as they relate to the effect on competitive conditions in the U.S. economy and the effect on U.S. consumers.”

In this case, the veto means that U.S. consumers will still be able to buy the iPhone 4 and other older Apple devices. But it also has broader implications for the companies involved in these types of disputes.

The Wall Street Journal reports, “The veto could discourage companies from taking patent disputes to the ITC, a strategy that had gained favor because the agency tends to issue orders in such cases faster and more easily than federal courts, patent experts said. It also could reduce some patent holders’ leverage in licensing talks, cutting the commercial value of their patents.”

Standard-essential patents have also been a central issue in other recent patent cases between tech giants, including Microsoft’s dispute with Google’s Motorola. A judge in Seattle ruled in April that Microsoft owed only a small fraction of what Motorola was seeking for Microsoft’s use patented video and wireless technologies in Windows, Xbox and other products.

  • Guest

    I don’t think the White House intervening in existing litigation in unpredictable ways is a good thing generally, regardless of whether their position has merit in this particular instance. Companies need to know what the rules are, good or bad, and have confidence those aren’t subject to the whims of bureaucrats. That this decision favors a US company with major political connections (Cook was Obama’s State of the Union guest) and lobbyists in Washington vs a non-US company, also raises some concerns.

  • Guest

    Is anyone surprised? This has been a corrupt administration doling out money and favors to supporters since day one. Google and Solyndra have been beneficiaries in the past. Now you can add Apple to the list.

    • Paul Ryan

      wow people like you really DO exist!????

      Go back to your trailer and prep you Doom prepper!

      • Guest

        People like me exist in growing numbers because of the ongoing corruption of both parties in big Goverment and big business. The only difference between Obama and Bush is which cronies get rewarded at our expense.

        And the trailer is already prepped. Just don’t come knocking.

        • Ray_Downen

          President Bush served the nation well and honorably. His service is in clear contrast with that of Obama.

          • Guest

            Sorry but I just can’t give Bush any more credit (or less condemnation) than Obama. With Bush, Halliburton and others got rich, with Obama the money is still flowing just to different companies (think: Silicon Valley rather than Texas).

            In this case, this looks pretty clearly of favoritism. The only thing that’s surprising is how blatant it is.

          • Ray_Downen

            It’s too bad that Guest supposes President Bush had no more love for this nation that Obama does. He couldn’t be more wrong.

      • Len

        Actually Paul, it’s amazes me that people like you exist. Instead of writing a constructive rebuttal, you reply with an insult and vague accusation.

        • guest2

          There are NO constructive Rebuttals for people like you…

  • http://www.toshaviation.com/ frederick@toshaviation.com

    http://www.youtube.com/watch?v=w2tXLaW0OoM American innovation setting the global standard for global luggage technology..no paper no kiosk no tags no printing..no r f i d radio frequency…

  • Richard Keith

    I cleary don’t see any justification for the president getting involved in these kinds of disputes. We already have systems in place to decide these things. If anything it only reflects negatively on his administration. It makes one wonder if he’s being paid off to favor one private enterprise over another.

  • Fallean Mintz

    Most Americans just dont get it. For a case to be heard at the Supreme Court, it needs 2 blessings. First, General Solicitor of the White House ( The Presidents Attorney) so basically the President. Second the governing body, like the FTC or FCC or FDA etc. depends on industry and issue. As a matter of policy, not law this is how the Supreme Court selects its cases. If either party does not issue this blessing the issue is dead. So the President has Veto Power all the time.

    • Guest

      This isn’t about the Supreme Court or whether the President has veto power. It’s about him using the latter to intervene in an ITC related import ban.

  • FungalSpawn

    Let apple fail. Why do we protect large corporations, retail jobs do nothing for our country.

    • oldmanlochinvar

      It wouldn’t have mattered what Obama would have done, Apple isn’t going to fail anytime soon.

      • Joe

        Apple is going downhill. They’ve stopped innovating. They just release iterations of previously released products. The market asks them to make a tv and they opt not to, they instead tease a watch. They’re teasing a watch because some company made a killing selling watchbands that hold ipod nanons.

        • oldmanlochinvar

          So they are just like Microsoft then 10 years ago and look how long MS has been beating a dead horse (or trying to play catchup with that pathetic Surface).

          I suspect in 20 years the big players won’t even be a blip now, but that is a normal cycle of things.

    • Jared

      Aren’t the majority of our jobs service-oriented? Serving food, selling products, and selling services… Total sales from the more than 3.6 million retail establishments in the United States reached about $2.5 trillion in 2011, and retailers supported more than 42 million jobs in the United States.

      • FungalSpawn

        Point is, move some of those china jobs here to the US.

  • amado

    That is a clear message to Google and the Koreans, it better cough up more dough donation to Obama

  • BobTheBuilder

    Gee, sure would be nice if the President overturned the DMCA from the Library of Congress, which ruling went into effect this year on Jan. 26th, essentially making commercial businesses suffer because we can no longer unlock cell phones for different carriers. Go figure. AT&T was one of the carriers who lobbied DC and greases some pockets to get the DMCA updated. OF COURSE, it would be in the best interested for Obama to overturn this hence it would have directly affected AT&T Apple products. Hypocritical nation. smh…..

  • Thomas Rene

    i think this is dumb! arguing about some patent, is the most dumbest thing i have heard of. get a life and stop arguing! oh, and Paul Ryan, people like me, you, and anyone can think what they want. smart ass