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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.

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