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White House vetoes ITC Apple trade ban

Sun., Aug. 4, 2013

Samsung alleged patent violation

In a rare step, the White House on Saturday overturned a decision by the U.S. International Trade Commission that would have banned Apple from importing several of its older products.

U.S. Trade Representative Michael Froman, an Obama appointee, issued a letter explaining the decision to make such a rare intervention in a trade dispute. The last time the White House vetoed a decision by the U.S. International Trade Commission was 1987.

“I have decided to disapprove the USITC’s determination to issue an exclusion order and cease and desist order in the investigation,” Froman wrote.

The decision comes two months after the ITC ruled that some older Apple gadgets violated a Samsung patent that covers a method for transmitting data.

In a statement, Apple said, “We applaud the administration for standing up for innovation in this landmark case. Samsung was wrong to abuse the patent system in this way.”

In its own statement, Samsung said, “We are disappointed that the U.S. trade representative has decided to set aside the exclusion order issued by the U.S. International Trade Commission. The ITC’s decision correctly recognized that Samsung has been negotiating in good faith and that Apple remains unwilling to take a license.”

The import ban would have applied to the iPhone 4 and iPad 2 3G models that run on networks operated by AT&T and T-Mobile as well as two regional carriers in Texas and Alaska.

Newer and more popular devices such as the iPad mini and the iPhone 5 were not covered in the potential ban, which had been scheduled to go into effect today.

While it’s hard to gauge the sales of devices like the iPhone 4, because Apple does not break out sales by device version, the older model remains popular among newer smartphone buyers who are more price conscious.

Many carriers offer the iPhone 4 for free, or almost free, in exchange for a contract.

“What we have seen is that the number of first-time smartphone buyers that the iPhone 4 is attracting is very, very impressive,” Apple Chief Executive Tim Cook said on the company’s most recent earnings call. “And we want to attract as many of these buyers as we can.”

Samsung and Apple had been negotiating a licensing deal for the patent, but talks eventually broke down and Samsung took the matter to the ITC. According to reports, Samsung wanted about $18 per phone, a figure Apple deemed too high.

Froman emphasized in his letter that he was not making a decision about the merits of Samsung’s case or its right to seek compensation.

Rather, he emphasized that because the patent in question was now a widely held technology standard, banning the products in question would be too disruptive to consumers and the economy.


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