The US legal system is complex, and companies have become adept at using trade rulings by the ITC as an alternate forum. But has it come to pass that President Obama must rule on Samsung versus Apple?
For those of you following the latest court wrangling between Apple and Samsung and who are not familiar with the structure of the US government it can all get very confusing, especially when you add a dose of essential patents for standards and the International Trade Commission. So let me try and unravel it for you, even though I won't get into the specifics of the case or its merits.
First, the US government is made up of three branches: legislative, judicial, and executive. The first of these, legislative, is basically Congress, and that one we can set aside for the purpose of this discussion, as it doesn't do much of anything.
The judicial branch is where the court system lies, and it is a hierarchy with the Supreme Court at the top and the trial courts at the bottom. It also has the US Court of International Trade, and this deals with things such as customs. Now this is where things start to get complicated.
The Court of International trade (CIT) is not the same as the International Trade Commission (ITC) although the CIT may enforce rulings from the ITC. The ITC is not part of the judicial system at all -- in fact, it is part of the executive branch of government, but it also reports into the legislative branch as well. Confusing?
As you all should know, the head of the executive branch of the US government is the President, and the ITC is led by six commissioners appointed by the President. The ITC is meant to take care of things such as controlling imports, subsidies, dumping, and, yes, patent infringement. In fact, the ITC has a quasi-court to determine rulings that relate to patent infringement on products that are being shipped into the US.
Now, a patent case passing through the judicial system can take months or years to even get a court date, and cases can go on for many years. With the ITC, everything happens in a speeded up manner, which makes this often a favored place for companies to duke out their differences when it comes to something that is imported -- and when we are talking about electronics, almost everything is imported.
The other important piece of information, before we get to the Apple/Samsung case, is about standard essential patents. This is a patent held by one company that has been used to create an industry standard. The company has told the standards bodies about the existence of this patent, and it is acknowledged that it is not possible to implement the standard without using this patent. Many such patents exist in the industry, especially where radio connectivity is concerned. In return for this patent being incorporated into the standard, the owner agrees to license the patent on fair, reasonable, and non-discriminatory terms to anyone who wishes to use it, including its competitors.
So, on to Apple and Samsung. In June of this year, the ITC issued a ruling that said Apple infringed a Samsung patent and that older models of the iPhone and iPad should not be allowed into the country. The patent in question is an essential patent, so there is no real question about whether Apple infringes or not. So, why hasn't Samsung licensed the patent to Apple? Good question. Apple says the terms are unreasonable and has refused to pay.
Apple also argues that the ITC does not have the jurisdiction to make a determination regarding an essential patent. If nothing happens, the ban takes effect on August 4, but there is one person who can stop it -- the President of the United States or one of his colleagues, such as US trade representative Michael Froman.
There are many companies lobbying the executive branch, both in favor of and against a veto taking effect, and I guess in a few days we will know the outcome of this case.
So, it could end up being trial by President in this case.
Are you confused by all of this? Weigh in with your opinions as to what the President should do -- in this case and in the use of the ITC for the pursuit of patent disputes in general.