Last month, a shock court decision by the ITC (International Trade Commission) ordered that Apple cease to import specific models of legacy GSM iPhones and iPads. The devices in question featured a 3G connection technology patented by Samsung.
Where the confusion comes in is that said technology is in fact a standards essential patent. In other words, it’s essential to allow those iDevices to connect to 3G. At the time, there was no other way of doing it. Knowing this, Apple has filed a motion for the ITC to stay the import ban stating that it would “sweep away an entire segment of Apple’s product offerings” which in turn would lead to a negative impact on sales no just for Apple, but for its carrier partners (AT&T).
Apple’s appeal is based on the fact that Samsung did not offer them FRAND (Fair, Reasonable and Non-Discrimanatory) terms to license the patented part. Or – at least – that’s what Cupertino’s lawyers claim. And as I’m sure you’re aware, any Standards Essential patent owner must negotiate FRAND terms with any company who wants to make use of its technology. What we’ve seen in other cases, in Europe and elsewhere, is that the patent owner tries to charge Apple a higher licensing fee than it charges other manufacturers, purely because it’s Apple and it has more cash to burn.
If Apple’s motion to stay the ban isn’t successful, imports of the iPhone 4 and iPad 2 will be stopped. That is unless the White House decides to step in and veto the ban, which it’s perfectly entitled to do within 60 days of the order being given.
This is only one of many battles Apple is going through against Samsung, with the major $1 billion dollar case to be settled later this year. On the positive side, Cupertino is doing everything it can to ensure that any needless lawsuits are ended. As we saw with Apple and Amazon deciding to their legal battle, and the 10-year licensing deal and settlement agreed between HTC and Cupertino last year.
We’ll keep an eye out for any developments as always. Worst case scenario: iPad 2 and iPhone 4 sales are banned only a few weeks before they’re ousted from the product line by new devices. If Apple does suffer, it won’t be for long.