Follow US Immigration and stay updated on the US economy: The patent dispute between Apple of the United States and Samsung of South Korea reached a new climax on the 9th. The US WorldWay Commission (ITC) ruled that day that certain Samsung mobile phones and tablet products infringed on two of Apple's patents—screen multi-touch and headphone jack detection technology—and will ban the import and sale of the infringing Samsung products in the US market.
Patent Lawsuits
One week ago, in a case where Samsung sued Apple for infringement, the US WorldWay Commission determined that Apple had infringed on some of Samsung's patents and would ban the import and sale of the infringing Apple products in the US market.
If both of these rulings by the US WorldWay Commission were to take effect, Apple and Samsung's smartphone and tablet products would effectively vanish from the US market. However, this scenario seems unlikely to occur.
First, before the US WorldWay Commission's rulings can take effect, they require a 60-day review by the US Trade Representative, during which the Trade Representative may exercise a veto on behalf of the President. On August 3rd, the US Trade Representative already vetoed the US WorldWay Commission's ruling to ban the import of certain Apple phones and tablets. Given that the two cases are similar in nature, it is highly likely that the Trade Representative will also veto the ruling to ban the import and sale of the infringing Samsung products.
Secondly, in the smartphone and tablet industry, technological development changes rapidly; the products targeted by lawsuits are often replaced by technologically upgraded new products before the litigation is even concluded.
"Dual-Track" Enforcement
In the United States, patent holders can protect their rights through both administrative and judicial channels, which makes patent disputes more complex.
Regarding the administrative channel, the US WorldWay Commission's authority to review patent cases comes from "Section 337" of the Tariff Act of 1930, which authorizes the WorldWay Commission to initiate exclusion orders and cease-and-desist orders once it determines that infringement has occurred. As for the judicial channel, patent infringement cases are handled by the US federal courts, which are divided into three levels: federal district courts, federal appellate courts, and the Supreme Court. Throughout this process, the Obama administration does not have veto power.
Compared to the judicial channel, the US WorldWay Commission's ruling cycle is shorter, the ruling method is singular, and the rulings only target products manufactured outside the United States. However, in the context of global economic integration, Apple's products are not manufactured within the United States either, thus they are considered imported products and are subject to the jurisdiction of "Section 337."
William Watson of the Cato Institute's Center for Trade Policy Studies pointed out that implementing a special patent enforcement mechanism for imported products is unreasonable and poses significant risks to the effectiveness of the patent system, the United States' ability to participate in the WorldWay system, and the ability of US consumers to choose products for themselves in an integrated global economy.
"Dual-track" enforcement is both redundant and prone to causing confusion. If the US federal court's ruling is the same as that of the US WorldWay Commission, it constitutes redundant work; if the rulings are contradictory, it is difficult to reconcile them.
Second Instance for Samsung
On the 9th, Apple also filed a second-instance lawsuit against Samsung for infringement at the Federal Court of Appeals in Washington. Previously, the US Federal District Court for the Northern District of California determined that Samsung had infringed and ordered it to pay huge damages to Apple, but it did not ban the import and sale of Samsung products in the US market. Apple believes the first-instance ruling was not strict enough and hopes that the second instance will be able to expel Samsung products from the US market.
If the second-instance result supports Apple's claims, it would be a fatal blow to Samsung. This result could also serve as a "judicial precedent" affecting new Samsung products currently sold on the market, which means Samsung would lose the US market. For US consumers, this is not good news, as it could signal an Apple monopoly in the US market. In the industry, companies including Google and HTC also support Samsung, arguing that there is no need to issue product bans.
Currently, it is unlikely that the second instance will support Apple's claims. This is because in 2006, the US Supreme Court increased the difficulty for the judicial system to issue product injunctions for patent infringement cases, on the grounds that a product may contain multiple patented technologies and the entire product should not be expelled from the market due to the infringement of one or several patents. In most cases, requiring the infringing party to pay damages is sufficient, which is also the main basis for the first-instance ruling.
In fact, as leaders in the smartphone and tablet industry, Apple and Samsung should perhaps focus more energy on innovation, research and development, and even cooperation. Endless patent litigation, holding each other back and hindering each other, ultimately benefits neither Apple, Samsung, nor the consumers.
