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Obama Administration Overrules iPhone Trade Ban

Posted by Soulskill on from the did-not-see-that-one-coming dept.

Back in June, the U.S. International Trade Commission issued an import ban on the iPhone 4 and iPad 2 3G due to patent violations. Now, the White House has exercised its privilege to overrule the ban. In his letter to the ITC (PDF), Ambassador Michael Froman said '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.' This is the first time an ITC decision has been overruled since 1987.

43 of 397 comments (clear)

  1. You know by oldhack · · Score: 5, Informative

    Money buys a lot.

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    1. Re:You know by Trepidity · · Score: 4, Informative

      Apple doesn't actually donate much to politicians at all, and their lobbying budget is exceptionally small for a company of their size, so I doubt that's the reason.

      My guess is that this is actually for the stated reason. Whether it's a good reason or not is another question, but I don't think they're covering up a hidden motive here. Basically, the iPhone 2 and 4 sell a lot in the U.S., and banning them would disrupt the U.S. economy to some extent, so they chose not to.

      The statute authorizing the ITC pretty explicitly contemplated that possibility, which is why it has an opt-out clause for the president to cancel ITC orders if he determines they would be too disruptive to the economy.

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      10 PRINT CHR$(205.5+RND(1)); : GOTO 10
    2. Re:You know by Tough+Love · · Score: 3, Informative

      Apple doesn't actually donate much to politicians at all...

      And yet judges and presidents seem to display a consistent bias. Funny that.

      --
      When all you have is a hammer, every problem starts to look like a thumb.
    3. Re:You know by Anonymous Coward · · Score: 5, Insightful

      It also probably doesn't hurt that Apple is a US based corporation, while Samsung is Korean. I'd bet if this was a Samsung vs Asus or Sony dispute, the Obama administration would not have stepped in.

    4. Re:You know by dmbasso · · Score: 5, Insightful

      Now when a 3rd-world country decides to ignore pharmaceutical patents to save its people from dying, that is crossing the line! Retaliation through economic restrictions must apply!

      --
      `echo $[0x853204FA81]|tr 0-9 ionbsdeaml`@gmail.com
    5. Re:You know by Trepidity · · Score: 4, Informative

      I think there's definitely some bias towards a U.S. company here, but fwiw, this isn't actually setting aside the patents or authorizing ignoring them. It's purely an import-regulations decision, not a patent-law decision. U.S. customs will not stop iPhone imports as a result of this ruling, but that doesn't mean it's actually legal to sell them in the US. Samsung can still sue Apple in regular courts for patent infringement.

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      10 PRINT CHR$(205.5+RND(1)); : GOTO 10
    6. Re:You know by Dunbal · · Score: 5, Insightful

      US based corporation? You mean the one publicly traded on the stock exchange, with manufacturing facilities in China? The one that ships iPhones and iPads directly from China? Or is it because they have an office in Cupertino that you consider them US based?

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      Seven puppies were harmed during the making of this post.
    7. Re:You know by am+2k · · Score: 5, Funny

      It's designed by Apple in California, it says so on back side of the case!

    8. Re: You know by quacking+duck · · Score: 3, Funny

      Elitist liberals love iPhones.

      Quick, better tell Rush Limbaugh he's an elitist liberal, he seems to love everything about Apple.

      (This in fact is probably contributing to many "liberals" shunning Apple. If Rush likes them so much, they must be bad, so "liberals" proceed to dig up mostly non-stories about the exceedingly rare labour problems and environmental issues while ignoring far worse violations by Apple's competitors.)

    9. Re:You know by samkass · · Score: 5, Interesting

      US based corporation? You mean the one publicly traded on the stock exchange, with manufacturing facilities in China? The one that ships iPhones and iPads directly from China? Or is it because they have an office in Cupertino that you consider them US based?

      But where is the value added? Every other phone maker in the world makes their phones in the exact same factories in China. Why aren't they all worth the same amount? Almost every dollar of value added over a simple sum of the cost of the parts (plus a couple dollars for assembly) is added in California. And even after the sale, Apple's call centers are all in the US to help get them their astronomical satisfaction numbers. Apple's about as US-based a corporation as you can get in that industry.

      --
      E pluribus unum
    10. Re:You know by MacDork · · Score: 4, Informative

      Apple doesn't actually donate much to politicians at all, and their lobbying budget is exceptionally small for a company of their size, so I doubt that's the reason.

      They don't need money. They have connections. Apple has Al Gore on their board of directors.

      My guess is that this is actually for the stated reason. Whether it's a good reason or not is another question, but I don't think they're covering up a hidden motive here. Basically, the iPhone 2 and 4 sell a lot in the U.S., and banning them would disrupt the U.S. economy to some extent, so they chose not to.

      Moral of the story. Intellectual property can only be enforced in the USA if your company has connections. Samsung violates Apple patents? 1 Beeeeelion dollar fine. Apple violates Samsung patents? Presidential pardon.

      If I were Samsung, I'd stop selling components to Apple until they decided to pay their licensing fees. That would put a stop to iPhone4 and iPad2 just as fast as an injuction. That would put a dent in new Apple products too.

      The statute authorizing the ITC pretty explicitly contemplated that possibility, which is why it has an opt-out clause for the president to cancel ITC orders if he determines they would be too disruptive to the economy.

      'too disruptive to the economy'? Read: Enforce laws only on companies full of dirty slant eyes who we don't like here in 'murica.

    11. Re: You know by SvnLyrBrto · · Score: 5, Informative

      That "office in Cupertino" is a campus the size of a small college plus satellite offices throughout the rest of town. It employs well over ten thousand people. And those are the high-value, well-paying jobs that propel people into the upper-middle class and beyond.

      Really, what's with the obsession with the location that a widget is put together, when the design, programming, and engineering (The good, high-value jobs that I'd actually like to have.) are all done here?

      --
      Imagine all the people...
    12. Re:You know by runeghost · · Score: 3, Informative

      It's not patriotism, it's just that America's odd system of post-facto and indirect bribery confuses foreigners, who are used to more honest corruption.

    13. Re: You know by Anonymous Coward · · Score: 5, Interesting

      Actually a lot of the engineering is done in Asia:

      * The screen is designed and built by Sharp in Japan.
      * The CPU and SoC is designed and built by Samsung and/or Exynos in Korea.
      * The Plastic tooling and dies are designed by a subcontractor to Hon Hai in Shen Zhen from designs for the part from Apple or a subcontractor in California (or possibly elsewhere)
      * The motion estimation parts are designed by Intersil in California
      * The production system is designed and managed by Hon Hai in Shen Zhen
      * The Flash is designed by Samsung or Micron in Korea or Taiwan

      It's safe to say it is an international collaboration, but they don't say that, they just say "Designed by Apple in California".

      The obsession with where the widget is made is because some people have some foresight and can see that once you give all your manufacturing capability (the hard bit) to another country, it won't take that long for that country to figure out the design (the easy bit), and cut you out of the loop. In fact this happened and now look at the Samsung Galaxy and all the Chinese Android devices (which are nearly as good and much, much cheaper). I can buy a near-equivalent to a Galaxy tablet for US$99 from Ali Express.

    14. Re:You know by MacDork · · Score: 3, Interesting

      There doesn't need to be a trial because there's no question that Apple is breaking the law. That is not in dispute. The Obama regime didn't say the judge was wrong and that laws were not broken. The Obama regime is specifically saying that Apple has the priviledge to break the law until Samsung decides to accept what Apple is willing to pay them.

      You know what this reminds me of? This reminds me of the time when AllOfMP3 decided to sell music they didn't have rights to sell in the US. AllOfMP3 actually offered to pay licensing fees to the RIAA, but only what AllOfMP3 thought was fair. That amounted to a few pennies per song, and the RIAA wasn't hearing any of that. Russia sided with AllOfMP3 and it was all perfectly legal there. The US music industry had to pursue other avenues to shut them down. In the end, they cut of the payment processing with Visa/Mastercard.

      So, I would expect to see new Korean law that allows Samsung to terminate Apple contracts for failure to pay licensing fees soon, if such a law does not already exist.

      I'm really beginning to think the Obama regime is destined to destroy the entire tech industry in the US. Between this and Snowden's revelations, they've driven a stake through the heart of the tech industry. Now they're just nailing the coffin shut for good measure. By the end of his second term, no one anywhere is going to want to do business with US tech companies anymore. He will have accomplished what no other US dictator has managed to do. Kill the goose that laid the golden egg over in silicon valley...

  2. Strangely... by kervin · · Score: 3, Insightful

    The same was not done for Samsung when their products were banned over flimsier design patents

    1. Re:Strangely... by sessamoid · · Score: 3, Informative

      Because those patents were not submitted and accepted as FRAND. Samsung agreed to license these technologies in Fair, Reasonable, and Non-Discriminatory terms. Anybody can use their patented technologies, and the only question is how much they get paid for them. When any infringement can be resolved with monetary payment, injunctive relief is not an appropriate tool. Samsung can always be made whole at any point in time with a monetary judgment.

      Apple made no such promises to any industry group concerning the design patents in question. They did make such a promise over the mpeg4 container, which is just the .mov container that quicktime has used for ages, and they have never attempted to get an import injunction over that patent or any others that they submitted to standards bodies.

      --
      "No, no, no. Don't tug on that. You never know what it might be attached to."
    2. Re:Strangely... by Rantank · · Score: 5, Insightful

      Seems to me the Prez just gave permission for good wholesome American companies to take on anyone they like, and if they lose in any way, shape or form, he'll make sure there's no real harm done. I wonder how long before foreign companies start ring-fencing America as just too expensive and corrupt to operate in.

    3. Re:Strangely... by MachineShedFred · · Score: 3, Insightful

      Strangely, design patents are not standard-essential, so the two incidents are not directly comparable.

      Nice try though.

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    4. Re:Strangely... by sconeu · · Score: 5, Informative

      And Apple has refused to license those patents. They have refused to negotiate to license them. They have even stated that they will not accept a court-ordered license fee unless they happen to think it's low enough.

      Tell me, oh wise one, what other recourse did Samsung have?

      --
      General Relativity: Space-time tells matter where to go; Matter tells space-time what shape to be.
    5. Re:Strangely... by Jeremy+Erwin · · Score: 4, Insightful

      Of course, if Apple made its products in California, it wouldn't have to import them from its Chinese suppliers.

    6. Re:Strangely... by makomk · · Score: 4, Informative

      Unless you work for either company, you don't know what negotiations have or have not taken place. You only have what is printed in the media. You believe everything you read?

      We know that Apple refused to negotiate a license for those patents because the ITC stated, in their ruling, that they ruled against Apple in part because of their failure to negotiate a license for the patents in question.

    7. Re:Strangely... by CrimsonAvenger · · Score: 3, Insightful

      And who cares about some foreign companies thinking the US is too expensive to operate in. The sooner they leave the sooner the jobs farmed out come back to the US.

      Senator Smoot? Representative Hawley? Is that you?

      Note that the last time we tried this particular technique to bring jobs back to the US, we got what is colloquially known as the "Great Depression".

      --

      "I do not agree with what you say, but I will defend to the death your right to say it"
    8. Re:Strangely... by Tough+Love · · Score: 5, Insightful

      It's the President's job to put US interests above all others.

      But not above the rule of law.

      --
      When all you have is a hammer, every problem starts to look like a thumb.
    9. Re:Strangely... by a_n_d_e_r_s · · Score: 5, Interesting

      Well, they often seem to like to put them before even the US constitution...

      Overreaching surveillance by NSA with PRISM and torture in Guantanamo bay are not fiction.

      --
      Just saying it like it are.
    10. Re:Strangely... by Nerdfest · · Score: 5, Interesting

      Between this and the PRISM bullshit, the US just went on my "don't buy from" list. Congratulations, your government has absolutely no regard for honour or fair play.

    11. Re:Strangely... by Anonymous Coward · · Score: 4, Informative

      Samsung refused to reasonably license the patents. Most FRAND patents are licensed as a percentage of the product using them. However which part of the product is the biggest question. Typically it is the piece that implements the patent. However in this case Samsung wants a percentage of the phone, rather than the typically percentage of the baseband processor (which implements the patent). Notice it is only a few of the products that are unlicensed, most notably ones that don't use Qualcomm modems. Qualcomm licensed the patents for Apple at a percentage of the baseband cost (~3%-5% of ~$20), where the older product Apple was supposed to license them separately and Samsung is asking for ~3%-5% of $450 which is basically discriminatory compared to the other products that license it for 1/20 of the cost.

    12. Re:Strangely... by AmiMoJo · · Score: 3, Informative

      Samsung offered fair and reasonable terms. The ITC agreed that they did. Apple just kept saying "no", hoping to get a lower price. The ITC saw that they were being unreasonable and rightly blamed them for the failure to reach an agreement.

      Read the report, it's quite clear. What it boils down to is that Apple doesn't have any real technical patents that Samsung needs in order to do the usual license exchange, so they have to pay cash. The cash rate is set as a percentage of retail price, and because Apple products are at the upper end of the market it isn't pennies. It's the same rate that everyone else pays though.

      --
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  3. By rights, overturning should be temporary by elwinc · · Score: 4, Insightful

    It would be very wrong of the White House to give one US corporation carte-blanche to ignore a patent. Although the ITC ban may be too strong a response, there's still the fact that Apple has been ignoring a patent for years. They shouldn't be free to continue indefinitely.

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    --- Often in error; never in doubt!
  4. Curiouser and curiouser by OpenSourced · · Score: 4, Insightful

    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

    That argument could be used to sooooo many other patent litigations, and somehow never is, except when the affected part is a big American company.

    --
    Rome taught me patience and assiduous application to detail. Virtues which temper the boldness of great, general views.
    1. Re:Curiouser and curiouser by sessamoid · · Score: 4, Interesting

      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

      That argument could be used to sooooo many other patent litigations, and somehow never is, except when the affected part is a big American company.

      Actually, only recently have big corporations started trying to use standards-essential patents as tools of corporate warfare. The EU is investigating Samsung for just this kind of behavior.

      --
      "No, no, no. Don't tug on that. You never know what it might be attached to."
    2. Re:Curiouser and curiouser by makomk · · Score: 4, Informative

      That's probably because Apple was the first big corporation which refused to license those standards-essential patents under the same RAND terms as all of their competitors, again as a form of corporate warfare - they're trying to get all the R&D work required to make modern mobiles possible for free, whilst suing all their competitors who did do the R&D over crap like swipe-to-unlock, meaning those companies can't even make back their costs by selling their own phones!

    3. Re:Curiouser and curiouser by serviscope_minor · · Score: 4, Informative

      Apple is not much of an innovator as you claim.

      What they are is very good at creating a well integrated product with a very slick user interface out of existing technologies. This is a hard skill which very few other companies have, and one that they wish to protect with lawyers. It is not, however, one you can protect with lawyers.

      So they they try by sueing over bullshit patents and people like you step up to defend them. You believe that others are doing a disservice to Apple, but you are just as guilty of doing a disservice to the people who invented those things in the first place.

      When it comes to swipe and multitouch gestures, it was mostly covered by academic (universities and industry) researchers im the early 80s long before the touch screen tech was anything but cumbersome, expensive and unusable out of the lab.

      Oh and as for the interface, you know that the whole icon grid, touch screen and apps was not even remotely an Apple innovation, right? http://www.xorl.org/people/krw/ipaqalone.jpg

      And the whole nothing but a touch screen as an interface was even older. http://en.wikipedia.org/wiki/File:IBM_Simon_Personal_Communicator.png

      The point is many innovations that are associated with Apple were around before.

      Apple are very good, possibly better than anyone a putting them together, but it does everyone a disservice to pretend Apple is something that it is not.

      --
      SJW n. One who posts facts.
  5. Sure by Anonymous Coward · · Score: 3, Insightful

    Money buys a lot.

    Double standards if nothing else.

    1. Re:Sure by oztiks · · Score: 4, Funny

      banning the products in question would be too disruptive to consumers and the economy

      I'm sure they were thinking of all those poor Chinese workers employed by Foxconn that could lose their jobs over this ...

      Thank god there's the Obama administration looking out for the little guy!

    2. Re:Sure by KingMotley · · Score: 5, Informative

      Of course the last time the ITC was overruled was in 1987, siding WITH SAMSUNG. Lol.

    3. Re:Sure by Kartu · · Score: 3, Insightful

      Except you can't consider monster multi-nationals to belong to any country, once you realize where do they pay their taxes...

  6. Figures by Anonymous Coward · · Score: 4, Informative

    Apple Political Donations
    Top Candidate Recipients, 2011-2012
    Barack Obama (D) $308,081
    Mitt Romney (R) $28,910
    Ron Paul (R-TX) $16,004
    Nathan Shinagawa (D-NY) $5,000
    Mark W. Neumann (R-WI) $5,000
    http://www.opensecrets.org/orgs/summary.php?id=D000021754

  7. Re: U.S.A. is dead. by turbidostato · · Score: 3, Funny

    Not unless netcraft confirms it!

  8. You missed one by SuperKendall · · Score: 3, Informative

    One of the few computer companies moving more manufacturing to the U.S. (the new Mac Pros are made in the U.S.).

    Or the one with many hundreds of retail stores in the U.S. bringing in billions of revenue each year to U.S. states?

    So yes, THAT U.S. based corporation. It's more U.S. based than just about any other at this point...

    --
    "There is more worth loving than we have strength to love." - Brian Jay Stanley
    1. Re:You missed one by MachineShedFred · · Score: 3, Informative

      Wrong.

      If they paid no taxes at all (completely false) then the IRS would have climbed so far up their ass that they'd need to cut in switchback trails to find their way back out. Just by having a single retail store that sells a single retail product, the would owe taxes on that revenue. To say otherwise is just being a fuckwad or a troll - you choose.

      Stop being willfully ignorant, and read.

      Apple pays US tax on all revenue gained in the US, Canada, Central America, and South America.

      --
      Slashdot still doesnâ(TM)t support Unicode after it was added to the HTML standard in 1997.
  9. Actually, Apple's more an Irish corporation by Anonymous Coward · · Score: 5, Interesting

    Almost every dollar of value added over a simple sum of the cost of the parts (plus a couple dollars for assembly) is added in California.

    Apple has filed legal documents that say that's untrue, and in May Tim Cook testified in front of The Senate Permanent Subcommittee on Investigations where he reiterated that a large percentage of the dollar value added by Apple is added in Ireland.

  10. No, it is much better by SmallFurryCreature · · Score: 3, Interesting

    Basically Obama just killed the patent system. The US is no longer the power it once was and it is just legitimized India's moves to take essential medicines out of the patent system. And while American voters can be easily swayed, the rest of the world has just seen that it is okay to ignore US laws when it doesn't suit you and they WILL follow.

    Obama seems determined to go down in history as the worst US president ever. This WILL end up biting the US in the ass. Samsung doesn't care about a billion dollar fine but the US NEEDS the patent system and for it to be respected. You can't win a trade war if you just made your only remaining product worthless.

    --

    MMO Quests are like orgasms:

    You may solo them, I prefer them in a group.