The ongoing battle between the two largest global smart phone manufacturers – US-based Apple and South Korean Samsung – continues to wage with no definitive end in sight. A brief look at the current score tends to suggest however that one is gaining the upper hand.
The US International Trade Commission (ITC) recently issued an order banning importation of Apple products including the iPhone 4 and early versions of the iPad, including the iPad 2, however this exclusion order has been overturned by a decision of the Obama administration exercising its right of veto against orders issued by the ITC. Naturally, the Samsung and the South Korean government have made allegations of US protectionism, but there are larger issues in play in this current battle-front.
The reasons given by the government for exercising the veto and overturning the import ban is that the Samsung patent in question is a so-called standards essential patent (SEP) and is so fundamental to global mobile communications standards that the patent owner is effectively required to grant licences to competitors. Samsung’s defence to this claim is that it has been willing to provide a license to Apple, but they have consistently refused, although Samsung themselves have been at the receiving end of allegations of not complying with their commitment to provide a licence to the SEPs on fair, reasonable and non-discriminatory (FRAND) terms. Where the truth lies is probably somewhere between these two extremes, but it is unlikely that the full detail will ever come to light, at least not while various courtroom battles are being waged across the globe.
In the latest shot across the bow, the US ITC has issued a ban against importation into the US of certain Samsung products which Apple alleges infringe on its patent rights. This latest decision is theoretically also subject to being overturned by the presidential administration. However the circumstances between the two cases are not closely related and ITC ban reversals are extremely rare. For example, prior to this latest effort, the last ban veto exercised by the US government was in 1987 by Ronald Reagan to allow importation of certain alkaline batteries.
The patents owned by Apple and which it claims are infringed by Samsung relate to a touch-screen control method and a headphone function auto-detect circuit. In theory these patents can be avoided by workarounds in the circuitry and user interface of the Samsung devices. That is, the asserted Apple patents are not essential for Samsung to comply with any communication standard as was the case for the Samsung-owned patents which were the subject of the recently overturned import ban of Apple products. Since there are no SEPs at issue, the chance of a presidential veto of the current ban on import of Samsung products would appear to be unlikely.
Should the ITC decision against Samsung hold, this would seem to be in line with the global trend in the Apple v Samsung ‘war’ where Apple seems to be getting the upper hand. While many would argue that it is still too close to call a winner, the state of play is that Samsung has won precisely no enforceable action against Apple (other than a minor damages award in The Netherlands) in any of the manifold legal actions worldwide. Samsung have also been criticised for asserting only SEP against Apple and are the subject of anti-trust investigations on three continents whereas Apple have scored a number of wins against Samsung in relation to non-SEP patents i.e. intellectual property which covers the manufacture or user interface of Apple devices. This has forced Samsung on a number of occasions to develop work-around solutions to avoid infringing Apple’s intellectual property whereas Apple have not been required to change its devices in any way.
Whilst most of the legal action has been in other than Australia, the recent decisions will have an effect on the smart phone industry here in Australia where court cases are still ongoing in the Federal court. As to whether these overseas developments will make Apple more confident or Samsung more desperate, or both, is yet to be seen. In any case, we will have to wait until nearer the end of the year to find out who will deal out the next legal blow in Australia and how much weight it will have behind it.