On August 3, 2013, the Obama Administration (in a letter available here from Ambassador Michael B. G. Froman) disapproved of the ITC’s exclusion order prohibiting the unlicensed importation of Apple devices that infringe certain Samsung patents. The letter “express[ed] substantial concerns . . . about the potential harms that can result from owners of standards-essential patents (‘SEPs’) who have made a voluntary commitment to offer to license SEPs on terms that are fair, reasonable, and non-discriminatory (‘FRAND’), gaining undue leverage and engagement in ‘patent hold-up’, i.e., asserting the patent to exclude an implementer of the standard from a market to obtain a higher price for use of the patent than would have been possible before the standard was set, when alternative technologies could have been chosen.” Ultimately, the letter found:
After extensive consultations with the agencies of the Trade Policy Staff Committee and the Trade Policy Review Group, as well as other interested agencies and persons, I have decided to disapprove the USITC’s determination to issue an exclusion order and cease and desist order in this investigation. This decision is based on my review of the various policy considerations discussed above as they relate to the effect on competitive conditions in the U.S. economy and the effect on U.S. consumers.
The letter also advised the Commission:
[to] be certain to (1) to examine thoroughly and carefully on its own initiative the public interest issues presented both at the outset of its proceeding and when determining whether a particular remedy is in the public interest and (2) seek proactively to have the parties develop a comprehensive factual record related to these issues in the proceedings before the Administrative Law Judge and during the formal remedy phase of the investigation before the Commission, including information on the standards-essential nature of the patent at issue if contested by the patent holder and the presence or absence of patent hold-up or reverse hold-up. In addition, the Commission should make explicit findings on these issues to the maximum extent possible.
The letter noted that Samsung could continue to pursue its rights “through the courts.”
The Wall Street Journal reported that this was the first time since 1987 that an Administration has disapproved of an ITC import ban.
