Can Apple Undo the ITC’s Import Ban?

courtroomApple (NASDAQ:AAPL) is urging the U.S. Trade Representative’s office to overturn an International Trade Commission-ordered import ban on some older models of iPhones and iPads. The ITC issued the import ban after Samsung (SSNLF.PK) appealed a preliminary ITC decision that ruled Apple had not violated Samsung’s patents.

Like all ITC decisions, this import ban is subject to a veto during a 60-day Presidential Review period. According to Foss Patents, the USTR has been delegated the veto authority by President Obama.

In its submission to the USTR, Apple argues that the patent that the ITC based its decision on is a standard-essential patent, or SEP, that Samsung refuses to license to Apple under “fair, reasonable, and non-discriminatory [FRAND]” terms. Apple notes that the ITC’s “decision is plainly inconsistent with Administration policy,” which recently issued a report that acknowledges the “potential policy concerns raised by an exclusion order issued on a SEP.”

Apple also points out that “the Federal Trade Commission has found that seeking an injunction or exclusion order for the alleged infringement of a SEP violates federal competition law.” Apple argues that the ban will harm consumers by removing popular products from the market and have a chilling effect on innovation since the ban involves a SEP.

Samsung has previously been hit with a Statement of Objections by a European Union regulator who contended that the Korea-based company was abusing the patent system by failing to abide by its FRAND licensing obligations. Since Samsung has already been sanctioned in Europe over this issue, Apple notes that the ITC’s decision will make it an outlier internationally.

Finally, Apple argues that the import ban “runs counter to the mission of the ITC,” which is to “protect American companies from unfair methods of competition.” Again, Apple notes that the Federal Trade Commission has previously found that import bans based on SEP infringements are inconsistent with federal competition laws.

Since all of Apple’s arguments are centered on the belief that ITC injunctions based on SEP infringement are invalid, the USTR’s decision will likely hinge on whether or not it buys this primary contention. However, even if the USTR decides not to veto the import ban, Apple can still appeal the ruling to the U.S. Court of Appeals for the Federal Circuit.

Here’s how Apple has traded so far today.


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