updated 08:30 pm EDT, Thu June 13, 2013
Will mostly affect older products but would represent significant blow
One of the numerous International Trade Commission (ITC) complaints Samsung and Apple have hurled at each other is now expected to result in a sales ban on some Samsung products, due to a finding by the ITC staff that grounds for objections on a sales ban are themselves baseless. The Office of Unfair Import Investigations (OUII) has determined that a sales ban on the products already found by the ITC in its preliminary judgement to be infringing would not damage the public interest.
The ITC made a preliminary judgement in October of last year that Samsung was willfully infringing on a total of four patents: two multi-touch software patents, a hardware patent and a design patent. The ruling from the OUII confirms the original judge's ruling, and indicates that the full panel of judges handling the review are likely (but not guaranteed) to leave the preliminary ruling intact, with the result that at least some Samsung products named in the Apple complaint barred from sale. Whether this would impact any current Samsung products remains to be seen, as the final judgement will not be issued until August 1.
The OUII rejected filings by Google which argued that a sales ban would not "advance public interests," explaining that sales injunctions on products are the ITC's normal enforcement mechanism, and that such sales bans go ahead unless there is a significant public interest to stop them (or they are overruled by the President during his 60-day review period). The OUII also referred to Google as a "non-party" in the case, since it nor any of its properties (such as Motorola) are named as defendants in the complaint, even though some of the patent violations may be more against Android than Samsung itself.
The sales injunctions the ITC will likely issue are probably intended to put pressure on Samsung to bring the "workaround" and "design-around" methods the company has already presented in court to market. Samsung, fearing it may lose the case, has already demonstrated versions of the products in question that do not infringe the patents contained in the complaint -- but have thus far not brought them to market, hoping to reverse its fortunes in the matter on review. The OUII also rejected the claim from Google and Samsung that a sales ban would reduce consumer choice, noting that a large number of other companies offer Android phones, meaning competition would not be harmed.
Samsung had engaged a total of 17 allies in the industry (mostly Android developers) to write amicus briefs against the idea of a sales ban on the infringing Samsung products, including HTC, Rackspace, Red Hat and SAP -- but none of the letters, patent analyst Florian Mueller points out, addressed the fact that workarounds already exist, which would resolve the complaint. Mueller points to a statement by an ITC judge in another case that says "if indeed [the defendant] had a non-infringing alternative which it could easily deliver to the market, then the balance of hardships would suggest that [it] should halt infringement and pursue a lawful course of market conduct."
Should a sales ban be implemented against Samsung products, Apple would have to provide a bond designed to compensate Samsung in the event of the ban being later overturned during appeals. Originally, the Administrative Law Judge had suggested Apple provide a bond of 88 percent of Samsung's sales on the infringing models, but a figure of 58 percent was recommended by the OUII. It will be up to the full panel to determine the actual criteria and amount of the bond, but as it will likely be based on actual sales rather than shipments, the amount should prove affordable (if substantial) to cash-rich Apple.