Linked by Thom Holwerda on Sat 3rd Aug 2013 20:34 UTC
Legal The Obama administration:

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.

Lots of talk about SEPs and FRAND in Obama's decree, which means that the Obama administration contradicts everything the ITC has said. To freshen your memory, the ITC ruled that not only was the patent in question not a standard essential patent, but Samsung's offer was actually proper FRAND:

Additionally, the Commission found that there were still disputed issues concerning the patent at issue was even actually essential to the standard (and therefore whether a FRAND or disclosure obligation applied at all).


The Commission analyzed the history of negotiations between Apple and Samsung (this portion is heavily redacted) to see if Apple showed that Samsung failed to negotiate “in good faith,” and found that Apple failed to do so. Notably, the Commission dismissed Apple’s arguments that (1) Samsung’s initial offer was so high as to show bad faith, and (2) Samsung’s attempts to get a cross-license to Apple’s non-SEPs violated its FRAND commitments.

In other words, the Obama administration threw out virtually everything the ITC has said in order to protect Apple. This effectively means that American companies can infringe on non-American companies' (standard essential) patents all they want, because the president will simply step in if they try to fight back.

So, I was wrong. I expected the Obama administration to be impartial and not give such a huge slap in the face of the ITC - as cynical as I usually am, I can still be naive. Protectionism is more important to the POTUS.

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It's not that clear, Thom
by oskeladden on Sat 3rd Aug 2013 22:02 UTC
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The trouble is that from a strictly legal point of view, it's not at all clear what FRAND means in relation to competitors. Does a FRAND requirement force you to offer your licenses to competitors on the same terms as to non-competitors, or can you offer terms that are substantially different? What does 'non-discriminatory' mean in this context? Legal opinion is far from clear. The ITC's ruling follows one strand of opinion (of which the clearest example is probably the work of Damien Gerardin, available on SSRN), but there are plenty of people who disagree (including the vast majority of US patent scholars). The reality is that the FRAND commitment was drafted in a different era, when nobody anticipated the sort of ridiculous behaviour we now see in relation to shiny gadgets, so the question of what the clause means is well and truly up for grabs. The ITC is pretty low down in the pecking order when it comes to interpreting the law, so it's not at all surprising that the US Department of Justice give its views as to what 'FRAND' means less than total respect. The view they're taking is in essence that this is an issue that needs to be resolved by a Court, not a quasi-administrative body like the ITC. That is the precise import of the last paragraph of the memo.

My own view is that this is not an issue the law courts can resolve - in an ideal world, standard-setting organisations would have arbitral tribunals that would provide authoritative rulings on the meaning of ambiguous clauses and phrases in their standard agreements and / or regulations. Regrettably, that's unlikely to happen. In the absence of that, though, I sort of agree with the DoJ that an organisation like the ITC should not be in the business of determining what contested phrases like 'FRAND' mean. That isn't the role it was supposed to play when it was set up. The courts (and, in particular, the lower judiciary in the US) are far from ideal as fora to decide disputes of this type, but even they're better than the ITC.

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