President Obama, acting through the United States Trade
Representative ("USTR"), has disapproved a limited
exclusion order and cease and desist order issued by the United
States International Trade Commission (the "Commission")
that covered an allegedly standards-essential patent
("SEP"). The orders, which were to take effect on August
5, covered certain products of respondent Apple Inc. that were
found to infringe a U.S. patent owned by Samsung Electronics Co.,
Ltd. and Samsung Telecommunications America Inc. The
President's disapproval means the remedial orders will not go
into effect.
Every remedial order issued by the Commission as the result of a
Section 337 investigation is automatically reviewed by the USTR
during the 60-day "Presidential review period," which
immediately follows the Commission's final determination. As
set forth in Section 337, the President may disapprove of the
Commission's determination, including its issuance of any
remedial orders, on policy grounds. Considerations relevant to the
Presidential review include an order's effect on the public
health and welfare, competitive conditions in the United States
economy, the production of like or directly competitive articles in
the United States, and United States consumers. If a determination
is disapproved on policy grounds, the remedial order(s) shall have
no force or effect.
Referencing the joint Department of Justice/United States Patent
and Trademark Office Policy Statement issued on January 8, titled
Policy Statement on Remedies for Standards-Essential Patents
Subject to Voluntary F/RAND Commitments, the USTR found that
"exclusionary relief from the Commission based on
FRAND-encumbered SEPs should be available based only on the
relevant factors described in the Policy Statement." Those
factors include, for example, an examination of whether an
"exclusion order based on a F/RAND-encumbered patent appears
to be incompatible with the terms of a patent holder's existing
F/RAND licensing commitment to an SDO." The USTR made clear,
however, that an "exclusion order may still be an appropriate
remedy in some circumstances, such as where the putative licensee
is unable or refuses to take a FRAND license, and is acting outside
of the patent holder's commitment to license on FRAND
terms."
The investigation-at-issue is styled Certain Electronic Devices,
Including Wireless Communications Devices, Portable Music and Data
Processing Devices, and Tablet Computers, Inv. No. 337-TA-794.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
