Published: 5/20/13
This investigation by the U.S. International Trade Commission (ITC) was based on a complaint filed by Samsung against Apple regarding alleged infringement of several of its patents on smartphones and tablets. Apple asserted that Samsung was precluded from seeking any form of injunctive relief (such as a cease-and-desist or an exclusion order) because it had committed to license the patents at issue on FRAND terms, and that its failure to disclose two of the patents to relevant SSOs rendered them unenforceable. The Commission ultimately rejected Apple’s FRAND defense and issued a limited cease-and-desist order.
Specifically, in July of 2013, the Commission held that, for a FRAND defense to be successful, Apple would have had to prove the following: (a) Samsung had a duty to disclose essential patents, (b) the patents at issue were essential patents, (c) Samsung breached its duty by failing to disclose these patents in a timely manner, and (d) appropriate circumstances exist to hold the patents unenforceable. It held that Apple had not met all of these requirements in this case. The Commission also noted that Apple itself had questioned whether the patents at issue were actually SEPs, that the requirements for a “timely disclosure” are unclear, and that Samsung’s licensing of its declared SEPs to more than 30 companies rendered the policy concerns underlying Apple’s FRAND defense moot.
U.S. Trade Representative Ambassador Michael Froman subsequently issued a letter in August, 2013, to the ITC disapproving of the Commission’s determination. The Trade Representative’s letter “underscore[d] that in any future cases involving SEPs that are subject to voluntary FRAND commitments, the Commission should be certain to (1) 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 . . . the standards-essential nature of the patent . . . and the presence or absence of hold-up.” The letter from USTR to the ITC is posted on this web page.