The U.S. International Trade Commission ruled that Apple (NASDAQ:AAPL) has infringed on a cellular data patent held by Samsung Electronics and ordered an import ban on older models of the iPhone and iPad, handing Samsung a legal victory in a long-simmering patent battle between the two companies that has lately favored Apple. Apple said it disagreed with the ruling and will appeal.
The ITC overturned a decision by ITC Judge James Gildea, who had ruled in September that Apple did not violate patents that were at the crux of case, according to Reuters. The ruling covers iPhones and iPads made for AT&T Mobility's (NYSE:T) network, including the iPhone 4, the iPhone 3GS, the iPad 3G, the iPad 2 3G and the iPad 3. Newer versions of the devices do not use the patent at issue. An AT&T spokesman declined to comment.
President Obama has the power to overturn the ruling on public-policy grounds, though the last president to use his veto in an ITC case was former President Ronald Reagan, according to the Financial Times. There is a 60-day review period during which Apple can continue to import and sell the products. The underlying ruling will also be reviewed by a federal appeals court specializing in patent cases, Bloomberg reported.
"Today's decision has no impact on the availability of Apple products in the United States," Apple spokeswoman Kristin Huguet told AllThingsD. "Samsung is using a strategy which has been rejected by courts and regulators around the world. They've admitted that it's against the interests of consumers in Europe and elsewhere, yet here in the United States Samsung continues to try to block the sale of Apple products by using patents they agreed to license to anyone for a reasonable fee."
Samsung praised the decision. "ITC's decision made it clear that Apple has made an unauthorized use of Samsung's patents," the company said in a statement. "We will do our best to defend our intellectual property rights."
Apple has argued that Samsung had agreed to license its standards-essential wireless patent on fair, reasonable, and non-discriminatory (FRAND) terms, but the ITC didn't agree with that argument.
Kevin Taylor, an intellectual property lawyer at Schnader Harrison Segal & Lewis LLP, told the Wall Street Journal that this is "a solid win for Samsung." However, he said the federal appeals court could temporarily delay the ruling from going into effect during an appeal.
He added: "Upheld on appeal, Apple has a big problem."
Wells Fargo analyst Maynard Um wrote in a research note that the ruling might not have a major impact on Apple. "We believe this ruling is unlikely to drive a settlement between Apple and Samsung given the impact is to an older product model that, based on our calculations, are likely to have a limited impact to earnings as we expect Apple to discontinue the iPhone 4 in its next product transition (it has historically discontinued the lowest end of its product portfolio)," he wrote.
Samsung continues to battle Apple in courts across 10 countries. Apple won a $1.05 billion blockbuster patent infringement case against Samsung last summer, but the judge later slashed the damages in the case by $450.5 million and ordered a new trial. However, Apple could potentially wind up receiving more in damages in a new patent-infringement trial than the $1.05 billion it was originally awarded last August.
For more:
- see this WSJ article (sub. req.)
- see this Bloomberg article
- see this Reuters article
- see this AllThingsD article
- see this The Verge article
- see this FT article (sub. req.)
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