With a view to the ITC's final ruling on Apple's complaint against Samsung, currently scheduled for August 1, 2013, 17 submissions on the public interest were made this week. An Administrative Law Judge had found Samsung to infringe four Apple patents (three utility patents, one design patent). His findings are now being reviewed by the Commission, the six-member decision-making body at the top of the U.S. trade agency. I published all 17 submissions on Scribd; I had to update that post twice as additional letters poured in. Some of the submissions discourage an exclusion order (import ban) against Android-based Samsung devices, while many just warn against the impact of an order that, due to insufficient clarity, might lead in seizures of non-infringing Samsung products by U.S. customs officers.
This investigation had been remanded to the Administrative Law Judge, so this was already the second window of opportunity for stakeholders to chime in. Google had already filed a public interest statement in support of Samsung (which was strikingly inconsistent with the positions Google's wholly-owned and micromanaged Motorola Mobility subsidiary filed at around the same time in connection with the investigation of Samsung's complaint against Apple). Yesterday the Office of Unfair Import Investigations (OUII, commonly referred to as the "ITC staff", which participates in certain investigations as a third party whose recommendations are not binding on the actual decision-makers) filed its answers to the Commission's review questions and its position on the public interest (both in the same document; this post continues below the document).
13-06-11 ITC Staff Brief in Apple-Samsung Case
The ITC staff couldn't disagree more with Google's arguments against an import ban. I'm now going to quote the ITC staff's comments on Google's submission and add my own comments below each quoted sentence:
"With respect to non-party Google's arguments, OUII first notes that the question is not whether an exclusion order would 'advance' the public interest (see Google Comments at 1); rather, the statute states that the Commission 'shall' issue an exclusion order 'unless' the public interest dictates otherwise. 19 U.S.C. § 1337(d)(1)."
The basic assumption is that the general public has an interest in intellectual property enforcement. That's also the starting point for any analysis of public interest arguments (such as in connection with one of the four eBay factors) by the Federal Circuit. This doesn't mean to say that the interest in IP enforcement always prevails, but there's a reasonable hurdle to overcom, and by suggesting that an order has to "advance" the public interest, Google subtly tried to lower the hurdle and shift the burden of proof. The ITC staff apparently doesn't like this distortion of the statute.
The ITC staff politely calls Google a "non-party". This case is in no small part about Android's infringements. Google would have had no less of a reason to join this investigation as an intervenor than in the investigation of Nokia's complaint against HTC, but for whatever reason it chose not to do so. Maybe its policy has changed over time, which would be fair. Anyway, Google is not a neutral third party in cases like this. It may not be a formal party to the dispute, but in practical, commercial terms it is a co-defendant -- in fact, a fully-intended additional target of some of Apple's assertions in this case.
"Moreover, Google's contention that the patents are not 'inventive' and are easily designed around, even if true, actually shows the lack of impact on the public interest – once Samsung designs around the patents, then its products will no longer be subject to exclusion."
This is the most important point the ITC staff makes. Three days ago I said the most fundamental shortcoming of an amicus curiae brief filed by Google, HTC, Rackspace, Red Hat and SAP with the Federal Circuit in support of Samsung against Apple's pursuit of a previously-denied injunction was its failure to address the possibility of workarounds/designarounds, and I pointed to the position Chief Judge Rader expressed in a recent ruling:
"If indeed [the defendant in that case] 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."
In the ITC investigation, Samsung insisted, against Apple's objections, on presenting to the judge certain workaround/designaround products in order to obtain clearance, which it received as far as the preliminary ruling is concerned. That's why there's also no reason to delay entry into force of an exclusion order. The key to the kingdom of legality is already in Samsung's hands.
What the ITC staff has now said about Google's argument is consistent with Chief Judge Rader's approach.
Note that the ITC staff also considers Google's claimt hat Apple's asserted patents are not "inventive" to be irrelevant. It's like saying, "If these patents are trivial, try to prove them invalid, and if you can't, then just work around them".
"Finally, Google's arguments concerning the lack of competition in the marketplace (see Google Comments at 3-4) are contradicted by both the publicly-available information cited above and the Commission's findings in other recent investigations involving similar products.
Various of the submissions by other parties that I published this week stress Samsung's huge Android market share. But there are stil plenty of other Android device makers out there, and even if any infringing Android-based Samsung devices were banned (which wouldn't happen in practical terms because Samsung can avoid infringing the patents-in-suit), there would be other platforms than Android.
"Thus, OUII does not believe that the public interest precludes issuance of its proposed remedies in this investigation."
I'd be surprised if this week's 17 public interest submissions will change the ITC staff's position on the appropriate remedies.
The sentence I just quoted is not the only one in the staff's filing that talks about remedies: there's a detailed discussion, and the conclusion is that a limited exclusion order (limited in the sense that only Samsung will be affected) is the way to go if the final ruling includes an infringement finding. I'm sure there will be at least some infringement finding(s). The question is just how many of the four patents the judge found infringed will ultimately be deemed valid and infringed; furthermore Apple has to satisfy the domestic industry requirement for each of them, but that should not be a problem.
The ITC staff's submission addresses the Commission's infringement-related questions in detail. The "Steve Jobs" touchscreen heuristics '949 patent and the translucent images RE'922 patent are software patents that cover parts of Android that aren't sold separately. The ITC staff argues that Apple and other patent holders cannot claim that such software components (as opposed to stand-alone software modules) are a "material or apparatus" for the purpose of a contributory infringement analysis. This means that Android as a whole, or at least a certain Android app as a whole, is in the staff's opinion the correct basis for determining whether there is substantial noninfringing use. Since it's easy to demonstrate substantial noninfringing use of a more widely-defined "material or apparatus", the ITC staff believes there's no contributory infringement, but given that Samsung's documentation discusses the relevant features, Apple has satisfied the requirement for proving that Samsung induces infringement (which would be just fine for Apple). There are some issues concerning the infringement analysis that the ITC staff raises. If the Commission agreed with the staff, Apple's victory would be considerably narrower than the preliminary ruling. But there would be an import ban if the ITC staff got its way, and during the Presidential Review period Samsung would have to post a hefty bond (for example, Judge Pender recommended that Samsung post 88% of its smartphone sales as a bond, and while the ITC staff thinks this percentage is too high, it proposes 58%, which is still substantial).
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