Today the Office of Unfair Import Investigations (OUII, commonly referred to as "the ITC staff") filed a response to an Ericsson motion for drastic sanctions against Samsung. Last week it filed a reply submission on the review questions and remedies issues in the investigation of Apple's complaint. The public redacted version of that one became available today. The ITC staff had strongly supported the import ban that the ITC recently ordered against Apple over a Samsung 3G standard-essential patent (1, 2). In the two investigations in which Samsung is defending itself against major tech rivals, the ITC backs Samsung's rivals on some issues but also takes positions that Samsung will consider helpful.
Investigation of Apple's complaint
The Commission, the six-member decision-making body at the top of the U.S. trade agency, is currently conducting an in-depth review of a preliminary ruling finding Samsung to infringe four Apple patents. The final decision will be due on August 1, 2013. In its first brief on review, the ITC staff already disagreed with Google's public interest argument, which the Android publisher had already filed at a much earlier stage of the investigation. More recently, politicians, carriers, activists and lobbyists filed a variety of public interest statements. In its reply submission the ITC staff responds to those.
According to the ITC staff, "the [more recent] statements can be divided into two categories: (1) statements from organizations or individuals concerned about the public interest effect on end-users of mobile telephones; and (2) statements from organizations that provide or support wireless services". The emphasis of the first group of statements is on the impact of an exclusion order, while the second group is more focused on "tailoring" an exclusion order. Basically, the ITC staff is not impressed by a flood of statements that don't add much substance to the debate. There are claims that consumers would be harmed, that other device makers can't meet the demand, that there should be a grace period to allow Samsung to modify its devices ("[f]or example, Sprint Spectrum recommends a six-month grace period but provides no explanation as to how it arrived at this number"), or that the bond (which Samsung would have to post during the 60-day Presidential Review period as well as any potential grace period for continuing the importation of devices held to infringe) shouldn't be too high, without proving or proposing anything specific.
The staff reiterates (it already said so in its opening brief on review) that it "would not oppose a grace period", but "there does not appear to be an adequate discussion of this issue". I agree that no one has so far explained why a grace period is necessary and why it should have a certain length. In particular, I haven't seen any argument as to why Samsung couldn't just import devices that come with the designarounds/workarounds it insisted to have adjudicated by the Administrative Law Judge.
Investigation of Ericsson's complaint
Ericsson and Samsung are suing each other over dozens of patents, many of which have been declared essential to wireless industry standards, particularly 4G/LTE. They have litigation pending in federal court in Texas, and lodged complaints against each other with the ITC (Ericsson, Samsung).
A recent Ericsson motion for sanctions against Samsung for failure to comply with discovery obligations has brought to light an interesting SEP-related litigation tactic: Ericsson based its SEP-related infringement allegations on essentiality claims and said Samsung should disclose any products implementing the relevant standard(s) that it is importing or intends to import into the United States. Ericsson specified dozens of exemplary infringing devices at the outset, but it wanted Samsung to complete the list since it knows which standards its products implement. Samsung allegedly failed to disclose several dozen products implementing those standards at the appropriate time. Ericsson says Samsung disclosed 82 products in late May, one month after a key deadline, and has not moved component information (for example, which baseband chips are incorporated into certain handsets) with respect to 70 other products. On this basis Ericsson moved for the most drastic sanction possible: it asked the ITC to find in Ericsson's favor on a number of claims.
The ITC staff considers Ericsson's proposed sanctions exceedingly harsh. It recalls that "severe sanctions, including taking allegations as established, should only be imposed in extreme circumstances". In other words, Ericsson can't expect to win this case just because Samsung tried to stall. But the staff does "believe[] that at least some evidentiary sanctions are appropriate unless Samsung can either cure the deficiencies during the recently-extended discovery period or can show that it did, in fact, produce requested documents or that it is not at fault for the apparent deficiencies".
Due to an extension of a discovery deadline Samsung still has the opportunity to make up for shortcomings of previous disclosures, and Ericsson can still prove that dozens of Samsung products infringe certain patents.
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