I can understand a certain degree of disappointment in South Korea about the Obama Administration's "Presid-ess-ential" veto of an ITC import ban of older iPhones and iPads over a Samsung declared-essential patent. But I strongly disagree with South Korean media labeling this defense of nothing less than the standardization system as "protectionism". This is downright absurd.
The European Union is undoubtedly a neutral jurisdiction in the Apple v. Samsung dispute, though a major battleground. In December the European Commission issued a Statement of Objections (SO), a preliminary antitrust ruling against Samsung's pursuit of injunctive relief against Apple a willing licensee, over FRAND-pledged standard-essential patents (SEPs). A few days earlier, Samsung unilaterally withdrew all of its European SEP-based injunction requests against Apple and said it was doing so "in the interest of protecting consumer choice". It never explained why European consumers should be treated preferentially over U.S. consumers.
Let's go to another continent. Australia, too, is a neutral jurisdiction. Justice Annabelle Bennett called Samsung's assertions of 3G-essential patents "ridiculous" because this should only be about the terms of a FRAND license.
There is also significant concern over SEP abuse in Asia. For example, China's Ministry of Commerce took a very close look at Google's acquisition of Motorola Mobility, and SEPs were a major issue in the merger review.
It's not just that South Korean media attribute to protectionism what decision-makers in other parts of the world would have done in the same situation, correcting an outlier decision. There's also an official statement now by South Korea's trade ministry, quoted by AFP and other agencies. According to those reports, the South Korean government voiced "concern about negative impacts the decision by the [United States Trade Representative] will have on protecting patents held by Samsung". There's no reason for such concern, though.
There are simply two categories of patents: SEPs (subject to FRAND licensing commitments) and non-SEPs (traditional, exclusionary rights). Both have their distinct sets of advantages and limitations. It's easy to sign up lots of licensees for SEPs on FRAND terms; it's anticompetitive to make supra-FRAND demands or to engage in anticompetitive tying. By contrast, you're typically free to use non-SEPs in an exclusionary manner, but they can be worked around. So there's a market mechanism in place. SEPs can't be worked around, and where there are no alternatives in place, there's no functioning market. Therefore, antitrust rules and public-interest considerations are key.
To the extent that Samsung has non-SEPs, the USTR's veto changes nothing. Nothing at all. And it also changes nothing with respect to the ITC ruling scheduled for August 9 on Apple's complaint against Samsung, which is all about non-SEPs. According to the reports, South Korea will "closely watch" that USITC ruling, but this means comparing apples to oranges. The preliminary ruling already said that designaround products presented by Samsung (which Samsung actually sold in the U.S., though the exact quantities aren't known) are in the clear and don't infringe. An import ban wouldn't prevent Samsung from competing in the U.S. market. It would just have to steer clear of any infringements identified, and it already has everything in place for doing so. By contrast, the ban that Samsung was pursuing against Apple over a FRAND-pledged patent would have required changes to the nationwide infrastructure of the AT&T network and to the networks of some smaller carriers. That's just so different from the minor task of, for example, avoiding infringement of a patent on translucent images used for text highlighting, a problem that (I repeat myself) Samsung has already solved a long time ago, as the Administrative Law Judge found in his preliminary ruling.
South Korea doesn't have to be concerned about the enforceability of Samsung's SEPs either. It can (as it already has) seek monetary damages in district court. That's what Microsoft and Google's Motorola are sorting out in court now. That's what Samsung is also doing in Europe after the aforementioned withdrawal of its European SEP-based injunction request. Again, why is something that's fine in Europe not fine in the United States? Sometimes there may be reasons, but the South Korean government, South Korean media and Samsung don't provide any. That's a major deficiency in their criticism of the U.S. government's decision.
All sorts of entities and people are now, more than ever, going to try to conflate SEP and non-SEP issues. They're not going to confuse the readers of this blog, who know that it all comes down, at the end of the day, to the question of workarounds (or its synonym, designarounds).
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