President Disapproves ITC Remedial Orders Based on Standards-Essential Patent
President Obama, acting through the United States Trade Representative ("USTR"), has disapproved a limited exclusion order and cease and desist order issued by the United States International Trade Commission (the "Commission") that covered an allegedly standards-essential patent ("SEP"). The orders, which were to take effect on August 5, covered certain products of respondent Apple Inc. that were found to infringe a U.S. patent owned by Samsung Electronics Co., Ltd. and Samsung Telecommunications America Inc. The President's disapproval means the remedial orders will not go into effect.
Every remedial order issued by the Commission as the result of a Section 337 investigation is automatically reviewed by the USTR during the 60-day "Presidential review period," which immediately follows the Commission's final determination. As set forth in Section 337, the President may disapprove of the Commission's determination, including its issuance of any remedial orders, on policy grounds. Considerations relevant to the Presidential review include an order's effect on the public health and welfare, competitive conditions in the United States economy, the production of like or directly competitive articles in the United States, and United States consumers. If a determination is disapproved on policy grounds, the remedial order(s) shall have no force or effect.
Referencing the joint Department of Justice/United States Patent and Trademark Office Policy Statement issued on January 8, titled Policy Statement on Remedies for Standards-Essential Patents Subject to Voluntary F/RAND Commitments, the USTR found that "exclusionary relief from the Commission based on FRAND-encumbered SEPs should be available based only on the relevant factors described in the Policy Statement." Those factors include, for example, an examination of whether "an exclusion order based on a F/RAND-encumbered patent appears to be incompatible with the terms of a patent holder's existing F/RAND licensing commitment to an SDO." The USTR made clear, however, that "[a]n exclusion order may still be an appropriate remedy in some circumstances, such as where the putative licensee is unable or refuses to take a FRAND license, and is acting outside of the patent holder's commitment to license on FRAND terms."
The investigation-at-issue is styled Certain Electronic Devices, Including Wireless Communications Devices, Portable Music and Data Processing Devices, and Tablet Computers, Inv. No. 337-TA-794.
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