The White House has officially overturned a pending ban by the U.S. International Trade Commission (USITC) that would have prohibited sales and imports of the AT&T versions of the iPhones and iPads under U.S. Patent No. 7,706,348. The move, which was thought to have little chance of success, represents the first veto of a USITC decision since 1987. The decision to veto the exclusion of Apple products “in the public interest” was made pursuant to Presidential authority under the Tariff Act of 1930, 19 U.S.C. 1337(j), which has been exercised only on five prior occasions.
In a letter written to the USITC Chairman Irving Williamson, U.S. Trade Representative Michael Froman disapproved the USITC’s determination to issue an exclusion order and a cease and desist order. The letter noted that the legislative history of 1337(j) lists several factors for consideration in the review, including public health, U.S. competition, production of competitive articles in the U.S., U.S. consumers, and foreign relations.
The letter also pointed to a January 2013 policy statement of the Justice Department and the U.S. PTO on standards-essential patents, which are subject to fair, reasonable, and nondiscriminatory (FRAND) terms. According to Froman, that policy recognized that voluntary consensus standards are fundamental to the interoperability of many consumer products, including those in this case.
A dispute still remains, however, as to whether the patent in question is standards-essential. Further, the USITC found that Apple in this case did not act in “good faith” in regards to negotiations over the patent licensing. Samsung is thus free to continue to pursue other legal avenues, as Froman notes in the letter. A parallel Delaware case had previously been stayed pending the outcome of the USITC case.