For those of you unfamiliar with the pace of litigation at the U.S. International Trade Commission, it is fast. Just several days ago, we were writing about the comments on the public interest submitted in Inv. No. 337-TA-794 by Apple and Samsung, the ITC Staff, and several other interested non-parties. Late last week, Apple, Samsung, and the ITC staff each submitted responses to these initial public interest comments.
Barring unexpected additional submissions from the parties (e.g., a notice of supplemental authority citing Judge Robart’s forthcoming ruling in the Microsoft-Motorola RAND case, which may come down any day), the briefing in this important ITC case should now be all wrapped up. Now, the waiting game begins — the Commission has until May 31 decide whether it will issue an exclusion order barring Apple products, should it find that they infringe Samsung’s (alleged) 3G UMTS-essential patent(s) (although a ruling could, of course, come before then).
A round-up of and links to the recent responsive submissions, after the jump…
Brief of the ITC Office of Unfair Import Investigations [Link]
The ITC Staff argued in its initial submission that Apple failed to carry its burden to prove that Samsung violated any FRAND obligations that it might have, and that the public interest doesn’t preclude issuing an exclusion order in this case. In its responsive filing, the Staff dismisses Apple’s arguments that U.S. consumers in certain areas would be greatly harmed by an exclusion order. But the Staff does agree with Apple that any exclusion order could be properly tailored to allow a phaseout of infringing products.
The Staff also takes issue with a third-party submission from Cisco, Micron, and H-P that denigrated the Georgia-Pacific factors. Even though the ITC doesn’t determine or award damages, the Staff argues some of the G-P factors “are certainly useful pieces of information to consider when determining whether a licensing offer is made on FRAND terms.” But the Staff does agree with both Apple and Samsung that in this case, a full-blown G-P analysis is not required.
Samsung’s Brief [Link]
Samsung continues with its theme of “Apple-as-an-unwilling-licensee,” noting that Apple’s prior comments included the phrase “Apple should not have to pay any royalty at all.” Like the Staff, Samsung remains unconvinced by Apple’s arguments about the effect that an exclusion order would have on competition in the smartphone and tablet market and on U.S. consumers. Samsung also disagrees with Apple’s request that any exclusion order by delayed in order to allow users and vendors to switch to non-infringing devices, claiming that such a delay is unwarranted because truly comparable substitutes are already being offered.
Samsung takes issue with Apple’s description of the license negotiation history between the parties and Apple’s criticism that Samsung has changed position on its FRAND rate. And Samsung disputes Apple’s contention that it has not been able to take enough FRAND-related discovery, arguing that Apple has taken over three hundred depositions relating to the parties’ dispute. Lastly, Samsung argues that Apple has waived its right to present arguments and evidence to the Commission that were not previously raised at the hearing. (Among this new evidence/argument is the allegation that there was an alternative to the technology claimed in the asserted ‘348 patent at the time it was incorporated into the UMTS standard, so the patent should be licensed on a royalty-free basis).
Apple’s Brief [Link]
As it did in its initial submission, Apple argues here that no exclusion order should issue in this case, and at the very least, the Commission should remand the investigation to the ALJ for further factual investigation. Apple claims that Samsung and the ITC Staff have misstated the effect that an exclusion order would have on the U.S. smartphone and tablet markets, arguing that there are not enough comparable substitutes.
Not surprisingly, much of Apple’s brief focuses on FRAND-related issues. Specifically, Apple characterizes Samsung’s initial royalty demand of 2.4% of the average selling price as unjustified and non-FRAND-compliant, and criticizes Samsung’s “moving target approach” to FRAND licensing — saying that is evidence of why district courts, not the ITC, should adjudicate FRAND issues. Apple again draws the ITC’s attention to Samsung’s record of asserting standard-essential patents in litigation against Apple, arguing that the fact that Samsung has repeatedly failed to provide infringement of a valid SEP shows that the ITC should be skeptical of Samsung’s declarations of its portfolio’s strength. And Apple attempts to rebut Samsung’s claim that it is an unwilling licensee, asserting that if the ITC were to determine that the patent at issue is valid, infringed, and enforceable (and the judgment is upheld on appeal), “Apple would stand ready to pay FRAND royalties.”