Apple (AAPL) and Samsung Need an Obama Intervention: Apple’s Future Hang In the Balance
The U.S. International Trade Commission barely makes headlines not until Samsung and Apple went all out filing lawsuits and patent cases all over. While American consumers do not often talk about the commission, that may soon change as the decision passed under it affects one of the most valued and popular consumer electronics company to date.
The ITC is a federal agency responsible for investigating allegations related to illegal or unfair trade practices. Their authority extends over copyright, trademark and patent infringement. Last June, the agency issued a decision banning Apple from importing certain products like the iPad 2 and the iPhone 4 following the decision that the tech giant infringed some of Samsung's patents.
Unless the U.S. government intervenes then importation of Apple products will start on August 5.
Digital and other related products can breach several or even thousands of patents. Analysts say that given ITC decides a product infringes even just one parent then it can ban the item from entering the country. However, that is all there is to it. The commission does not have the power to levy any penalty lesser or lower than that.
Many analysts and consumers have expressed their concerns over such decisions. The market can suffer when agencies as such use that kind of authority unwarranted. According to Wall Street Journal's Randal Milch, it is essential to take a leaf out of Justice Anthony Kennedy's book back in 2006 over a patent case.
According to the judge, when an agency or institution exercises automatic shutdown orders, this can turn into a "bargaining tool to charge exorbitant fees to companies that seek to buy licenses to practice the patent." The "exorbitant fee" refers to the patent tax. When the commission refrains from purchasing anything innovative and sticks with buying those that increases prices or impeded innovation then the country loses the purpose of patenting.
As the Constitution states, the purposes of patents are "To promote the Progress of Science and useful Arts." This will become futile when the commission decides to exercise its power in the same way it did with the Apple and Samsung case.
The Obama administration needs to decide by early August. The president must finalize whether the government will be vetoing the decision of the ITC to ban importation or not. It can have big implications on the future of Apple.