Presidential review of USITC exclusion orders is designed to directly inject politics into the ultimate legal determination between the parties. In his recent letter of disapproval, US Trade Representative Michael Froman recognized that the review is based upon a number of policy goals, including considerations of how the decision impacts the US economy, US consumers, US competitive manufacture, and US-Foreign relations. Although Froman’s letter of disapproval focused on FRAND issues, an undercurrent of the decision is that the American company (Apple) is avoiding its penalty after being judged as an infringer of a patent held by a foreign company (Samsung). Supporting the undercurrent of US-company favoritism is the fact that the USITC is designed as to protect US industry.
In an email, Hal Wegner draws a parallel analogy:
Imagine an American movie studio, book publisher, high tech electronics manufacturer or other intellectual property rights holder going to a Shanghai Court and successfully winning an infringement suit. Then, imagine that President Xi Jinping blocks enforcement “[a]fter extensive consultations with … interested … persons … based on … review of … considerations … as they relate to … the effect on [domestic] consumers.
The question then is how can the US expect for China, India, South Korea and Brazil to strongly enforce foreign-owned intellectual property rights when the US is unwilling to do so itself.
Of course, as I wrote earlier, Samsung is still able to enforce its patent rights in Federal Court and, in that process will be able to seek both injunctive relief (to block imports of the iPhone) and monetary damages for past and ongoing infringement.
In addition to the US/Foreign divide, the USTR involvement brings politics into the dispute at a level orders-of-magnitude beyond what is seen in Federal Courts. Apple is able to get the ear of the US Administration and other influential politicians, and that influence almost certainly impacted the outcome. If adjudged infringer had been a smaller company or perhaps Koch Ind., the outcome may well have been different. The best outcome here is probably to take-away the USITC’s jurisdiction over patent cases and simply allow those cases to be heard in Federal Courts.
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A different perspective on the administrative disapproval here is that it is designed as a signal to the USITC to stop issuing injunctive relief without full consideration of the public interest at stake. If the USITC takes that message to heart then we may observe some interesting development of the law and theory of public-interest in enforcing patent rights. Public interest is also one of the four factors used by Federal Courts when determining whether to issue injunctive relief in patent cases under eBay. In the eBay line of cases, the public interest is typically the least-explored factor. However, it is the only factor available for consideration by the USITC under the Tariff-Act. As the USITC develops its law of public-interest, the next step in the law’s evolution will be for the Federal Courts to begin picking-up that analysis and applying it under eBay.